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-2013.9.30-10Q

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 September 30, 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 November 6, 2013 was 192,111,755.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended September 30, 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 September 30, 2013, BioMed Realty Trust, Inc. owned an approximate 97.3% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining 2.7% 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 SEPTEMBER 30, 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 September 30, 2013 (Unaudited) and December 31, 2012	7

	Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (Unaudited)	8

	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30 2013 and 2012 (Unaudited)	9

	Consolidated Statement of Equity for the nine months ended September 30, 2013 (Unaudited)	10

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (Unaudited)	11

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

	Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and December 31, 2012	13

	Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (Unaudited)	14

	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012 (Unaudited)	15

	Consolidated Statement of Capital for the nine months ended September 30, 2013 (Unaudited)	16

	Consolidated Statements of Cash Flows for the nine months ended September 30, 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		37

Item 3 Quantitative and Qualitative Disclosures About Market Risk		56

Item 4 Controls and Procedures		59

PART II - OTHER INFORMATION

Item 1 Legal Proceedings		60

Item 1A Risk Factors		60

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		60

Item 3 Defaults Upon Senior Securities		60




Item 4 Mine Safety Disclosures		60

Item 5 Other Information		60

Item 6 Exhibits		61

SIGNATURES		62

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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)



	September 30, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments in real estate, net	$	5,172,102		$	4,319,716
Investments in unconsolidated partnerships	31,978			32,367
Cash and cash equivalents	29,230			19,976
Accounts receivable, net	10,580			4,507
Accrued straight-line rents, net	169,272			152,096
Deferred leasing costs, net	202,393			172,363
Other assets	278,600			133,454
Total assets	$	5,894,155		$	4,834,479
LIABILITIES AND EQUITY
Mortgage notes payable, net	$	716,733		$	571,652
Exchangeable senior notes	180,000			180,000
Unsecured senior notes, net	894,850			894,177
Unsecured senior term loans	755,226			405,456
Unsecured line of credit	20,000			118,000
Accounts payable, accrued expenses and other liabilities	311,287			180,653
Total liabilities	2,878,096			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 at September 30, 2013; and 7,920,000 shares issued and outstanding at December 31, 2012, $198,000 liquidation preference ($25.00 per share)	—			191,469
Common stock, $.01 par value, 250,000,000 shares authorized, 192,106,749 shares issued and outstanding at September 30, 2013; and 200,000,000 shares authorized, 154,327,818 shares issued and outstanding at December 31, 2012	1,921			1,543
Additional paid-in capital	3,552,595			2,781,849
Accumulated other comprehensive loss, net	(38,618		)	(54,725		)
Dividends in excess of earnings	(545,819		)	(443,280		)
Total stockholders’ equity	2,970,079			2,476,856
Noncontrolling interests	45,980			7,685
Total equity	3,016,059			2,484,541
Total liabilities and equity	$	5,894,155		$	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						For the Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Revenues:
Rental	$	116,884		$	101,467		$	327,932		$	288,650
Tenant recoveries	38,907			31,765			104,037			89,155
Other revenue	3,441			1,305			47,352			1,590
Total revenues	159,232			134,537			479,321			379,395
Expenses:
Rental operations	51,688			38,944			134,182			112,717
Depreciation and amortization	61,898			51,372			186,219			143,882
General and administrative	11,934			10,226			32,358			27,416
Acquisition-related expenses	907			176			5,263			13,055
Total expenses	126,427			100,718			358,022			297,070
Income from operations	32,805			33,819			121,299			82,325
Equity in net loss of unconsolidated partnerships	(112		)	(339		)	(697		)	(1,011		)
Interest expense, net	(27,870		)	(26,817		)	(79,890		)	(72,863		)
Other expense	(687		)	(208		)	(4,079		)	(580		)
Income from continuing operations	4,136			6,455			36,633			7,871
Loss from discontinued operations	—			—			—			(4,370		)
Net income	4,136			6,455			36,633			3,501
Net loss / (income) attributable to noncontrolling interests	111			(46		)	(268		)	156
Net income attributable to the Company	4,247			6,409			36,365			3,657
Preferred stock dividends	—			(3,651		)	(2,393		)	(10,952		)
Cost on redemption of preferred stock	—			—			(6,531		)	—
Net income / (loss) available to common stockholders	$	4,247		$	2,758		$	27,441		$	(7,295	)
Income / (loss) from continuing operations per share available to common stockholders:
Basic and diluted earnings per share	$	0.02		$	0.02		$	0.15		$	(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	$	0.02		$	0.02		$	0.15		$	(0.05	)
Weighted-average common shares outstanding:
Basic	190,646,722			152,785,451			179,138,169			152,739,130
Diluted	196,131,643			155,728,209			183,121,240			152,739,130

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						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income	$	4,136		$	6,455		$	36,633		$	3,501
Other comprehensive income:
Foreign currency translation adjustments	1,866			576			(252		)	3,567
Unrealized (loss) / gain from derivative instruments, net	(771		)	(1,966		)	4,405			(5,563		)
Amortization of deferred interest costs	1,705			1,730			5,134			5,209
Reclassification of unrealized loss on equity securities	—			—			—			545
Reclassification on sale of equity securities	—			(6		)	—			(38		)
Unrealized gain / (loss) on equity securities	2,280			10			8,435			(509		)
Total other comprehensive income	5,080			344			17,722			3,211
Comprehensive income	9,216			6,799			54,355			6,712
Comprehensive (income) / loss attributable to noncontrolling interests	(493		)	(51		)	(1,883		)	95
Comprehensive income attributable to the Company	$	8,723		$	6,748		$	52,472		$	6,807

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)/Income, 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)/Income, 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	—			31,855,000	319		640,811			—			—			641,130			—			641,130
Net issuances of unvested restricted common stock	—			335,308	3		(4,803		)	—			—			(4,800		)	—			(4,800		)
Conversion of OP units to common stock	—			20,396	—		(87		)	—			—			(87		)	87			—
Redemption of Series A preferred stock	(191,469		)	—	—		—			—			(6,531		)	(198,000		)	—			(198,000		)
Vesting of share-based awards	—			—	—		9,324			—			—			9,324			—			9,324
Issuance of common stock in connection with Wexford merger	—			5,568,227	56		116,487			—			—			116,543			—			116,543
Issuance of OP units	—			—	—		—			—			—			—			48,571			48,571
Reallocation of noncontrolling interests to equity	—			—	—		9,014			—			—			9,014			(9,014		)	—
Common stock dividends	—			—	—		—			—			(129,980		)	(129,980		)	—			(129,980		)
OP unit distributions	—			—	—		—			—			—			—			(3,232		)	(3,232		)
Net income	—			—	—		—			—			36,365			36,365			268			36,633
Preferred stock dividends	—			—	—		—			—			(2,393		)	(2,393		)	—			(2,393		)
Foreign currency translation adjustments	—			—	—		—			(267		)	—			(267		)	15			(252		)
Unrealized gain on equity securities	—			—	—		—			7,075			—			7,075			1,360			8,435
Amortization of deferred interest costs	—			—	—		—			5,013			—			5,013			121			5,134
Unrealized gain on derivative instruments, net	—			—	—		—			4,286			—			4,286			119			4,405
Balance at September 30, 2013	$	—		192,106,749	$	1,921	$	3,552,595		$	(38,618	)	$	(545,819	)	$	2,970,079		$	45,980		$	3,016,059

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Nine Months Ended
	September 30,
	2013			2012

Operating activities:
Net income	$	36,633		$	3,501
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	186,219			143,974
Allowance for doubtful accounts	730			1,167
Non-cash revenue adjustments	9,590			9,045
Other non-cash adjustments	9,903			15,283
Compensation expense related to restricted common stock and LTIP units	9,567			8,670
Distributions representing a return on capital from unconsolidated partnerships	178			1,145
Changes in operating assets and liabilities:
Accounts receivable	(5,573		)	(2,040		)
Accrued straight-line rents	(17,470		)	(15,740		)
Deferred leasing costs	(12,833		)	(9,873		)
Other assets	(14,001		)	(2,925		)
Accounts payable, accrued expenses and other liabilities	1,759			23,825
Net cash provided by operating activities	204,702			176,032
Investing activities:
Purchases of investments in real estate and related intangible assets	(471,910		)	(367,785		)
Capital expenditures	(142,833		)	(110,205		)
Contributions from historic tax credit transactions, net of deferred costs	8,620			—
Contributions from new market tax credit transactions, net of deferred costs	4,078			—
Draws on construction loan receivable	(95,303		)	—
Contributions to unconsolidated partnerships, net	(983		)	(1,351		)
Purchases of debt and equity securities	(12,674		)	(5,101		)
Proceeds from the sale of debt and equity securities	6,103			133
Net cash used in investing activities	(704,902		)	(484,309		)
Financing activities:
Proceeds from common stock offering	668,553			—
Payment of offering costs	(27,423		)	—
Redemption of Series A preferred stock	(198,000		)	—
Payment of deferred loan costs	(7,172		)	(5,989		)
Unsecured line of credit proceeds	687,000			543,000
Unsecured line of credit payments	(785,000		)	(724,000		)
Mortgage notes proceeds	4,182			—
Principal payments on mortgage notes payable	(112,837		)	(38,533		)
Proceeds from unsecured senior term loans	350,000			556,404
Unsecured senior term loan payments	—			(156,404		)
Proceeds from unsecured senior notes	—			247,815
Release of restriction of cash for repayment of debt	60,000			—
Distributions to operating partnership unit and LTIP unit holders	(2,648		)	(1,865		)
Dividends paid to common stockholders	(121,103		)	(97,116		)
Dividends paid to preferred stockholders	(6,045		)	(10,950		)

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	Nine Months Ended
	September 30,
	2013			2012

Net cash provided by financing activities	509,507			312,362
Effect of exchange rate changes on cash and cash equivalents	(53		)	150
Net increase in cash and cash equivalents	9,254			4,235
Cash and cash equivalents at beginning of period	19,976			16,411
Cash and cash equivalents at end of period	$	29,230		$	20,646
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $9,999 and $6,376 during the nine months ended September 30, 2013 and 2012, respectively)	$	67,079		$	58,978
Supplemental disclosure of non-cash investing and financing activities:
Accrual for preferred stock dividends declared	$	—		$	3,651
Accrual for common stock dividends declared	45,145			33,182
Accrual for distributions declared for operating partnership unit and LTIP unit holders	1,273			633
Accrued additions to real estate and related intangible assets	60,246			28,545
Mortgage notes assumed (includes premiums of $8,671 and $1,802 during the nine months ended September 30, 2013 and 2012, respectively)	254,660			25,947
Equity issued in connection with Wexford merger and 320 Charles Street acquisition	165,114			—
Deposits applied for acquisitions	—			18,649

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)



	September 30, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments in real estate, net	$	5,172,102		$	4,319,716
Investments in unconsolidated partnerships	31,978			32,367
Cash and cash equivalents	29,230			19,976
Accounts receivable, net	10,580			4,507
Accrued straight-line rents, net	169,272			152,096
Deferred leasing costs, net	202,393			172,363
Other assets	278,600			133,454
Total assets	$	5,894,155		$	4,834,479
LIABILITIES AND CAPITAL
Mortgage notes payable, net	$	716,733		$	571,652
Exchangeable senior notes	180,000			180,000
Unsecured senior notes, net	894,850			894,177
Unsecured senior term loans	755,226			405,456
Unsecured line of credit	20,000			118,000
Accounts payable, accrued expenses and other liabilities	311,287			180,653
Total liabilities	2,878,096			2,349,938
Capital:
Partners’ capital:
Preferred units, 7.375% Series A cumulative redeemable preferred units, no units issued and outstanding at September 30, 2013; and 7,920,000 units issued and outstanding at December 31, 2012, $198,000 liquidation preference ($25.00 per unit)	—			191,469
Limited partners' capital, 5,415,974 and 2,932,758 units issued and outstanding at September 30, 2013 and December 31, 2012, respectively	46,498			7,937
General partner's capital, 192,106,749 and 154,327,818 units issued and outstanding at September 30, 2013 and December 31, 2012, respectively	3,005,434			2,338,464
Accumulated other comprehensive loss	(35,355		)	(53,077		)
Total partners’ capital	3,016,577			2,484,793
Noncontrolling interests deficit	(518		)	(252		)
Total capital	3,016,059			2,484,541
Total liabilities and capital	$	5,894,155		$	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						For the Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Revenues:
Rental	$	116,884		$	101,467		$	327,932		$	288,650
Tenant recoveries	38,907			31,765			104,037			89,155
Other revenue	3,441			1,305			47,352			1,590
Total revenues	159,232			134,537			479,321			379,395
Expenses:
Rental operations	51,688			38,944			134,182			112,717
Depreciation and amortization	61,898			51,372			186,219			143,882
General and administrative	11,934			10,226			32,358			27,416
Acquisition-related expenses	907			176			5,263			13,055
Total expenses	126,427			100,718			358,022			297,070
Income from operations	32,805			33,819			121,299			82,325
Equity in net loss of unconsolidated partnerships	(112		)	(339		)	(697		)	(1,011		)
Interest expense, net	(27,870		)	(26,817		)	(79,890		)	(72,863		)
Other expense	(687		)	(208		)	(4,079		)	(580		)
Income from continuing operations	4,136			6,455			36,633			7,871
Loss from discontinued operations	—			—			—			(4,370		)
Net income	4,136			6,455			36,633			3,501
Net loss attributable to noncontrolling interests	229			7			266			16
Net income attributable to the Operating Partnership	4,365			6,462			36,899			3,517
Preferred unit distributions	—			(3,651		)	(2,393		)	(10,952		)
Cost on redemption of preferred units	—			—			(6,531		)	—
Net income / (loss) available to unitholders	$	4,365		$	2,811		$	27,975		$	(7,435	)
Income / (loss) from continuing operations per unit available to unitholders:
Basic and diluted earnings per unit	$	0.02		$	0.02		$	0.15		$	(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	$	0.02		$	0.02		$	0.15		$	(0.05	)
Weighted-average units outstanding:
Basic	196,062,696			155,699,816			183,048,587			155,661,231
Diluted	196,131,643			155,699,816			183,120,286			155,661,231

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						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income	$	4,136		$	6,455		$	36,633		$	3,501
Other comprehensive income:
Foreign currency translation adjustments	1,866			576			(252		)	3,567
Unrealized (loss) / gain from derivative instruments, net	(771		)	(1,966		)	4,405			(5,563		)
Amortization of deferred interest costs	1,705			1,730			5,134			5,209
Reclassification of unrealized loss on equity securities	—			—			—			545
Reclassification on sale of equity securities	—			(6		)	—			(38		)
Unrealized gain / (loss) on equity securities	2,280			10			8,435			(509		)
Total other comprehensive income	5,080			344			17,722			3,211
Comprehensive income	9,216			6,799			54,355			6,712
Comprehensive loss attributable to noncontrolling interests	229			7			266			16
Comprehensive income attributable to the Operating Partnership	$	9,445		$	6,806		$	54,621		$	6,728

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' Capital			Noncontrolling Interests Deficit			Total Capital
	Units		Amount			Units		Amount			Units	Amount			Accumulated Other Comprehensive (Loss)/Income			Total Partners' Capital			Noncontrolling Interests Deficit			Total Capital
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	—		—			2,034,211		41,518			31,855,000	641,130			—			682,648			—			682,648
Net issuances of unvested restricted OP units	—		—			132,441		—			335,308	(4,800		)	—			(4,800		)	—			(4,800		)
Conversion of OP units	—		—			(20,396	)	87			20,396	(87		)	—			—			—			—
Redemption of Series A preferred units	(7,920,000	)	(198,000		)	—		—			—	—			—			(198,000		)	—			(198,000		)
Vesting of share-based awards	—		—			—		—			—	9,324			—			9,324			—			9,324
Issuance of OP units in connection with Wexford merger	—		—			336,960		7,053			5,568,227	116,543			—			123,596			—			123,596
Reallocation of capital to limited partners	—		—			—		(7,399		)	—	7,399			—			—			—			—
Distributions	—		(2,393		)	—		(3,232		)	—	(129,980		)	—			(135,605		)	—			(135,605		)
Net income	—		8,924			—		534			—	27,441			—			36,899			(266		)	36,633
Foreign currency translation adjustments	—		—			—		—			—	—			(252		)	(252		)	—			(252		)
Unrealized gain on equity securities	—		—			—		—			—	—			8,435			8,435			—			8,435
Amortization of deferred interest costs	—		—			—		—			—	—			5,134			5,134			—			5,134
Unrealized gain on derivative instruments, net	—		—			—		—			—	—			4,405			4,405			—			4,405
Balance at September 30, 2013	—		$	—		5,415,974		$	46,498		192,106,749	$	3,005,434		$	(35,355	)	$	3,016,577		$	(518	)	$	3,016,059

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Nine Months Ended
	September 30,
	2013			2012

Operating activities:
Net income	$	36,633		$	3,501
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	186,219			143,974
Allowance for doubtful accounts	730			1,167
Non-cash revenue adjustments	9,590			9,045
Other non-cash adjustments	9,903			15,283
Compensation expense related to share-based payments	9,567			8,670
Distributions representing a return on capital from unconsolidated partnerships	178			1,145
Changes in operating assets and liabilities:
Accounts receivable	(5,573		)	(2,040		)
Accrued straight-line rents	(17,470		)	(15,740		)
Deferred leasing costs	(12,833		)	(9,873		)
Other assets	(14,001		)	(2,925		)
Accounts payable, accrued expenses and other liabilities	1,759			23,825
Net cash provided by operating activities	204,702			176,032
Investing activities:
Purchases of investments in real estate and related intangible assets	(471,910		)	(367,785		)
Capital expenditures	(142,833		)	(110,205		)
Contributions from historic tax credit transactions, net of deferred costs	8,620			—
Contributions from new market tax credit transactions, net of deferred costs	4,078			—
Draws on construction loan receivable	(95,303		)	—
Contributions to unconsolidated partnerships, net	(983		)	(1,351		)
Purchases of debt and equity securities	(12,674		)	(5,101		)
Proceeds from the sale of debt and equity securities	6,103			133
Net cash used in investing activities	(704,902		)	(484,309		)
Financing activities:
Proceeds from issuance of OP units	641,130			—
Redemption of Series A preferred units	(198,000		)	—
Payment of deferred loan costs	(7,172		)	(5,989		)
Unsecured line of credit proceeds	687,000			543,000
Unsecured line of credit payments	(785,000		)	(724,000		)
Mortgage notes proceeds	4,182			—
Principal payments on mortgage notes payable	(112,837		)	(38,533		)
Proceeds from unsecured senior term loans	350,000			556,404
Unsecured senior term loan payments	—			(156,404		)
Proceeds from unsecured senior notes	—			247,815
Release of restriction of cash for repayment of debt	60,000			—

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	Nine Months Ended
	September 30,
	2013			2012

Distributions paid to unitholders	(123,751		)	(98,981		)
Distributions paid to preferred unitholders	(6,045		)	(10,950		)
Net cash provided by financing activities	509,507			312,362
Effect of exchange rate changes on cash and cash equivalents	(53		)	150
Net increase in cash and cash equivalents	9,254			4,235
Cash and cash equivalents at beginning of period	19,976			16,411
Cash and cash equivalents at end of period	$	29,230		$	20,646
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $9,999 and $6,376 during the nine months ended September 30, 2013 and 2012, respectively)	$	67,079		$	58,978
Supplemental disclosure of non-cash investing and financing activities:
Accrual for unit distributions declared	$	46,418		$	33,815
Accrual for preferred unit distributions declared	—			3,651
Accrued additions to real estate and related intangible assets	60,246			28,545
Mortgage notes assumed (includes premiums of $8,671 and $1,802 during the nine months ended September 30, 2013 and 2012, respectively)	254,660			25,947
Equity issued in connection with Wexford merger and 320 Charles Street acquisition	165,114			—
Deposits applied for acquisitions	—			18,649

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, San Francisco, Maryland, San Diego and New York and, through Wexford Science and Technology, LLC and related entities (collectively, "Wexford"), with universities and their related medical systems such as Wake Forest University in Winston-Salem, North Carolina, University of Pennsylvania in Philadelphia, Pennsylvania, and Washington University in St. Louis, Missouri.

The Parent Company is the sole general partner of the Operating Partnership and, as of September 30, 2013, owned a 97.3% interest in the Operating Partnership. The remaining 2.7% 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.

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 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 September 30, 2013 and 2012, total revenues from properties outside the United States were $4.5 million and $4.4 million, respectively, which represented 2.8% and 3.3% of the Company’s total revenues during the respective periods. For the nine months ended September 30, 2013 and 2012, total revenues from properties outside the United States were $13.5 million and $5.3 million, respectively, which represented 2.8% and 1.4% of the Company's total revenues during the respective periods. The Company’s net investment in properties outside the United States was $190.5 million and $188.8 million at September 30, 2013 and December 31, 2012, respectively.

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Investments in Partnerships and Limited Liability Companies

The Company has determined that it is the primary beneficiary in five 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 September 30, 2013 and December 31, 2012 consist of the following (in thousands):



	September 30, 2013		December 31, 2012
Investment in real estate, net	$	332,004	$	334,331
Total assets	371,341		369,460
Total debt	143,538		144,889
Total liabilities	152,051		149,336

The Company is also a party to certain VIEs through its ownership of Wexford, which are described in further detail in Note 11.

Investments in Real Estate, Net

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



	September 30, 2013			December 31, 2012
Land	$	692,633		$	702,993
Land under development	133,372			48,744
Buildings and improvements	4,771,874			4,028,089
Construction in progress	311,296			143,340
	5,909,175			4,923,166
Accumulated depreciation	(737,073		)	(603,450		)
	$	5,172,102		$	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 operations for the nine months ended September 30, 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 12 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

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20 years as of September 30, 2013. Deferred leasing costs also include the net carrying value of acquired in-place leases and acquired management agreements.

Deferred leasing costs, net at September 30, 2013 consisted of the following (in thousands):



	Balance at		Accumulated
	September 30, 2013		Amortization			Net
Acquired in-place leases	$	368,733	$	(225,811	)	$	142,922
Acquired management agreements	25,801		(19,677		)	6,124
Deferred leasing and other direct costs	82,205		(28,858		)	53,347
	$	476,739	$	(274,346	)	$	202,393

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):



	September 30, 2013		December 31, 2012
Available-for-sale securities, historical cost	$	8,840	$	275
Unrealized gain, net	8,551		115
Available-for-sale securities, fair-value (1)	17,391		390
Privately-held securities, cost basis	13,130		12,280
Total equity securities	$	30,521	$	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 certain 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 nine months ended September 30, 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.

The Company also holds investments in securities of certain privately-held companies and funds, which are recorded at cost basis due to the Company’s lack of control or significant influence over such companies and funds.

During the nine months ended September 30, 2013, the Company recorded a $2.8 million impairment charge, which is included in other expense in the consolidated statements of operations. The impairment charge 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

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and therefore, no evaluation of impairment was performed during the nine months ended September 30, 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 September 30, 2013, the Company had invested approximately $120.9 million in the construction loan, which is included in other assets on the Company's consolidated balance sheet. The Company expects to have fully funded its obligation in early 2014.

Lease Termination

During the three and nine months ended September 30, 2013, the Company recorded lease termination revenue, net of write-offs of lease intangibles, included in other revenue on the consolidated statement of operations of approximately $1.5 million and $42.8 million, respectively. Lease termination revenue related to the termination of a lease with Elan Corporation (“Elan”) at the Company’s Science Center at Oyster Point property for which Elan paid the Company $46.5 million, and the termination of a lease effective August 2013 with Merck at the Company's 320 Bent Street property for which Merck paid the Company $8.7 million in August 2012.

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 nine months ended September 30, 2013, the Parent Company issued restricted stock awards to the Company’s employees and directors totaling 620,590 and 26,897 shares of common stock, respectively (253,289 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 38,821 shares were forfeited during the same period), which are included in the total of common stock outstanding as of the period end.

Of the restricted stock awards issued to the Company's employees, 20,069 shares were issued as part of the consideration paid in the Company's merger with Wexford (as discussed below), and 41,568 shares are subject to performance-based vesting conditions. In addition, in connection with the merger with Wexford, the Operating Partnership issued 132,441 operating partnership units which are also subject to performance-based vesting conditions. The aggregate grant date fair-value of these performance-based awards of approximately $3.6 million will be recognized as compensation expense on a straight-line basis over each respective vesting period. The total compensation expense remaining for these awards to be expensed in future periods as of September 30, 2013 was approximately $3.3 million over a weighted-average term of approximately 3.70 years. Dividends and distributions are payable on these awards from the date of issuance.

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. Outstanding Performance Units vest ratably over 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

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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 Parent Company and the peer group, considering the stock price variance for each of the peer group companies compared to each other and the Parent Company. 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 nine months ended September 30, 2013, the Parent Company awarded 406,288 performance units 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 nine months ended September 30, 2013 to be expensed in future periods over a weighted-average term of approximately 1.78 years was $2.5 million as of September 30, 2013. 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 were 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 merger with Wexford and for other general corporate and working capital purposes.

In May 2013, as part of the consideration paid for the merger with Wexford, the sellers received 5,568,227 shares of the Parent Company’s common stock and 336,960 operating partnership units, of which 20,069 shares of common stock and all of the operating partnership units are subject to certain restrictions.

In June 2013, as part of the consideration paid for the Company’s acquisition of the 320 Charles Street property in Cambridge, Massachusetts, the seller received 2,034,211 operating partnership units.

Common Stock, Operating Partnership Units and LTIP Units

As of September 30, 2013, the Company had outstanding 192,106,749 shares of the Parent Company’s common stock and 5,083,400 and 332,574 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 nine months ended September 30, 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 nine months ended September 30, 2013:

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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

0.235

January 1, 2013 to March 31, 2013

April 15, 2013

40,413

June 14, 2013

Common stock and OP units

0.235

April 1, 2013 to June 30, 2013

July 15, 2013

46,381

September 16, 2013

Common stock and OP units

0.235

July 1, 2013 to September 30, 2013

October 15, 2013

46,418

Total 2013 dividends and distributions declared through September 30, 2013 (in thousands):



Common stock and OP units	$	133,212
Series A preferred stock/units (1)	2,393
	$	135,605

____________


(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						Gain / (loss) on derivative instruments			Total
Balance at December 31, 2012	$	3,543		$	114		$	(58,382	)	$	(54,725	)
Other comprehensive (loss) / income before reclassifications	(252		)	8,435			2,653			10,836
Amounts reclassified from accumulated other comprehensive income (1)	—			—			6,886			6,886
Net other comprehensive (loss) / income	(252		)	8,435			9,539			17,722
Net other comprehensive loss allocable to noncontrolling interests	(15		)	(1,360		)	(240		)	(1,615		)
Balance as of September 30, 2013	$	3,276		$	7,189		$	(49,083	)	$	(38,618	)

____________


(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.

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The redemption value of the OP units not owned by the Parent Company, had such units been redeemed at September 30, 2013, was approximately $103.2 million based on the average closing price of the Parent Company’s common stock of $19.05 per share for the ten consecutive trading days immediately preceding September 30, 2013.

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



	September 30, 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	190,676,810	97.3	%	152,853,368	98.1	%
Noncontrolling interest consisting of:
Operating partnership and LTIP units held by employees and related parties	2,656,388	1.4	%	2,339,314	1.5	%
Operating partnership and LTIP units held by third parties	2,627,145	1.3	%	565,051	0.4	%
Total	195,960,343	100.0	%	155,757,733	100.0	%

4. Capital of the Operating Partnership

Operating Partnership Units and LTIP Units

As of September 30, 2013, the Operating Partnership had outstanding 197,190,149 operating partnership units and 332,574 LTIP units. The Parent Company owned 97.3% of the partnership interests in the Operating Partnership at September 30, 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 September 30, 2013, was approximately $103.2 million based on the average closing price of the Parent Company’s common stock of $19.05 per share for the ten consecutive trading days immediately preceding September 30, 2013.

Changes in Accumulated Other Comprehensive Loss by Component



	Foreign currency translation adjustments			Unrealized gains on available- for-sale securities		Gain / (loss) on derivative instruments			Total
	Foreign currency translation adjustments			Unrealized gains 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) / income before reclassifications	(252		)	8,435		2,653			10,836
Amounts reclassified from accumulated other comprehensive income (1)	—			—		6,886			6,886
Net other comprehensive (loss) / income	(252		)	8,435		9,539			17,722
Balance as of September 30, 2013	$	3,359		$	8,550	$	(47,264	)	$	(35,355	)

____________


(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.

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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 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 due 2017 (the “Term Loan due 2017”), Unsecured Senior Term Loan due 2018 (the “Term Loan due 2018”) 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 September 30, 2013 and December 31, 2012 (dollars in thousands):



	Stated Interest Rate		Effective Interest Rate		Principal Balance
	Stated Interest Rate		Effective Interest Rate		September 30, 2013			December 31, 2012			Maturity Date
Mortgage Notes Payable
9900 Belward Campus Drive	5.64	%	3.99	%	$	10,666		$	10,767		July 1, 2017
9901 Belward Campus Drive	5.64	%	3.99	%	13,135			13,260			July 1, 2017
Center for Life Science \| Boston	7.75	%	7.75	%	335,476			338,447			June 30, 2014
4320 Forest Park Avenue (1)	4.00	%	2.70	%	21,000			—			June 30, 2015
Heritage @ 4240 (2)	3.18	%	3.18	%	4,194			—			December 26, 2015
Hershey Center for Applied Research (1)	6.15	%	4.71	%	13,568			—			May 5, 2027
500 Kendall Street (Kendall D)	6.38	%	5.45	%	58,500			60,164			December 1, 2018
Shady Grove Road	5.97	%	5.97	%	143,538			144,889			September 1, 2016
University of Maryland BioPark I (1)	5.93	%	4.69	%	16,915			—			May 15, 2025
University of Maryland BioPark II (1)	5.20	%	4.33	%	63,198			—			September 5, 2021
University of Maryland BioPark Garage (1)	5.20	%	4.33	%	4,757			—			September 1, 2021
University of Miami Life Science & Technology Park (1)	4.00	%	2.89	%	20,000			—			February 1, 2016
					704,947			567,527
Unamortized premiums					11,786			4,125
Mortgage notes payable, net					716,733			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					(5,150		)	(5,823		)
Unsecured senior notes, net					894,850			894,177
Term Loan due 2017 - U.S. dollar (3)	1.83	%	2.64	%	243,596			243,596			March 30, 2017
Term Loan due 2017 - GBP (3)	2.14	%	2.39	%	161,630			161,860			March 30, 2017
Term Loan due 2018 (4)	1.68	%	1.68	%	350,000			—			March 24, 2018
Unsecured senior term loans					755,226			405,456
Unsecured line of credit (4) (5)	1.48	%	1.48	%	20,000			118,000			March 24, 2018
Total consolidated debt					$	2,566,809		$	2,169,285

____________

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(1)	Mortgage notes which were assumed on May 31, 2013 in connection with the Company’s merger with Wexford.


(2)	In October 2013, the Operating Partnership voluntarily repaid in full the outstanding mortgage note pertaining to the Heritage @ 4240 property prior to the scheduled maturity.

(3)

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 $1.62 to £1.00 at both September 30, 2013 and December 31, 2012. The effective interest rate includes the impact of interest rate swap agreements (see Note 9 for further discussion of interest rate swap agreements).

(4)

In September 2013, the Operating Partnership amended and restated its unsecured credit agreement, providing for aggregate borrowing of up to $1.25 billion, consisting of an unsecured line of credit of $900.0 million and a term loan of $350.0 million (the Term Loan due 2018). In connection with the amendment and restatement of the credit agreement, unamortized loan fees under the previous credit agreement of approximately $462,500 were charged to interest expense.


(5)	At September 30, 2013, the Operating Partnership had additional borrowing capacity under the unsecured line of credit of up to approximately $880.0 million.

Exchangeable Senior Notes

The exchange rate for the Exchangeable Senior Notes may be adjusted under certain circumstances, including the payment of cash dividends in excess of $0.14 per share of common stock. The increase in the quarterly cash dividend through the third quarter of 2013 resulted in an increase in the exchange rate of the Exchangeable Senior Notes to 57.8068 shares per $1,000 principal amount of Exchangeable Senior Notes (effective conversion value of $17.30 per share), as of September 26, 2013, the Company’s ex-dividend date.

Amended and Restated Credit Facility and Term Loan Amendment

On September 24, 2013, the Operating Partnership entered into an amended and restated unsecured credit agreement (the “Amended and Restated Credit Facility”), amending and restating its unsecured credit agreement dated July 14, 2011, as amended, and a second amendment (the “Term Loan Amendment”) to its senior unsecured term loan facility dated March 30, 2012, as amended, with KeyBank National Association, as Administrative Agent, and certain other lenders.

The Amended and Restated Credit Facility provides for aggregate borrowings of up to $1.25 billion, consisting of a $900.0 million revolving line of credit and a $350.0 million Term Loan due 2018, with a maturity date of March 24, 2018. Subject to the Administrative Agent’s reasonable discretion, the Operating Partnership may increase the amount of the commitments under the Amended and Restated Credit Facility up to $1.8 billion upon satisfying certain conditions. In addition, the Operating Partnership, at its sole discretion, may extend the maturity date to September 24, 2018 after satisfying certain conditions and paying an extension fee. Borrowings under the unsecured line of credit and the Term Loan due 2018 are guaranteed by the Parent Company.

Borrowings under the Amended and Restated Credit Facility bear interest at floating rates equal to, at the Operating Partnership’s option, either (1) reserve-adjusted LIBOR plus a spread which ranges from 92.5 to 170 basis points (with respect to the unsecured line of credit) and a spread which ranges from 95 to 195 basis points (with respect to the Term Loan due 2018), in each case depending on the Parent Company’s credit ratings, or (2) the highest of (a) the prime rate then in effect plus a spread which ranges from 0 to 70 basis points, (b) the federal funds rate then in effect plus a spread which ranges from 50 to 120 basis points, or (c) one-month LIBOR plus a spread which ranges from 92.5 to 170 basis points (with respect to the unsecured line of credit) and a spread which ranges from 95 to 195 basis points (with respect to the Term Loan due 2018), in each case depending on the Parent Company’s credit ratings. In addition, a facility fee is payable on the total $900.0 million capacity of the unsecured line of credit, which ranges from 12.5 to 30 basis points per annum, depending on the Parent Company’s credit ratings.

The Amended and Restated Credit Facility and Term Loan Amendment changed, among other things, (1) the definition of “Capitalization Rate” to mean 7.25% with respect to all projects other than the Company's Center for Life Science | Boston property, and 6.25% with respect to the Center for Life Science | Boston property and (2) certain definitions used to calculate the financial covenants.

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On September 25, 2013, the Operating Partnership entered into interest rate swap agreements, which are intended to have the effect of fixing interest payments associated with $200.0 million of the Term Loan due 2018 outstanding at approximately 2.2% for a three-year term, subject to adjustment based on the Parent Company's credit ratings. See Note 9 for further details.

Net Investment Hedge

The Operating Partnership designated the GBP denominated debt under the Term Loan due 2017 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 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 September 30, 2013, principal payments due for the Operating Partnership’s consolidated indebtedness (excluding debt premiums and discounts) were as follows (in thousands):



2013	$	6,897
2014	341,415
2015	30,006
2016	566,516
2017	435,520
Thereafter (1)	1,179,819
	$	2,560,173

____________


(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 September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 2013 and the three months ended September 30, 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 nine months ended September 30, 2012, the outstanding OP units (both vested and unvested) were anti-dilutive to the calculation of diluted earnings per share and were therefore excluded and net income attributable to noncontrolling interests in the Operating Partnership has not been added back to net income available to common stockholders. For the three and nine months ended September 30, 2013, the Performance Units were dilutive to the calculation of diluted earnings per share as calculated, assuming that September 30, 2013 was the end date of the Performance Units' Performance Period. For the three and nine months ended September 30, 2012, the Performance Units were anti-dilutive to the calculation of diluted earnings per share as calculated, assuming that September 30, 2012 was the end date of the Performance Units' Performance Period. For the three and nine months ended September 30, 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, 10,405,224 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 and nine months ended September 30, 2013 and 2012, respectively. No other shares were considered anti-dilutive for the three and nine months ended September 30, 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						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Basic earnings per share:
Income from continuing operations	$	4,136		$	6,455		$	36,633		$	7,871
Loss / (income) from continuing operations attributable to noncontrolling interests	111			(46		)	(268		)	74
Preferred stock dividends	—			(3,651		)	(2,393		)	(10,952		)
Cost on redemption of preferred stock	—			—			(6,531		)	—
Net income allocable and distributions in excess of earnings to participating securities (continuing operations)	(333		)	(322		)	(989		)	(940		)
Income / (loss) from continuing operations available to common stockholders - basic	3,914			2,436			26,452			(3,947		)

Loss from discontinued operations	—			—			—			(4,370		)
Loss from discontinued operations attributable to noncontrolling interests	—			—			—			82
Loss from discontinued operations available to common stockholders - basic	—			—			—			(4,288		)

Net income / (loss) available to common stockholders - basic	$	3,914		$	2,436		$	26,452		$	(8,235	)

Diluted earnings per share:
Income / (loss) from continuing operations available to common stockholders - basic	3,914			2,436			26,452			(3,947		)
Income from continuing operations attributable to noncontrolling interests in Operating Partnership	118			53			534			—
Income / (loss) from continuing operations available to common stockholders - diluted	4,032			2,489			26,986			(3,947		)

Loss from discontinued operations available to common stockholders - basic and diluted	—			—			—			(4,288		)

Net income / (loss) available to common stockholders - diluted	$	4,032		$	2,489		$	26,986		$	(8,235	)

Weighted-average common shares outstanding:
Basic	190,646,722			152,785,451			179,138,169			152,739,130
Incremental shares from assumed conversion:
Performance units	68,947			—			71,699			—
Operating partnership and LTIP units	5,415,974			2,942,758			3,911,372			—
Diluted	196,131,643			155,728,209			183,121,240			152,739,130

Basic and diluted earnings per share:
Income / (loss) from continuing operations per share available to common stockholders - basic and diluted	$	0.02		$	0.02		$	0.15		$	(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	$	0.02		$	0.02		$	0.15		$	(0.05	)

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7. Earnings Per Unit of the Operating Partnership

Through September 30, 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 and nine months ended September 30, 2013 and 2012 has been deducted from net income available to unitholders to calculate basic earnings per unit. For the three and nine months ended September 30, 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 and nine months ended September 30, 2013, the Performance Units were dilutive to the calculation of diluted earnings per unit as calculated, assuming that September 30, 2013 was the end date of the Performance Units’ Performance Period. For the three and nine months ended September 30, 2012, the Performance Units were anti-dilutive to the calculation of diluted earnings per unit as calculated, assuming that September 30, 2012 was the end date of the Performance Units' Performance Period. In addition, 10,405,224 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 and nine months ended September 30, 2013 and 2012, respectively. No other units were considered anti-dilutive for the three and nine months ended September 30, 2013 or 2012.

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



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Basic and diluted earnings per unit:
Income from continuing operations	$	4,136		$	6,455		$	36,633		$	7,871
Loss from continuing operations attributable to noncontrolling interests	229			7			266			16
Preferred unit distributions	—			(3,651		)	(2,393		)	(10,952		)
Cost on redemption of preferred units	—			—			(6,531		)	—
Net income allocable and distributions in excess of earnings to participating securities (continuing operations)	(333		)	(328		)	(993		)	(959		)
Income / (loss) from continuing operations available to unitholders - basic and diluted	4,032			2,483			26,982			(4,024		)

Loss from discontinued operations - basic and diluted	—			—			—			(4,370		)

Net income / (loss) available to unitholders - basic and diluted	$	4,032		$	2,483		$	26,982		$	(8,394	)

Weighted-average units outstanding:
Basic	196,062,696			155,699,816			183,048,587			155,661,231
Incremental units from assumed conversion:
Performance units	68,947			—			71,699			—
Diluted	196,131,643			155,699,816			183,120,286			155,661,231

Basic and diluted earnings per unit:
Income / (loss) from continuing operations per unit available to unitholders - basic and diluted	$	0.02		$	0.02		$	0.15		$	(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	$	0.02		$	0.02		$	0.15		$	(0.05	)

8. Investment in Unconsolidated Partnerships

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The accompanying consolidated financial statements include investments in two limited liability companies with Prudential Real Estate Investors (“PREI”), 10165 McKellar Court, L.P. (“McKellar Court”), a limited partnership with Quidel Corporation, the tenant which occupies the McKellar Court property and BioPark Fremont, LLC ("BioPark Fremont"), a limited liability company with RPC Poppleton, LLC. General information on the PREI limited liability companies, the McKellar Court partnership, and BioPark Fremont (each referred to in this footnote individually as a “partnership” and collectively as the “partnerships”) as of September 30, 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
BioPark Fremont (3)	RPC Poppleton, LLC	50%	50%	May 31, 2013

____________


(1)	PREI I LLC owns two properties in Cambridge, Massachusetts. At September 30, 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 3.19% (including the applicable credit spread) and a maturity date of August 13, 2014.


(2)	The Company’s investment in the McKellar Court partnership (maximum exposure to losses) was approximately $12.1 million at September 30, 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.


(3)	The Company's partnership interest was acquired in connection with the Company's merger with Wexford.

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



	September 30, 2013		December 31, 2012
Assets:
Investments in real estate, net	$	260,411	$	257,666
Cash and cash equivalents (including restricted cash)	2,761		1,968
Other assets	6,097		4,370
Total assets	$	269,269	$	264,004
Liabilities and members’ equity:
Mortgage notes payable and secured loan	$	151,954	$	149,255
Other liabilities	10,708		5,988
Members’ equity	106,607		108,761
Total liabilities and members equity	$	269,269	$	264,004
Company’s net investment in unconsolidated partnerships	$	31,978	$	32,367

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



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Total revenues	$	3,778		$	2,195		$	9,486		$	6,582
Total expenses	(5,328		)	(4,975		)	(16,013		)	(14,756		)
Net loss	(1,550		)	(2,780		)	(6,527		)	(8,174		)

Company’s equity in net loss of unconsolidated partnerships	$	(112	)	$	(339	)	$	(697	)	$	(1,011	)

Fees earned by the Company (1)	$	35		$	22		$	121		$	67

____________

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(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 operations.

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 due 2017 and Term Loan due 2018.

On September 25, 2013, the Operating Partnership entered into three interest rate swaps with an aggregate notional amount of $200.0 million under which at each monthly settlement date the Company either (1) receives the difference between a fixed interest rate (the “Strike Rate”) and one-month U.S. dollar -LIBOR if the Strike Rate is less than one-month U.S. dollar-LIBOR or (2) pays such difference if the Strike Rate is greater than one-month U.S. dollar-LIBOR. The interest rate swaps hedge the Company’s exposure to the variability on expected cash flows attributable to changes in interest rates on the first interest payments, due date on or after each swap’s settlement date, associated with the amount of one-month U.S. dollar LIBOR-based debt equal to each swap’s notional amount. These interest rate swaps, with a notional amount of $200.0 million, are currently intended to hedge interest payments associated with the Operating Partnership’s Term Loan due 2018 for three years. No initial investment was made to enter into the interest rate swap agreements.

As of September 30, 2013, the Company had deferred interest costs of approximately $37.1 million in accumulated other comprehensive loss related to forward starting swaps, which were settled with the corresponding counterparties in 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 five years.

The following is a summary of the terms of the interest rate swaps and their respective fair-values (dollars in thousands):



							Fair-Value(1)
	Notional Amount						September 30, 2013			December 31, 2012
	Notional Amount		Strike Rate		Effective Date	Expiration Date	September 30, 2013			December 31, 2012
Interest rate swaps	$	200,000	1.1630	%	March 30, 2012	March 30, 2017	$	(2,291	)	$	(4,826	)
Interest rate swaps	200,000		0.7010	%	October 1, 2013	October 1, 2016	(330		)	—
Interest rate swaps(2)	80,815		0.7310	%	August 2, 2012	March 30, 2017	890			(216		)
Interest rate swaps(2)	80,815		0.7425	%	August 2, 2012	March 30, 2017	866			(243		)
Total interest rate swaps	$	561,630					$	(865	)	$	(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. Assets are included in other assets and liabilities are included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheets.


(2)	Translation to U.S. dollars is based on an exchange rate of $1.62 to £1.00 at both September 30, 2013 and December 31, 2012.

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 September 30, 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

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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 September 30, 2013 and 2012.

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



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013		2012
Amount of (loss) / gain recognized in other comprehensive income (effective portion):
Cash flow hedges
Interest rate swaps	$	(1,371	)	$	(2,523	)	$	2,653	$	(6,701	)

Amount of loss reclassified from accumulated other comprehensive loss to income (effective portion):
Cash flow hedges
Interest rate swaps (1)	$	600		$	522		$	1,752	$	999
Forward starting swaps (2)	1,705			1,730			5,134		5,209
Total interest rate swaps	$	2,305		$	2,252		$	6,886	$	6,208

____________


(1)	Amount represents payments made to swap counterparties for the effective portion of interest rate swaps that were recognized as an increase to interest expense for the periods presented (the amount was recorded as an increase and corresponding decrease to accumulated other comprehensive loss in the same accounting period).


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

During the next twelve months, the Company estimates that an additional $10.0 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 September 30, 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 September 30, 2013 and December 31, 2012, the aggregate fair-value and the carrying value of the Company’s financial instruments were as follows (in thousands):

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	September 30, 2013				December 31, 2012
	Fair-Value (1)		Carrying Value		Fair-Value (1)		Carrying Value
Mortgage notes payable, net	$	738,873	$	716,733	$	605,948	$	571,652
Exchangeable Senior Notes	205,434		180,000		209,484		180,000
Notes due 2016, net	418,640		398,659		421,400		398,289
Notes due 2020, net	276,625		248,151		292,725		247,984
Notes due 2022, net	242,125		248,040		261,750		247,904
Term Loan due 2017 - U.S. dollar	244,837		243,596		243,596		243,596
Term Loan due 2017 - GBP (2)	162,449		161,630		161,860		161,860
Term Loan due 2018	350,000		350,000		—		—
Unsecured line of credit	20,000		20,000		118,000		118,000
Derivative instruments (3)	865		865		5,285		5,285
Available-for-sale securities	17,391		17,391		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)	The principal balance represents the U.S. dollar amount based on the exchange rate of $1.62 to £1.00 at both September 30, 2013 and December 31, 2012.


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

11. Acquisitions

The Company acquired the following properties during the nine months ended September 30, 2013. The table below reflects the purchase price allocation for these acquisitions and excludes the merger with Wexford, which is discussed below (in thousands):



Property	Acquisition Date	Investments in Real Estate		In-Place Lease		Management Agreement		Below Market Lease			Acquisition Date Fair- Value
Woodside Technology Park	February 28, 2013	$	78,681	$	8,162	$	865	$	(708	)	$	87,000
The Campus at Lincoln Centre	March 20, 2013	37,000		—		—		—			37,000
320 Charles Street	June 18, 2013	47,018		4,578		—		(2,078		)	49,518
Total		$	162,699	$	12,740	$	865	$	(2,786	)	$	173,518
Weighted average intangible amortization life (in months)				61		108		18

Wexford Merger

On May 31, 2013, the Company completed a merger with Wexford. The preliminary purchase price allocations of the fair-value of assets acquired, liabilities assumed and consideration paid in the Wexford merger are presented below (in thousands). The Company expects the purchase price allocations to be finalized within one year of the acquisition date.

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	At Acquisition
Assets:
Investments in real estate	$	663,969
Cash and cash equivalents	5,182
Accounts receivable, net	937
Deferred leasing costs (1)	50,555
Other assets (2)	82,825
Total assets	$	803,468
Liabilities:
Mortgage notes payable (3)	254,735
Other liabilities (4)	64,201
Total liabilities	$	318,936

Fair value of net assets acquired	$	484,532

Cash consideration paid for Wexford	$	345,268
Equity consideration paid for Wexford (5)	123,596
Contingent consideration in merger with Wexford (6)	15,668
Total consideration for Wexford	$	484,532

____________


(1)	$50.6 million of acquired in-place leases with a weighted-average lease term of approximately 10.3 years are included in deferred leasing costs.


(2)	$9.6 million of acquired above-market leases with a weighted-average lease term of approximately 11.6 years and $8.5 million of acquired below-market ground leases with a weighted-average lease term of approximately 45.0 years are included in other assets.


(3)	$8.7 million of debt premiums with a weighted-average term of approximately 9.2 years are included in mortgage notes payable, net.


(4)	$31.4 million of acquired below-market leases with a weighted-average lease term of approximately 13.4 years and $1.4 million of acquired above-market ground leases with a weighted-average lease term of approximately 64.8 years are included in other liabilities.


(5)	Consists of 5,568,227 shares of the Parent Company's common stock and 336,960 operating partnership units.


(6)	Includes potential additional consideration to be paid to the seller upon the achievement of certain pipeline development milestones.

Wexford - Variable Interest Entities

Wexford is a party to certain contractual arrangements with tax credit investors (“TCIs”) that were established to enable the TCIs to receive the benefits of historic tax credits (“HTCs”) and/or new market tax credits (“NMTCs”) for certain properties owned by Wexford. At May 31, 2013, Wexford owned seven properties that had syndicated HTCs or NMTCs, or both, to TCIs.

Historic Tax Credits and New Market Tax Credits

Capital contributions are made by TCIs into special purpose entities that ultimately invest these funds in the entity that owns the subject property that generates the tax credits. The TCIs are allocated substantially all of the tax credits and hold only a noncontrolling interest in the economic risk and rewards of the special purpose entities. HTCs are delivered to the TCI upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCI after the investment has been funded and spent on a qualified business. HTCs are subject to 20% recapture per year beginning one year after the completion of the historic rehabilitation of the subject property. NMTCs are subject to 100% recapture until the end of the seventh year following the qualifying investment. The Company has provided the TCIs with certain guarantees which protect the TCIs from loss should a tax credit recapture event occur. The contractual arrangements with the TCIs include a put/call provision whereby the Company may be obligated or entitled to repurchase the ownership interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. The Company anticipates that either the TCIs will exercise their put rights or the Company will exercise its call rights; however, the Company believes that the put rights are more likely to be exercised.

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The Company has determined that the special purpose entities are VIEs, since there is insufficient capital to finance their activities without further subordinated financial support. The Company has determined that it is the primary beneficiary of these VIEs, because it has the authority to direct the activities which most significantly impact their economic performance.

The portion of the TCI’s capital contribution that is attributed to the put is recorded at fair-value at inception and is accreted to the expected put price as interest expense in the consolidated statement of operations. At September 30, 2013, approximately $3.7 million of put liabilities were included in other liabilities in the consolidated balance sheets. The remaining balance of the TCI’s capital contribution is initially recorded in other liabilities in the consolidated balance sheets and will be relieved, upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. During the nine months ended September 30, 2013, $12.3 million of tax credits, net of costs and estimated put payments, were contributed by TCIs which were recorded as other liabilities in the consolidated balance sheets, of which $4.1 million of tax credits have been delivered to the TCIs and were reclassified as a reduction of the carrying value of the subject property. Direct and incremental costs incurred in structuring the transaction are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above. Subsequent to quarter end, $5.0 million of tax credits, net of costs, were contributed by and delivered to TCIs and were recorded as a reduction of the carrying value of the subject property.

The Company has determined that certain special purpose entities owning properties under development are VIEs, since there is insufficient capital to finance the remaining development activities without further subordinated financial support. The Company has determined it is the primary beneficiary of these VIEs, because it has the authority to direct the activities which most significantly impact their economic performance. Selected financial data of the VIEs at September 30, 2013 consisted of the following (in thousands):



	September 30, 2013
Investment in real estate, net	$	148,660
Total assets	148,662
Total liabilities	64,314

Pro Forma Results of the Parent Company

The unaudited pro forma revenues and operating income of the Parent Company, including the acquisitions that occurred in 2013 as if they had taken place on January 1, 2012, are as follows (in thousands, except per share amounts):



	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Total revenues	$	159,232	$	152,599		$	508,911	$	433,581
Net income / (loss) available to common stockholders	4,247		(2,362		)	26,702		(20,763		)
Net income / (loss) per share available to common stockholders - basic and diluted	$	0.02	$	(0.02	)	$	0.15	$	(0.14	)

Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2012, nor is it intended to be a projection of future results.

Pro Forma Results of the Operating Partnership

The unaudited pro forma revenues and operating income of the Operating Partnership, including the acquisitions that occurred in 2013 as if they had taken place on January 1, 2012, are as follows (in thousands, except per unit amounts):

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	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Total revenues	$	159,232	$	152,599		$	508,911	$	433,581
Net income / (loss) available to unitholders	4,365		(2,309		)	27,236		(20,903		)
Net income / (loss) per share available to unitholders - basic and diluted	$	0.02	$	(0.02	)	$	0.15	$	(0.14	)

Revenues of approximately $18.7 million and net loss of approximately $512,000 associated with properties acquired in 2013 listed above are included in the consolidated statements of operations for the three months ended September 30, 2013 for both the Parent Company and the Operating Partnership.

Revenues of approximately $27.0 million and net income of approximately $12,000 associated with properties acquired in 2013 listed above are included in the consolidated statements of operations for the nine months ended September 30, 2013 for both the Parent Company and the Operating Partnership.

12. 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 nine months ended September 30, 2012, the Company reclassified the Forbes Boulevard property as a discontinued operation. The table below reflects the details of the property and the exchange (in thousands):

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.

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;

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risks and uncertainties affecting property development and construction; risks associated with tax credits, grants and other subsidies to fund development activities; 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 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 and in our subsequent quarterly reports on Form 10-Q. 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, San Francisco, Maryland, San Diego and New York and, through Wexford, with universities and their related medical systems such as Wake Forest University in Winston-Salem, North Carolina, University of Pennsylvania in Philadelphia, Pennsylvania, and Washington University in St. Louis, Missouri.

At September 30, 2013, we owned or had interests in a portfolio of properties with an aggregate of approximately 16.3 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 September 30, 2013:



					Weighted-
	Gross			Rentable	Average
	Book Value		Buildings	Square Feet	Leased % (1)
	(In thousands)
Stabilized	$	3,940,716	111	9,180,716	98.9	%
Lease up	1,475,218		62	5,253,032	68.6	%
Total operating portfolio	5,415,934		173	14,433,748	90.7	%

Development	176,764		6	1,353,889	68.9	%
Redevelopment	23,993		2	143,757	79.7	%
Pre-development	125,511		—	1,043,000	—
Unconsolidated partnership portfolio	31,871		3	355,080	77.3	%
Development potential	166,973		—	3,306,000	—
Total portfolio	$	5,941,046	184	20,635,474

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(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 September 30, 2013, our total operating portfolio was 90.7% leased on a weighted-average basis, to 287 tenants. As of December 31, 2012, our total operating portfolio was 92.1% leased on a weighted-average basis, to 209 tenants. The decrease in our total operating portfolio leased percentage and increase in number of tenants was primarily due to our acquisitions completed in 2013, which were 83.5% leased at acquisition.

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 September 30, 2013, leases representing 0.4% and 6.3% 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 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. Other than the property sold, 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,” in our annual report on Form 10-K for the year ended December 31, 2012 and in our quarterly report on Form 10-Q for the quarter ended June 30, 2013.

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 nine months ended September 30, 2013, we executed 86 leasing transactions representing 1,821,853 square feet, including 48 new leases totaling 1,072,036 square feet and 38 leases amended to extend their terms totaling 749,817 square feet. The following table summarizes our leasing activity, including leasing activity in our unconsolidated portfolio, during the nine months ended September 30, 2013:

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	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	2,428,965		$	25.31	$	29.53
Dispositions	(27,750	)	10.56		10.70
Expirations	(1,378,402	)	39.41		38.21
Terminations	(331,739	)	42.13		43.84
Pre-leased delivery	438,737		37.65		42.08
Renewals, amendments, and extensions	749,817		39.35		38.16
New leases - first generation (3)	649,405		31.39		32.97
New leases - second generation (4)	54,905		28.05		24.35
Leased square feet as of September 30, 2013	14,133,545

Pre-leased square feet as of December 31, 2012	71,011
Pre-leased acquisitions	13,373		$	18.00	$	20.29
Pre-leased new leases - second generation (4)	367,726		39.81		41.07
Pre-leased delivery	(438,737	)	37.65		42.08
Pre-leased square feet as of September 30, 2013	13,373

____________


(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.


(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 nine months ended September 30, 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)	38	749,817	$	4.23	$	2.94	$	0.83
New leases - first generation	29	649,405	88.86		10.14		17.94
New leases - second generation	19	422,631	24.35		14.11		3.05
Total / weighted-average	86	1,821,853	$	39.06	$	8.10	$	7.44

____________


(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 $38.16 per square foot, representing an increase of 3.2% over the previously expiring rents on a GAAP basis.

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Development/Redevelopment Activity

The following summarizes our consolidated properties under development, redevelopment, pre-development or other construction activities at September 30, 2013 (dollars in thousands):




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

Development
Heritage @ 4240	183,842	60.6	%	$	17,300	$	22,400	Q1 2014
450 Kendall Street (Kendall G)	63,000	—		9,300		44,100		Q3 2015
Landmark at Eastview III	297,000	100.0	%	7,100		152,700		Q3 2015
3737 Market Street	334,305	55.2	%	29,600		101,400		Q4 2014
Piedmont Triad Research - Wake 90	475,742	83.4	%	59,100		63,500		Q1 2014
Total / weighted-average	1,353,889	73.1	%	$	122,400	$	384,100

Redevelopment
60 Hampshire Street	39,014	—		$	4,300	$	16,600	Q1 2015
1701 / 1711 Research Blvd	104,743	100.0	%	15,900		28,200		Q1 2014
Total / weighted-average	143,757	72.9	%	$	20,200	$	44,800

Total				$	142,600

___________


(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 September 30, 2013.


(2)	Includes construction 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.

The following summarizes our capital expenditures during the nine months ended September 30, 2013 and 2012 (dollars in thousands):



	Nine Months Ended
	September 30,							Percent
	2013		2012		Change			Change
Development / Pre-development	$	50,428	$	3,976	$	46,452		1,168.3	%
Redevelopment	2,641		21,552		(18,911		)	(87.7	)%
Tenant improvements - first generation	25,951		53,060		(27,109		)	(51.1	)%
Recurring capital expenditures and second generation tenant improvements (1)	32,251		8,801		23,450			266.4	%
Other capital	31,562		22,816		8,746			38.3	%
Total capital expenditures	$	142,833	$	110,205	$	32,628		29.6	%

___________


(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

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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 increased $32.6 million to $142.8 million for the nine months ended September 30, 2013 from $110.2 million for the nine months ended September 30, 2012. The change was primarily the result of projects under development in the Wexford portfolio, which was acquired in May 2013, and 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 nine months ended September 30, 2013, we acquired approximately 2.9 million rentable square feet of laboratory and office space, which was 83.5% leased at acquisition, and approximately 580,000 square feet of development potential for approximately $842.6 million, excluding transaction costs:



Property	Market	Closing Date	Rentable Square Feet	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 (1)	San Francisco	March 20, 2013	—	37,000		n/a
Wexford (2)	Various	May 31, 2013	2,555,174	669,100		81.2	%
320 Charles Street	Boston	June 18, 2013	99,513	49,518		100.0	%
Total			2,910,337	$	842,618	83.5	%

___________


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


(2)	Includes approximately 935,000 square feet in development and approximately 300,000 square feet of potential development.

Comparison of the Three Months Ended September 30, 2013 to the Three Months Ended September 30, 2012

The following table sets forth historical financial information of the continuing operations for same properties (all properties except properties held for sale, development/redevelopment properties, new properties and corporate entities), development/redevelopment properties (properties that were entirely or primarily under redevelopment or development during either of the three months ended September 30, 2013 or 2012), new properties (properties that were not owned for each of the three months ended September 30, 2013 and 2012 and were not under development/redevelopment) 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						Development/Redevelopment Properties						New Properties						Corporate						Total
	September 30,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rentable square feet	12,349,481			12,349,481			2,540,646			359,267			2,084,267			106,469			N/A			N/A			16,974,394			12,815,217
Percent of total portfolio	72.7		%	96.4		%	15.0		%	2.8		%	12.3		%	0.8		%	N/A			N/A			100.0		%	100.0		%
Percent leased	87.9		%	87.8		%	43.1		%	76.1		%	91.5		%	92.5		%	N/A			N/A			81.6		%	87.5		%
Current annualized base rent per square foot - GAAP basis (1)	$	38.38		$	38.46		$	28.43		$	36.76		$	33.42		$	28.57		N/A			N/A			$	36.91		$	38.33
	Three Months Ended September 30,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rental revenue	$	102,522		$	99,098		$	5		$	1,789		$	14,408		$	576		$	(51	)	$	4		$	116,884		$	101,467
Tenant recoveries	33,727			31,298			5			436			5,133			83			42			(52		)	38,907			31,765
Other revenue	1,516			976			—			—			78			—			1,847			329			3,441			1,305
Total revenues	137,765			131,372			10			2,225			19,619			659			1,838			281			159,232			134,537
Rental operations	40,127			36,631			21			733			7,965			183			3,575			1,397			51,688			38,944
Net operating income/(loss)	97,638			94,741			(11		)	1,492			11,654			476			(1,737		)	(1,116		)	107,544			95,593
Adjustments to cash basis (2)	(3,227		)	(4,464		)	155			1,087			(2,160		)	(25		)	(1,847		)	(159		)	(7,079		)	(3,561		)
Net operating income/(loss) - cash basis	$	94,411		$	90,277		$	144		$	2,579		$	9,494		$	451		$	(3,584	)	$	(1,275	)	$	100,465		$	92,032

____________


(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 September 30, 2013 and 2012 (dollars in thousands):

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	Three Months Ended
	September 30,									Percent
	2013			2012			Change			Change
Net operating income - cash basis	$	100,465		$	92,032		$	8,433		9.2	%
Adjustments to cash basis	7,079			3,561			3,518			98.8	%
Net operating income	107,544			95,593			11,951			12.5	%
Unallocated income / (expense) :
Depreciation and amortization expense	61,898			51,372			10,526			20.5	%
General and administrative expense	11,934			10,226			1,708			16.7	%
Acquisition-related expenses	907			176			731			415.3	%
Income from operations	32,805			33,819			(1,014		)	(3.0	)%
Equity in net loss of unconsolidated partnerships	(112		)	(339		)	227			(67.0	)%
Interest expense, net	(27,870		)	(26,817		)	(1,053		)	3.9	%
Other expense	(687		)	(208		)	(479		)	230.3	%
Net income	$	4,136		$	6,455		$	(2,319	)	(35.9	)%

Net Operating Income. Net operating income increased $12.0 million to $107.5 million for the three months ended September 30, 2013 compared to $95.6 million for the three months ended September 30, 2012. This increase was primarily due to the following:


•	The acquisition of properties totaling approximately 106,500 square feet in the three months ended September 30, 2012 and properties totaling approximately 2.0 million square feet in the nine months ended September 30, 2013 contributed an additional $11.2 million in net operating income for the three months ended September 30, 2013 compared to the three months ended September 30, 2012.


•	The placement of three properties that were operating in 2012 into redevelopment in 2013, partially offset by the placement of two properties that were under development in 2012 into service, resulted in a decrease of $1.5 million in net operating income for the three months ended September 30, 2013 compared to the three months ended September 30, 2012.

•

Same property net operating income increased $2.9 million to $97.6 million for the three months ended September 30, 2013 compared to $94.7 million for the three months ended September 30, 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 87.8% at September 30, 2012 to 87.9% at September 30, 2013, and resulted in an increase in rental revenue of $3.4 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 from $38.46 at September 30, 2012 to $38.38 at September 30, 2013 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 $10.5 million to $61.9 million for the three months ended September 30, 2013 compared to $51.4 million for the three months ended September 30, 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 approximately 2.0 million square feet for an initial investment of $727.2 million in the nine months ended September 30, 2013.

General and Administrative Expenses. General and administrative expenses increased $1.7 million to $11.9 million for the three months ended September 30, 2013 compared to $10.2 million for the three months ended September 30, 2012. The increase was primarily due to higher staffing levels reflecting our merger with Wexford and 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 $907,000 for the three months ended September 30, 2013 compared to $176,000 for the three months ended September 30, 2012. Acquisition-related expenses for the three months ended September 30, 2013 are primarily related to our merger with Wexford.

Interest Expense, Net. Interest cost incurred for the three months ended September 30, 2013 totaled $31.9 million compared to $28.7 million for the three months ended September 30, 2012. Total interest cost incurred increased primarily as a result of higher average debt balances outstanding during 2013 due to the assumption of mortgages in our merger with Wexford and higher average balances on our unsecured line of credit. Interest expense, net increased $1.1 million to $27.9 million for the three months

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ended September 30, 2013 compared to $26.8 million for the three months ended September 30, 2012, primarily as a result of the increase in interest cost incurred, partially offset by an increase in capitalized interest related to increased development in 2013.

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



	Three Months Ended
	September 30,
	2013			2012
Mortgage notes payable	$	11,968		$	10,075
Amortization of debt premium on mortgage notes payable	(511		)	(178		)
Amortization of deferred interest costs	1,705			1,730
Derivative instruments	600			522
Unsecured senior term loans	1,993			2,023
Exchangeable senior notes	1,688			1,688
Unsecured senior notes	10,334			10,334
Amortization of debt discount on notes	228			218
Unsecured line of credit	1,242			347
Unsecured line of credit fees	602			729
Amortization of deferred loan fees	1,825			1,255
Amortization - put call / preferred return	179			—
Interest cost incurred	31,853			28,743
Capitalized interest	(3,983		)	(1,926		)
Total interest expense, net	$	27,870		$	26,817

Other Expense. Other expense increased to $687,000 for the three months ended September 30, 2013 compared to $208,000 for the three months ended September 30, 2012. This increase was primarily due to the following:


•	During the three months ended September 30, 2013, we recorded approximately $551,000 in net realized losses, which includes our pro-rata allocation of losses of a privately-held company in which we hold a non-controlling investment. At September 30, 2013, our maximum potential future realizable losses were approximately $107,000 relating to this investment.


•	During the three months ended September 30, 2013 and 2012, we recorded income tax expense of $447,000 and $247,000, respectively, including entity-level taxes on on our Granta Park campus in the United Kingdom and certain properties that were acquired in the Wexford merger. The increase was primarily due to additional entity-level taxes incurred by the operation of the Wexford properties.

Other Revenue. During the three months ended September 30, 2013 and 2012, we recorded lease termination revenue of $1.5 million and $935,000, respectively. Lease termination revenue for the three months ended September 30, 2013 and 2012 primarily related to the termination of a lease with Merck at our 320 Bent Street property, which expired in August 2013. During the three months ended September 30, 2013, we recorded $1.8 million of interest revenue related to our construction loan.

Comparison of the Nine Months Ended September 30, 2013 to the Nine Months Ended September 30, 2012

The following table sets forth historical financial information of the continuing operations for same properties (all properties except properties held for sale, development/redevelopment properties, new properties and corporate entities), development/redevelopment properties (properties that were entirely or primarily under redevelopment or development during either of the nine months ended September 30, 2013 or 2012), new properties (properties that were not owned for each of the nine months ended September 30, 2013 and 2012 and were not under development/redevelopment) 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						Development/Redevelopment Properties						New Properties						Corporate						Total
	September 30,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rentable square feet	11,237,520			11,237,520			2,793,270			611,891			2,943,604			965,806			N/A			N/A			16,974,394			12,815,217
Percent of total portfolio	66.2		%	87.7		%	16.5		%	4.8		%	17.3		%	7.5		%	N/A			N/A			100.0		%	100.0		%
Percent leased	87.5		%	87.7		%	45.5		%	71.8		%	93.6		%	94.2		%	N/A			N/A			81.6		%	87.5		%
Current annualized base rent per square foot - GAAP basis (1)	$	38.44		$	38.44		$	28.75		$	34.49		$	35.22		$	39.01		N/A			N/A			$	36.91		$	38.33
	Nine Months Ended September 30,
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
Rental revenue	$	277,544		$	268,426		$	4,312		$	7,021		$	46,121		$	13,196		$	(45	)	$	7		$	327,932		$	288,650
Tenant recoveries	91,660			85,676			1,868			2,060			10,385			1,330			124			89			104,037			89,155
Other revenue	42,892			1,111			321			—			126			33			4,013			446			47,352			1,590
Total revenues	412,096			355,213			6,501			9,081			56,632			14,559			4,092			542			479,321			379,395
Rental operations	106,123			101,272			3,763			3,470			16,314			2,967			7,982			5,008			134,182			112,717
Net operating income/(loss)	305,973			253,941			2,738			5,611			40,318			11,592			(3,890		)	(4,466		)	345,139			266,678
Adjustments to cash basis (2)	(38,221		)	(5,586		)	(331		)	3,091			(5,294		)	(1,475		)	(4,013		)	(446		)	(47,859		)	(4,416		)
Net operating income/(loss) - cash basis	$	267,752		$	248,355		$	2,407		$	8,702		$	35,024		$	10,117		$	(7,903	)	$	(4,912	)	$	297,280		$	262,262

____________


(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 nine months ended September 30, 2013 and 2012 (dollars in thousands):

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	Nine Months Ended
	September 30,									Percent
	2013			2012			Change			Change
Net operating income - cash basis	$	297,280		$	262,262		$	35,018		13.4	%
Adjustments to cash basis	47,859			4,416			43,443			983.8	%
Net operating income	345,139			266,678			78,461			29.4	%
Unallocated income / (expense) :
Depreciation and amortization expense	186,219			143,882			42,337			29.4	%
General and administrative expense	32,358			27,416			4,942			18.0	%
Acquisition-related expenses	5,263			13,055			(7,792		)	(59.7	)%
Income from operations	121,299			82,325			38,974			47.3	%
Equity in net loss of unconsolidated partnerships	(697		)	(1,011		)	314			(31.1	)%
Interest expense, net	(79,890		)	(72,863		)	(7,027		)	9.6	%
Other expense	(4,079		)	(580		)	(3,499		)	603.3	%
Income from continuing operations	36,633			7,871			28,762			365.4	%
Loss from discontinued operations	—			(4,370		)	4,370			(100.0	)%
Net income	$	36,633		$	3,501		$	33,132		946.4	%

Net Operating Income. Net operating income increased $78.5 million to $345.1 million for the nine months ended September 30, 2013 compared to $266.7 million for the nine months ended September 30, 2012. This increase was primarily due to lease termination income of $42.8 million for the nine months ended September 30, 2013 (see the section entitled "Other Revenue" below). Excluding the lease termination income, net operating income increased $36.7 million to $302.3 million for the nine months ended September 30, 2013 compared to $265.6 million for the nine months ended September 30, 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 approximately 2.0 million square feet in the nine months ended September 30, 2013 contributed an additional $28.7 million in net operating income for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.


•	The placement of three properties that were operating in 2012 into redevelopment in 2013, partially offset by the placement of one property that was under development in 2011 into service, resulted in a decrease of $2.9 million in net operating income for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.


•	Same property net operating income, excluding the impact of lease terminations, increased $10.2 million to $263.2 million for the nine months ended September 30, 2013 compared to $253.0 million for the nine months ended September 30, 2012. This increase was primarily due to the following:


•	An increase in the percentage of recoverable expenses in our same property portfolio to 86.4% for the nine months ended September 30, 2013 compared to 84.6% for the nine months ended September 30, 2012, which contributed an additional $1.1 million in net operating income for the nine months ended September 30, 2013.


•	An increase in rental revenue of $9.1 million directly attributable to the commencement of leases in our same property portfolio.

Depreciation and Amortization Expense. Depreciation and amortization expense increased $42.3 million to $186.2 million for the nine months ended September 30, 2013 compared to $143.9 million for the nine months ended September 30, 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 approximately 2.0 million square feet for an initial investment of $727.2 million in the nine months ended September 30, 2013.

General and Administrative Expenses. General and administrative expenses increased $4.9 million to $32.4 million for the nine months ended September 30, 2013 compared to $27.4 million for the nine months ended September 30, 2012. The increase was primarily due to higher staffing levels reflecting our merger with Wexford and continuing growth and compensation associated with our above-plan leasing and financial performance as compared to the prior year.

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Acquisition-Related Expenses. Acquisition-related expenses decreased to $5.3 million for the nine months ended September 30, 2013 compared to $13.1 million for the nine months ended September 30, 2012. Acquisition-related expenses for the nine months ended September 30, 2013 primarily related to our merger with Wexford. Acquisition-related expenses for the nine months ended September 30, 2012 primarily related to a United Kingdom transfer tax assessed in connection with our purchase of Granta Park.

Interest Expense, Net. Interest cost incurred for the nine months ended September 30, 2013 totaled $89.9 million compared to $79.2 million for the nine months ended September 30, 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. Interest expense, net increased $7.0 million to $79.9 million for the nine months ended September 30, 2013 compared to $72.9 million for the nine months ended September 30, 2012, primarily as a result of the increase in interest cost incurred, partially offset by an increase in capitalized interest related to increased development in 2013.

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



	Nine Months Ended
	September 30,
	2013			2012
Mortgage notes payable	$	32,647		$	30,233
Amortization of debt premium on mortgage notes payable	(1,011		)	(539		)
Amortization of deferred interest costs	5,134			5,209
Derivative instruments	1,752			999
Unsecured senior term loans	5,921			3,976
Exchangeable senior notes	5,063			5,063
Unsecured senior notes	31,003			25,779
Amortization of debt discount on notes	673			559
Unsecured line of credit	1,997			2,389
Unsecured line of credit fees	1,922			2,056
Amortization of deferred loan fees	4,550			3,515
Amortization - put call / preferred return	238			—
Interest cost incurred	89,889			79,239
Capitalized interest	(9,999		)	(6,376		)
Total interest expense, net	$	79,890		$	72,863

Other Expense. Other expense increased to $4.1 million for the nine months ended September 30, 2013 compared to $580,000 for the nine months ended September 30, 2012. This increase was primarily due to the following:


•	During the nine months ended September 30, 2013 we recorded approximately $2.8 million in impairment charge related to our cost basis investment in, and notes receivable from, a privately-held company that is in liquidation.

•

During the nine months ended September 30, 2012, we repaid in full the outstanding mortgage notes totaling approximately $32.5 million pertaining to the 6828 Nancy Ridge Drive and Sidney Street properties. This resulted in the recognition of a gain of approximately $216,000 on early extinguishment of debt representing the write-off of unamortized debt premium, partially offset by the write-off of deferred loan fees. Also during the nine months ended September 30, 2012, significant declines in the value of investments in available-for-sale securities in a publicly traded company that we considered other-than-temporary resulted in the reclassification of approximately $545,000 of an unrealized loss from other comprehensive income to impairment of securities.


•	During the nine months ended September 30, 2013 and 2012, we recorded income tax expense related to entity-level taxes on certain of our investments of $944,000 and $285,000, respectively. The increase was primarily due to additional entity-level taxes incurred by the operation of certain properties acquired in the Wexford merger.

Other Revenue. During the nine months ended September 30, 2013 and 2012, we recorded lease termination revenue of $42.8 million and $1.0 million, respectively. Lease termination revenue for the nine months ended September 30, 2013 primarily related to the termination of leases with Merck at our 320 Bent Street property which expired in August 2013 and Elan at our Science

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Center at Oyster Point property, which expired in March and April 2013. During the nine months ended September 30, 2013, we recorded $3.9 million of interest revenue related to our construction loan.

Loss from Discontinued Operations. Loss from discontinued operations was approximately $4.4 million for the nine months ended September 30, 2012 due to an impairment loss that was recorded as a result of the completion of the exchange of our Forbes Boulevard property.

Cash Flows

Comparison of the Nine Months Ended September 30, 2013 to the Nine Months Ended September 30, 2012



	2013			2012			Change
	(In thousands)
Net cash provided by operating activities	$	204,702		$	176,032		$	28,670
Net cash used in investing activities	(704,902		)	(484,309		)	(220,593		)
Net cash provided by financing activities	509,507			312,362			197,145
Ending cash and cash equivalents balance	29,230			20,646			8,584

Net cash provided by operating activities increased $28.7 million to $204.7 million for the nine months ended September 30, 2013 compared to $176.0 million for the nine months ended September 30, 2012. The increase was primarily due to cash flow generated by acquisitions, cash rent starts on new leases and lease termination payments.

Net cash used in investing activities increased $220.6 million to $704.9 million for the nine months ended September 30, 2013 compared to $484.3 million for the nine months ended September 30, 2012. The increase primarily reflects increased acquisition-related activity and funding of our construction loan receivable during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.

Net cash provided by financing activities increased $197.1 million to $509.5 million for the nine months ended September 30, 2013 compared to $312.4 million for the nine months ended September 30, 2012. The increase primarily reflects increased financing requirements due to increased acquisition-related activity and funding of our construction loan receivable during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. The proceeds from our common stock offerings in February 2013 and April 2013 were primarily used to redeem our Series A preferred stock and to acquire properties, including the Wexford portfolio.

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 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.

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Our FFO and CFFO available to common shares and OP units and a reconciliation to net income for the three and nine months ended September 30, 2013 and 2012 (in thousands, except per share and share data) were as follows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income / (loss) available to the common stockholders	$	4,247		$	2,758		$	27,441		$	(7,295	)
Adjustments:
(Gain)/loss on sale of assets	(230		)	—			(230		)	4,552
Noncontrolling interests in operating partnership(1)	118			53			534			(140		)
Depreciation and amortization - unconsolidated partnerships	380			323			1,116			968
Depreciation and amortization - consolidated entities	61,898			51,372			186,219			143,882
Depreciation and amortization - discontinued operations	—			—			—			92
Depreciation and amortization - allocable to noncontrolling interest of consolidated joint ventures	(515		)	(28		)	(709		)	(83		)
FFO available to common shares and units - basic	65,898			54,478			214,371			141,976
Interest expense on Exchangeable Senior Notes(2)	1,688			1,688			5,063			5,063
FFO available to common shares and units - diluted	67,586			56,166			219,434			147,039
Acquisition-related expenses	907			176			5,263			13,055
CFFO available to common shares and units - diluted	$	68,493		$	56,342		$	224,697		$	160,094
FFO per share - diluted	$	0.33		$	0.34		$	1.13		$	0.88
CFFO per share - diluted	$	0.33		$	0.34		$	1.15		$	0.96
Weighted-average common shares and units outstanding - diluted(2) (3)	207,952,002			167,350,914			194,899,709			167,275,526

____________


(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 our operating partnership, included elsewhere herein.

(2)

Reflects interest expense adjustment of the Exchangeable Senior Notes based on the “if converted” method. Both the three and nine months ended September 30, 2013 include 10,405,224 shares of common stock potentially issuable pursuant to the exchange feature of the Exchangeable Senior Notes based on the “if converted” method. Both the three and nine months ended September 30, 2012 include 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.

(3)

The three months ended September 30, 2013 and 2012 include 1,415,135 and 1,495,473 shares of unvested restricted stock, respectively, which are considered anti-dilutive for purposes of calculating diluted earnings per share. The nine months ended September 30, 2013 and 2012 include 1,373,245 and 1,457,250 shares of unvested restricted stock, respectively, which are considered anti-dilutive for purposes of calculating diluted earnings per share. The nine months ended September 30, 2012 includes 2,951,914 shares issuable upon redemption of the OP units, which are considered anti-dilutive for purposes of calculating diluted earnings per share.

Liquidity and Capital Resources of BioMed Realty Trust, Inc.

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

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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 September 30, 2013, the Company owned an approximate 97.3% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining 2.7% 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 and leasing commissions.

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 common 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.

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.

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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.

The remaining principal payments due for our consolidated and our proportionate share of unconsolidated indebtedness (excluding debt premiums and discounts) as of September 30, 2013 were as follows (in thousands):



	2013		2014		2015		2016		2017		Thereafter		Total
Consolidated indebtedness:
Secured mortgages	$	6,897	$	341,415	$	30,006	$	166,516	$	30,294	$	129,819	$	704,947
Unsecured line of credit	—		—		—		—		—		20,000		20,000
Term Loan due 2017 - U.S. dollar	—		—		—		—		243,596		—		243,596
Term Loan due 2017 - GBP (1)	—		—		—		—		161,630		—		161,630
Term Loan due 2018	—		—		—		—		—		350,000		350,000
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	6,897		341,415		30,006		566,516		435,520		1,179,819		2,560,173
Share of unconsolidated indebtedness:
Secured mortgage	—		1,343		—		—		—		—		1,343
Secured construction loan	—		27,795		—		—		—		—		27,795
Total share of unconsolidated indebtedness	—		29,138		—		—		—		—		29,138
Total indebtedness	$	6,897	$	370,553	$	30,006	$	566,516	$	435,520	$	1,179,819	$	2,589,311

____________


(1)	The principal balance represents the U.S. dollar amount based on the exchange rate of $1.62 to £1.00 at both September 30, 2013 and December 31, 2012.

Certain of our mortgage loans include financial covenants which require us to maintain minimum levels of debt service coverage and a minimum amount of net worth. Management believes that it was in compliance with these covenants as of September 30, 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.

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.

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 utilized the net proceeds to fund a portion of the purchase price in connection

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with our merger with Wexford, to repay a portion of the outstanding indebtedness under our unsecured line of credit and for other general corporate and working capital purposes.

On May 31, 2013, we completed our merger with Wexford. The aggregate consideration for Wexford at the close of the transaction was approximately $669.1 million. We assumed approximately $255 million in debt at fair-value. The sellers received 5,568,227 shares of our Parent Company's common stock and 336,960 operating partnership units, with the balance of the merger consideration paid in cash.

On June 18, 2013, we acquired the 320 Charles Street property in Cambridge, Massachusetts for $49.5 million, with approximately $8.0 million paid in cash and the remaining consideration paid through the issuance of 2,034,211 operating partnership units.

On September 24, 2013, we entered into the Amended and Restated Credit Facility, providing for aggregate borrowings of up to $1.25 billion, consisting of the $900.0 million unsecured line of credit and the $350.0 million Term Loan due 2018.

The credit facility governing the Amended and Restated Credit Facility and the Term Loan due 2017 include certain restrictions and covenants relating to, among other things, overall leverage and unsecured leverage ratios, fixed charge coverage, unsecured debt service coverage, maximum amount of secured indebtedness and certain investment limitations. Management believes that it was in compliance with these covenants as of September 30, 2013.

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 September 30, 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 September 30, 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 $454.3 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. We also expect to utilize tax credits, grants and other subsidies from time to time to fund development activities. 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 September 30, 2013 was approximately $6.2 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
	September 30, 2013	Aggregate Principal Amount or Dollar Value Equivalent		Percent of Total Capitalization
Debt:
Mortgage notes payable (1)		$	704,947	11.3	%
Exchangeable senior notes		180,000		2.9	%
Unsecured senior notes (1)		900,000		14.4	%
Unsecured senior term loans (1)(2)		755,226		12.2	%
Unsecured line of credit		20,000		0.3	%
Total debt		2,560,173		41.1	%
Equity:
Common shares, operating partnership and LTIP units outstanding (3)	197,522,723	3,671,947		58.9	%
Total capital		3,671,947		58.9	%
Total capitalization		$	6,232,120	100.0	%

____________


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

(2)

In August 2012, the Operating Partnership converted approximately $156.4 million of outstanding borrowings of the Term Loan due 2017 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. $161.6 million of the principal balance represents the U.S. dollar amount based on the exchange rate of $1.62 to £1.00 at September 30, 2013.

(3)

Aggregate amount based on the market closing price of the common stock of our Parent Company of $18.59 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 September 30, 2013, 192,106,749 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.

Our organizational documents do not limit the amount of indebtedness that we may incur, and we may adjust the amount of indebtedness that we incur from time to time 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. The terms of the indentures governing our Notes due 2016, Notes due 2020 and Notes due 2022, the credit facility governing the Term Loan due 2017 and the Amended and Restated Credit Facility 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 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 September 30, 2013, we had investments in the following unconsolidated partnerships: (1) BioPark Fremont, LLC, which owns a land parcel located in Baltimore; (2) McKellar Court limited partnership, which owns a single tenant occupied property located in San Diego; and (3) 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).

BioPark Fremont, LLC is a VIE; however, we are not the primary beneficiary. We will receive 50% of the operating cash flows and 50% of the gains upon sale of the property. We account for our membership interest using the equity method. The assets of BioPark Fremont, LLC were $2.7 million and the liabilities were $2.8 million at September 30, 2013.

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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 $13.7 million and $14.1 million at September 30, 2013 and December 31, 2012, respectively, and the liabilities were $10.5 million at September 30, 2013 and December 31, 2012. Our equity in net income of the McKellar Court partnership was $683,000 and $685,000 for the nine months ended September 30, 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 $252.8 million and $249.9 million at September 30, 2013 and December 31, 2012, respectively, and the liabilities were $149.3 million and $144.7 million at September 30, 2013 and December 31, 2012, respectively. Our equity in net loss of the PREI joint ventures was $1.4 million and $1.7 million for the nine months ended September 30, 2013 and 2012, respectively.

We are the primary beneficiary in five other VIEs, consisting of single-tenant properties in which the tenant has a fixed-price purchase option, and VIEs at seven properties with tax credit structures, 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)		September 30, 2013		December 31, 2012		Maturity Date
BioPark Fremont	50	%	3.7	%	$	1,343	$	—	May 1, 2014
PREI I LLC (3)	20	%	3.2	%	27,795		27,795		August 13, 2014
Total					$	29,138	$	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 September 30, 2013.

(3)

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 nine months ended September, 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

—

June 30, 2013

June 14, 2013

July 15, 2013

0.235

—

September 30, 2013

September 16, 2013

October 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 due 2017, the outstanding balance of a mortgage secured by a property in Pennsylvania 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 September 30, 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		September 30, 2013
Fixed interest rate (2)	$	1,787,389	69.6	%	5.25	%
Variable interest rate - hedged (3)	561,630		21.9	%	2.29	%
Variable interest rate - unhedged (4)	217,790		8.5	%	1.72	%
Total/weighted-average effective interest rate	$	2,566,809	100.0	%	4.30	%

____________


(1)	Principal balance includes only consolidated indebtedness.


(2)	Includes eleven 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 the hedged portions of our Term Loan due 2017 and Term Loan due 2018, 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 due 2017 into GBP equal to £100.0 million. The principal balance represents the U.S. dollar amount based on the exchange rate of $1.62 to £1.00 at September 30, 2013. The stated effective rate for the variable interest hedged debt includes the impact of our 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 due 2017 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 due 2017 at approximately 2.39% for the remaining term of the Term Loan due 2017 (including applicable credit spreads for the underlying debt), subject to adjustment based on our credit ratings. On September 25, 2013, we entered into three 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 due 2018 at a weighted-average interest rate of approximately 2.20% for a three-year term (including applicable credit spreads for the underlying debt), subject to adjustment based on our credit ratings.


(4)	Includes one variable rate mortgage, the unhedged portions of our Term Loan due 2017 and Term Loan due 2018 and our unsecured line of credit, which bear interest at LIBOR-indexed variable interest rates, plus a credit spread.

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 September 30, 2013, the fair-value of all fixed-rate debt was estimated to be equal to the net carrying value of $1.8 billion (including debt premiums and discounts). At September 30, 2013, the fair-value of all variable-rate debt was estimated to be $781.5 million compared to the net carrying value of $779.4 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 September 30, 2013 in relation to total assets of $5.9 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 due 2017, our Term Loan due 2018 and our proportionate share of the outstanding balance of the PREI joint ventures’ secured construction loan at September 30, 2013, a 1% change in interest rates would change our interest costs by approximately $2.4 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

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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

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 September 30, 2013, would equal approximately $3.1 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 September 30, 2013 and 2012, total revenues from our foreign subsidiary were $4.5 million and $4.4 million, respectively, which represented 2.8% and 3.3% of our total revenues for the respective periods. For the nine months ended September 30, 2013 and 2012, total revenues from our foreign subsidiary were $13.5 million and $5.3 million, respectively, which represented 2.8% and 1.4% of our total revenues for the respective periods. Our net investment in properties outside the United States was $190.5 million and $188.8 million as of September 30, 2013 and December 31, 2012, respectively. On August 2, 2012, we converted a portion of the outstanding borrowings of our Term Loan due 2017 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 $28.9 million as of September 30, 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 September 30, 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 September 30, 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

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2012, as updated by our quarterly report on Form 10-Q for the quarter ended June 30, 2013, which could materially affect our business, financial condition and/or results of operations. There have been no material changes to the risk factors described in the "Risk Factors" section in our annual report on Form 10-K for the year ended December 31, 2012, as so updated. The risks described in our annual report on Form 10-K and quarterly reports on Form 10-Q are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.

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

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

None.

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

During the three months ended September 30, 2013, our Parent Company issued, net of forfeitures, an aggregate of 158,638 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(a)(2) of the Securities Act of 1933, as amended, or the Securities Act. During the three months ended September 30, 2013, the operating partnership issued an aggregate of 158,638 restricted operating partnership units to our Parent Company, as required by the operating partnership's partnership agreement.

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
3.1		Third Amended and Restated Bylaws of BioMed Realty Trust, Inc.(1)
10.1		Director Compensation Policy.
10.2		Amended and Restated Unsecured Credit Agreement, dated as of September 24, 2013, by and among BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders party thereto.(2)
10.3		Form of Amended and Restated Line Note under Amended and Restated Unsecured Credit Agreement.(2)
10.4		Form of Amended and Restated Competitive Bid Note under Amended and Restated Unsecured Credit Agreement.(2)
10.5		Form of Term Note under Amended and Restated Unsecured Credit Agreement.(2)
10.6		Form of Amended and Restated Swing Loan Note under Amended and Restated Unsecured Credit Agreement.(2)
10.7		Second Amendment to Unsecured Term Credit Agreement, dated as of September 24, 2013, by and among BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders party thereto.(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 September 6, 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 September 30, 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:	November 6, 2013	Dated:	November 6, 2013

EXHIBIT INDEX



Exhibit Number		Description of Exhibit
3.1		Third Amended and Restated Bylaws of BioMed Realty Trust, Inc.(1)
10.1		Director Compensation Policy.
10.2		Amended and Restated Unsecured Credit Agreement, dated as of September 24, 2013, by and among BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders party thereto.(2)
10.3		Form of Amended and Restated Line Note under Amended and Restated Unsecured Credit Agreement.(2)
10.4		Form of Amended and Restated Competitive Bid Note under Amended and Restated Unsecured Credit Agreement.(2)
10.5		Form of Term Note under Amended and Restated Unsecured Credit Agreement.(2)
10.6		Form of Amended and Restated Swing Loan Note under Amended and Restated Unsecured Credit Agreement.(2)
10.7		Second Amendment to Unsecured Term Credit Agreement, dated as of September 24, 2013, by and among BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders party thereto.(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 September 6, 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 September 30, 2013.