##### 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, 2010
 Commission File Number: 000-54089
 (LOGO)
BIOMED REALTY, L.P.
  Maryland
    
    20-1320636(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)
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



BIOMED REALTY, L.P.
 FORM 10-Q  QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1 Consolidated Financial Statements
    
    
    3Consolidated Balance Sheets as of September 30, 2010 (Unaudited) and December 31, 2009
    
    
    3Consolidated Statements of Income for the three and nine months ended September 30, 2010 and 2009 (Unaudited)
    
    
    4Consolidated Statements of Equity for the nine months ended September 30, 2010 (Unaudited)
    
    
    5Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2010 and
2009 (Unaudited)
    
    
    6Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 (Unaudited)
    
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    33Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    47Item 4 Controls and Procedures
    
    
    48PART II  OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    48Item 1A Risk Factors
    
    
    49Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 3 Defaults Upon Senior Securities
    
    
    49Item 4 Reserved
    
    
    49Item 5 Other Information
    
    
    49Item 6 Exhibits
    
    
    50SIGNATURES
    
    
    51Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1.
    
    CONSOLIDATED FINANCIAL STATEMENTS
 BIOMED REALTY, L.P.
 
 CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 September 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSInvestments in real estate, net
    
    $
    3,207,957
    
    
    $
    2,971,767Investments in unconsolidated partnerships
    
    
    58,565
    
    
    
    56,909Cash and cash equivalents
    
    
    20,687
    
    
    
    19,922Restricted cash
    
    
    12,384
    
    
    
    15,355Accounts receivable, net
    
    
    7,333
    
    
    
    4,135Accrued straight-line rents, net
    
    
    102,567
    
    
    
    82,066Acquired above-market leases, net
    
    
    3,796
    
    
    
    3,047Deferred leasing costs, net
    
    
    88,828
    
    
    
    83,274Deferred loan costs, net
    
    
    12,394
    
    
    
    8,123Other assets
    
    
    58,042
    
    
    
    38,676Total assets
    
    $
    3,572,553
    
    
    $
    3,283,274LIABILITIES AND EQUITYMortgage notes payable, net
    
    $
    662,522
    
    
    $
    669,454Secured term loan
    
    
    
    
    
    
    250,000Exchangeable senior notes due 2026, net
    
    
    19,432
    
    
    
    44,685Exchangeable senior notes due 2030
    
    
    180,000
    
    
    
    Unsecured senior notes due 2020, net
    
    
    247,523
    
    
    
    Unsecured line of credit
    
    
    14,050
    
    
    
    397,666Security deposits
    
    
    10,883
    
    
    
    7,929Distributions payable
    
    
    26,992
    
    
    
    18,531Accounts payable, accrued expenses and other liabilities
    
    
    75,319
    
    
    
    47,388Derivative instruments
    
    
    5,453
    
    
    
    12,551Acquired below-market leases, net
    
    
    8,031
    
    
    
    11,138Total liabilities
    
    
    1,250,205
    
    
    
    1,459,342Equity:Partners equity:Preferred units, 7.375% Series A cumulative
redeemable preferred units, $230,000,000 liquidation
preference ($25.00 per unit), 9,200,000 units issued
and outstanding at September 30, 2010 and December
31, 2009
    
    
    222,413
    
    
    
    222,413Limited partners capital, 3,001,250 and 3,076,560
units issued and outstanding at September 30, 2010
and December 31, 2009, respectively
    
    
    10,124
    
    
    
    9,723General partners capital, 130,831,009 and
99,000,269 units issued and outstanding at September
30, 2010 and December 31, 2009, respectively
    
    
    2,162,598
    
    
    
    1,676,182Accumulated other comprehensive loss
    
    
    (72,597
    )
    
    
    (84,234
    )Total partners equity
    
    
    2,322,538
    
    
    
    1,824,084Noncontrolling interests
    
    
    (190
    )
    
    
    (152
    )Total equity
    
    
    2,322,348
    
    
    
    1,823,932Total liabilities and equity
    
    $
    3,572,553
    
    
    $
    3,283,274
   3




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##### Table of Contents



BIOMED REALTY, L.P.
 
 CONSOLIDATED STATEMENTS OF INCOME  (In thousands, except share data)
 (Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Rental
    
    $
    72,971
    
    
    $
    68,472
    
    
    $
    215,950
    
    
    $
    202,608Tenant recoveries
    
    
    22,723
    
    
    
    19,240
    
    
    
    63,823
    
    
    
    57,510Other income
    
    
    39
    
    
    
    5,251
    
    
    
    1,628
    
    
    
    12,876Total revenues
    
    
    95,733
    
    
    
    92,963
    
    
    
    281,401
    
    
    
    272,994Expenses:Rental operations
    
    
    19,998
    
    
    
    18,726
    
    
    
    54,926
    
    
    
    55,539Real estate taxes
    
    
    9,408
    
    
    
    8,233
    
    
    
    26,832
    
    
    
    23,079Depreciation and amortization
    
    
    27,774
    
    
    
    30,953
    
    
    
    83,159
    
    
    
    82,767General and administrative
    
    
    6,805
    
    
    
    5,712
    
    
    
    19,523
    
    
    
    16,119Acquisition related expenses
    
    
    420
    
    
    
    244
    
    
    
    2,388
    
    
    
    244Total expenses
    
    
    64,405
    
    
    
    63,868
    
    
    
    186,828
    
    
    
    177,748Income from operations
    
    
    31,328
    
    
    
    29,095
    
    
    
    94,573
    
    
    
    95,246Equity in net loss of unconsolidated partnerships
    
    
    (308
    )
    
    
    (1,118
    )
    
    
    (686
    )
    
    
    (1,884
    )Interest income
    
    
    55
    
    
    
    62
    
    
    
    126
    
    
    
    226Interest expense
    
    
    (21,589
    )
    
    
    (19,614
    )
    
    
    (64,719
    )
    
    
    (44,567
    )(Loss)/gain on derivative instruments
    
    
    (287
    )
    
    
    (14
    )
    
    
    (634
    )
    
    
    289(Loss)/gain on extinguishment of debt
    
    
    (22
    )
    
    
    
    
    
    
    (2,286
    )
    
    
    6,152Net income
    
    
    9,177
    
    
    
    8,411
    
    
    
    26,374
    
    
    
    55,462Net loss attributable to noncontrolling interests
    
    
    18
    
    
    
    14
    
    
    
    38
    
    
    
    44Net income attributable to the
Operating Partnership
    
    
    9,195
    
    
    
    8,425
    
    
    
    26,412
    
    
    
    55,506Preferred unit distributions
    
    
    (4,241
    )
    
    
    (4,241
    )
    
    
    (12,722
    )
    
    
    (12,722
    )Net income available to the unitholders
    
    $
    4,954
    
    
    $
    4,184
    
    
    $
    13,690
    
    
    $
    42,784Net income per unit attributable to unitholders:Basic and diluted earnings per unit
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.12
    
    
    $
    0.46Weighted-average units outstanding:Basic
    
    
    115,768,368
    
    
    
    100,233,171
    
    
    
    109,882,418
    
    
    
    91,798,862Diluted
    
    
    115,768,368
    
    
    
    101,289,458
    
    
    
    109,882,418
    
    
    
    92,863,088
   4




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##### Table of Contents



BIOMED REALTY, L.P.
 
 CONSOLIDATED STATEMENTS OF EQUITY  (In thousands, except share data)
 (Unaudited)
 AccumulatedOther
    
    
    TotalPreferred Series A
    
    
    Limited Partners Capital
    
    
    General Partners Capital
    
    
    Comprehensive
    
    
    Partners
    
    
    Noncontrolling
    
    
    TotalUnits
    
    
    Amount
    
    
    Units
    
    
    Amount
    
    
    Units
    
    
    Amount
    
    
    (Loss)/Income
    
    
    Equity
    
    
    Interests
    
    
    EquityBalance at
December 31, 2009
    
    
    9,200,000
    
    
    $
    222,413
    
    
    
    3,076,560
    
    
    $
    9,723
    
    
    
    99,000,269
    
    
    $
    1,676,182
    
    
    $
    (84,234
    )
    
    $
    1,824,084
    
    
    $
    (152
    )
    
    $
    1,823,932Proceeds from
issuance of
operating
partnership units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,426,000
    
    
    
    523,756
    
    
    
    
    
    
    
    523,756
    
    
    
    
    
    
    
    523,756Net issuances of
unvested
restricted units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    329,430
    
    
    
    (1,238
    )
    
    
    
    
    
    
    (1,238
    )
    
    
    
    
    
    
    (1,238
    )Conversion of units
    
    
    
    
    
    
    
    
    
    
    (75,310
    )
    
    
    29
    
    
    
    75,310
    
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vesting of
share-based awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,316
    
    
    
    
    
    
    
    5,316
    
    
    
    
    
    
    
    5,316Allocation of
equity to limited
partners
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,399
    
    
    
    
    
    
    
    (1,399
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distributions
    
    
    
    
    
    
    (12,722
    )
    
    
    
    
    
    
    (1,386
    )
    
    
    
    
    
    
    (53,321
    )
    
    
    
    
    
    
    (67,429
    )
    
    
    
    
    
    
    (67,429
    )Net income
    
    
    
    
    
    
    12,722
    
    
    
    
    
    
    
    359
    
    
    
    
    
    
    
    13,331
    
    
    
    
    
    
    
    26,412
    
    
    
    (38
    )
    
    
    26,374Realized gain on
marketable
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (538
    )
    
    
    (538
    )
    
    
    
    
    
    
    (538
    )Amortization of
deferred interest
costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,343
    
    
    
    5,343
    
    
    
    
    
    
    
    5,343Unrealized gain on
derivative
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,832
    
    
    
    6,832
    
    
    
    
    
    
    
    6,832Balance at
September 30, 2010
    
    
    9,200,000
    
    
    $
    222,413
    
    
    
    3,001,250
    
    
    $
    10,124
    
    
    
    130,831,009
    
    
    $
    2,162,598
    
    
    $
    (72,597
    )
    
    $
    2,322,538
    
    
    $
    (190
    )
    
    $
    2,322,348
   5




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##### Table of Contents



BIOMED REALTY, L.P.
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (In thousands)
 (Unaudited)
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income available to the unitholders and noncontrolling interests
    
    $
    4,936
    
    
    $
    4,170
    
    
    $
    13,652
    
    
    $
    42,740Other comprehensive income:Unrealized gain on derivative instruments
    
    
    1,479
    
    
    
    1,978
    
    
    
    7,303
    
    
    
    23,436Amortization of deferred interest costs
    
    
    1,776
    
    
    
    1,797
    
    
    
    5,343
    
    
    
    1,797Equity in other comprehensive income/(loss) of unconsolidated
partnerships
    
    
    35
    
    
    
    (198
    )
    
    
    24
    
    
    
    (434
    )Deferred settlement payments on interest rate swaps, net
    
    
    (11
    )
    
    
    (668
    )
    
    
    (495
    )
    
    
    (2,268
    )Realized (loss)/gain on marketable securities
    
    
    
    
    
    
    (199
    )
    
    
    (538
    )
    
    
    1,541Total other comprehensive income
    
    
    3,279
    
    
    
    2,710
    
    
    
    11,637
    
    
    
    24,072Comprehensive income
    
    $
    8,215
    
    
    $
    6,880
    
    
    $
    25,289
    
    
    $
    66,812
   6




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##### Table of Contents



BIOMED REALTY, L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)
 (Unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009Operating activities:Net income
    
    $
    26,374
    
    
    $
    55,462Adjustments to reconcile net income to net cash provided by operating activities:Loss/(gain) on extinguishment of debt
    
    
    2,237
    
    
    
    (6,152
    )Loss/(gain) on derivative instruments
    
    
    634
    
    
    
    (289
    )Gain on sale of marketable securities
    
    
    (865
    )
    
    
    Depreciation and amortization
    
    
    83,159
    
    
    
    82,767Allowance for doubtful accounts
    
    
    108
    
    
    
    5,163Revenue reduction attributable to acquired above-market leases
    
    
    922
    
    
    
    961Revenue recognized related to acquired below-market leases
    
    
    (3,449
    )
    
    
    (6,320
    )Revenue reduction attributable to lease incentives
    
    
    1,622
    
    
    
    949Compensation expense related to share-based payments
    
    
    5,316
    
    
    
    4,163Amortization of deferred loan costs
    
    
    3,223
    
    
    
    3,166Amortization of debt premium on mortgage notes payable
    
    
    (1,418
    )
    
    
    (1,386
    )Amortization of debt discount on exchangeable senior notes due 2026
    
    
    483
    
    
    
    1,383Amortization of debt discount on unsecured senior notes due 2020
    
    
    80
    
    
    
    Loss from unconsolidated partnerships
    
    
    1,491
    
    
    
    1,884Distributions representing return on capital from unconsolidated partnerships
    
    
    1,195
    
    
    
    92Amortization of deferred interest costs
    
    
    5,343
    
    
    
    1,797Changes in operating assets and liabilities:Restricted cash
    
    
    2,971
    
    
    
    (8,097
    )Accounts receivable
    
    
    (3,306
    )
    
    
    3,640Accrued straight-line rents
    
    
    (20,501
    )
    
    
    (22,219
    )Deferred leasing costs
    
    
    (3,223
    )
    
    
    (5,332
    )Other assets
    
    
    (14,639
    )
    
    
    (3,627
    )Security deposits
    
    
    1,038
    
    
    
    (436
    )Accounts payable, accrued expenses and other liabilities
    
    
    14,119
    
    
    
    7,102Net cash provided by operating activities
    
    
    102,914
    
    
    
    114,671Investing activities:Purchases of interests in and additions to investments in real estate and related intangible assets
    
    
    (313,674
    )
    
    
    (81,955
    )Contributions to unconsolidated partnerships, net
    
    
    
    
    
    
    (31,985
    )Proceeds from the sale of marketable securities
    
    
    1,227
    
    
    
    Additions to non-real estate assets
    
    
    (513
    )
    
    
    (281
    )Funds held in escrow for acquisitions
    
    
    (6,572
    )
    
    
    Net cash used in investing activities
    
    
    (319,532
    )
    
    
    (114,221
    )Financing activities:Proceeds from issuance of operating partnership units
    
    
    523,756
    
    
    
    166,931Payment of deferred loan costs
    
    
    (8,814
    )
    
    
    (1,926
    )Unsecured line of credit proceeds
    
    
    366,992
    
    
    
    399,337Unsecured line of credit payments
    
    
    (750,608
    )
    
    
    (186,980
    )Mortgage loan proceeds
    
    
    
    
    
    
    368,000Principal payments on mortgage notes payable
    
    
    (5,514
    )
    
    
    (48,082
    )Payments on secured term loan
    
    
    (250,000
    )
    
    
    Repurchases of exchangeable senior notes due 2026
    
    
    (26,410
    )
    
    
    (12,605
    )Proceeds from exchangeable senior notes due 2030
    
    
    180,000
    
    
    
    Proceeds from unsecured senior notes due 2020
    
    
    247,443
    
    
    
    Settlement of derivative instruments
    
    
    
    
    
    
    (86,482
    )Secured construction loan payments
    
    
    
    
    
    
    (507,128
    )Deferred settlement payments, net on interest rate swaps
    
    
    (495
    )
    
    
    (2,268
    )Distributions paid to unitholders
    
    
    (46,245
    )
    
    
    (67,668
    )Distributions paid to preferred unitholders
    
    
    (12,722
    )
    
    
    (12,722
    )Net cash provided by financing activities
    
    
    217,383
    
    
    
    8,407Net increase in cash and cash equivalents
    
    
    765
    
    
    
    8,857Cash and cash equivalents at beginning of period
    
    
    19,922
    
    
    
    21,422Cash and cash equivalents at end of period
    
    $
    20,687
    
    
    $
    30,279Supplemental disclosure of cash flow information:Cash paid during the period for interest (net of amounts capitalized of $4,136 and $10,545,
respectively)
    
    $
    50,507
    
    
    $
    37,760Supplemental disclosure of non-cash investing and financing activities:Accrual for unit distributions declared
    
    $
    22,751
    
    
    $
    11,142Accrual for preferred unit distributions declared
    
    
    4,241
    
    
    
    4,241Accrued additions to real estate and related intangible assets
    
    
    23,157
    
    
    
    22,623
   7




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##### Table of Contents



BIOMED REALTY, L.P.
 
 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
   8




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##### Table of Contents



Investments in Partnerships and Limited Liability Companies
     Investments in Real Estate
  September 30,
    
    
    December 31,2010
    
    
    2009Land
    
    $
    420,648
    
    
    $
    388,292Land under development
    
    
    48,843
    
    
    
    31,609Buildings and improvements
    
    
    2,721,332
    
    
    
    2,485,972Construction in progress
    
    
    56,153
    
    
    
    87,810Tenant improvements
    
    
    276,577
    
    
    
    222,8583,523,553
    
    
    
    3,216,541Accumulated depreciation
    
    
    (315,596
    )
    
    
    (244,774
    )$
    3,207,957
    
    
    $
    2,971,767
  9




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##### Table of Contents



Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
   Deferred Leasing Costs
   Balance atSeptember 30,
    
    
    Accumulated2010
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    181,017
    
    
    $
    (121,846
    )
    
    $
    59,171Acquired management agreements
    
    
    13,988
    
    
    
    (10,890
    )
    
    
    3,098Deferred leasing and other direct costs
    
    
    38,798
    
    
    
    (12,239
    )
    
    
    26,559$
    233,803
    
    
    $
    (144,975
    )
    
    $
    88,828
  Balance atDecember 31,
    
    
    Accumulated2009
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    168,390
    
    
    $
    (112,613
    )
    
    $
    55,777Acquired management agreements
    
    
    12,921
    
    
    
    (10,405
    )
    
    
    2,516Deferred leasing and other direct costs
    
    
    34,851
    
    
    
    (9,870
    )
    
    
    24,981$
    216,162
    
    
    $
    (132,888
    )
    
    $
    83,274
  10




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##### Table of Contents



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.
    September 30,
    
    
    December 31,2010
    
    
    2009Acquired above-market leases
    
    $
    14,400
    
    
    $
    12,729Accumulated amortization
    
    
    (10,604
    )
    
    
    (9,682
    )$
    3,796
    
    
    $
    3,047
  September 30,
    
    
    December 31,2010
    
    
    2009Acquired below-market leases
    
    $
    39,681
    
    
    $
    39,339Accumulated amortization
    
    
    (31,650
    )
    
    
    (28,201
    )$
    8,031
    
    
    $
    11,138
  11




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Lease incentives
    
    $
    27,062
    
    
    $
    12,816Accumulated amortization
    
    
    (5,111
    )
    
    
    (3,489
    )$
    21,951
    
    
    $
    9,327
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Rental revenues
    
    $
    
    
    
    $
    458
    
    
    $
    
    
    
    $
    3,077Other income
    
    
    14
    
    
    
    4,396
    
    
    
    86
    
    
    
    10,866Total revenue
    
    
    14
    
    
    
    4,854
    
    
    
    86
    
    
    
    13,943Rental operations expense
    
    
    
    
    
    
    660
    
    
    
    
    
    
    
    4,498Depreciation and amortization
    
    
    202
    
    
    
    6,150
    
    
    
    202
    
    
    
    10,155Total expenses
    
    
    202
    
    
    
    6,810
    
    
    
    202
    
    
    
    14,653Net effect of lease terminations
    
    $
    (188
    )
    
    $
    (1,956
    )
    
    $
    (116
    )
    
    $
    (710
    )
 Investments
   12




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Equity securities, initial cost basis
    
    $
    
    
    
    $
    361Unrealized gain
    
    
    
    
    
    
    537Equity securities, fair-value
    
    $
    
    
    
    $
    898
  Share-Based Payments
  Assets and Liabilities Measured at Fair-Value
     13




---



##### Table of Contents



Derivative Instruments
    14




---



##### Table of Contents



Managements Estimates
  Segment Information
   15




---



##### Table of Contents



3. Equity
     Operating Partnership Units and LTIP Units
   16




---



##### Table of Contents



September 30, 2010
    
    
    December 31, 2009Partnership Units
    
    
    Percentage of
    
    
    Partnership Units
    
    
    Percentage ofand LTIP Units
    
    
    Total
    
    
    and LTIP Units
    
    
    TotalBioMed Realty Trust, Inc.
    
    
    129,599,004
    
    
    
    97.8
    %
    
    
    97,939,028
    
    
    
    97.2
    %Noncontrolling interest consisting of:OP units held by employees and related parties
    
    
    2,268,873
    
    
    
    1.7
    %
    
    
    2,246,493
    
    
    
    2.2
    %OP units held by third parties
    
    
    588,801
    
    
    
    0.5
    %
    
    
    595,551
    
    
    
    0.6
    %Total
    
    
    132,456,678
    
    
    
    100.0
    %
    
    
    100,781,072
    
    
    
    100.0
    %
   7.375% Series A Cumulative Redeemable Preferred Units
    17




---



##### Table of Contents



Distributions
  Amount Per
    
    
    
    
    Distribution
    
    Distribution AmountDeclaration Date
    
    Securities Class
    
    Unit
    
    
    Period Covered
    
    Payable Date
    
    (in thousands)March 15, 2010
    
    OP units
    
    $
    0.14000
    
    
    January 1, 2010 to March 31, 2010
    
    April 15, 2010
    
    $
    14,468March 15, 2010
    
    Series A preferred units
    
    $
    0.46094
    
    
    January 16, 2010 to April 15, 2010
    
    April 15, 2010
    
    $
    4,240June 15, 2010
    
    OP units
    
    $
    0.15000
    
    
    April 1, 2010 to June 30, 2010
    
    July 15, 2010
    
    $
    17,487June 15, 2010
    
    Series A preferred units
    
    $
    0.46094
    
    
    April 16, 2010 to July 15, 2010
    
    July 15, 2010
    
    $
    4,241September 15, 2010
    
    OP units
    
    $
    0.17000
    
    
    July 1, 2010 to September 30, 2010
    
    October 15, 2010
    
    $
    22,751September 15, 2010
    
    Series A preferred units
    
    $
    0.46094
    
    
    July 16, 2010 to October 15, 2010
    
    October 15, 2010
    
    $
    4,241
  OP units
    
    $
    54,706Series A preferred units
    
    
    12,722$
    67,428
 Noncontrolling Interests
     18




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##### Table of Contents



4. Mortgage Notes Payable
  Stated Fixed
    
    
    Effective
    
    
    Principal BalanceInterest
    
    
    Interest
    
    
    September 30,
    
    
    December 31,Rate
    
    
    Rate
    
    
    2010
    
    
    2009
    
    
    Maturity DateArdentech Court
    
    
    7.25
    %
    
    
    5.06
    %
    
    $
    4,267
    
    
    $
    4,354
    
    
    July 1, 2012Bridgeview Technology Park I
    
    
    8.07
    %
    
    
    5.04
    %
    
    
    11,136
    
    
    
    11,246
    
    
    January 1, 2011Center for Life Science | Boston
    
    
    7.75
    %
    
    
    7.75
    %
    
    
    346,396
    
    
    
    348,749
    
    
    June 30, 2014500 Kendall Street (Kendall D)
    
    
    6.38
    %
    
    
    5.45
    %
    
    
    64,703
    
    
    
    66,077
    
    
    December 1, 2018Lucent Drive
    
    
    4.75
    %
    
    
    4.75
    %
    
    
    4,954
    
    
    
    5,129
    
    
    January 21, 20156828 Nancy Ridge Drive
    
    
    7.15
    %
    
    
    5.38
    %
    
    
    6,515
    
    
    
    6,595
    
    
    September 1, 2012Road to the Cure
    
    
    6.70
    %
    
    
    5.78
    %
    
    
    14,762
    
    
    
    14,956
    
    
    January 31, 2014Science Center Drive
    
    
    7.65
    %
    
    
    5.04
    %
    
    
    10,847
    
    
    
    10,981
    
    
    July 1, 2011Shady Grove Road
    
    
    5.97
    %
    
    
    5.97
    %
    
    
    147,000
    
    
    
    147,000
    
    
    September 1, 2016Sidney Street
    
    
    7.23
    %
    
    
    5.11
    %
    
    
    27,633
    
    
    
    28,322
    
    
    June 1, 20129865 Towne Centre Drive
    
    
    7.95
    %
    
    
    7.95
    %
    
    
    17,700
    
    
    
    17,884
    
    
    June 30, 2013900 Uniqema Boulevard
    
    
    8.61
    %
    
    
    5.61
    %
    
    
    1,057
    
    
    
    1,191
    
    
    May 1, 2015656,970
    
    
    
    662,484Unamortized premiums
    
    
    
    
    
    
    
    
    
    
    5,552
    
    
    
    6,970Total principal balance
    
    
    
    
    
    
    
    
    
    $
    662,522
    
    
    $
    669,454
     5. Credit Facilities, Exchangeable Senior Notes, and Other Debt Instruments
 Unsecured Line of Credit
   19




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##### Table of Contents



Secured Term Loan
  Exchangeable Senior Notes due 2026, net
     20




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Notes due 2026
    
    $
    19,800
    
    
    $
    46,150Unamortized debt discount
    
    
    (368
    )
    
    
    (1,465
    )$
    19,432
    
    
    $
    44,685
  Exchangeable Senior Notes due 2030
   Unsecured Senior Notes due 2020, net
   21




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Notes due 2020
    
    $
    250,000
    
    
    $
    Unamortized debt discount
    
    
    (2,477
    )
    
    
    $
    247,523
    
    
    $
    
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Mortgage notes payable
    
    $
    11,838
    
    
    $
    12,148
    
    
    $
    35,539
    
    
    $
    23,011Mortgage notes payable debt premium
    
    
    (476
    )
    
    
    (466
    )
    
    
    (1,418
    )
    
    
    (1,386
    )Amortization of deferred interest costs (see Note 8)
    
    
    1,776
    
    
    
    1,797
    
    
    
    5,343
    
    
    
    1,797Derivative instruments
    
    
    1,676
    
    
    
    4,121
    
    
    
    8,647
    
    
    
    12,046Secured construction loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,187Secured term loan
    
    
    
    
    
    
    1,236
    
    
    
    1,392
    
    
    
    3,862Notes due 2026
    
    
    234
    
    
    
    1,208
    
    
    
    1,136
    
    
    
    3,864Amortization of debt discount on Notes due 2026
    
    
    132
    
    
    
    447
    
    
    
    483
    
    
    
    1,383Notes due 2030
    
    
    1,681
    
    
    
    
    
    
    
    4,875
    
    
    
    Notes due 2020
    
    
    3,829
    
    
    
    
    
    
    
    6,466
    
    
    
    Amortization of debt discount on Notes due 2020
    
    
    47
    
    
    
    
    
    
    
    80
    
    
    
    Unsecured line of credit
    
    
    1,004
    
    
    
    1,263
    
    
    
    3,089
    
    
    
    3,108Amortization of deferred loan fees
    
    
    1,039
    
    
    
    803
    
    
    
    3,223
    
    
    
    3,240Capitalized interest
    
    
    (1,191
    )
    
    
    (2,943
    )
    
    
    (4,136
    )
    
    
    (10,545
    )Total interest expense
    
    $
    21,589
    
    
    $
    19,614
    
    
    $
    64,719
    
    
    $
    44,567
  22




---



##### Table of Contents



2010
    
    $
    1,8902011
    
    
    43,9642012
    
    
    45,4142013
    
    
    25,9412014
    
    
    353,091Thereafter(1)
    
    
    650,520$
    1,120,820
 
 (1)
    
    Includes $19.8 million in principal payments of the Notes due 2026 based on a contractual
maturity date of October 1, 2026 and $180.0 million in principal payments of the Notes due
2030 based on a contractual maturity date of January 15, 2030. 6. Earnings Per Unit
    23




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic earnings per unit:Net income available to the unitholders
    
    $
    4,954
    
    
    $
    4,184
    
    
    $
    13,690
    
    
    $
    42,784Less: net income allocable and distributions in
excess of earnings to participating securities
    
    
    (266
    )
    
    
    (116
    )
    
    
    (686
    )
    
    
    (582
    )Net income attributable to unitholders
    
    $
    4,688
    
    
    $
    4,068
    
    
    $
    13,004
    
    
    $
    42,202Diluted earnings per unit:Net income available to the unitholders
    
    $
    4,954
    
    
    $
    4,184
    
    
    $
    13,690
    
    
    $
    42,784Less: net income allocable and distributions in
excess of earnings to participating securities
    
    
    (266
    )
    
    
    
    
    
    
    (686
    )
    
    
    Net income attributable to unitholders
    
    $
    4,688
    
    
    $
    4,184
    
    
    $
    13,004
    
    
    $
    42,784Weighted-average units outstanding:Basic
    
    
    115,768,368
    
    
    
    100,233,171
    
    
    
    109,882,418
    
    
    
    91,798,861Incremental shares from assumed conversion/vesting:Unvested units
    
    
    
    
    
    
    1,056,287
    
    
    
    
    
    
    
    1,064,227Diluted
    
    
    115,768,368
    
    
    
    101,289,458
    
    
    
    109,882,418
    
    
    
    92,863,088Basic and diluted earnings per unit:Net income per unit attributable to
unitholders, basic and diluted:
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.12
    
    
    $
    0.46
 7. Investment in Unconsolidated Partnerships
  Operating
    
    
    OperatingPartnerships
    
    
    Partnership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
    
    
    22
    %
    
    
    22
    %(4)
    
    September 30, 2004
 
 (1)
    
    In April 2007, 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 partially leased laboratory/office building totaling 420,000 square feet
located at 301 Binney 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 at 650 East Kendall Street that can support up to
280,000 rentable square feet of laboratory and office space. The 650 East Kendall Street site
also includes a below grade parking facility.  24




---



##### Table of Contents



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 Operating Partnership 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
Operating Partnership believes that it would have adequate resources to fund the purchase price
and the Operating Partnership also has the option to fund a portion of the purchase price through
the issuance of the Parent Companys common stock.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 were utilized to fund construction costs at certain properties under development.
Pursuant to the loan facility, the Operating Partnership executed guaranty agreements in which it
guaranteed the full completion of the construction and any tenant improvements at the 301 Binney
Street property if PREI I LLC was unable or unwilling to complete the project. On February 11,
2009, the PREI joint ventures jointly refinanced the outstanding balance of the secured
acquisition and interim loan facility, or approximately $364.1 million, with the proceeds of a
new loan totaling $203.3 million and members capital contributions funding the balance due. The
new loan bears interest at a rate equal to, at the option of the PREI joint ventures, either (1)
reserve adjusted LIBOR plus 350 basis points or (2) the higher of (a) the prime rate then in
effect, (b) the federal funds rate then in effect plus 50 basis points or (c) one-month LIBOR
plus 450 basis points, and requires interest only monthly payments until the maturity date,
February 10, 2011. In addition, the PREI joint ventures, at their sole discretion, may extend the
maturity date of the secured acquisition and interim loan facility to February 10, 2012 after
satisfying certain conditions under its control and paying an extension fee based on the then
current facility commitment. At maturity, the PREI joint ventures may refinance the loan,
depending on market conditions and the availability of credit, or they may execute the extension
option. On March 11, 2009, the PREI joint ventures jointly entered into an interest rate cap
agreement, which is intended to have the effect of hedging variability in future interest
payments on the $203.3 million secured acquisition and interim loan facility above a strike rate
of 2.5% (excluding the applicable credit spread) through February 10, 2011. At September 30,
2010, there were $203.3 million in outstanding borrowings on the secured acquisition and interim
loan facility, with a contractual interest rate of 3.8% (including the applicable credit spread).On February 13, 2008, a wholly owned subsidiary of the Operating Partnerships joint venture with
PREI I LLC entered into a secured construction loan facility with certain lenders to provide
borrowings of up to approximately $245.0 million in connection with the construction of 650 East
Kendall Street, a life sciences building located in Cambridge, Massachusetts. On August 3, 2010,
the maturity date of the secured construction loan facility was extended from August 13, 2010 to
February 13, 2011. The secured construction loan has one remaining six-month extension option,
which may be exercised after satisfying certain conditions and paying an extension fee. In
addition, in accordance with the loan agreement, Prudential Insurance Corporation of America has
guaranteed repayment of the construction loan. At maturity, the wholly owned subsidiary may
refinance the loan, depending on market conditions and the availability of credit, or it may
execute the remaining extension option, at its sole discretion, after satisfying certain
conditions under its control and paying an extension fee based on the then current facility
commitment, which could extend the maturity date to August 13, 2011. Proceeds from the secured
construction loan were used in part to repay a portion of the secured acquisition and interim
loan facility held by the PREI joint ventures and are being used to fund the balance of the cost
to complete construction of the project. In February 2008, the subsidiary entered into an
interest rate swap agreement, which is intended to have the effect of initially fixing the
interest rate on up to $163.0 million of the secured construction loan facility at a weighted
average rate of 4.4% through August 2010. The swap agreement had an original notional amount of
$84.0 million based on the initial borrowing on the secured construction loan facility, which
will increase on a monthly basis at predetermined amounts as additional borrowings are made. At
September 30, 2010, there were $200.4 million in outstanding borrowings on the secured
construction loan facility, with a contractual interest rate of 1.8% (including the applicable
credit spread).(2)
    
    As part of a larger transaction which included the acquisition by PREI I LLC referred to
above, PREI II LLC acquired a portfolio of properties in April 2007. It disposed of its
acquired properties in 2007 at no material gain or loss. 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. The Operating
Partnerships remaining investment in PREI II LLC (maximum exposure to losses) was
approximately $813,000 at September 30, 2010.  25




---



##### Table of Contents



(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 Operating
Partnerships investment in the McKellar Court partnership (maximum exposure to losses) was
approximately $12.6 million at September 30, 2010. In December 2009, the Operating Partnership
provided funding in the form of a promissory note to the McKellar Court partnership in the
amount of $10.3 million, which matures at the earlier of (a) January 1, 2020, or (b) the day
that the limited partner exercises an option to purchase the Operating Partnerships ownership
interest. Loan proceeds were utilized to repay a mortgage with a third party. Interest-only
payments on the promissory note are due monthly at a fixed rate of 8.15% (the rate may adjust
higher after January 1, 2015), with the principal balance outstanding due at maturity.(4)
    
    The Operating Partnerships economic interest in the McKellar Court partnership entitles it
to 75% of the extraordinary cash flows after repayment of the partners capital contributions
and 22% of the operating cash flows.   September 30,
    
    
    December 31,2010
    
    
    2009Assets:Investments in real estate, net
    
    $
    624,258
    
    
    $
    613,306Cash and cash equivalents (including restricted cash)
    
    
    5,521
    
    
    
    6,758Intangible assets, net
    
    
    12,752
    
    
    
    13,498Other assets
    
    
    26,600
    
    
    
    18,374Total assets
    
    $
    669,131
    
    
    $
    651,936Liabilities and equity:Debt
    
    $
    413,880
    
    
    $
    405,606Other liabilities
    
    
    15,842
    
    
    
    15,195Members equity
    
    
    239,409
    
    
    
    231,135Total liabilities and equity
    
    $
    669,131
    
    
    $
    651,936Operating Partnerships net investment in unconsolidated partnerships
    
    $
    58,565
    
    
    $
    56,909
  Three Months Ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Total revenues
    
    $
    9,967
    
    
    $
    7,542
    
    
    $
    26,981
    
    
    $
    22,870Rental operations expense
    
    
    4,016
    
    
    
    6,424
    
    
    
    10,674
    
    
    
    13,335Real estate taxes
    
    
    1,634
    
    
    
    1,146
    
    
    
    4,807
    
    
    
    3,353Depreciation and amortization
    
    
    4,166
    
    
    
    3,305
    
    
    
    10,931
    
    
    
    9,913Interest expense, net of interest income
    
    
    2,997
    
    
    
    2,500
    
    
    
    8,011
    
    
    
    7,112Total expenses
    
    
    12,813
    
    
    
    13,375
    
    
    
    34,423
    
    
    
    33,713Net loss
    
    $
    (2,846
    )
    
    $
    (5,833
    )
    
    $
    (7,442
    )
    
    $
    (10,843
    )Operating Partnerships equity in net loss of unconsolidated partnerships
    
    $
    (308
    )
    
    $
    (1,118
    )
    
    $
    (686
    )
    
    $
    (1,884
    )
  26




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##### Table of Contents



8. Derivatives and Other Financial Instruments
    Current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fair-Value(1)Notional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 30,
    
    
    December 31,Amount
    
    
    Strike Rate
    
    
    Effective Date
    
    Expiration Date
    
    2010
    
    
    2009$
    115,000
    
    
    
    4.673
    %
    
    October 1, 2007
    
    August 1, 2011
    
    $
    (4,174
    )
    
    $
    (6,530
    )35,000
    
    
    
    4.700
    %
    
    October 10, 2007
    
    August 1, 2011
    
    
    (1,279
    )
    
    
    (2,004
    )Interest rate swaps
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,453
    )
    
    
    (8,534
    )Interest rate swap(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,017
    )Other(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    119Total derivative instruments
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (5,308
    )
    
    $
    (12,432
    )
 
 (1)
    
    Fair-value of derivative instruments does not include any related accrued interest payable,
which is included in accrued expenses on the accompanying consolidated balance sheets.(2)
    
    The interest rate swap, with notional amount of $250.0 million, expired on June 1, 2010.(3)
    
    A stock purchase warrant was received in connection with an early lease termination in
September 2009 and was recorded as a derivative instrument with an initial fair-value of
approximately $199,000 in other assets in the accompanying consolidated balance sheets.   27




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28




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of gain recognized in
other comprehensive income (effective
portion):Cash flow hedgesInterest rate swaps
    
    $
    1,479
    
    
    $
    1,978
    
    
    $
    7,303
    
    
    $
    7,332Forward starting swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,783Total cash flow hedges
    
    
    1,479
    
    
    
    1,978
    
    
    
    7,303
    
    
    
    19,115Ineffective interest rate swaps(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,321Total interest rate swaps
    
    $
    1,479
    
    
    $
    1,978
    
    
    $
    7,303
    
    
    $
    23,436
 
 (1)
    
    For the nine months ended September 30, 2009, the amount represents the reclassification of
unrealized losses from accumulated other comprehensive income to earnings relating to a
previously effective forward starting swap as a result of the reduction in the notional amount
of forecasted debt.  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of loss
reclassified from other
comprehensive income to income
(effective portion):Cash flow hedgesInterest rate swaps(1)
    
    $
    (1,676
    )
    
    $
    (4,121
    )
    
    $
    (8,647
    )
    
    $
    (12,046
    )Forward starting swaps(2)
    
    
    (1,776
    )
    
    
    (1,797
    )
    
    
    (5,343
    )
    
    
    (1,797
    )Total interest rate swaps
    
    $
    (3,452
    )
    
    $
    (5,918
    )
    
    $
    (13,990
    )
    
    $
    (13,843
    )
 
 (1)
    
    Amount represents payments made to swap counterparties for the effective portion of interest
rate swaps that were recognized as an increase to interest expense for the periods presented
(the amount was recorded as an increase and corresponding decrease to accumulated other
comprehensive loss in the same accounting period).(2)
    
    Amount represents reclassifications of deferred interest costs from accumulated other
comprehensive loss to interest expense related to the Operating Partnerships previously
settled forward starting swaps.  29




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of (loss)/gain recognized in income
(ineffective portion and amount excluded
from effectiveness testing):Cash flow hedges Interest rate swapsInterest rate swaps
    
    $
    (301
    )
    
    $
    (14
    )
    
    $
    (245
    )
    
    $
    (25
    )Forward starting swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477
    )Total cash flow hedges
    
    
    (301
    )
    
    
    (14
    )
    
    
    (245
    )
    
    
    (502
    )Ineffective interest rate swaps
    
    
    
    
    
    
    
    
    
    
    (416
    )
    
    
    791Total interest rate swaps
    
    
    (301
    )
    
    
    (14
    )
    
    
    (661
    )
    
    
    289Other derivative instruments
    
    
    14
    
    
    
    
    
    
    
    27
    
    
    
    Total (loss)/gain on derivative instruments
    
    $
    (287
    )
    
    $
    (14
    )
    
    $
    (634
    )
    
    $
    289
  30




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##### Table of Contents



9. Property Acquisitions
  Acquisition

    
    Investments
    
    
    Above
    
    
    In-Place
    
    
    Management
    
    
    Below
    
    
    Total CashProperty
    
    Date

    
    in Real Estate(1)
    
    
    Market Lease
    
    
    Lease
    
    
    Agreement
    
    
    Market Lease
    
    
    Consideration55 / 65 West Watkins Mill Road
    
    February 23, 2010
    
    $
    12,463
    
    
    $
    
    
    
    $
    1,677
    
    
    $
    370
    
    
    $
    (125
    )
    
    $
    14,385Gazelle Court(2)
    
    March 30, 2010
    
    
    11,623
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,623Medical Center Drive
    
    May 3, 2010
    
    
    53,181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (181
    )
    
    
    53,00050 West Watkins Mill Road
    
    May 7, 2010
    
    
    13,061
    
    
    
    
    
    
    
    1,175
    
    
    
    
    
    
    
    (36
    )
    
    
    14,2004775/4785 Executive Drive
    
    July 15, 2010
    
    
    27,280
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,280Paramount Parkway
    
    July 20, 2010
    
    
    15,615
    
    
    
    
    
    
    
    1,639
    
    
    
    295
    
    
    
    
    
    
    
    17,54911388 Sorrento Valley Road
    
    September 10, 2010
    
    
    10,879
    
    
    
    168
    
    
    
    1,264
    
    
    
    109
    
    
    
    
    
    
    
    12,4204570 Executive Drive
    
    September 17, 2010
    
    
    56,378
    
    
    
    1,504
    
    
    
    5,367
    
    
    
    251
    
    
    
    
    
    
    
    63,50010240 Science Center Drive
    
    September 23, 2010
    
    
    16,203
    
    
    
    
    
    
    
    1,505
    
    
    
    42
    
    
    
    
    
    
    
    17,750Total
    
    
    
    
    
    $
    216,683
    
    
    $
    1,672
    
    
    $
    12,627
    
    
    $
    1,067
    
    
    $
    (342
    )
    
    $
    231,707Intangible amortization life (in
months)
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    56
    
    
    
    63
    
    
    
    23
 
 (1)
    
    Prior to January 1, 2009, the Operating Partnership capitalized transaction costs related to
property acquisitions as an addition to the investment in real estate. However, in accordance
with revisions to the accounting guidance effective on January 1, 2009, the Operating
Partnership has recorded the costs incurred related to the acquisitions noted above as a
charge to earnings in the period in which they were incurred.(2)
    
    On March 30, 2010, the Operating Partnership acquired a land parcel for the purchase price of
$10.1 million (in addition to reimbursing the selling party for pre-construction costs
incurred through the date of sale on the project). Concurrent with the purchase, the Operating
Partnership executed a lease with an existing tenant for a laboratory/office building totaling
176,000 square feet to be constructed on the site by the Operating Partnership. The lease will
commence after the Operating Partnership substantially completes construction of the building.
It is estimated that the building will be completed in January 2012. As the Operating
Partnership determined that the purchase constituted an asset acquisition rather than the
acquisition of a business, transaction costs associated with the transaction were capitalized
as an increase to the investment in real estate.     31




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##### Table of Contents



10. Fair-Value of Financial Instruments
     September 30, 2010
    
    
    December 31, 2009Fair-Value
    
    
    Carrying Value
    
    
    Fair-Value
    
    
    Carrying ValueMortgage notes payable(1)
    
    $
    732,997
    
    
    $
    662,522
    
    
    $
    671,614
    
    
    $
    669,454Unsecured line of credit
    
    
    13,850
    
    
    
    14,050
    
    
    
    380,699
    
    
    
    397,666Notes due 2026(2)
    
    
    23,244
    
    
    
    19,432
    
    
    
    46,150
    
    
    
    44,685Notes due 2030
    
    
    206,663
    
    
    
    180,000
    
    
    
    
    
    
    
    Notes due 2020(3)
    
    
    273,818
    
    
    
    247,523
    
    
    
    
    
    
    
    Secured term loan
    
    
    
    
    
    
    
    
    
    
    233,389
    
    
    
    250,000Derivative instruments(4)
    
    
    (5,308
    )
    
    
    (5,308
    )
    
    
    (12,432
    )
    
    
    (12,432
    )Investments(5)
    
    
    
    
    
    
    
    
    
    
    898
    
    
    
    898
 
 (1)
    
    Carrying value includes $5.6 million and $7.0 million of debt premium as of September 30,
2010 and December 31, 2009, respectively.(2)
    
    Carrying value includes $368,000 and $1.5 million of debt discount as of September 30, 2010
and December 31, 2009, respectively.(3)
    
    Carrying value includes $2.5 million of debt discount as of September 30, 2010.(4)
    
    The Operating Partnerships derivative instruments are reflected in other assets and
derivative instruments (liability account) on the accompanying consolidated balance sheets
based on their respective balances (see Note 8).(5)
    
    The Operating Partnerships investments are included in other assets on the accompanying
consolidated balance sheets (see Investments section in Note 2). 11. New Accounting Standards
   32




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    Overview
    33




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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
    
    
    47
    
    
    
    5,951,604
    
    
    
    98.7
    %
    
    
    4
    
    
    
    257,268
    
    
    
    100.0
    %
    
    
    51
    
    
    
    6,208,872
    
    
    
    98.8
    %Lease up
    
    
    21
    
    
    
    2,754,444
    
    
    
    66.1
    %
    
    
    3
    
    
    
    697,290
    
    
    
    34,9
    %
    
    
    24
    
    
    
    3,451,734
    
    
    
    59.8
    %Current operating
portfolio
    
    
    68
    
    
    
    8,706,048
    
    
    
    88.4
    %
    
    
    7
    
    
    
    954,558
    
    
    
    52.4
    %
    
    
    75
    
    
    
    9,660,606
    
    
    
    84.8
    %Long-term lease up
    
    
    1
    
    
    
    1,389,517
    
    
    
    16.2
    %
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    1
    
    
    
    1,389,517
    
    
    
    16.2
    %Total operating portfolio
    
    
    69
    
    
    
    10,095,565
    
    
    
    78.5
    %
    
    
    7
    
    
    
    954,558
    
    
    
    52.4
    %
    
    
    76
    
    
    
    11,050,123
    
    
    
    76.2
    %Development
    
    
    1
    
    
    
    176,000
    
    
    
    100.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    176,000
    
    
    
    100.0
    %Redevelopment
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    n/aPre-development
    
    
    1
    
    
    
    152,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    1
    
    
    
    152,145
    
    
    
    Total property portfolio
    
    
    71
    
    
    
    10,423,710
    
    
    
    77.7
    %
    
    
    7
    
    
    
    954,558
    
    
    
    52.4
    %
    
    
    78
    
    
    
    11,378,268
    
    
    
    75.6
    %Development potential
    
    
    n/a
    
    
    
    1,680,000
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    1,680,000
    
    
    
    n/aTotal portfolio
    
    
    71
    
    
    
    12,103,710
    
    
    
    n/a
    
    
    
    7
    
    
    
    954,558
    
    
    
    n/a
    
    
    
    78
    
    
    
    13,058,268
    
    
    
    n/a
 Factors Which May Influence Future Operations
      34




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##### Table of Contents



Critical Accounting Policies
  New Accounting Standards
  Results of Operations
 Comparison of the Three Months Ended September 30, 2010 to the Three Months Ended September 30,
2009
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties
    
    
    Corporate2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Rental
    
    $
    64,108
    
    
    $
    65,111
    
    
    $
    6,364
    
    
    $
    3,359
    
    
    $
    2,497
    
    
    $
    
    
    
    $
    2
    
    
    $
    2Tenant recoveries
    
    
    20,670
    
    
    
    18,418
    
    
    
    1,287
    
    
    
    651
    
    
    
    538
    
    
    
    
    
    
    
    228
    
    
    
    171Other income
    
    
    33
    
    
    
    4,467
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    784Total revenues
    
    $
    84,811
    
    
    $
    87,996
    
    
    $
    7,651
    
    
    $
    4,010
    
    
    $
    3,035
    
    
    $
    
    
    
    $
    236
    
    
    $
    957
 Rental Revenues
 Tenant Recoveries
   35




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##### Table of Contents



Other Income
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties
    
    
    Corporate2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Rental operations
    
    $
    15,577
    
    
    $
    15,032
    
    
    $
    2,550
    
    
    $
    2,596
    
    
    $
    324
    
    
    $
    
    
    
    $
    1,547
    
    
    $
    1,098Real estate taxes
    
    
    7,927
    
    
    
    7,433
    
    
    
    1,182
    
    
    
    800
    
    
    
    299
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and
amortization
    
    
    22,020
    
    
    
    28,955
    
    
    
    4,627
    
    
    
    1,998
    
    
    
    1,127
    
    
    
    
    
    
    
    
    
    
    
    Total expenses
    
    $
    45,524
    
    
    $
    51,420
    
    
    $
    8,359
    
    
    $
    5,394
    
    
    $
    1,750
    
    
    $
    
    
    
    $
    1,547
    
    
    $
    1,098
 Rental Operations Expense
  Real Estate Tax Expense
 Depreciation and Amortization Expense
 General and Administrative Expenses
  36




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##### Table of Contents



Acquisition Related Expenses
 Equity in Net Loss of Unconsolidated Partnerships
 Interest Expense
  (Loss)/Gain on Derivative Instruments
  (Loss)/Gain on Extinguishment of Debt
  37




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##### Table of Contents



Comparison of the Nine Months Ended September 30, 2010 to the Nine Months Ended September 30, 2009
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties
    
    
    Corporate2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Rental
    
    $
    157,658
    
    
    $
    162,154
    
    
    $
    54,321
    
    
    $
    40,455
    
    
    $
    3,966
    
    
    $
    
    
    
    $
    5
    
    
    $
    (1
    )Tenant recoveries
    
    
    41,211
    
    
    
    41,899
    
    
    
    21,197
    
    
    
    15,016
    
    
    
    815
    
    
    
    
    
    
    
    600
    
    
    
    595Other income
    
    
    169
    
    
    
    11,044
    
    
    
    20
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    1,439
    
    
    
    1,825Total revenues
    
    $
    199,038
    
    
    $
    215,097
    
    
    $
    75,538
    
    
    $
    55,478
    
    
    $
    4,781
    
    
    $
    
    
    
    $
    2,044
    
    
    $
    2,419
 Rental Revenues
 Tenant Recoveries
  Other Income
  38




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##### Table of Contents



Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties
    
    
    Corporate2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Rental operations
    
    $
    32,031
    
    
    $
    37,680
    
    
    $
    18,600
    
    
    $
    14,156
    
    
    $
    402
    
    
    $
    
    
    
    $
    3,893
    
    
    $
    3,703Real estate taxes
    
    
    17,343
    
    
    
    16,150
    
    
    
    8,994
    
    
    
    6,929
    
    
    
    495
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and
amortization
    
    
    51,835
    
    
    
    62,886
    
    
    
    29,503
    
    
    
    19,881
    
    
    
    1,821
    
    
    
    
    
    
    
    
    
    
    
    Total expenses
    
    $
    101,209
    
    
    $
    116,716
    
    
    $
    57,097
    
    
    $
    40,966
    
    
    $
    2,718
    
    
    $
    
    
    
    $
    3,893
    
    
    $
    3,703
 Rental Operations Expense
  Real Estate Tax Expense
 Depreciation and Amortization Expense
 General and Administrative Expenses
 Acquisition Related Expenses
  39




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##### Table of Contents



Equity in Net Loss of Unconsolidated Partnerships
 Interest Expense
  (Loss)/Gain on Derivative Instruments
  (Loss)/Gain on Extinguishment of Debt
  40




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##### Table of Contents



Cash Flows
 Comparison of the Nine Months Ended September 30, 2010 to the Nine Months Ended September 30, 2009
 2010
    
    
    2009
    
    
    Change(In thousands)Net cash provided by operating activities
    
    $
    102,914
    
    
    $
    114,671
    
    
    $
    (11,757
    )Net cash used in investing activities
    
    
    (319,532
    )
    
    
    (114,221
    )
    
    
    (205,311
    )Net cash provided by financing activities
    
    
    217,383
    
    
    
    8,407
    
    
    
    208,976Ending cash and cash equivalents
    
    
    20,687
    
    
    
    30,279
    
    
    
    (9,592
    )
    Funds from Operations
   41




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income available to the unitholders
    
    $
    4,954
    
    
    $
    4,184
    
    
    $
    13,690
    
    
    $
    42,784Adjustments:Interest expense on Notes due 2030 (1)
    
    
    1,681
    
    
    
    
    
    
    
    4,875
    
    
    
    Depreciation and amortization  unconsolidated partnerships
    
    
    835
    
    
    
    662
    
    
    
    2,192
    
    
    
    1,986Depreciation and amortization  consolidated entities
    
    
    27,774
    
    
    
    30,953
    
    
    
    83,159
    
    
    
    82,767Depreciation and amortization  allocable to
noncontrolling interest of consolidated joint ventures
    
    
    (24
    )
    
    
    (20
    )
    
    
    (67
    )
    
    
    (58
    )Funds from operations available to OP unitholders
    
    $
    35,220
    
    
    $
    35,779
    
    
    $
    103,849
    
    
    $
    127,479Funds from operations per unit  diluted
    
    $
    0.28
    
    
    $
    0.35
    
    
    $
    .86
    
    
    $
    1.37Weighted-average OP units outstanding  diluted(1)(2)
    
    
    127,053,959
    
    
    
    101,289,458
    
    
    
    121,191,848
    
    
    
    92,863,088
 
 (1)
    
    Reflects interest expense adjustment of the Notes due 2030 based on the if converted
method. See Item 8.01 of the Form 8-K filed by our Parent Company with the Securities and
Exchange Commission on September 22, 2010 for more information.(2)
    
    The three and nine months ended September 30, 2010 each include 9,914,076 OP units
potentially issuable pursuant to the exchange feature of the Notes due 2030 based on the if
converted method, and 1,371,515 and 1,395,354 unvested OP units, respectively, which are
considered anti-dilutive for purposes of calculating diluted earnings per unit. Liquidity and Capital Resources
   2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalFixed-rate mortgages
    
    $
    1,890
    
    
    $
    29,914
    
    
    $
    45,414
    
    
    $
    25,941
    
    
    $
    353,091
    
    
    $
    200,720
    
    
    $
    656,970Unsecured line of credit
    
    
    
    
    
    
    14,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,050Notes due 2026
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,800
    
    
    
    19,800Notes due 2030
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180,000
    
    
    
    180,000Notes due 2020
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    
    250,000Total consolidated indebtedness
    
    
    1,890
    
    
    
    43,964
    
    
    
    45,414
    
    
    
    25,941
    
    
    
    353,091
    
    
    
    650,520
    
    
    
    1,120,820Secured acquisition and interim loan facility
    
    
    
    
    
    
    40,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,650Secured construction loan
    
    
    
    
    
    
    40,070
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,070Total unconsolidated indebtedness
    
    
    
    
    
    
    80,720
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,720Total indebtedness
    
    $
    1,890
    
    
    $
    124,684
    
    
    $
    45,414
    
    
    $
    25,941
    
    
    $
    353,091
    
    
    $
    650,520
    
    
    $
    1,201,540
   42




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43




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##### Table of Contents



AggregatePrincipalUnits at
    
    
    Amount orSeptember 30,
    
    
    Dollar Value
    
    
    Percent of Total2010
    
    
    Equivalent
    
    
    Capitalization(In thousands)Debt:Mortgage notes payable (1)
    
    
    
    
    
    $
    656,970
    
    
    
    17.5
    %Notes due 2026, net (2)
    
    
    
    
    
    
    19,800
    
    
    
    0.5
    %Notes due 2030
    
    
    
    
    
    
    180,000
    
    
    
    4.8
    %Notes due 2020, net (3)
    
    
    
    
    
    
    250,000
    
    
    
    6.7
    %Unsecured line of credit
    
    
    
    
    
    
    14,050
    
    
    
    0.4
    %Total debt
    
    
    
    
    
    
    1,120,820
    
    
    
    29.9
    %Equity:OP units outstanding (4)
    
    
    133,832,259
    
    
    
    2,398,274
    
    
    
    64.0
    %7.375% Series A Preferred shares outstanding (5)
    
    
    9,200,000
    
    
    
    230,000
    
    
    
    6.1
    %Total equity
    
    
    
    
    
    
    2,628,274
    
    
    
    70.1
    %Total capitalization
    
    
    
    
    
    $
    3,749,094
    
    
    
    100.0
    %
 
 (1)
    
    Amount excludes debt premiums of $5.6 million recorded upon the assumption of the outstanding
indebtedness in connection with our purchase of the corresponding properties.(2)
    
    Amount excludes a debt discount of $368,000.(3)
    
    Amount excludes a debt discount of $2.5 million.(4)
    
    Based on the market closing price of our Parent Companys common stock of $17.92 per share on
the last trading day of the quarter (September 30, 2010).(5)
    
    Based on the liquidation preference of $25.00 per share for our 7.375% Series A preferred
stock.   44




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##### Table of Contents



Off-Balance Sheet Arrangements
      Principal Amount (1)Ownership
    
    
    
    
    
    
    September 30,
    
    
    December 31,Name
    
    Percentage
    
    
    Interest Rate (2)
    
    
    2010
    
    
    2009
    
    
    Maturity DatePREI I and PREI II(3)
    
    
    20
    %
    
    
    3.76
    %
    
    $
    40,650
    
    
    $
    40,650
    
    
    February 10, 2011PREI I(4)
    
    
    20
    %
    
    
    1.76
    %
    
    
    40,070
    
    
    
    38,415
    
    
    February 13, 2011Total
    
    
    
    
    
    
    
    
    
    $
    80,720
    
    
    $
    79,065
 (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, 2010, including the effect of interest rate swaps.  45




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##### Table of Contents



(3)
    
    Amount at September 30, 2010 represents our proportionate share of the total draws
outstanding under a secured acquisition and
interim loan facility, which bore interest at a LIBOR-indexed variable rate. A portion of 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 9 of the Notes to Consolidated Financial Statements included elsewhere herein
for more information). On February 11, 2009, our PREI joint ventures jointly refinanced the
outstanding balance of the secured acquisition and interim loan facility, or approximately $364.1
million, with the proceeds of a new loan totaling $203.3 million and members capital
contributions funding the balance due. The new loan bears interest at a rate equal to, at the
option of our PREI joint ventures, either (a) reserve adjusted LIBOR plus 350 basis points or (b)
the higher of (i) the prime rate then in effect, (ii) the federal funds rate then in effect plus
50 basis points or (iii) one-month LIBOR plus 450 basis points, and requires interest only
monthly payments until the maturity date, February 10, 2011.(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 13, 2008 were used in
part to repay a portion of the secured acquisition and interim loan facility). The remaining
balance is being utilized to fund construction costs at the property. Cash Distribution Policy
 i.e.
   Distribution
    
    
    DistributionQuarter Ended
    
    Date Declared
    
    Date Paid
    
    per OP Unit
    
    
    per Preferred UnitMarch 31, 2008
    
    March 14, 2008
    
    April 15, 2008
    
    $
    0.3350
    
    
    $
    0.46094June 30, 2008
    
    June 16, 2008
    
    July 15, 2008
    
    
    0.3350
    
    
    
    0.46094September 30, 2008
    
    September 15, 2008
    
    October 15, 2008
    
    
    0.3350
    
    
    
    0.46094December 31, 2008
    
    December 15, 2008
    
    January 15, 2009
    
    
    0.3350
    
    
    
    0.46094March 31, 2009
    
    March 16, 2009
    
    April 15, 2009
    
    
    0.3350
    
    
    
    0.46094June 30, 2009
    
    June 15, 2009
    
    July 15, 2009
    
    
    0.1100
    
    
    
    0.46094September 30, 2009
    
    September 15, 2009
    
    October 15, 2009
    
    
    0.1100
    
    
    
    0.46094December 31, 2009
    
    December 15, 2009
    
    January 15, 2010
    
    
    0.1400
    
    
    
    0.46094March 31, 2010
    
    March 15, 2010
    
    April 15, 2010
    
    
    0.1400
    
    
    
    0.46094June 30, 2010
    
    June 15, 2010
    
    July 15, 2010
    
    
    0.1500
    
    
    
    0.46094September 30, 2010
    
    September 15, 2010
    
    October 15, 2010
    
    
    0.1700
    
    
    
    0.46094
  46




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Inflation
   
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   Effective InterestPercent of
    
    
    Rate atPrincipal Balance(1)
    
    
    Total Debt
    
    
    September 30, 2010Fixed interest rate (2)
    
    $
    1,106,770
    
    
    
    98.7
    %
    
    
    6.19
    %Variable interest rate (3)
    
    
    14,050
    
    
    
    1.3
    %
    
    
    1.36
    %Total/effective interest rate
    
    $
    1,120,820
    
    
    
    100.0
    %
    
    
    6.13
    %
 (1)
    
    Principal balance includes only consolidated indebtedness.(2)
    
    Includes 12 mortgage notes payable secured by certain of our properties (including $5.6
million of unamortized premium), our Notes due 2026 (including $368,000 of unamortized debt
discount), our Notes due 2030, and our Notes due 2020 (including $2.5 million of unamortized
debt discount).(3)
    
    Includes our unsecured line of credit, which bears interest based on a LIBOR-indexed variable
interest rate, plus a credit spread. The stated effective rate for the variable interest debt
excludes the impact of any interest rate swap agreements. We have entered into two interest
rate swaps, which are intended to have the effect of initially fixing the interest rates on
$150.0 million of our variable rate debt at weighted average interest rates of approximately
4.7% (excluding applicable credit spreads for the underlying debt).   47




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##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
    
 PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
   48




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##### Table of Contents



ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    RESERVED
 ITEM 5.
    
    OTHER INFORMATION
 
   49




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
 ExhibitNumber
    
    Description of Exhibit10.1
    
    
    BioMed Realty Trust, Inc. Severance Plan, effective August 25, 2010.(1)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 31, 2010.  50




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##### Table of Contents



SIGNATURES
  BioMed Realty, L.P.By:
    
    BioMed Realty Trust, Inc.Its general partner/s/ ALAN D. GOLDAlan D. GoldChairman of the Board and Chief Executive Officer(Principal Executive Officer)/s/ GREG N. LUBUSHKINGreg N. LubushkinChief Financial Officer(Principal Financial Officer)
   51




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit10.1
    
    
    BioMed Realty Trust, Inc. Severance Plan, effective August 25, 2010.(1)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 31, 2010.  52