Edgar Filing: BioMed Realty Trust Inc

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller

reporting company)

BMR-2013.3.31-10Q

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 March 31, 2013

Commission File Number: 1-32261 (BioMed Realty Trust, Inc.)

000-54089 (BioMed Realty, L.P.)

BIOMED REALTY TRUST, INC.

BIOMED REALTY, L.P.

(Exact name of registrant as specified in its charter)



Maryland	20-1142292 (BioMed Realty Trust, Inc.)
(State or other jurisdiction of	20-1320636 (BioMed Realty, L.P.)
incorporation or organization)	(I.R.S. Employer Identification No.)

17190 Bernardo Center Drive
San Diego, California	92128
(Address of Principal Executive Offices)	(Zip Code)

(858) 485-9840

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



BioMed Realty Trust, Inc.	Yes þ No o
BioMed Realty, L.P.	Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



BioMed Realty Trust, Inc.	Yes þ No o
BioMed Realty, L.P.	Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

BioMed Realty Trust, Inc.:

BioMed Realty, L.P.:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



BioMed Realty Trust, Inc.	Yes o No þ
BioMed Realty, L.P.	Yes o No þ

The number of outstanding shares of BioMed Realty Trust, Inc.’s common stock, par value $0.01 per share, as of May 2, 2013 was 186,311,657.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2013 of BioMed Realty Trust, Inc., a Maryland corporation, and BioMed Realty, L.P., a Maryland limited partnership of which BioMed Realty Trust, Inc. is the parent company and general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our” or “our company” refer to BioMed Realty Trust, Inc. together with its consolidated subsidiaries, including BioMed Realty, L.P. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “our operating partnership” or “the operating partnership” refer to BioMed Realty, L.P. together with its consolidated subsidiaries.

BioMed Realty Trust, Inc. operates as a real estate investment trust, or REIT, and is the general partner of BioMed Realty, L.P. As of March 31, 2013, BioMed Realty Trust, Inc. owned an approximate 98.3% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining 1.7% partnership interest (including long term incentive plan units) in BioMed Realty, L.P. As the sole general partner of BioMed Realty, L.P., BioMed Realty Trust, Inc. has the full, exclusive and complete responsibility for the operating partnership’s day-to-day management and control.

There are a few differences between our company and our operating partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between our company and our operating partnership in the context of how BioMed Realty Trust, Inc. and BioMed Realty, L.P. operate as an interrelated consolidated company. BioMed Realty Trust, Inc. is a REIT, whose only material asset is its ownership of partnership interests of BioMed Realty, L.P. As a result, BioMed Realty Trust, Inc. does not conduct business itself, other than acting as the sole general partner of BioMed Realty, L.P., issuing public equity from time to time and guaranteeing certain debt of BioMed Realty, L.P. BioMed Realty Trust, Inc. itself does not hold any indebtedness but guarantees some of the secured and unsecured debt of BioMed Realty, L.P. BioMed Realty, L.P. holds substantially all the assets of the company and holds the ownership interests in the company’s joint ventures. BioMed Realty, L.P. conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by BioMed Realty Trust, Inc., which are generally contributed to BioMed Realty, L.P. in exchange for partnership units, BioMed Realty, L.P. generates the capital required by the company’s business through BioMed Realty, L.P.’s operations, by BioMed Realty, L.P.’s direct or indirect incurrence of indebtedness or through the issuance of partnership units.

Noncontrolling interests and stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of BioMed Realty Trust, Inc. and those of BioMed Realty, L.P. The operating partnership and long term incentive plan units in BioMed Realty, L.P. that are not owned by BioMed Realty Trust, Inc. are accounted for as partners’ capital in BioMed Realty, L.P.’s financial statements and as noncontrolling interests in BioMed Realty Trust, Inc.’s financial statements. The noncontrolling interests in BioMed Realty, L.P.’s financial statements include the interests of joint venture partners. The noncontrolling interests in BioMed Realty Trust, Inc.’s financial statements include the same noncontrolling interests at the BioMed Realty, L.P. level as well as the limited partnership unitholders of BioMed Realty, L.P., not including BioMed Realty Trust, Inc. The differences between stockholders’ equity and partners’ capital result from the differences in the equity issued at the BioMed Realty Trust, Inc. and BioMed Realty, L.P. levels.

We believe combining the quarterly reports on Form 10-Q of BioMed Realty Trust, Inc. and BioMed Realty, L.P. into this single report:


•	better reflects how management and the analyst community view the business as a single operating unit,


•	enhances investor understanding of our company by enabling them to view the business as a whole and in the same manner as management,


•	is more efficient for our company and results in savings in time, effort and expense, and


•	is more efficient for investors by reducing duplicative disclosure and providing a single document for their review.

To help investors understand the significant differences between our company and our operating partnership, this report presents the following separate sections for each of BioMed Realty Trust, Inc. and BioMed Realty, L.P.:


•	consolidated financial statements,


•	the following notes to the consolidated financial statements:


•	Equity / Partners’ Capital,


•	Debt, and

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•	Earnings Per Share / Unit,


•	Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and


•	Unregistered Sales of Equity Securities and Use of Proceeds.

This report also includes separate Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of BioMed Realty Trust, Inc. and BioMed Realty, L.P. in order to establish that the Chief Executive Officer and the Chief Financial Officer of BioMed Realty Trust, Inc. have made the requisite certifications and BioMed Realty Trust, Inc. and BioMed Realty, L.P. are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

BIOMED REALTY TRUST, INC. AND BIOMED REALTY, L.P.

FORM 10-Q - QUARTERLY REPORT

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2013

TABLE OF CONTENTS



		Page
PART I - FINANCIAL INFORMATION

Item 1 Consolidated Financial Statements

Consolidated Financial Statements of BioMed Realty Trust, Inc.:

	Consolidated Balance Sheets as of March 31, 2013 (Unaudited) and December 31, 2012	7

	Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012 (Unaudited)	8

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and 2012 (Unaudited)	9

	Consolidated Statement of Equity for the three months ended March 31, 2013 (Unaudited)	10

	Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012 (Unaudited)	11

Consolidated Financial Statements of BioMed Realty, L.P.:

	Consolidated Balance Sheets as of March 31, 2013 (Unaudited) and December 31, 2012	13

	Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012 (Unaudited)	14

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and 2012 (Unaudited)	15

	Consolidated Statement of Capital for the three months ended March 31, 2013 (Unaudited)	16

	Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012 (Unaudited)	17

Notes to Consolidated Financial Statements of BioMed Realty Trust, Inc. and BioMed Realty, L.P.		19

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations		33

Item 3 Quantitative and Qualitative Disclosures About Market Risk		49

Item 4 Controls and Procedures		52

PART II - OTHER INFORMATION

Item 1 Legal Proceedings		53

Item 1A Risk Factors		53

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		53

Item 3 Defaults Upon Senior Securities		54

Item 4 Mine Safety Disclosures		54




Item 5 Other Information		54

Item 6 Exhibits		55

SIGNATURES		56

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

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BIOMED REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



	March 31, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments in real estate, net	$	4,424,867		$	4,319,716
Investments in unconsolidated partnerships	32,118			32,367
Cash and cash equivalents	18,552			19,976
Accounts receivable, net	35,888			4,507
Accrued straight-line rents, net	155,591			152,096
Deferred leasing costs, net	167,648			172,363
Other assets	164,968			133,454
Total assets	$	4,999,632		$	4,834,479
LIABILITIES AND EQUITY
Mortgage notes payable, net	$	569,390		$	571,652
Exchangeable senior notes	180,000			180,000
Unsecured senior notes, net	894,397			894,177
Unsecured senior term loan	395,486			405,456
Unsecured line of credit	215,000			118,000
Accounts payable, accrued expenses and other liabilities	199,731			180,653
Total liabilities	2,454,004			2,349,938
Equity:
Stockholders’ equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized: 7.375% Series A cumulative redeemable preferred stock, no shares issued and outstanding as of March 31, 2013; and 7,920,000 shares issued and outstanding as of December 31, 2012, $198,000 liquidation preference ($25.00 per share)	—			191,469
Common stock, $.01 par value, 250,000,000 shares authorized, 169,054,707 shares issued and outstanding at March 31, 2013; and 200,000,000 shares authorized, 154,327,818 shares issued and outstanding at December 31, 2012	1,691			1,543
Additional paid-in capital	3,065,589			2,781,849
Accumulated other comprehensive loss, net	(55,480		)	(54,725		)
Dividends in excess of earnings	(474,619		)	(443,280		)
Total stockholders’ equity	2,537,181			2,476,856
Noncontrolling interests	8,447			7,685
Total equity	2,545,628			2,484,541
Total liabilities and equity	$	4,999,632		$	4,834,479

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data)

(Unaudited)



	For the Three Months Ended
	March 31,
	2013			2012
Revenues:
Rental	$	102,956		$	91,475
Tenant recoveries	32,637			28,453
Other revenue	24,857			84
Total revenues	160,450			120,012
Expenses:
Rental operations	40,553			36,729
Depreciation and amortization	60,764			44,934
General and administrative	10,028			8,614
Acquisition-related expenses	2,236			633
Total expenses	113,581			90,910
Income from operations	46,869			29,102
Equity in net loss of unconsolidated partnerships	(319		)	(355		)
Interest expense, net	(25,902		)	(22,219		)
Other (expense) / income	(3,190		)	174
Income from continuing operations	17,458			6,702
Loss from discontinued operations	—			(4,420		)
Net income	17,458			2,282
Net (income) / loss attributable to noncontrolling interests	(146		)	30
Net income attributable to the Company	17,312			2,312
Preferred stock dividends	(2,393		)	(3,651		)
Cost on redemption of preferred stock	(6,531		)	—
Net income / (loss) available to common stockholders	$	8,388		$	(1,339	)
Income from continuing operations per share available to common stockholders:
Basic and diluted earnings per share	$	0.05		$	0.02
Loss from discontinued operations per share available to common stockholders:
Basic and diluted earnings per share	$	—		$	(0.03	)
Net income / (loss) per share available to common stockholders:
Basic and diluted earnings per share	$	0.05		$	(0.01	)
Weighted-average common shares outstanding:
Basic	159,692,470			152,659,258
Diluted	162,713,677			155,625,204

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2013			2012
Net income	$	17,458		$	2,282
Other comprehensive income:
Foreign currency translation adjustments	(2,182		)	—
Unrealized loss from derivative instruments, net	(137		)	(225		)
Amortization of deferred interest costs	1,718			1,743
Reclassification on sale of equity securities	—			28
Unrealized loss on equity securities	(168		)	(265		)
Total other comprehensive (loss) / income	(769		)	1,281
Comprehensive income	16,689			3,563
Comprehensive (income) / loss attributable to noncontrolling interests	(132		)	5
Comprehensive income attributable to the Company	$	16,557		$	3,568

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share data)

(Unaudited)



	Series A Preferred Stock			Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss, net			Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
	Series A Preferred Stock			Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss, net			Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2012	$	191,469		154,327,818	$	1,543	$	2,781,849		$	(54,725	)	$	(443,280	)	$	2,476,856		$	7,685		$	2,484,541
Net proceeds from sale of common stock	—			14,605,000	147		286,845			—			—			286,992			—			286,992
Net issuances of unvested restricted common stock	—			108,493	1		(4,800		)	—			—			(4,799		)	—			(4,799		)
Conversion of OP units to common stock	—			13,396	—		(58		)	—			—			(58		)	58			—
Redemption of Series A Preferred Stock	(191,469		)	—	—		—			—			(6,531		)	(198,000		)	—			(198,000		)
Vesting of share-based awards	—			—	—		3,011			—			—			3,011			—			3,011
Reallocation of equity to noncontrolling interests	—			—	—		(1,258		)	—			—			(1,258		)	1,258			—
Common stock dividends	—			—	—		—			—			(39,727		)	(39,727		)	—			(39,727		)
OP unit distributions	—			—	—		—			—			—			—			(686		)	(686		)
Net income	—			—	—		—			—			17,312			17,312			146			17,458
Preferred stock dividends	—			—	—		—			—			(2,393		)	(2,393		)	—			(2,393		)
Foreign currency translation adjustment	—			—	—		—			(2,145		)	—			(2,145		)	(37		)	(2,182		)
Unrealized loss on equity securities	—			—	—		—			(165		)	—			(165		)	(3		)	(168		)
Amortization of deferred interest costs	—			—	—		—			1,689			—			1,689			29			1,718
Unrealized loss on derivative instruments, net	—			—	—		—			(134		)	—			(134		)	(3		)	(137		)
Balance at March 31, 2013	$	—		169,054,707	$	1,691	$	3,065,589		$	(55,480	)	$	(474,619	)	$	2,537,181		$	8,447		$	2,545,628

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2013			2012

Operating activities:
Net income	$	17,458		$	2,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	60,764			45,026
Allowance for doubtful accounts	501			213
Non-cash revenue adjustments	5,803			3,469
Other non-cash adjustments	6,457			7,696
Compensation expense related to restricted common stock and LTIP units	3,011			2,689
Distributions representing a return on capital from unconsolidated partnerships	59			1,031
Changes in operating assets and liabilities:
Accounts receivable	(31,822		)	902
Accrued straight-line rents	(3,555		)	(4,427		)
Deferred leasing costs	(1,520		)	(2,517		)
Other assets	314			(146		)
Accounts payable, accrued expenses and other liabilities	2,823			8,376
Net cash provided by operating activities	60,293			64,594
Investing activities:
Purchases of investments in real estate and related intangible assets	(123,841		)	(113,985		)
Capital expenditures	(39,250		)	(42,070		)
Draws on construction loan receivable	(34,310		)	—
Contributions to unconsolidated partnerships, net	(336		)	(1,107		)
Purchases of debt and equity securities	(5,395		)	(1,125		)
Proceeds from the sale of equity securities	—			79
Deposits to escrow for acquisitions	—			(1,000		)
Net cash used in investing activities	(203,132		)	(159,208		)
Financing activities:
Proceeds from common stock offering	299,402			—
Payment of offering costs	(12,410		)	—
Redemption of Series A preferred stock	(198,000		)	—
Payment of deferred loan costs	—			(3,071		)
Unsecured line of credit proceeds	284,000			176,000
Unsecured line of credit payments	(187,000		)	(418,000		)
Principal payments on mortgage notes payable	(2,073		)	(28,322		)
Proceeds from unsecured senior term loan	—			400,000
Distributions to operating partnership unit and LTIP unit holders	(689		)	(596		)
Dividends paid to common stockholders	(36,268		)	(30,821		)
Dividends paid to preferred stockholders	(6,044		)	(3,651		)
Net cash provided by financing activities	140,918			91,539
Effect of exchange rate changes on cash and cash equivalents	497			—
Net decrease in cash and cash equivalents	(1,424		)	(3,075		)
Cash and cash equivalents at beginning of period	19,976			16,411

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	Three Months Ended
	March 31,
	2013		2012

Cash and cash equivalents at end of period	$	18,552	$	13,336
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $2,840 and $2,360 during the three months ended March 31, 2013 and 2012, respectively)	$	16,654	$	13,077
Supplemental disclosure of non-cash investing and financing activities:
Accrual for preferred stock dividends declared	$	—	$	3,651
Accrual for common stock dividends declared	39,727		33,145
Accrual for distributions declared for operating partnership unit and LTIP unit holders	686		636
Accrued additions to real estate and related intangible assets	31,928		34,651

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)



	March 31, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments in real estate, net	$	4,424,867		$	4,319,716
Investments in unconsolidated partnerships	32,118			32,367
Cash and cash equivalents	18,552			19,976
Accounts receivable, net	35,888			4,507
Accrued straight-line rents, net	155,591			152,096
Deferred leasing costs, net	167,648			172,363
Other assets	164,968			133,454
Total assets	$	4,999,632		$	4,834,479
LIABILITIES AND CAPITAL
Mortgage notes payable, net	$	569,390		$	571,652
Exchangeable senior notes	180,000			180,000
Unsecured senior notes, net	894,397			894,177
Unsecured senior term loan	395,486			405,456
Unsecured line of credit	215,000			118,000
Accounts payable, accrued expenses and other liabilities	199,731			180,653
Total liabilities	2,454,004			2,349,938
Capital:
Partners’ capital:
Preferred units, 7.375% Series A cumulative redeemable preferred units, no units issued and outstanding as of March 31, 2013; and 7,920,000 units issued and outstanding as of December 31, 2012, $198,000 liquidation preference ($25.00 per unit)	—			191,469
Limited partners' capital, 2,919,362 and 2,932,758 units issued and outstanding at March 31, 2013 and December 31, 2012, respectively	8,707			7,937
General partner's capital, 169,054,707 and 154,327,818 units issued and outstanding at March 31, 2013 and December 31, 2012, respectively	2,591,027			2,338,464
Accumulated other comprehensive loss	(53,846		)	(53,077		)
Total partners’ capital	2,545,888			2,484,793
Noncontrolling interests deficit	(260		)	(252		)
Total capital	2,545,628			2,484,541
Total liabilities and capital	$	4,999,632		$	4,834,479

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except unit data)

(Unaudited)



	For the Three Months Ended
	March 31,
	2013			2012
Revenues:
Rental	$	102,956		$	91,475
Tenant recoveries	32,637			28,453
Other revenue	24,857			84
Total revenues	160,450			120,012
Expenses:
Rental operations	40,553			36,729
Depreciation and amortization	60,764			44,934
General and administrative	10,028			8,614
Acquisition-related expenses	2,236			633
Total expenses	113,581			90,910
Income from operations	46,869			29,102
Equity in net loss of unconsolidated partnerships	(319		)	(355		)
Interest expense, net	(25,902		)	(22,219		)
Other (expense) / income	(3,190		)	174
Income from continuing operations	17,458			6,702
Loss from discontinued operations	—			(4,420		)
Net income	17,458			2,282
Net loss attributable to noncontrolling interests	8			4
Net income attributable to the Operating Partnership	17,466			2,286
Preferred unit distributions	(2,393		)	(3,651		)
Cost on redemption of preferred units	(6,531		)	—
Net income / (loss) available to unitholders	$	8,542		$	(1,365	)
Income from continuing operations per unit available to unitholders:
Basic and diluted earnings per unit	$	0.05		$	0.02
Loss from discontinued operations per unit available to unitholders:
Basic and diluted earnings per unit	$	—		$	(0.03	)
Net income / (loss) per unit available to unitholders:
Basic and diluted earnings per unit	$	0.05		$	(0.01	)
Weighted-average units outstanding:
Basic	162,612,998			155,592,535
Diluted	162,710,786			155,592,535

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2013			2012
Net income	$	17,458		$	2,282
Other comprehensive income:
Foreign currency translation adjustments	(2,182		)	—
Unrealized loss from derivative instruments, net	(137		)	(225		)
Amortization of deferred interest costs	1,718			1,743
Reclassification on sale of equity securities	—			28
Unrealized loss on equity securities	(168		)	(265		)
Total other comprehensive (loss) / income	(769		)	1,281
Comprehensive income	16,689			3,563
Comprehensive loss attributable to noncontrolling interests	8			4
Comprehensive income attributable to the Operating Partnership	$	16,697		$	3,567

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENT OF CAPITAL

(In thousands, except unit data)

(Unaudited)



	Preferred Series A					Limited Partners' Capital					General Partner's Capital				Accumulated Other Comprehensive (Loss)/Income			Total Partners' Equity			Noncontrolling Interests			Total Equity
	Units		Amount			Units		Amount			Units	Amount			Accumulated Other Comprehensive (Loss)/Income			Total Partners' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2012	7,920,000		$	191,469		2,932,758		$	7,937		154,327,818	$	2,338,464		$	(53,077	)	$	2,484,793		$	(252	)	$	2,484,541
Proceeds from issuance of OP units	—		—			—		—			14,605,000	286,992			—			286,992			—			286,992
Net issuances of unvested restricted OP units	—		—			—		—			108,493	(4,799		)	—			(4,799		)	—			(4,799		)
Conversion of OP units	—		—			(13,396	)	58			13,396	(58		)	—			—			—			—
Redemption of Series A Preferred Units	(7,920,000	)	(198,000		)	—		—			—	—			—			(198,000		)	—			(198,000		)
Vesting of share-based awards	—		—			—		—			—	3,011			—			3,011			—			3,011
Reallocation of equity to limited partners	—		—			—		1,244			—	(1,244		)	—			—			—			—
Distributions	—		(2,393		)	—		(686		)	—	(39,727		)	—			(42,806		)	—			(42,806		)
Net income	—		8,924			—		154			—	8,388			—			17,466			(8		)	17,458
Foreign currency translation adjustment	—		—			—		—			—	—			(2,182		)	(2,182		)	—			(2,182		)
Unrealized loss on equity securities	—		—			—		—			—	—			(168		)	(168		)	—			(168		)
Amortization of deferred interest costs	—		—			—		—			—	—			1,718			1,718			—			1,718
Unrealized loss on derivative instruments, net	—		—			—		—			—	—			(137		)	(137		)	—			(137		)
Balance at March 31, 2013	—		$	—		2,919,362		$	8,707		169,054,707	$	2,591,027		$	(53,846	)	$	2,545,888		$	(260	)	$	2,545,628

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2013			2012

Operating activities:
Net income	$	17,458		$	2,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	60,764			45,026
Allowance for doubtful accounts	501			213
Non-cash revenue adjustments	5,803			3,469
Other non-cash adjustments	6,457			7,696
Compensation expense related to share-based payments	3,011			2,689
Distributions representing a return on capital from unconsolidated partnerships	59			1,031
Changes in operating assets and liabilities:
Accounts receivable	(31,822		)	902
Accrued straight-line rents	(3,555		)	(4,427		)
Deferred leasing costs	(1,520		)	(2,517		)
Other assets	314			(146		)
Accounts payable, accrued expenses and other liabilities	2,823			8,376
Net cash provided by operating activities	60,293			64,594
Investing activities:
Purchases of investments in real estate and related intangible assets	(123,841		)	(113,985		)
Capital expenditures	(39,250		)	(42,070		)
Draws on construction loan receivable	(34,310		)	—
Contributions to unconsolidated partnerships, net	(336		)	(1,107		)
Purchases of debt and equity securities	(5,395		)	(1,125		)
Proceeds from the sale of equity securities	—			79
Deposits to escrow for acquisitions	—			(1,000		)
Net cash used in investing activities	(203,132		)	(159,208		)
Financing activities:
Proceeds from issuance of OP units	286,992			—
Redemption of Series A preferred units	(198,000		)	—
Payment of deferred loan costs	—			(3,071		)
Unsecured line of credit proceeds	284,000			176,000
Unsecured line of credit payments	(187,000		)	(418,000		)
Principal payments on mortgage notes payable	(2,073		)	(28,322		)
Proceeds from unsecured senior term loan	—			400,000
Distributions paid to unitholders	(36,957		)	(31,417		)
Distributions paid to preferred unitholders	(6,044		)	(3,651		)
Net cash provided by financing activities	140,918			91,539
Effect of exchange rate changes on cash and cash equivalents	497			—
Net decrease in cash and cash equivalents	(1,424		)	(3,075		)

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	Three Months Ended
	March 31,
	2013		2012

Cash and cash equivalents at beginning of period	19,976		16,411
Cash and cash equivalents at end of period	$	18,552	$	13,336
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $2,840 and $2,360 during the three months ended March 31, 2013 and 2012, respectively)	$	16,654	$	13,077
Supplemental disclosure of non-cash investing and financing activities:
Accrual for unit distributions declared	$	40,413	$	33,781
Accrual for preferred unit distributions declared	—		3,651
Accrued additions to real estate and related intangible assets	31,928		34,651

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

BIOMED REALTY, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization of the Parent Company and Description of Business

BioMed Realty Trust, Inc., a Maryland corporation (the “Parent Company”), operates as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) focused on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry principally through its subsidiary, BioMed Realty, L.P., a Maryland limited partnership (the “Operating Partnership” and together with the Parent Company referred to as the “Company”). The Company’s tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. The Company’s properties are generally located in markets with well-established reputations as centers for scientific research, including Boston, Maryland, San Francisco, San Diego, New York/New Jersey, Pennsylvania and Seattle.

The Parent Company is the sole general partner of the Operating Partnership and, as of March 31, 2013, owned a 98.3% interest in the Operating Partnership. The remaining 1.7% interest in the Operating Partnership is held by limited partners. Each partner’s percentage interest in the Operating Partnership is determined based on the number of operating partnership units and long-term incentive plan units (“LTIP units” and together with the operating partnership units, the “OP units”) owned as compared to total OP units (and potentially issuable OP units, as applicable) outstanding as of each period end and is used as the basis for the allocation of net income or loss to each partner.

In March 2013, the Company entered into a definitive agreement to merge with Wexford Science & Technology, LLC, a private real estate investment and development company that owns approximately 1.6 million square feet of laboratory and office space located in U.S. educational and research centers, such as Baltimore, Chicago, Miami, Philadelphia, St. Louis and Winston-Salem, and which are occupied primarily by universities and university-related institutions either on campus or nearby land that carries the university brand or direct sponsorship. The acquisition also includes three properties that are currently under construction and that are expected to comprise approximately 935,000 square feet of rentable space upon completion, as well as other pipeline projects. The aggregate consideration for the merger is approximately $640 million, excluding transaction costs and subject to adjustment based on working capital levels and construction and development costs incurred prior to closing. Approximately $551 million of the initial consideration is for Wexford Science & Technology's current operating portfolio and approximately $89 million of the initial consideration is for the projects currently under development. The acquisition is subject to the receipt of lender, ground lessor and other third-party consents, waivers of rights of first offer and customary closing conditions, and the Company can offer no assurances that the acquisition will close on the terms described herein, or at all.

2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying interim financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments and eliminations, consisting of normal recurring adjustments necessary for a fair presentation of the financial statements for these interim periods have been recorded. These financial statements should be read in conjunction with the audited consolidated financial statements and notes therein included in the Company's annual report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, partnerships and limited liability companies it controls, and variable interest entities ("VIEs") for which the Company has determined itself to be the primary beneficiary. All material intercompany transactions and balances have been eliminated. The Company consolidates entities the Company controls and records a noncontrolling interest for the portions not owned by the Company. Control is determined, where applicable, by the sufficiency of equity invested and the rights of the equity holders, and by the ownership of a majority of the voting interests, with consideration given to the existence of approval or veto rights granted to the minority stockholder. If the minority stockholder holds substantive participating rights, it overcomes the presumption of control by the

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majority voting interest holder. In contrast, if the minority stockholder simply holds protective rights (such as consent rights over certain actions), it does not overcome the presumption of control by the majority voting interest holder.

Assets and liabilities of subsidiaries outside the United States with non-U.S. dollar functional currencies are translated into U.S. dollars using exchange rates as of the balance sheet dates. Income and expenses are translated using the average exchange rates for the reporting period. Foreign currency translation adjustments are recorded as a component of other comprehensive income. For the three months ended March 31, 2013, total revenues from properties outside the United States were $4.5 million, which represented 2.8% of the Company’s total revenues during the same period. The Company’s net investment in properties outside the United States was $191.8 million and $188.8 million at March 31, 2013 and December 31, 2012, respectively.

Investments in Partnerships and Limited Liability Companies

The Company has determined that it is the primary beneficiary in six VIEs, consisting of single-tenant properties in which the tenant has a fixed-price purchase option, which are consolidated and reflected in the accompanying consolidated financial statements. Selected financial data of the VIEs at March 31, 2013 and December 31, 2012 consist of the following (in thousands):



	March 31, 2013		December 31, 2012
Investment in real estate, net	$	394,483	$	397,542
Total assets	433,025		434,105
Total debt	144,414		144,889
Total liabilities	152,130		150,330

Investments in Real Estate, Net

Investments in real estate, net consisted of the following (in thousands):



	March 31, 2013			December 31, 2012
Land	$	711,431		$	702,993
Land under development	88,570			48,744
Buildings and improvements	4,151,971			4,028,089
Construction in progress	117,469			143,340
	5,069,441			4,923,166
Accumulated depreciation	(644,574		)	(603,450		)
	$	4,424,867		$	4,319,716

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed

The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on an estimate of the future undiscounted cash flows (excluding interest charges) expected to result from the long-lived asset’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a long-lived asset, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair-value of the property. The Company is required to make subjective assessments as to whether there are impairments in the values of its investments in long-lived assets. These assessments have a direct impact on the Company’s net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. Although the Company’s strategy is to hold its properties over the long-term, if the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized to reduce the property to the lower of the carrying amount or fair-value, and such loss could be material.

In April 2012, the Company completed the exchange of a property for another real estate operating property. As a result, the property disposed of was reclassified as a discontinued operation. This property was written down to its estimated fair-value of $28.0 million, less costs to sell, which resulted in an impairment loss of $4.6 million that is included in loss from discontinued

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operations for the three months ended March 31, 2012. The parties to the exchange determined and agreed upon the fair-value of the property received in the transaction, which the Company considers to be a level 2 input in the fair-value hierarchy. See Note 11 for discussion of discontinued operations.

Deferred Leasing Costs, Net

Leasing commissions and other direct costs associated with obtaining new or renewal leases are recorded at cost and amortized on a straight-line basis over the terms of the respective leases, with remaining terms ranging from less than one year to approximately 20 years as of March 31, 2013. Deferred leasing costs also include the net carrying value of acquired in-place leases and acquired management agreements.

Deferred leasing costs, net at March 31, 2013 consisted of the following (in thousands):



	Balance at		Accumulated
	March 31, 2013		Amortization			Net
Acquired in-place leases	$	310,196	$	(200,812	)	$	109,384
Acquired management agreements	25,827		(17,463		)	8,364
Deferred leasing and other direct costs	75,060		(25,160		)	49,900
	$	411,083	$	(243,435	)	$	167,648

Deferred leasing costs, net at December 31, 2012 consisted of the following (in thousands):



	Balance at		Accumulated
	December 31, 2012		Amortization			Net
Acquired in-place leases	$	303,521	$	(185,463	)	$	118,058
Acquired management agreements	24,963		(15,242		)	9,721
Deferred leasing and other direct costs	68,175		(23,591		)	44,584
	$	396,659	$	(224,296	)	$	172,363

Investments

Investments in equity securities, which are included in other assets on the accompanying consolidated balance sheets, consisted of the following (in thousands):



	March 31, 2013			December 31, 2012
Available-for-sale securities, historical cost	$	275		$	275
Unrealized (loss) / gain	(53		)	115
Available-for-sale securities, fair-value (1)	222			390
Privately-held securities, cost basis	15,796			12,280
Total equity securities	$	16,018		$	12,670

____________


(1)	Determination of fair-value is classified as Level 1 in the fair-value hierarchy based on the use of quoted prices in active markets.

The Company holds investments in available-for-sale securities of three publicly traded companies. Certain of these investments have fair-values less than the Company's cost basis, net of previous other-than-temporary impairment in these securities due to decreases in their respective stock prices during the three months ended March 31, 2013. However, management has the intent and ability to retain the investments for a period of time sufficient to allow for an anticipated recovery in their market value. Management will continue to periodically evaluate whether any investment, the fair-value of which is less than the Company’s cost basis, should be considered other-than-temporarily impaired. If other-than-temporary impairment is considered to exist, the related unrealized loss will be reclassified from accumulated other comprehensive loss and recorded as a reduction of net income.

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The Company’s remaining investments consisted of securities in privately held companies or funds, which are recorded at cost basis due to the Company’s lack of control or significant influence over such companies or funds. The Company owned equity securities of six privately-held companies and four privately held funds during the three months ended March 31, 2013.

During the three months ended March 31, 2013, the Company recorded $2.8 million in impairment charges, which are included in other (expense) / income in the consolidated statements of operations. The impairment charges related to the Company's investment in a privately-held company, comprising a $2.0 million cost basis equity investment and $825,000 related to notes receivable that were included in other assets on the consolidated balance sheets. Other than this investment there were no identified events or changes in circumstances that may have a significant adverse effect on the carrying value of the Company’s cost basis investments and therefore, no evaluation of impairment was performed during the three months ended March 31, 2013 on the Company’s remaining cost basis investments.

Construction Loan Receivable

The Company has a $255.0 million interest in a $355.0 million construction loan secured by first priority mortgages on a 1.1 million square foot laboratory, office and retail development project located in Boston, Massachusetts, which is 95% leased to Vertex Pharmaceuticals Incorporated to serve as its new corporate headquarters.

The construction loan matures on September 30, 2014, with two one-year extension options exercisable at the borrower’s election after paying the lenders an extension fee on the then-outstanding principal amount. The construction loan bears interest on the outstanding principal amount at a floating rate equal to the greater of (1) reserve adjusted LIBOR plus 550 basis points and (2) 6.5%. In addition, the borrower is required to pay a fee to the lenders based on a specified percentage of the average daily unfunded amount of the construction loan. The borrower may prepay the construction loan in part under certain circumstances, and may prepay the construction loan in full with prior notice and a prepayment fee to the lenders. As of March 31, 2013, the Company had invested approximately $56.0 million in the construction loan. The Company expects to have fully funded its obligation in early 2014.

Lease Termination

During the three months ended March 31, 2013, the Company recorded approximately $21.6 million of lease termination revenue, net or write offs of lease intangibles, included in other revenue on the consolidated statement of operations, related to the termination of a lease with Elan Corporation (“Elan”) at the Company's Science Center at Oyster Point property for which Elan will pay the Company $46.5 million. The impact of the Elan lease termination will be recognized through the date of termination of the lease in April 2013.

Management’s Estimates

Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reporting of revenue and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and reported amounts of revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions.

3. Equity of the Parent Company

During the three months ended March 31, 2013, the Parent Company issued restricted stock awards to the Company’s employees and directors totaling 374,047 and 4,139 shares of common stock, respectively (240,093 shares of common stock were surrendered to the Company and subsequently retired in lieu of cash payments for taxes due on the vesting of restricted stock and 29,600 shares were forfeited during the same period), which are included in the total of common stock outstanding as of the period end.

The Parent Company awarded units to certain of its executive officers (the “Performance Units”), which represent a contingent right to receive one share of the Parent Company’s common stock if vesting conditions are satisfied. Performance Units vest ratably over one, two or three year periods (each, a “Performance Period”) based upon the Parent Company’s total stockholder return relative to its peer group (the "Market Conditions"). The grant date fair-value of the Performance Units was estimated using a Monte Carlo simulation which considered the likelihood of achieving the Market Conditions. The expected value of the Performance Units on the grant date was determined by simulating the total stockholder return for the Company and the peer group, considering the stock price variance for each of the peer group companies compared to each other and the Company. No

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dividends will be paid or accrued on the Performance Units, and shares of the Parent Company’s common stock will not be issued until vesting of the Performance Units occurs. In January 2013, 136,296 Performance Units, which were originally granted to certain executive officers in January 2012 and represent the maximum number of Performance Units that could have vested, were forfeited as a result of the Parent Company's total stockholder return relative to its peer group in 2012 being below the threshold for any payout. During the three months ended March 31, 2013, the Parent Company awarded 406,288 performance units which vest ratably over two and three year performance periods, which represent the maximum number of Performance Units that may vest. The grant date fair-value of these awards of approximately $3.6 million will be recognized as compensation expense on a straight-line basis over each respective Performance Period. The total compensation remaining on the Performance Units granted during the three months ended March 31, 2013 to be expensed in future periods as of March 31, 2013 was $3.3 million over a weighted-average of approximately 2.3 years. No dividends will be paid or accrued on the Performance Units, and shares of the Parent Company's common stock will not be issued until vesting of the Performance Units occurs.

In February 2013, the Parent Company issued 14,605,000 shares of common stock and contributed net proceeds of approximately $287.0 million, after deducting the underwriters' discounts and commissions and offering expenses, to the Operating Partnership in exchange for the issuance of 14,605,000 operating partnership units. The net proceeds to the Operating Partnership were utilized to fund the acquisition of the Woodside Technology Park property in Redwood City, California, to fund a portion of the redemption of all 7,920,000 outstanding shares of the Parent Company's 7.375% Series A Cumulative Redeemable Preferred Stock ("Series A preferred stock"), to repay a portion of the outstanding indebtedness under its unsecured line of credit and for other general corporate and working capital purposes.

In April 2013, the Parent Company issued 17,250,000 shares of common stock and contributed net proceeds of approximately $354.1 million, after deducting the underwriters' discounts and commissions and offering expenses, to the Operating Partnership in exchange for the issuance of 17,250,000 operating partnership units. The net proceeds to the Operating Partnership are expected to be utilized to repay a portion of the outstanding indebtedness under its unsecured line of credit, to fund a portion of the purchase price of the pending merger with Wexford Science & Technology and for other general corporate and working capital purposes.

Common Stock, Operating Partnership Units and LTIP Units

As of March 31, 2013, the Company had outstanding 169,054,707 shares of the Parent Company’s common stock and 2,579,788 and 339,574 operating partnership and LTIP units, respectively (excluding operating partnership units held by the Parent Company). A share of the Parent Company’s common stock and the operating partnership and LTIP units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership.

7.375% Series A Cumulative Redeemable Preferred Stock

On March 15, 2013, the Company redeemed all 7,920,000 outstanding shares of its Series A preferred stock for approximately $198.0 million, or $25.00 per share, net of accrued dividends of approximately $2.4 million, or $0.30217 per share. The redemption of the Series A preferred stock resulted in the recognition of costs on redemption of preferred stock of approximately $6.5 million for the three months ended March 31, 2013 as a result of the difference between the carrying value and the price paid to redeem the Series A preferred stock.

Dividends and Distributions

The following table lists the dividends and distributions declared by the Parent Company and the Operating Partnership during the three months ended March 31, 2013:

Declaration Date

Securities Class

Amount Per

Share/Unit

Period Covered

Dividend and

Distribution

Payable Date

Dividend and

Distribution Amount

(In thousands)

March 15, 2013

Common stock and OP units

0.23500

January 1, 2013 to March 31, 2013

April 15, 2013

40,413

Total 2013 dividends and distributions declared through March 31, 2013 (in thousands):



Common stock and OP units	$	40,413
Series A preferred stock/units (1)	$	2,393
	$	42,806

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____________


(1)	On March 15, 2013, the Company redeemed all 7,920,000 outstanding shares of its Series A preferred stock for approximately $198.0 million, or $25.00 per share, net of accrued dividends of approximately $2.4 million, or $0.30217 per share.

Changes in Accumulated Other Comprehensive Loss by Component



	Foreign currency translation adjustments			Unrealized gains/(losses) on available for-sale securities			Gain/(loss) on derivative instruments			Total
	Foreign currency translation adjustments			Unrealized gains/(losses) on available for-sale securities			Gain/(loss) on derivative instruments			Total
Balance at December 31, 2012	$	3,543		$	114		$	(58,382	)	$	(54,725	)
Other comprehensive (loss) before reclassifications	(2,182		)	(168		)	(697		)	(3,047		)
Amounts reclassified from accumulated other comprehensive income (1)	—			—			2,278			2,278
Net other comprehensive (loss)/income	(2,182		)	(168		)	1,581			(769		)
Net other comprehensive loss/(income) allocable to noncontrolling interests	$	37		$	3		$	(26	)	$	14
Balance as of March 31, 2013	$	1,398		$	(51	)	$	(56,827	)	$	(55,480	)

____________


(1)	Amounts reclassified from loss on derivative instruments are included in interest expense, net in the consolidated statements of operations. See Note 9 for further information.

Noncontrolling Interests

Noncontrolling interests on the consolidated balance sheets of the Parent Company relate primarily to the OP units in the Operating Partnership that are not owned by the Parent Company. With respect to the noncontrolling interests in the Operating Partnership, noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer are further evaluated to determine whether temporary or permanent equity classification on the balance sheet is appropriate. Because the OP units comprising the noncontrolling interests contain such a provision, the Company evaluated this guidance, including the requirement to settle in unregistered shares, and determined that the OP units meet the requirements to qualify for presentation as permanent equity.

The Company evaluates individual redeemable noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets. Any redeemable noncontrolling interest that fails to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value at the end of the period in which the determination is made.

The redemption value of the OP units not owned by the Parent Company, had such units been redeemed at March 31, 2013, was approximately $63.9 million based on the average closing price of the Parent Company’s common stock of $21.90 per share for the ten consecutive trading days immediately preceding March 31, 2013.

The following table shows the vested ownership interests in the Operating Partnership were as follows:

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	March 31, 2013			December 31, 2012
	Operating Partnership Units and LTIP Units	Percentage of Total		Operating Partnership Units and LTIP Units	Percentage of Total
BioMed Realty Trust	167,812,947	98.3	%	152,853,368	98.1	%
Noncontrolling interest consisting of:
Operating partnership and LTIP units held by employees and related parties	2,354,311	1.4	%	2,339,314	1.5	%
Operating partnership and LTIP units held by third parties	565,051	0.3	%	565,051	0.4	%
Total	170,732,309	100.0	%	155,757,733	100.0	%

4. Capital of the Operating Partnership

Operating Partnership Units and LTIP Units

As of March 31, 2013, the Operating Partnership had outstanding 171,634,495 operating partnership units and 339,574 LTIP units. The Parent Company owned 98.3% of the partnership interests in the Operating Partnership at March 31, 2013, is the Operating Partnership’s general partner and is responsible for the management of the Operating Partnership’s business. As the general partner of the Operating Partnership, the Parent Company effectively controls the ability to issue common stock of the Parent Company upon a limited partner’s notice of redemption. In addition, the Parent Company has generally acquired OP units upon a limited partner’s notice of redemption in exchange for shares of its common stock. The redemption provisions of OP units owned by limited partners that permit the Parent Company to settle in either cash or common stock at the option of the Parent Company are further evaluated in accordance with applicable accounting guidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Operating Partnership evaluated this guidance, including the requirement to settle in unregistered shares, and determined that these OP units meet the requirements to qualify for presentation as permanent equity.

The redemption value of the OP units owned by the limited partners, not including the Parent Company, had such units been redeemed at March 31, 2013, was approximately $63.9 million based on the average closing price of the Parent Company’s common stock of $21.90 per share for the ten consecutive trading days immediately preceding March 31, 2013.

Changes in Accumulated Other Comprehensive Loss by Component



	Foreign currency translation adjustments			Unrealized gains/(losses) on available for-sale securities			Gain/(loss) on derivative instruments			Total
	Foreign currency translation adjustments			Unrealized gains/(losses) on available for-sale securities			Gain/(loss) on derivative instruments			Total
Balance at December 31, 2012	$	3,611		$	115		$	(56,803	)	$	(53,077	)
Other comprehensive (loss) before reclassifications	(2,182		)	(168		)	(697		)	(3,047		)
Amounts reclassified from accumulated other comprehensive income (1)	—			—			2,278			2,278
Net other comprehensive (loss)/income	(2,182		)	(168		)	1,581			(769		)
Balance as of March 31, 2013	$	1,429		$	(53	)	$	(55,222	)	$	(53,846	)

____________


(1)	Amounts reclassified from loss on derivative instruments are included in interest expense, net in the consolidated statements of operations. See Note 9 for further information.

5. Debt

Debt of the Parent Company

The Parent Company does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, the Parent Company has guaranteed the Operating Partnership’s mortgage loan secured by the Company’s Center for

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Life Science | Boston property, Exchangeable Senior Notes due 2030 (the “Exchangeable Senior Notes”), Unsecured Senior Notes due 2016 (the “Notes due 2016”), Unsecured Senior Notes due 2020 (the “Notes due 2020”), Unsecured Senior Notes due 2022 (the “Notes due 2022”), Unsecured Senior Term Loan (the “Term Loan”) and unsecured line of credit.

Debt of the Operating Partnership

The following is a summary of the Operating Partnership’s outstanding consolidated debt as of March 31, 2013 and December 31, 2012 (dollars in thousands):



	Stated Interest Rate		Effective Interest Rate		Principal Balance
	Stated Interest Rate		Effective Interest Rate		March 31, 2013			December 31, 2012			Maturity Date
Mortgage Notes Payable
9900 Belward Campus Drive	5.64	%	3.99	%	$	10,732		$	10,767		July 1, 2017
9901 Belward Campus Drive	5.64	%	3.99	%	13,216			13,260			July 1, 2017
Center for Life Science \| Boston	7.75	%	7.75	%	337,476			338,447			June 30, 2014
500 Kendall Street (Kendall D)	6.38	%	5.45	%	59,617			60,164			December 1, 2018
Shady Grove Road	5.97	%	5.97	%	144,414			144,889			September 1, 2016
					565,455			567,527
Unamortized premiums					3,935			4,125
Mortgage notes payable, net					569,390			571,652
Exchangeable Senior Notes	3.75	%	3.75	%	180,000			180,000			January 15, 2030
Notes due 2016	3.85	%	3.99	%	400,000			400,000			April 15, 2016
Notes due 2020	6.13	%	6.27	%	250,000			250,000			April 15, 2020
Notes due 2022	4.25	%	4.36	%	250,000			250,000			July 15, 2022
					900,000			900,000
Unamortized discounts					(5,603		)	(5,823		)
Unsecured senior notes, net					894,397			894,177
Term Loan - U.S. dollar (1)	1.85	%	2.64	%	243,596			243,596			March 30, 2017
Term Loan - GBP (1)	2.14	%	2.39	%	151,890			161,860			March 30, 2017
Term Loan					395,486			405,456
Unsecured line of credit (2)	1.75	%	1.75	%	215,000			118,000			July 13, 2015
Total consolidated debt					$	2,254,273		$	2,169,285

____________

(1)

In August 2012, the Operating Partnership converted approximately $156.4 million of outstanding borrowings into British pounds sterling (“GBP”) equal to £100.0 million, which was designated as a net investment hedge to mitigate the risk of fluctuations in foreign currency exchange rates. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.52 to £1.00 and $1.62 to £1.00 at March 31, 2013 and December 31, 2012, respectively. The effective interest rate includes the impact of interest rate swap agreements (see Note 9 for further discussion of interest rate swap agreements).


(2)	At March 31, 2013, the Operating Partnership had additional borrowing capacity under the unsecured line of credit of up to approximately $535.0 million.

Net Investment Hedge

The Operating Partnership designated the GBP denominated debt under the Term Loan as a net investment hedge. The Operating Partnership entered into this net investment hedge to protect a designated amount of the Operating Partnership’s net investment in a GBP functional currency subsidiary against the risk of adverse changes in the GBP/U.S. dollar exchange rate (foreign exchange risk). Variability in the GBP/U.S. dollar exchange rate impacts the Operating Partnership (a U.S. dollar functional currency entity) as the financial statements of the GBP functional currency subsidiary are translated each period, with the effect of changes in the GBP/U.S. dollar exchange rate being recorded in accumulated other comprehensive income. When the net investment is sold or substantially liquidated, the balance of the cumulative translation adjustment accumulated in other comprehensive income will be

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reclassified into earnings. The Operating Partnership is hedging the risk of changes in the U.S. dollar equivalent value of a portion of its net investment in its GBP subsidiary attributable to changes in the GBP/U.S. dollar exchange rate during the period of investment during which the hedging instrument is outstanding.

As of March 31, 2013, principal payments due for the Operating Partnership’s consolidated indebtedness (excluding debt premiums and discounts) were as follows (in thousands):



2013	$	6,292
2014	339,088
2015	221,482
2016	543,784
2017	422,824
Thereafter (1)	722,471
	$	2,255,941

____________


(1)	Includes $180.0 million in principal payments of the Exchangeable Senior Notes based on a contractual maturity date of January 15, 2030.

6. Earnings Per Share of the Parent Company

Through March 31, 2013 all of the Company’s participating securities (including the OP units) received dividends/distributions at an equal dividend/distribution rate per share/unit. As a result, the portion of net income allocable to the weighted-average unvested restricted stock outstanding for the three months ended March 31, 2013 and 2012 has been deducted from net income available to common stockholders to calculate basic earnings per share. The calculation of diluted earnings per share for the three months ended March 31, 2013 and 2012 includes the outstanding OP units (both vested and unvested) in the weighted-average shares, and net income attributable to noncontrolling interests in the Operating Partnership has been added back to net income available to common stockholders. For the three months ended March 31, 2013, the Performance Units were dilutive to the calculation of diluted earnings per share as calculated, assuming that March 31, 2013 was the end date of the Performance Units' Performance Period. For the three months ended March 31, 2012, the Performance Units were anti-dilutive to the calculation of diluted earnings per share as calculated, assuming that March 31, 2012 was the end date of the Performance Units' Performance Period. For the three months ended March 31, 2013 and 2012 the unvested restricted stock was anti-dilutive to the calculation of diluted earnings per share and was therefore excluded. As a result, diluted earnings per share was calculated based upon net income available to common stockholders less net income allocable to unvested restricted stock and distributions in excess of earnings attributable to unvested restricted stock. In addition, 10,259,496 and 10,127,232 shares issuable upon settlement of the exchange feature of the Exchangeable Senior Notes were anti-dilutive and were not included in the calculation of diluted earnings per share based on the “if converted” method for the three months ended March 31, 2013 and 2012, respectively. No other shares were considered anti-dilutive for the three months ended March 31, 2013 or 2012.

Computations of basic and diluted earnings per share (in thousands, except share data) were as follows:

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	Three Months Ended
	March 31,
	2013			2012
Basic earnings per share:
Income from continuing operations	$	17,458		$	6,702
Income from continuing operations attributable to noncontrolling interests	(146		)	(58		)
Preferred stock dividends	(2,393		)	(3,651		)
Cost on redemption of preferred stock	(6,531		)	—
Net income allocable and distributions in excess of earnings to participating securities (continuing operations)	(345		)	(319		)
Income from continuing operations available to common stockholders - basic	8,043			2,674

Loss from discontinued operations	—			(4,420		)
Loss from discontinued operations attributable to noncontrolling interests	—			83
Loss from discontinued operations available to common stockholders - basic	—			(4,337		)

Net income / (loss) available to common stockholders - basic	$	8,043		$	(1,663	)
Diluted earnings per share:
Income from continuing operations available to common stockholders - basic	8,043			2,674
Income from continuing operations attributable to noncontrolling interests in Operating Partnership	159			58
Income from continuing operations available to common stockholders - diluted	8,202			2,732

Loss from discontinued operations available to common stockholders - basic	—			(4,337		)
Loss from discontinued operations attributable to noncontrolling interests in the Operating Partnership	—			(83		)
Loss from discontinued operations available to common stockholders - diluted	—			(4,420		)

Net income / (loss) available to common stockholders - diluted	$	8,202		$	(1,688	)
Weighted-average common shares outstanding:
Basic	159,692,470			152,659,258
Incremental shares from assumed conversion:
Performance units	97,788			—
Operating partnership and LTIP units	2,923,419			2,965,946
Diluted	162,713,677			155,625,204
Basic and diluted earnings per share:
Income from continuing operations per share available to common stockholders - basic and diluted	$	0.05		$	0.02
Loss from discontinued operations per share available to common stockholders - basic and diluted	$	—		$	(0.03	)
Net income / (loss) per share available to common stockholders - basic and diluted	$	0.05		$	(0.01	)

7. Earnings Per Unit of the Operating Partnership

Through March 31, 2013 all of the Operating Partnership’s participating securities received distributions at an equal distribution rate per unit. As a result, the portion of net income allocable to the weighted-average unvested OP units outstanding for the three months ended March 31, 2013 and 2012 has been deducted from net income available to unitholders to calculate basic earnings per unit. For the three months ended March 31, 2013 and 2012 the unvested OP units were anti-dilutive to the calculation of earnings per unit and were therefore excluded from the calculation of diluted earnings per unit, and diluted earnings per unit is calculated based upon net income attributable to unitholders. For the three months ended March 31, 2013, the Performance Units

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were dilutive to the calculation of diluted earnings per unit as calculated, assuming that March 31, 2013 was the end date of the Performance Units’ Performance Period. For the three months ended March 31, 2012, the Performance Units were anti-dilutive to the calculation of diluted earnings per unit as calculated, assuming that March 31, 2012 was the end date of the Performance Units' Performance Period. In addition 10,259,496 and 10,127,232 units issuable upon settlement of the exchange feature of the Exchangeable Senior Notes were anti-dilutive and were not included in the calculation of diluted earnings per unit based on the “if converted” method for the three months ended March 31, 2013 and 2012, respectively. No other units were considered anti-dilutive for the three months ended March 31, 2013 or 2012.

Computations of basic and diluted earnings per unit (in thousands, except unit data) were as follows:



	Three Months Ended
	March 31,
	2013			2012
Basic and diluted earnings per unit:
Income from continuing operations	$	17,458		$	6,702
Loss from continuing operations attributable to noncontrolling interests	8			—
Preferred unit distributions	(2,393		)	(3,651		)
Cost on redemption of preferred unit	(6,531		)	—
Net income allocable and distributions in excess of earnings to participating securities (continuing operations)	(345		)	(326		)
Income from continuing operations available to unitholders - basic and diluted	8,197			2,725

Loss from discontinued operations - basic and diluted	—			(4,420		)

Net income / (loss) available to unitholders - basic and diluted	$	8,197		$	(1,695	)
Weighted-average units outstanding:
Basic	162,612,998			155,592,535
Incremental units from assumed conversion:
Performance units	97,788			—
Diluted	162,710,786			155,592,535
Basic and diluted earnings per unit:
Income from continuing operations per unit available to unitholders - basic and diluted	$	0.05		$	0.02
Loss from discontinued operations per share available to unitholders - basic and diluted	$	—		$	(0.03	)
Net income / (loss) per unit available to unitholders, basic and diluted	$	0.05		$	(0.01	)

8. Investment in Unconsolidated Partnerships

The accompanying consolidated financial statements include investments in two limited liability companies with Prudential Real Estate Investors (“PREI”), and in 10165 McKellar Court, L.P. (“McKellar Court”), a limited partnership with Quidel Corporation, the tenant which occupies the McKellar Court property. General information on the PREI limited liability companies and the McKellar Court partnership (each referred to in this footnote individually as a “partnership” and collectively as the “partnerships”) as of March 31, 2013 was as follows:



Name	Partner	Company’s Ownership Interest	Company’s Economic Interest	Date Acquired
PREI I LLC (1)	PREI	20%	20%	April 4, 2007
PREI II LLC	PREI	20%	20%	April 4, 2007
McKellar Court (2)	Quidel Corporation	22%	22%	September 30, 2004

____________

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(1)

PREI I LLC owns two properties in Cambridge, Massachusetts. At March 31, 2013, there were $139.0 million in outstanding borrowings on a secured loan facility held by a wholly-owned subsidiary of PREI I LLC, with a contractual interest rate of 3.21% (including the applicable credit spread) and a maturity date of August 13, 2013, which may be extended for one year at the discretion of the PREI I LLC subsidiary.


(2)	The Company’s investment in the McKellar Court partnership (maximum exposure to losses) was approximately $12.1 million at March 31, 2013. The Company’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.

The condensed combined balance sheets for all of the Company’s unconsolidated partnerships were as follows (in thousands):



	March 31, 2013		December 31, 2012
Assets:
Investments in real estate, net	$	259,234	$	257,666
Cash and cash equivalents (including restricted cash)	1,996		1,968
Other assets	4,567		4,370
Total assets	$	265,797	$	264,004
Liabilities and members’ equity:
Mortgage notes payable and secured loan	$	149,255	$	149,255
Other liabilities	8,929		5,988
Members’ equity	107,613		108,761
Total liabilities and members equity	$	265,797	$	264,004
Company’s net investment in unconsolidated partnerships	$	32,118	$	32,367

The selected data and results of operations for the unconsolidated partnerships were as follows (in thousands):



	March 31, 2013			March 31, 2012
Total revenues	$	2,830		$	2,205
Total expenses	(5,448		)	(5,013		)
Net loss	(2,618		)	(2,808		)

Company’s equity in net loss of unconsolidated partnerships	$	(319	)	$	(355	)

Fees earned by the Company (1)	$	22		$	22

____________


(1)	The Company acts as the operating member or partner, as applicable, and day-to-day manager for the partnerships. The Company is entitled to receive fees for providing construction and development services (as applicable) and management services to the PREI joint ventures, which are reflected in tenant recoveries and other income in the consolidated statements of income.

9. Derivatives and Other Financial Instruments

The Company is exposed to the effect of changes in interest rates on the Operating Partnership’s U.S. dollar-LIBOR-based and GBP-LIBOR-based debt. The Company limits this risk by following established risk management policies and procedures including the use of derivatives. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements related to the Operating Partnership’s LIBOR-based debt. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The interest rate swaps hedge the Company’s exposure to the variability on expected cash flows attributable to changes in interest rates. These interest rate swaps are currently intended to hedge interest payments associated with the Operating Partnership’s Term Loan.

As of March 31, 2013, the Company had deferred interest costs of approximately $40.5 million in accumulated other comprehensive loss related to forward starting swaps, which were settled with the corresponding counterparties in March and

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April 2009. The forward starting swaps were entered into to mitigate the Company’s exposure to the variability in expected future cash flows attributable to changes in future interest rates associated with a forecasted issuance of fixed-rate debt, with interest payments for a minimum of ten years. The deferred interest costs will be amortized as additional interest expense over a remaining period of approximately six years.

The following is a summary of the terms of the interest rate swaps and stock purchase warrants and their respective fair-values, which are included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheets (dollars in thousands):



							Fair-Value(1)
	Notional Amount						March 31, 2013			December 31, 2012
	Notional Amount		Strike Rate		Effective Date	Expiration Date	March 31, 2013			December 31, 2012
Interest rate swaps	$	200,000	1.1630	%	March 30, 2012	March 30, 2017	$	(4,457	)	$	(4,826	)
Interest rate swaps(2)	75,945		0.7310	%	August 2, 2012	March 30, 2017	(503		)	(216		)
Interest rate swaps(2)	75,945		0.7425	%	August 2, 2012	March 30, 2017	(475		)	(243		)
Total interest rate swaps	$	351,890					$	(5,435	)	$	(5,285	)

____________


(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. Derivative valuations are classified in Level 2 of the fair-value hierarchy.


(2)	Translation to U.S. dollars is based on an exchange rate of $1.52 to £1.00 and $1.62 to £1.00 at March 31, 2013 and December 31, 2012, respectively.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair-value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings in the period in which the hedged forecasted transaction affects earnings. During the three months ended March 31, 2013 and 2012, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair-value of the derivatives is recognized directly in earnings. No portion of the derivatives designated as cash flow hedges were classified as ineffective during the three months ended March 31, 2013 and 2012.

The following is a summary of the amount of loss recognized in other comprehensive income related to the derivative instruments (in thousands):



	Three Months Ended
	March 31,
	2013			2012
Amount of loss recognized in other comprehensive income (effective portion):
Cash flow hedges
Interest rate swaps	$	(697	)	$	(299	)

Amount of loss reclassified from accumulated other comprehensive loss to income (effective portion):
Cash flow hedges
Interest rate swaps (1)	$	560		$	10
Forward starting swaps (2)	1,718			1,742
Total interest rate swaps	$	2,278		$	1,752

____________


(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).

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(2)	Amount represents reclassifications of deferred interest costs from accumulated other comprehensive loss to interest expense related to the Company’s previously settled forward starting swaps.

During the next twelve months, the Company estimates that an additional $9.2 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense.

10. Fair-Value of Financial Instruments

The Company’s disclosures of estimated fair-value of financial instruments at March 31, 2013 and December 31, 2012 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair-value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair-value amounts.

The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities approximate fair-value due to the short-term nature of these instruments.

The Company utilizes quoted market prices to estimate the fair-value of its fixed-rate and variable-rate debt, when available. If quoted market prices are not available, the Company calculates the fair-value of its mortgage notes payable and other fixed-rate debt based on a currently available market rate assuming the loans are outstanding through maturity and considering the collateral. In determining the current market rate for fixed-rate debt, a market credit spread is added to the quoted yields on federal government treasury securities with similar terms to debt. In determining the current market rate for variable-rate debt, a market credit spread is added to the current effective interest rate. The carrying values of interest rate swaps are reflected at their fair-values.

At March 31, 2013 and December 31, 2012, the aggregate fair-value and the carrying value of the Company’s financial instruments were as follows (in thousands):



	March 31, 2013						December 31, 2012
	Fair-Value (1)			Carrying Value			Fair-Value (1)			Carrying Value
Mortgage notes payable, net	$	599,096		$	569,390		$	605,948		$	571,652
Exchangeable Senior Notes	225,594			180,000			209,484			180,000
Notes due 2016, net	424,040			398,410			421,400			398,289
Notes due 2020, net	290,225			248,038			292,725			247,984
Notes due 2022, net	261,525			247,949			261,750			247,904
Term Loan - U.S. dollars (2)	243,596			243,596			243,596			243,596
Term Loan - GBP (2)	151,890			151,890			161,860			161,860
Unsecured line of credit	215,000			215,000			118,000			118,000
Derivative instruments (3)	(5,435		)	(5,435		)	(5,285		)	(5,285		)
Available-for-sale securities	222			222			390			390

____________


(1)	Fair-values of debt and derivative instruments are classified in Level 2 of the fair-value hierarchy. Fair-value of available-for-sale securities are classified in Level 1 of the fair-value hierarchy.


(2)	In August 2012, the Operating Partnership converted approximately $156.4 million of outstanding borrowings into GBP equal to £100.0 million. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.52 to £1.00 and $1.62 to £1.00 at March 31, 2013 and December 31, 2012, respectively.


(3)	The Company’s derivative instruments are reflected in other liabilities on the accompanying consolidated balance sheets based on their respective balances (see Note 9).

11. Discontinued Operations

In April 2012, the Company completed the exchange of an operating property on Forbes Boulevard in South San Francisco for an office property located in Redwood City, California. As a result, during the three months ended March 31, 2012, the Company reclassified the Forbes Boulevard property as held for sale. The table below reflects the details of the property and the exchange (in thousands):

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Property

Date of Sale

Original Acquisition Date

Sales Price (1)

Impairment loss

Forbes Boulevard

April 27, 2012

September 5, 2007

28,000

(4,552

)

_________


(1)	The sales price was equal to the fair-value of the office property received as consideration in the exchange with the independent third party.

The results of operations of the Forbes Boulevard property are reported as discontinued operations for all periods presented in the accompanying consolidated financial statements. The following table summarizes the revenue and expense components that comprise loss from discontinued operations (in thousands):



	Three Months Ended
	March 31,
	2013		2012
Total revenues	$	—	$	351
Total expenses	—		219
Income from discontinued operations before impairment loss	—		132
Impairment loss	—		(4,552		)
Loss from discontinued operations	$	—	$	(4,420	)

Discontinued operations have not been segregated in the consolidated statements of cash flows. Therefore, amounts for certain captions will not agree with respective data in the consolidated statements of operations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used herein, the terms “we,” “us,” “our” or the “Company” refer to BioMed Realty Trust, Inc., a Maryland corporation, and any of our subsidiaries, including BioMed Realty, L.P., a Maryland limited partnership of which BioMed Realty Trust, Inc. is the parent company and general partner, which may be referred to herein as the “operating partnership.”

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. We make statements in this report that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in the life science industry or in our target markets, including the inability of our tenants to obtain funding to run their businesses; our dependence upon significant tenants; our failure to obtain necessary outside financing on favorable terms or at all, including the continued availability of our unsecured line of credit; general economic conditions, including downturns in the foreign, domestic and local economies; volatility in financial and securities markets; defaults on or non-renewal of leases by tenants; our inability to compete effectively; changes in interest rates and foreign currency exchange rates; increased operating costs; our inability to successfully complete real estate acquisitions, developments and dispositions; risks and uncertainties affecting property development and construction; our failure to effectively manage our growth and expansion into new markets or to successfully operate acquired properties and operations; our ownership of properties outside of the United States that subject us to different and potentially greater risks than those associated with our domestic operations; risks associated with our investments in loans, including borrower defaults and potential principal losses; reductions in asset valuations and related impairment charges; the loss of services of one or more of our executive officers; our failure to qualify or continue to qualify as a REIT; our failure to maintain our investment grade corporate credit ratings or a downgrade in our investment grade corporate credit ratings from one or more of the rating agencies; government approvals, actions and initiatives, including the need for compliance with environmental requirements; the effects of earthquakes and other natural disasters; lack of or insufficient amounts of insurance; and changes in real estate, zoning and other laws and increases in real property tax rates. We disclaim any intention or

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obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks included in other sections of this report. In addition, we discussed a number of material risks in our annual report on Form 10-K for the year ended December 31, 2012. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Overview

We operate as a fully integrated, self-administered and self-managed REIT focused on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry. Our tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. Our properties are generally located in markets with well-established reputations as centers for scientific research, including Boston, Maryland, San Francisco, San Diego, New York/New Jersey, Pennsylvania and Seattle.

At March 31, 2013, we owned or had interests in a portfolio of properties with an aggregate of approximately 13.2 million rentable square feet.

The following reflects the classification of our properties between stabilized properties (operating properties in which more than 90% of the rentable square footage is under lease), lease up properties (operating properties in which less than 90% of the rentable square footage is under lease), redevelopment properties (properties that are currently being prepared for their intended use), pre-development properties (development properties that are engaged in activities related to planning, entitlement or other preparations for future construction), unconsolidated partnership properties (properties which we partially own, but are not included in our consolidated financial statements) and development potential (representing management's estimates of rentable square footage if development of these properties was undertaken) at March 31, 2013:



					Weighted-
	Gross			Rentable	Average
	Book Value		Buildings	Square Feet	Leased % (1)
	(In thousands)
Stabilized	$	3,575,932	105	8,278,755	99.4	%
Lease up	1,166,124		54	4,413,310	68.0	%
Total operating portfolio	4,742,056		159	12,692,065	91.7	%

Redevelopment	48,799		4	196,867	42.9	%
Pre-development	94,084		—	1,096,000	—
Unconsolidated partnership portfolio	32,118		3	352,863	56.4	%
Development potential	184,502		—	3,303,000	—
Total portfolio	$	5,101,559	166	17,640,795


(1)	Calculated based on gross book value for each asset multiplied by the percentage leased.

Factors Which May Influence Future Operations

Our long-term corporate strategy is to continue to focus on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry. As of March 31, 2013, our total operating portfolio was 91.7% leased on a weighted-average basis, to 208 tenants. As of December 31, 2012, our total operating portfolio was 92.1% leased on a weighted-average basis, to 209 tenants.

Our leasing strategy for 2013 focuses on leasing vacant space, negotiating renewals for leases scheduled to expire during the year, and identifying new tenants or existing tenants seeking additional space to occupy the spaces for which we are unable to negotiate such renewals. We may proceed with additional new developments and acquisitions, as real estate and capital market conditions permit. As of March 31, 2013, leases representing 2.8% and 6.2% of our leased square feet were scheduled to expire during 2013 and 2014, respectively. The success of our leasing and development strategy depends on, among other things, general

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economic conditions, real estate market conditions and life science industry trends in our target markets in the United States and the United Kingdom.

As a result of changing market conditions and the recent economic recession, we believe that the fair-values of some of our properties may have declined below their respective carrying values. However, to the extent that a property has a substantial remaining estimated useful life and management does not believe that the property will be disposed of prior to the end of its useful life, it would be unusual for undiscounted cash flows to be insufficient to recover the property’s carrying value. We presently have the ability and intent to continue to own and operate our existing portfolio of properties and estimated undiscounted future cash flows from the operation of the properties are expected to be sufficient to recover the carrying value of each property. Accordingly, we do not believe that the carrying value of any of our properties is impaired. If our ability and/or our intent with regard to the operation of our properties otherwise dictate an earlier sale date, an impairment loss may be recognized to reduce the property to fair-value and such loss could be material.

A discussion of additional factors which may influence future operations can be found below under Part II, Item 1A, “Risk Factors” and in our annual report on Form 10-K for the year ended December 31, 2012.

Critical Accounting Policies

A complete discussion of our critical accounting policies can be found in our annual report on Form 10-K for the year ended December 31, 2012.

Results of Operations

Leasing Activity

During the three months ended March 31, 2013, we executed 29 leasing transactions representing 583,735 square feet, including 16 new leases totaling 419,731 square feet and 13 leases amended to extend their terms totaling 164,004 square feet. The following table summarizes our leasing activity, including leasing activity in our unconsolidated portfolio, during the three months ended March 31, 2013:



	Leased Square Feet		Current annualized base rent per leased square foot (1)		Current annualized base rent per leased square foot - GAAP basis (2)
Leased square feet as of December 31, 2012	11,549,607
Acquisitions	255,650		$	22.15	$	25.94
Expirations	(454,620	)	38.78		36.98
Terminations	(51,472	)	7.52		16.31
Pre-leased delivery	70,865		26.43		12.71
Renewals, amendments, and extensions	164,004		28.59		29.86
New leases - first generation (3)	65,779		17.02		17.24
New leases - second generation (4)	25,279		27.60		29.97
Leased square feet as of March 31, 2013	11,625,092

Pre-leased square feet as of December 31, 2012	71,011
Pre-leased new leases - second generation (4)	328,673		40.72		45.95
Pre-leased delivery	(70,865	)	$	26.43	$	12.71
Pre-leased square feet as of March 31, 2013	328,819

____________


(1)	Current annualized base rent per leased square foot is the monthly contractual rent per leased square foot as of the period end, or if rent has not yet commenced, the first monthly rent payment per leased square foot due at each rent commencement date, multiplied by 12 months.

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(2)	Current annualized base rent per leased square foot - GAAP basis is the monthly contractual rent per square foot as of the period end, or if rent has not yet commenced, the first monthly rent payment per square foot due at each rent commencement date, multiplied by 12 months (as adjusted for straight line rent, fair-value lease revenue, and lease incentive revenue).


(3)	Leases on space which, in management’s evaluation, require significant improvements to prepare or condition the premises for its intended purpose or enhance the value of the property. This generally includes capital expenditures for development, redevelopment or repositioning a property.


(4)	Leases which are not considered by management to be first generation leases.

The following table summarizes our leasing activity and associated leasing costs for the three months ended March 31, 2013:



	Number of leases	Square feet	Tenant improvement costs per square foot		Lease commission costs per square foot		Tenant concession costs per square foot (1)
Renewals, amendments, and extensions (2)	13	164,004	$	15.21	$	0.58	$	2.88
New leases - first generation	7	65,779	39.46		7.99		4.99
New leases - second generation	9	353,952	26.03		15.90		3.51
Total / weighted-average	29	583,735	$	24.50	$	10.70	$	3.50

____________


(1)	Includes both rent concessions due to free or discounted rent periods and lease incentives paid to tenants.


(2)	Renewals, amendments and extensions were leased at a weighted-average current annualized base rent of $29.86 per square foot, representing an increase of 18.1% over the previously expiring rents on a GAAP basis.

Redevelopment/Development Activity

The following summarizes our consolidated properties under redevelopment, pre-development or other construction activities at March 31, 2013 (dollars in thousands):

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	Rentable					Estimated		Estimated
	Square	Percent		Investment		Total		In-Service
Property	Feet	Leased		to Date (1)		Investment (2)		Date (3)

Redevelopment
9708-9714 Medical Center Drive	92,124	17.4	%	$	29,500	$	29,500	In-Service
1701 / 1711 Research Blvd	104,743	100.0	%	13,300		28,200		Q1 2014
Total / weighted-average	196,867	61.4	%	$	42,800	$	57,700

Other capital improvements (4)				$	65,200

Pre-development
Eccles Avenue	260,000	—		$	29,600
4775 / 4785 Executive Drive	275,000	—		30,000
500 Fairview Avenue	108,000	—		1,000
800 / 1000 Gateway Business Park	400,000	—		45,800
450 Kendall Street (Kendall G)	53,000	—		10,300
Total / weighted-average	1,096,000	—		$	116,700

Total				$	224,700

___________


(1)	Includes amounts paid for acquiring the property, landlord improvements and tenant improvement allowances, but for redevelopment properties excludes any amounts accrued, and payroll, interest or operating expenses capitalized, through March 31, 2013.


(2)	Excludes costs associated with speculative leasing.


(3)	Management’s estimate of the time in which construction will be substantially completed. A project is considered substantially complete and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity.


(4)	Includes improvements on operating properties, including major tenant improvement projects on properties which are not considered to be in redevelopment or pre-development during the three months ended March 31, 2013.

The following summarizes our capital expenditures during the three months ended March 31, 2013 and 2012 (dollars in thousands):



	Three Months Ended
	March 31,							Percent
	2013		2012		Change			Change
Development / Pre-development	$	3,241	$	443	$	2,798		631.6	%
Redevelopment	1,395		11,006		(9,611		)	(87.3	)%
Tenant improvements - first generation	13,933		15,083		(1,150		)	(7.6	)%
Recurring capital expenditures and second generation tenant improvements (1)	9,795		4,629		5,166			111.6	%
Other capital	10,886		10,909		(23		)	(0.2	)%
Total capital expenditures	$	39,250	$	42,070	$	(2,820	)	(6.7	)%

___________

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(1)

Recurring capital expenditures exclude (a) items associated with the expansion of a building or its improvements, (b) renovations to a building which change the underlying classification of the building, incurred to prepare or condition the premises for its intended purpose (for example, from office to laboratory) or (c) capital improvements that represent an addition to the property rather than the replacement of property, plant or equipment. Includes revenue enhancing and non-revenue enhancing recurring capital expenditures.

Total capital expenditures decreased $2.8 million to $39.3 million for the three months ended March 31, 2013 from $42.1 million for the three months ended March 31, 2012. The change was primarily the result of completion of construction of certain redevelopment properties in 2012 partially offset by an increase in maintenance capital expenditures and second generation tenant improvements related to increased leasing activity. See the section entitled “Liquidity and Capital Resources of BioMed Realty, L.P.” below for further information on obligations for capital expenditures expected to be incurred in the future.

Acquisition Activity

During the three months ended March 31, 2013, we acquired 255,650 rentable square feet of laboratory and office space, which was 100.0% leased at acquisition on a weighted-average basis, and approximately 280,000 square feet of development potential for $124.0 million, excluding closing costs:



Property	Market	Closing Date	Rentable Square Feet(1)	Investment		Percent Leased at Acquisition
				(In thousands)
Woodside Technology Park	San Francisco	February 28, 2013	255,650	$	87,000	100.0	%
The Campus at Lincoln Centre (2)	San Francisco	March 20, 2013	—	37,000		—
Total / weighted-average			255,650	$	124,000	100.0	%

___________


(1)	Rentable square feet at time of acquisition.


(2)	Includes approximately 280,000 square feet of potential development.

In March 2013, we entered into a definitive merger agreement to acquire Wexford Science & Technology, LLC a private real estate investment and development company that owns approximately 1.6 million square feet of laboratory and office space located in U.S. educational and research centers, such as Baltimore, Chicago, Miami, Philadelphia, St. Louis and Winston-Salem, and which are occupied primarily by universities and university-related institutions either on campus or nearby land that carries the university brand or direct sponsorship. The acquisition also includes three properties that are currently under construction and that are expected to comprise approximately 935,000 square feet of rentable space upon completion, as well as other pipeline projects. The aggregate consideration for the merger is approximately $640 million, excluding transaction costs and subject to adjustment based on working capital levels and construction and development costs incurred prior to closing. The acquisition is subject to the receipt of lender, ground lessor and other third-party consents, waivers of rights of first offer and customary closing conditions, and we can offer no assurances that the acquisition will close on the terms described herein, or at all.

Comparison of the Three Months Ended March 31, 2013 to the Three Months Ended March 31, 2012

The following table sets forth historical financial information of the continuing operations for same properties (all properties except properties held for sale, redevelopment/development properties, new properties and corporate entities), redevelopment/development properties (properties that were entirely or primarily under redevelopment or development during either of the three months ended March 31, 2013 or 2012), new properties (properties that were not owned for each of the three months ended March 31, 2013 and 2012 and were not under redevelopment/development) and corporate entities (legal entities performing general and administrative and other corporate level functions) (dollars in thousands, except on a per square foot basis):

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	Same Properties						Redevelopment/Development Properties						New Properties						Corporate						Total
	March 31,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rentable square feet	11,271,095			11,271,095			1,453,367			1,453,367			1,260,470			286,878			N/A			N/A			13,984,932			13,011,340
Percent of total portfolio	80.6		%	86.6		%	10.4		%	11.2		%	9.0		%	2.2		%	N/A			N/A			100.0		%	100.0		%
Percent leased	88.3		%	86.0		%	19.4		%	27.2		%	96.2		%	80.2		%	N/A			N/A			81.8		%	79.3		%
Current annualized base rent per square foot - GAAP basis (1)	$	37.92		$	38.47		$	29.68		$	34.16		$	30.10		$	41.20		N/A			N/A			$	36.89		$	38.37
	Three Months Ended March 31,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rental revenue	$	92,040		$	88,442		$	1,269		$	1,664		$	9,644		$	1,367		$	3		$	2		$	102,956		$	91,475
Tenant recoveries	30,641			27,772			352			436			1,603			162			41			83			32,637			28,453
Other income	24,015			56			—			—			14			—			828			28			24,857			84
Total revenues	146,696			116,270			1,621			2,100			11,261			1,529			872			113			160,450			120,012
Rental operations	35,386			33,446			965			829			2,591			434			1,611			2,020			40,553			36,729
Net operating income/(loss)	111,310			82,824			656			1,271			8,670			1,095			(739		)	(1,907		)	119,897			83,283
Adjustments to cash basis (2)	(19,512		)	(846		)	11			1,127			(784		)	(104		)	(828		)	(28		)	(21,113		)	149
Net operating income/(loss) - cash basis	$	91,798		$	81,978		$	667		$	2,398		$	7,886		$	991		$	(1,567	)	$	(1,935	)	$	98,784		$	83,432

____________


(1)	Current annualized base rent per square foot - GAAP basis is the monthly contractual rent per square foot as of the period end, or if rent has not yet commenced, the first monthly rent payment per square foot due at each rent commencement date, multiplied by 12 months (as adjusted for straight line rent, fair-value lease revenue and lease incentive revenue).


(2)	Adjustments to cash basis exclude adjustments to expenses accrued in rental operations, but include straight line rents, fair-value lease revenue, lease incentive revenue, bad debt expense and other revenue (including lease termination revenue).

The following table provides a reconciliation of net operating income - cash basis to net income for the three months ended March 31, 2013 and 2012 (dollars in thousands):

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	Three Months Ended
	March 31,									Percent
	2013			2012			Change			Change
Net operating income - cash basis	$	98,784		$	83,432		$	15,352		18.4	%
Adjustments to cash basis	21,113			(149		)	21,262			(14,269.8	)%
Net operating income	119,897			83,283			36,614			44.0	%
Unallocated income / (expense) :
Depreciation and amortization expense	60,764			44,934			15,830			35.2	%
General and administrative expense	10,028			8,614			1,414			16.4	%
Acquisition-related expenses	2,236			633			1,603			253.2	%
Income from operations	46,869			29,102			17,767			61.1	%
Equity in net loss of unconsolidated partnerships	(319		)	(355		)	36			(10.1	)%
Interest expense, net	(25,902		)	(22,219		)	(3,683		)	16.6	%
Other (expense) / income	(3,190		)	174			(3,364		)	(1,933.3	)%
Income from continuing operations	17,458			6,702			10,756			160.5	%
Loss from discontinued operations	—			(4,420		)	4,420			(100.0	)%
Net income	$	17,458		$	2,282		$	15,176		665.0	%

Net Operating Income. Net operating income increased $36.6 million to $119.9 million for the three months ended March 31, 2013 compared to $83.3 million for the three months ended March 31, 2012. This increase was primarily due to lease termination income of $24.0 million for the three months ended March 31, 2013 (see the section entitled "Lease Terminations" below). Excluding the lease termination income, net operating income increased $12.6 million to $95.9 million for the three months ended March 31, 2013 compared to $83.3 million for the three months ended March 31, 2012. This increase was primarily due to the following:


•	The acquisition of properties totaling approximately 1.0 million square feet in 2012 and properties totaling 255,650 square feet in the three months ended March 31, 2013 contributed an additional $7.6 million in net operating income for the three months ended March 31, 2013 compared to the three months ended March 31, 2012.


•	The placement of three properties that were operating in 2012 into redevelopment in 2013, offset by the placement of one property that was under development in 2012 into service, resulted in a decrease of $615,000 in net operating income for the three months ended March 31, 2013 compared to the three months ended March 31, 2012.

•

Same property net operating income, excluding the impact of lease terminations, increased $4.5 million to $87.3 million for the three months ended March 31, 2013 compared to $82.8 million for the three months ended March 31, 2012. This increase was primarily due to increased leasing activity in our same property portfolio during 2012 and 2013, which increased the leased percentage from 86.0% at March 31, 2012 to 88.3% at March 31, 2013, and resulted in the following:


•	An increase in the percentage of recoverable expenses in our same property portfolio to 86.6% for the three months ended March 31, 2013 compared to 83.0% for the three months ended March 31, 2012, which contributed an additional $929,000 in net operating income for the three months ended March 31, 2013.


•	An increase in rental revenue of $3.6 million directly attributable to the commencement of leases in our same property portfolio. On a GAAP basis, the current annualized base rent per square foot decreased to $37.92 at March 31, 2013 from $38.47 at March 31, 2012 due to lease up of previously vacant space at a lower average rent than our total overall portfolio on a per square foot basis.

Depreciation and Amortization Expense. Depreciation and amortization expense increased $15.8 million to $60.8 million for the three months ended March 31, 2013 compared to $44.9 million for the three months ended March 31, 2012. The increase was primarily due to the acquisition of properties totaling approximately 1.0 million square feet with an acquisition date fair-value of $436.4 million in 2012 and properties totaling 255,650 square feet with an acquisition date fair-value of $124.0 million in the three months ended March 31, 2013.

General and Administrative Expenses. General and administrative expenses increased $1.4 million to $10.0 million for the three months ended March 31, 2013 compared to $8.6 million for the three months ended March 31, 2012. The increase was

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primarily due to higher staffing levels reflecting our continuing growth and compensation associated with our above-plan leasing and financial performance as compared to the prior year.

Acquisition-Related Expenses. Acquisition-related expenses increased to $2.2 million for the three months ended March 31, 2013 compared to $633,000 for the three months ended March 31, 2012. The increase was primarily due to an increase in acquisition activities in the three months ended March 31, 2013 as compared to the prior year period, including in connection with our pending merger with Wexford Science & Technology.

Interest Expense, Net. Interest cost incurred for the three months ended March 31, 2013 totaled $28.7 million compared to $24.6 million for the three months ended March 31, 2012. Total interest cost incurred increased primarily as a result of higher average debt balances outstanding during 2013 and increases in the average interest rate on our outstanding borrowings due to the issuance of new indebtedness, partially offset by the repayment of certain higher coupon mortgage notes payable. Interest expense, net increased $3.7 million to $25.9 million for the three months ended March 31, 2013 compared to $22.2 million for the three months ended March 31, 2012, primarily as a result of the increase in interest cost incurred.

Interest expense, net consisted of the following (in thousands):



	Three Months Ended
	March 31,
	2013			2012
Mortgage notes payable	$	10,004		$	10,275
Amortization of debt premium on mortgage notes payable	(189		)	(231		)
Amortization of deferred interest costs	1,718			1,742
Derivative instruments	560			10
Unsecured senior term loan	1,940			42
Exchangeable senior notes	1,688			1,688
Unsecured senior notes	10,334			7,678
Amortization of debt discount on notes	219			168
Unsecured line of credit	461			1,508
Unsecured line of credit fees	656			664
Amortization of deferred loan fees	1,351			1,035
Interest cost incurred	28,742			24,579
Capitalized interest	(2,840		)	(2,360		)
Total interest expense, net	$	25,902		$	22,219

Other (Expense) / Income. Other (expense) / income consisted of the following (in thousands):



	Three Months Ended
	March 31,
	2013			2012
Gain on early extinguishment of debt	$	—		$	174
Impairment of privately-held securities	(2,825		)	—
Loss on foreign currency transactions	(160		)	—
Foreign income tax expense	(205		)	—
Total other (expense) / income	$	(3,190	)	$	174

During the three months ended March 31, 2012, we repaid in full the outstanding mortgage note totaling approximately $26.2 million pertaining to the Sidney Street property. This resulted in the recognition of a gain on early extinguishment of debt representing the write-off of unamortized debt premium, partially offset by the write-off of deferred loan fees.

For the three months ended March 31, 2013, we recorded $2.8 million in impairment charges, related to our cost basis investment in and notes receivable from a privately-held company that is in liquidation. Loss on foreign currency transactions reflects decreasing foreign currency rates on our unhedged transactions involving nonfunctional currencies. Foreign income tax expense relates to entity level income taxes on our Granta Park investment.

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Lease Terminations. During the three months ended March 31, 2013 and 2012, we recorded lease termination revenue of $24.0 million and $32,000, respectively. Lease termination revenue for the three months ended March 31, 2013 primarily related to the termination of a lease with Elan Corporation, or Elan, at our Science Center at Oyster Point property. The total impact of the Elan lease termination consists of the following.



	Elan lease termination impact
Lease termination payment	$	46,564
Accrued straight line revenue write off	(4,800		)
Above market lease intangible write off	(6,604		)
Lease termination revenue	35,160
Deferred lease costs write off	(13,237		)
Increase in reported net income	$	21,923

The impact of the Elan lease termination will be recognized through the date of termination of the lease in April 2013. Approximately $21.6 million of the lease termination revenue was recorded during the three months ended March 31, 2013, which increased net income reported during that period by $13.6 million. We expect to record the remaining $13.6 million of lease termination revenue in the second quarter of 2013, which is expected to increase net income reported during that period by $8.3 million.

Loss from Discontinued Operations. In April 2012, we completed the exchange of our Forbes Boulevard property and reclassified the income and expense attributable to the Forbes Boulevard property to discontinued operations for the three months ended March 31, 2012. Loss from discontinued operations was approximately $4.4 million for the three months ended March 31, 2012 due to an impairment loss that was recorded, as the carrying value of the property exceeded the value of the consideration we received when the property was disposed.

Cash Flows

Comparison of the Three Months Ended March 31, 2013 to the Three Months Ended March 31, 2012



	2013			2012			Change
	(In thousands)
Net cash provided by operating activities	$	60,293		$	64,594		$	(4,301	)
Net cash used in investing activities	(203,132		)	(159,208		)	(43,924		)
Net cash provided by financing activities	140,918			91,539			49,379
Ending cash and cash equivalents balance	18,552			13,336			5,216

Net cash provided by operating activities decreased $4.3 million to $60.3 million for the three months ended March 31, 2013 compared to $64.6 million for the three months ended March 31, 2012. The decrease was primarily due to the timing of our first cash payment of interest on our Notes due 2022.

Net cash used in investing activities increased $43.9 million to $203.1 million for the three months ended March 31, 2013 compared to $159.2 million for the three months ended March 31, 2012. The increase reflects funding of our construction loan receivable and increased acquisition related activity during the three months ended March 31, 2013 compared to the three months ended March 31, 2012.

Net cash provided by financing activities increased $49.4 million to $140.9 million for the three months ended March 31, 2013 compared to $91.5 million for the three months ended March 31, 2012. The increase primarily reflects increased financing requirements due to funding of our construction loan receivable and increased acquisition -related activity during the three months ended March 31, 2013 compared to the three months ended March 31, 2012. The proceeds from our common stock offering in February 2013 were primarily used to redeem our Series A preferred stock and to acquire properties.

Funds from Operations

We present funds from operations, or FFO, and FFO excluding acquisition-related expenses, or CFFO, available to common shares and OP units because we consider them to be important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which

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present FFO and CFFO when reporting their results. FFO and CFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and CFFO exclude depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, and, in the case of CFFO, acquisition-related expenses, they provide performance measures that, when compared year over year, reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable property, impairment charges on depreciable real estate, real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Our computations may differ from the methodologies for calculating FFO and CFFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO and CFFO should not be considered alternatives to net income / (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as indicators of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

Our FFO and CFFO available to common shares and OP units and a reconciliation to net income for the three months ended March 31, 2013 and 2012 (in thousands, except per share and share data) were as follows:



	Three Months Ended
	March 31,
	2013			2012
Net income / (loss) available to the common stockholders	$	8,388		$	(1,339	)
Adjustments:
Impairment loss	—			4,552
Noncontrolling interests in operating partnership(1)	154			(26		)
Depreciation and amortization - unconsolidated partnerships	369			323
Depreciation and amortization - consolidated entities	60,764			44,934
Depreciation and amortization - discontinued operations	—			92
Depreciation and amortization - allocable to noncontrolling interest of consolidated joint ventures	(30		)	(27		)
FFO available to common shares and units - basic	69,645			48,509
Interest expense on Exchangeable Senior Notes(2)	1,688			1,688
FFO available to common shares and units - diluted	71,333			50,197
Acquisition-related expenses	2,236			633
CFFO available to common shares and units - diluted	$	73,569		$	50,830
FFO per share - diluted	$	0.41		$	0.30
CFFO per share - diluted	$	0.42		$	0.30
Weighted-average common shares and units outstanding - diluted(2) (3)	174,371,376			167,236,142

____________


(1)	Net income allocable to noncontrolling interests in the operating partnership is included in net income available to unitholders of the operating partnership as reflected in the consolidated financial statements of BioMed Realty, L.P., included elsewhere herein.


(2)	Reflects interest expense adjustment of the Exchangeable Senior Notes based on the “if converted” method. The three months ended March 31, 2013 and 2012 include 10,259,496 and 10,127,232 shares of common stock potentially issuable pursuant to the exchange feature of the Exchangeable Senior Notes based on the “if converted” method, respectively.


(3)	The three months ended March 31, 2013 and 2012 include 1,398,203 and 1,483,706 shares of unvested restricted stock, respectively, which are considered anti-dilutive for purposes of calculating diluted earnings per share.

Liquidity and Capital Resources of BioMed Realty Trust, Inc.

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In this “Liquidity and Capital Resources of BioMed Realty Trust, Inc.” section, the term the “Company” refers only to BioMed Realty Trust, Inc. on an unconsolidated basis, and excludes the operating partnership and all other subsidiaries. For further discussion of the liquidity and capital resources of the Company on a consolidated basis, see the section entitled “Liquidity and Capital Resources of BioMed Realty, L.P.” below.

The Company’s business is operated primarily through the operating partnership. The Company issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company which are fully reimbursed by the operating partnership. The Company itself does not hold any indebtedness, and its only material asset is its ownership of partnership interests of the operating partnership. The Company’s principal funding requirement is the payment of dividends on its common and preferred shares. The Company’s principal source of funding for its dividend payments is distributions it receives from the operating partnership.

As of March 31, 2013, the Company owned an approximate 98.3% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining 1.7% partnership interest (including LTIP units) in the operating partnership. As the sole general partner of the operating partnership, BioMed Realty Trust, Inc. has the full, exclusive and complete responsibility for the operating partnership’s day-to-day management and control.

The liquidity of the Company is dependent on the operating partnership’s ability to make sufficient distributions to the Company. The primary cash requirement of the Company is its payment of dividends to its stockholders. The Company also guarantees some of the operating partnership’s debt, as discussed further in Note 5 of the Notes to Consolidated Financial Statements included elsewhere herein. If the operating partnership fails to fulfill certain of its debt requirements, which trigger the Company’s guarantee obligations, then the Company will be required to fulfill its cash payment commitments under such guarantees. However, the Company’s only significant asset is its investment in the operating partnership.

We believe the operating partnership’s sources of working capital, specifically its cash flow from operations, and borrowings available under its unsecured line of credit, are adequate for it to make its distribution payments to the Company and, in turn, for the Company to make its dividend payments to its stockholders. However, we cannot assure you that the operating partnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including its ability to make distribution payments to the Company. The unavailability of capital could adversely affect the operating partnership’s ability to pay its distributions to the Company, which would in turn, adversely affect the Company’s ability to pay cash dividends to its stockholders.

Our short-term liquidity requirements consist primarily of funds to pay for future dividends expected to be paid to the Company’s stockholders, operating expenses and other expenditures directly associated with our properties, interest expense and scheduled principal payments on outstanding indebtedness, general and administrative expenses, construction projects, capital expenditures, tenant improvements, leasing commissions, and payment of the cash consideration for our pending merger with Wexford Science & Technology.

The Company may from time to time seek to repurchase or redeem the operating partnership’s outstanding debt, the Company’s shares of common stock or other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

For the Company to maintain its qualification as a REIT, it must pay dividends to its stockholders aggregating annually at least 90% of its ordinary taxable income. While historically the Company has satisfied this distribution requirement by making cash distributions to its stockholders, it may choose to satisfy this requirement by making distributions of cash or other property, including, in limited circumstances, the Company’s own stock. As a result of this distribution requirement, the operating partnership cannot rely on retained earnings to fund its ongoing operations to the same extent that other companies whose parent companies are not REITs can. The Company may need to continue to raise capital in the equity markets to fund the operating partnership’s working capital needs, acquisitions and developments.

The Company is a well-known seasoned issuer with an effective shelf registration statement that allows the Company to register an unspecified amount of various classes of equity securities and the operating partnership to register an unspecified amount of various classes of debt securities. As circumstances warrant, the Company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing. When the Company receives proceeds from preferred or common equity issuances, it is required by the operating partnership’s partnership agreement to contribute the proceeds from its equity issuances to the operating partnership in exchange for preferred or partnership units of the operating partnership. The operating partnership may use the proceeds to repay debt, including borrowings under its unsecured line of credit, to develop new or existing properties, to acquire properties or for general corporate purposes.

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Liquidity and Capital Resources of BioMed Realty, L.P.

In this “Liquidity and Capital Resources of BioMed Realty, L.P.” section, the terms “we,” “our” and “us” refer to the operating partnership together with its consolidated subsidiaries or our operating partnership and BioMed Realty Trust, Inc. together with their consolidated subsidiaries, as the context requires. BioMed Realty Trust, Inc., or our Parent Company, is our sole general partner and consolidates our results of operations for financial reporting purposes. Because we operate on a consolidated basis with our Parent Company, the section entitled “Liquidity and Capital Resources of BioMed Realty Trust, Inc.” should be read in conjunction with this section to understand our liquidity and capital resources on a consolidated basis.

Our short-term liquidity requirements consist primarily of funds to pay for future dividends expected to be paid to our Parent Company’s stockholders, operating expenses and other expenditures directly associated with our properties, interest expense and scheduled principal payments on outstanding indebtedness, general and administrative expenses, construction projects, capital expenditures, tenant improvements and leasing commissions and payment of the cash consideration for our pending merger with Wexford Science & Technology.

The remaining principal payments due for our consolidated and our proportionate share of unconsolidated indebtedness (excluding debt premiums and discounts) as of March 31, 2013 were as follows (in thousands):



	2013		2014		2015		2016		2017		Thereafter		Total
Consolidated indebtedness:
Fixed-rate mortgages	$	6,292	$	339,088	$	6,482	$	143,784	$	27,338	$	42,471	$	565,455
Unsecured line of credit	—		—		215,000		—		—		—		215,000
Term Loan - U.S. dollars	—		—		—		—		243,596		—		243,596
Term Loan - GBP (1)	—		—		—		—		151,890		—		151,890
Exchangeable Senior Notes	—		—		—		—		—		180,000		180,000
Notes due 2016	—		—		—		400,000		—		—		400,000
Notes due 2020	—		—		—		—		—		250,000		250,000
Notes due 2022	—		—		—		—		—		250,000		250,000
Total consolidated indebtedness	6,292		339,088		221,482		543,784		422,824		722,471		2,255,941
Share of unconsolidated indebtedness:
Secured construction loan	27,795		—		—		—		—		—		27,795
Total share of unconsolidated indebtedness	27,795		—		—		—		—		—		27,795
Total indebtedness	$	34,087	$	339,088	$	221,482	$	543,784	$	422,824	$	722,471	$	2,283,736

____________


(1)	In August 2012, we converted approximately $156.4 million of outstanding borrowings of our Term Loan into GBP equal to £100.0 million. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.52 to £1.00 and $1.62 to £1.00 at March 31, 2013 and December 31, 2012, respectively.

Our $337.5 million mortgage loan secured by our Center for Life Science | Boston property matures in 2014, and includes a financial covenant relating to a minimum amount of net worth. Management believes that it was in compliance with this covenant as of March 31, 2013.

On February 19, 2013, our Parent Company issued 14,605,000 shares of common stock, including the exercise in full of the underwriters' option to purchase an additional 1,905,000 shares, resulting in net proceeds of approximately $287.0 million, after deducting the underwriters' discounts and commissions and offering expenses. The net proceeds were contributed to us in exchange for 14,605,000 operating partnership units, and we utilized the net proceeds to fund the acquisition of the Woodside Technology Park property, to fund a portion of the redemption of our Parent Company's Series A preferred stock, to repay a portion of the outstanding indebtedness on our unsecured line of credit and for other general corporate and working capital purposes.

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On March 15, 2013, our Parent Company redeemed all 7,920,000 outstanding shares of its Series A preferred stock for approximately $198.0 million, or $25.00 per share, net of accrued dividends of approximately $2.4 million, or $0.30217 per share.

In March 2013, we entered into a definitive merger agreement to acquire Wexford Science & Technology, LLC, which we refer to as the Wexford Merger. The aggregate consideration for the Wexford Merger is approximately $640 million, excluding transaction costs and subject to adjustment based on working capital levels and construction and development costs incurred prior to closing. The consideration payable at closing includes (a) approximately $169 million in assumed debt at fair value (net of funded reserves), (b) approximately $133 million payable in common equity of us and our Parent Company (of which $125 million will be payable either in shares of our Parent Company's common stock or in cash, at our election, and (c) the balance payable in cash. The Wexford Merger is subject to the receipt of lender, ground lessor and other third-party consents, waivers of rights of first offer and customary closing conditions, and we can offer no assurances that the Wexford Merger will close on the terms described herein, or at all.

On April 2, 2013, our Parent Company issued 17,250,000 shares of common stock, including the exercise in full of the underwriters' option to purchase an additional 2,250,000 shares, resulting in net proceeds of approximately $354.1 million, after deducting the underwriters' discounts and commissions and offering expenses. The net proceeds were contributed to us in exchange for 17,250,000 operating partnership units, and we expect to utilize the net proceeds to fund a portion of the purchase price in connection with the Wexford Merger, to repay a portion of the outstanding indebtedness under our unsecured line of credit and for other general corporate and working capital purposes.

The terms of the indentures governing the Notes due 2016, the Notes due 2020 and the Notes due 2022 require compliance with various financial covenants, including limits on the amount of total leverage and secured debt maintained by us and which require us to maintain minimum levels of debt service coverage. Management believes that it was in compliance with these covenants as of March 31, 2013.

The Term Loan and the credit agreement governing our unsecured line of credit include certain restrictions and covenants which require compliance with financial covenants relating to the minimum amounts of net worth, fixed charge coverage, unsecured debt service coverage, overall leverage and unsecured leverage ratios, the maximum amount of secured indebtedness and certain investment limitations. Management believes that it was in compliance with these covenants as of March 31, 2013.

Our long-term liquidity requirements consist primarily of funds to pay for scheduled debt maturities, construction obligations, renovations, expansions, capital commitments and other non-recurring capital expenditures that need to be made periodically, and the costs associated with acquisitions of properties that we pursue. At March 31, 2013, we had acquired a participating interest in a construction loan and entered into construction contracts and lease agreements, with a remaining commitment totaling approximately $299.3 million related to funding the construction loan, tenant improvements, leasing commissions and construction-related capital expenditures.

We expect to satisfy our short-term liquidity requirements through our existing working capital and cash provided by our operations, the issuance of long-term secured and unsecured indebtedness, the issuance of additional equity or debt securities and the use of net proceeds from the disposition of non-strategic assets. Our rental revenues, provided by our leases, generally provide cash inflows to meet our debt service obligations, pay general and administrative expenses, and fund regular distributions. We expect to satisfy our long-term liquidity requirements through our existing working capital, cash provided by operations, long-term secured and unsecured indebtedness and the issuance of additional equity or debt securities. We also expect to use funds available under our unsecured line of credit to finance acquisition and development activities and capital expenditures on an interim basis. In addition, we have an investment grade credit rating, which we believe will provide us with continued access to the unsecured debt markets, providing us with an additional source of long term financing.

BioMed Realty Trust, Inc.’s total capitalization at March 31, 2013 was approximately $6.0 billion and was comprised of the following (dollars in thousands):

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	Shares/Units at	Aggregate Principal Amount or Dollar Value Equivalent		Percent of Total Capitalization
	March 31, 2013	Aggregate Principal Amount or Dollar Value Equivalent		Percent of Total Capitalization
Debt:
Mortgage notes payable (1)		$	565,455	9.5	%
Exchangeable Senior Notes		180,000		3.0	%
Notes due 2016 (1)		400,000		6.7	%
Notes due 2020 (1)		250,000		4.2	%
Notes due 2022 (1)		250,000		4.2	%
Term Loan (2)		395,486		6.6	%
Unsecured line of credit		215,000		3.6	%
Total debt		2,255,941		37.8	%
Equity:
Common shares, operating partnership and LTIP units outstanding (3)	171,974,069	3,714,640		62.2	%
Total capital		3,714,640		62.2	%
Total capitalization		$	5,970,581	100.0	%

____________


(1)	Amounts exclude unamortized debt premiums and unamortized debt discounts.


(2)	In August 2012, we converted approximately $156.4 million of outstanding borrowings of our Term Loan into GBP equal to £100.0 million. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.52 to £1.00 and $1.62 to £1.00 at March 31, 2013 and December 31, 2012, respectively.

(3)

Aggregate amount based on the market closing price of the common stock of our Parent Company of $21.60 per share on the last trading day of the quarter. Limited partners who have been issued OP units have the right to require the operating partnership to redeem part or all of their OP units, which right with respect to LTIP units is subject to vesting and the satisfaction of other conditions. We may elect to redeem those OP units in exchange for shares of our Parent Company’s common stock on a one-for-one basis, subject to adjustment. At March 31, 2013, 169,054,707 of the outstanding OP units had been issued to our Parent Company upon receipt of the net proceeds from the issuance of an equal number of shares of our Parent Company’s common stock.

Although our organizational documents do not limit the amount of indebtedness that we may incur, our Parent Company’s board of directors has adopted a policy of targeting our indebtedness at approximately 50% of our total asset book value. At March 31, 2013, the ratio of debt to total asset book value was approximately 45.1%. However, our Parent Company’s board of directors may from time to time modify our debt policy in light of current economic or market conditions including, but not limited to, the relative costs of debt and equity capital, market conditions for debt and equity securities and fluctuations in the market price of our Parent Company’s common stock. Accordingly, we may increase or decrease our debt to total asset book value ratio beyond the limit described above. In addition, the terms of the indentures governing our Notes due 2016, Notes due 2020 and Notes due 2022, the Term Loan credit facility and the credit agreement governing our unsecured line of credit require compliance with various financial covenants and ratios, which are discussed in detail above.

We may from time to time seek to repurchase or redeem our outstanding debt or OP units (subject to the repurchase or redemption of an equivalent number of shares of common stock by our Parent Company) or other securities, and our Parent Company may seek to repurchase or redeem its outstanding shares of common stock or other securities, in each case in open market purchases, privately negotiated transactions or otherwise. Such repurchases or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Off-Balance Sheet Arrangements

As of March 31, 2013, we had investments in the following unconsolidated partnerships: (1) McKellar Court limited partnership, which owns a single tenant occupied property located in San Diego; and (2) two limited liability companies with PREI, which own a portfolio of properties located in Cambridge, Massachusetts (see Note 8 of the Notes to Consolidated Financial Statements included elsewhere herein for more information).

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The McKellar Court partnership is a VIE; however, we are not the primary beneficiary. The limited partner at McKellar Court is the only tenant in the property and will bear a disproportionate amount of any losses. We, as the general partner, will receive 22% of the operating cash flows and 75% of the gains upon sale of the property. We account for our general partner interest using the equity method. The assets of the McKellar Court partnership were $14.0 million and $14.1 million and the liabilities were $10.5 million and $10.5 million at March 31, 2013 and December 31, 2012, respectively. Our equity in net income of the McKellar Court partnership was $226,000 and $227,000 for the three months ended March 31, 2013 and 2012, respectively. In December 2009, we 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 (1) January 1, 2020, or (2) the day that the limited partner exercises an option to purchase our ownership interest. 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.

PREI II LLC is a VIE; however, we are not the primary beneficiary. PREI will bear the majority of any losses incurred. PREI I LLC does not qualify as a VIE. In addition, consolidation is not required as we do not control the limited liability companies. In connection with the formation of the PREI joint ventures in April 2007, we contributed 20% of the initial capital. However, the amount of cash flow distributions that we receive may be more or less based on the nature of the circumstances underlying the cash distributions due to provisions in the operating agreements governing the distribution of funds to each member and the occurrence of extraordinary cash flow events. We account for our member interests using the equity method for both limited liability companies. The assets of the PREI joint ventures were $251.8 million and $249.9 million at March 31, 2013 and December 31, 2012, respectively, and the liabilities were $147.6 million and $144.7 million at March 31, 2013 and December 31, 2012, respectively. Our equity in net loss of the PREI joint ventures was $545,000 and $581,000 for the three months ended March 31, 2013 and 2012, respectively.

We are the primary beneficiary in six other VIEs, consisting of single-tenant properties in which the tenant has a fixed-price purchase option, which are consolidated and reflected in our consolidated financial statements.

Our proportionate share of outstanding debt related to our unconsolidated partnerships is summarized below (dollars in thousands):



					Principal Amount(1)
Name	Ownership Percentage		Interest Rate(2)		March 31, 2013		December 31, 2012		Maturity Date (3)
PREI I LLC (4)	20	%	3.2	%	$	27,795	$	27,795	August 13, 2013
Total					$	27,795	$	27,795

____________


(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 March 31, 2013.


(3)	The wholly-owned subsidiary of PREI I LLC has an option to extend the maturity date of this loan for one year.

(4)

Amount represents our proportionate share of a secured loan, which bears interest at a LIBOR-indexed variable rate with a borrowing capacity of up to $139.0 million. The secured loan was executed by a wholly-owned subsidiary of PREI I LLC in connection with the construction of the 650 East Kendall Street property. In accordance with the loan agreement, Prudential Insurance Corporation of America has guaranteed repayment of the secured loan.

Cash Distribution Policy

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2004. To qualify as a REIT, we must meet a number of organizational and operational requirements, including the requirement that we distribute currently at least 90% of our ordinary taxable income to our stockholders. It is our intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to U.S. corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for subsequent tax years. Even if we qualify as a REIT for federal income tax purposes, we may be subject to certain foreign state and local taxes on our income and to federal income and excise taxes on our undistributed taxable income, i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Code and applicable regulations thereunder.

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While we most recently paid a dividend on shares of common stock at an annual dividend rate of $0.94 per share, the actual dividend payable in the future will be determined by our board of directors based upon the circumstances at the time of declaration and, as a result, the actual dividend payable in the future may vary from the current rate. The decision to declare and pay dividends on shares of our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions and general overall economic conditions and other factors.

The following table provides historical dividend information for our common and preferred stock for the prior two fiscal years and the three months ended March, 2013:

Quarter Ended

Date Declared

Date Paid

Dividend

per Common Share

Dividend

per Preferred Share

March 31, 2011

March 14, 2011

April 15, 2011

0.200

0.46094

June 30, 2011

June 15, 2011

July 15, 2011

0.200

0.46094

September 30, 2011

September 15, 2011

October 17, 2011

0.200

0.46094

December 31, 2011

December 14, 2011

January 17, 2012

0.200

0.46094

March 31, 2012

March 15, 2012

April 16, 2012

0.215

0.46094

June 30, 2012

June 15, 2012

July 16, 2012

0.215

0.46094

September 30, 2012

September 14, 2012

October 15, 2012

0.215

0.46094

December 31, 2012

December 12, 2012

January 15, 2013

0.235

0.46094

March 31, 2013(1)

March 15, 2013

April 15, 2013

0.235

—

____________

(1) On March 15, 2013, we redeemed all 7,920,000 outstanding shares of our Series A preferred stock for approximately $198.0 million, or $25.00 per share, net of accrued dividends of approximately $2.4 million, or $0.30217 per share.

Inflation

Some of our leases contain provisions designed to mitigate the adverse impact of inflation. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions. In addition, most of our leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance. This may reduce our exposure to increases in costs and operating expenses resulting from inflation, assuming our properties remain leased and tenants fulfill their obligations to reimburse us for such expenses.

Our unsecured line of credit, a portion of our Term Loan and our proportionate share of the outstanding balance of the PREI joint ventures’ secured construction loan bear interest at variable rates, which will be influenced by changes in short-term interest rates, and will be sensitive to inflation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair-values relevant to financial instruments depend upon prevailing market interest rates. Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk, equity price risk, and foreign currency exchange rate risk.

Interest Rate Risk

As of March 31, 2013, our consolidated debt consisted of the following (dollars in thousands):

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					Effective Interest
			Percent of		Rate at
	Principal Balance (1)		Total Debt		March 31, 2013
Fixed interest rate (2)	$	1,643,787	72.9	%	5.36	%
Variable interest rate (3)	610,486		27.1	%	1.89	%
Total/weighted-average effective interest rate	$	2,254,273	100.0	%	4.42	%

____________


(1)	Principal balance includes only consolidated indebtedness.


(2)	Includes five mortgage notes payable secured by certain of our properties (including unamortized premiums), our Exchangeable Senior Notes, our Notes due 2016 (including unamortized debt discount), our Notes due 2020 (including unamortized debt discount) and our Notes due 2022 (including unamortized debt discount).

(3)

Includes our Term Loan and our unsecured line of credit, which bear interest at LIBOR-indexed variable interest rates, plus a credit spread. On August 2, 2012, we converted approximately $156.4 million of outstanding borrowings of the Term Loan into GBP equal to £100.0 million. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.52 to £1.00 at March 31, 2013. The stated effective rate for the variable interest debt excludes the impact of any interest rate swap agreements. We have entered into four U.S. dollar interest rate swaps, which are intended to have the effect of initially fixing the interest rate on $200.0 million of the outstanding amount under our Term Loan at a weighted-average interest rate of approximately 2.81% for a five-year term (including applicable credit spreads for the underlying debt), subject to adjustment based on our credit ratings. We have entered into two GBP interest rate swaps, which are intended to have the effect of initially fixing the interest rate on £100.0 million of the outstanding amount under our Term Loan at approximately 2.39% for the remaining term of the Term Loan (including applicable credit spreads for the underlying debt), subject to adjustment based on our credit ratings.

To determine the fair-value of our outstanding consolidated indebtedness, we utilize quoted market prices to estimate the fair-value, when available. If quoted market prices are not available, we calculate the fair-value of our mortgage notes payable and other fixed-rate debt based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the notes’ collateral. In determining the current market rate for fixed-rate debt, a market credit spread is added to the quoted yields on federal government treasury securities with similar terms to debt. In determining the current market rate for variable-rate debt, a market credit spread is added to the current effective interest rate. At March 31, 2013, the fair-value of the fixed-rate debt was estimated to be $1.8 billion compared to the net carrying value of $1.6 billion (including debt premiums and discounts). At March 31, 2013, the fair-value of the variable-rate debt was estimated to be equal to the net carrying value of $610.5 million. We do not believe that the interest rate risk represented by our fixed-rate debt or the risk of changes in the credit spread related to our variable-rate debt was material as of March 31, 2013 in relation to total assets of $5.0 billion and equity market capitalization of $3.7 billion of BioMed Realty Trust, Inc.’s common stock, and BioMed Realty, L.P.’s OP units.

Based on the unhedged outstanding balances of our unsecured line of credit, our Term Loan and our proportionate share of the outstanding balance of the PREI joint ventures’ secured construction loan at March 31, 2013, a 1% change in interest rates would change our interest costs by approximately $2.9 million per year. This amount was determined by considering the impact of hypothetical interest rates on our financial instruments. This analysis does not consider the effect of any change in overall economic activity that could occur in that environment. Further, in the event of a change of the magnitude discussed above, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure.

In order to modify and manage the interest rate characteristics of our outstanding debt and to limit the effects of interest rate risks on our operations, we may utilize a variety of financial instruments, including interest rate swaps, caps and treasury locks in order to mitigate our interest rate risk on a related financial instrument. The use of these types of instruments to hedge our exposure to changes in interest rates carries additional risks, including counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. To limit counterparty credit risk we will seek to enter into such agreements with major financial institutions with high credit ratings. There can be no assurance that we will be able to adequately protect against the foregoing risks and will ultimately realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging activities. We do not enter into such contracts for speculative or trading purposes.

Equity Price Risk

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We have exposure to equity price market risk because of our equity investments in certain publicly traded companies and privately held entities. We classify investments in publicly traded companies as “available for sale” and, consequently, record them on our condensed consolidated balance sheets at fair-value, with unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. Investments in privately held entities are generally accounted for under the cost method because we do not influence any of the operating or financial policies of the entities in which we invest. For all investments, we recognize other-than-temporary declines in value against earnings in the same period during which the decline in value was deemed to have occurred. There is no assurance that future declines in value will not have a material adverse impact on our future results of operations. A 10% decrease in the fair-value of our equity investments as of March 31, 2013, would equal approximately $1.6 million.

Foreign Currency Exchange Rate Risk

We have exposure to foreign currency exchange rate risk related to our subsidiary operating in the United Kingdom. The functional currency of our foreign subsidiary is GBP. Gains or losses resulting from the translation of our foreign subsidiary’s balance sheet and statement of income are included in other comprehensive income. Gains or losses will be reflected in our statements of income when there is a sale of our investment in these operations or upon a complete or substantially complete liquidation of the investment. For the three months ended March 31, 2013, total revenues from our foreign subsidiary were $4.5 million, which represented 2.8% of our total revenues. Our net investment in properties outside the United States was $191.8 million and $188.8 million as of March 31, 2013 and December 31, 2012, respectively. On August 2, 2012, we converted a portion of the outstanding borrowings of our Term Loan into GBP, which we designated as a net investment hedge to mitigate our risk to fluctuations in foreign currency exchange rates. As a result, our unhedged net investment in properties outside the United States was $39.9 million as of March 31, 2013.

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ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures (BioMed Realty Trust, Inc.)

BioMed Realty Trust, Inc. maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to its management, including BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, BioMed Realty Trust, Inc. has investments in unconsolidated entities. As BioMed Realty Trust, Inc. manages these entities, its disclosure controls and procedures with respect to such entities are essentially consistent with those it maintains with respect to its consolidated entities.

As required by Rule 13a-15(b) under the Exchange Act, BioMed Realty Trust, Inc. carried out an evaluation, under the supervision and with the participation of its management, including BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of BioMed Realty Trust, Inc.’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer concluded that BioMed Realty Trust, Inc.’s disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in BioMed Realty Trust, Inc.’s internal control over financial reporting during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, BioMed Realty Trust, Inc.’s internal control over financial reporting.

Controls and Procedures (BioMed Realty, L.P.)

BioMed Realty, L.P. maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to its management, including BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, BioMed Realty, L.P. has investments in unconsolidated entities. As BioMed Realty, L.P. manages these entities, its disclosure controls and procedures with respect to such entities are essentially consistent with those it maintains with respect to its consolidated entities.

As required by 13a-15(b) under the Exchange Act, BioMed Realty, L.P. carried out an evaluation, under the supervision and with the participation of its management, including BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of BioMed Realty, L.P.’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, BioMed Realty Trust, Inc.’s Chief Executive Officer and Chief Financial Officer concluded that BioMed Realty, L.P.’s disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in BioMed Realty, L.P.’s internal control over financial reporting during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, BioMed Realty, L.P.’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Although we are involved in legal proceedings arising in the ordinary course of business, we are not currently a party to any legal proceedings nor is any legal proceeding threatened against us that we believe would have a material adverse effect on our financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors described under Part I, Item 1A, “Risk Factors,” in our annual report on Form 10-K for the year ended December 31, 2012. Please refer to that section for disclosures regarding the risks and uncertainties related to our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities and Use of Proceeds (BioMed Realty Trust, Inc.)

The following table presents information regarding our redemption of our Series A preferred stock during the three months ended March 31, 2013.



Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program(2)
January 1, 2013 - January 31, 2013	—	—		—	—
February 1, 2013 - February 28, 2013	—	—		—	—
March 1, 2013 - March 31, 2013(1)	7,920,000	$	25.30217	7,920,000	—
Total	7,920,000	$	25.30217	7,920,000	—

____________

(1) On February 12, 2013, we distributed a Notice of Redemption to all holders of record of our outstanding Series A preferred stock, announcing the redemption of all 7,920,000 outstanding shares of the Series A preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends. The redemption was made at our option pursuant to Section 5(c) of the Articles Supplementary establishing and fixing the rights and preferences of the Series A preferred stock. The redemption date was March 15, 2013.

(2) We redeemed all outstanding shares of our Series A preferred stock on March 15, 2013.

Unregistered Sales of Equity Securities and Use of Proceeds (BioMed Realty L.P.)

During the three months ended March 31, 2013, our Parent Company issued, net of forfeitures, an aggregate of 108,493 shares of its common stock in connection with restricted stock awards under its incentive award plan for no cash consideration. For each share of common stock issued by our Parent Company in connection with such an award, the operating partnership issued a restricted operating partnership unit to our Parent Company, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, or the Securities Act. During the three months ended March 31, 2013, the operating partnership issued an aggregate of 108,493 restricted operating partnership units to our Parent Company, as required by the operating partnership's partnership agreement.

On February 13, 2013, our Parent Company sold 14,605,000 shares of its common stock, including the exercise in full of the underwriters' option to purchase an additional 1,905,000 shares, to Morgan Stanley & Co. LLC and Raymond James & Associates, Inc., as representatives of the underwriters. Our Parent Company contributed the net proceeds from this offering of approximately $287.0 million, after deducting the underwriters' discounts and commissions and offering expenses, to us in exchange for 14,605,000 operating partnership units. The operating partnership units were issued in reliance on the exemption from registration provided

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by Section 4(2) of the Securities Act. The shares of common stock were offered and sold under a prospectus supplement and related prospectus filed with the Securities and Exchange Commission pursuant to our Parent Company's shelf registration statement on Form S-3 (File No 33-183669).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS



Exhibit Number		Description of Exhibit
2.1		Agreement and Plan of Merger, dated as of March 26, 2013, by and among BioMed Trust, Inc., BioMed Realty, L.P., Westco Sub LLC, Wexford Science & Technology, LLC and Wexford Equities, LLC.(1)
3.1		Articles of Amendment of BioMed Realty Trust, Inc.(2)
31.1		Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certifications 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.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

____________


(1)	Incorporated herein by reference to BioMed Realty Trust, Inc.’s and BioMed Realty, L.P.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 26, 2013.


(2)	Incorporated herein by reference to BioMed Realty Trust, Inc.’s and BioMed Realty, L.P.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2013.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.



BIOMED REALTY TRUST, INC.		BIOMED REALTY, L.P.
		By: BioMed Realty Trust, Inc.
		Its general partner

/s/ ALAN D. GOLD		/s/ ALAN D. GOLD
Alan D. Gold		Alan D. Gold
Chairman of the Board and		Chairman of the Board and
Chief Executive Officer		Chief Executive Officer
(Principal Executive Officer)		(Principal Executive Officer)

/s/ GREG N. LUBUSHKIN		/s/ GREG N. LUBUSHKIN
Greg N. Lubushkin		Greg N. Lubushkin
Chief Financial Officer		Chief Financial Officer
(Principal Financial Officer)		(Principal Financial Officer)

Dated:	May 2, 2013	Dated:	May 2, 2013

EXHIBIT INDEX



Exhibit Number		Description of Exhibit
2.1		Agreement and Plan of Merger, dated as of March 26, 2013, by and among BioMed Trust, Inc., BioMed Realty, L.P., Westco Sub LLC, Wexford Science & Technology, LLC and Wexford Equities, LLC.(1)
3.1		Articles of Amendment of BioMed Realty Trust, Inc.(2)
31.1		Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certifications 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.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

____________


(1)	Incorporated herein by reference to BioMed Realty Trust, Inc.’s and BioMed Realty, L.P.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 26, 2013.


(2)	Incorporated herein by reference to BioMed Realty Trust, Inc.’s and BioMed Realty, L.P's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2013.