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, 2005.

BIOMED REALTY TRUST, INC.

Maryland
(State or other jurisdiction of		20-1142292
incorporation or organization)		(I.R.S. Employer Identification No.)

17140 Bernardo Center Drive, Suite 222
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 Securities Exchange Act of 1934 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. Yes þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     The number of outstanding shares of the registrant’s common stock, par value $0.01 per share, as of November 14, 2005 was 46,634,640.

 

 

BIOMED REALTY TRUST, INC.

FORM 10-Q — QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION			3
Item 1 Consolidated Financial Statements			3
Consolidated Balance Sheets for BioMed Realty Trust, Inc. as of September 30, 2005 (Unaudited) and December 31, 2004 (Unaudited)			3
Consolidated Statements of Income for BioMed Realty Trust, Inc. for the three months ended September 30, 2005 (Unaudited), for BioMed Realty Trust, Inc. for the period from August 11, 2004 through September 30, 2004 (Unaudited), and for Inhale 201 Industrial Road, L.P. (Predecessor) for the period from July 1, 2004 through August 17, 2004 (Unaudited)			4
Consolidated Statements of Income for BioMed Realty Trust, Inc. for the nine months ended September 30, 2005 (Unaudited), for BioMed Realty Trust, Inc. for the period from August 11, 2004 through September 30, 2004 (Unaudited), and for Inhale 201 Industrial Road, L.P. (Predecessor) for the period from January 1, 2004 through August 17, 2004 (Unaudited)			5
Consolidated Statements of Cash Flows for BioMed Realty Trust, Inc. for the nine months ended September 30, 2005 (Unaudited) and for BioMed Realty Trust, Inc. and Inhale 201 Industrial Road, L.P. (Predecessor) for the nine months ended September 30, 2004 (Unaudited)			6
Notes to Consolidated Financial Statements (Unaudited)			7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3 Quantitative and Qualitative Disclosures About Market Risk			23
Item 4 Controls and Procedures			24
PART II — OTHER INFORMATION			24
Item 1 Legal Proceedings			24
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds			24
Item 3 Defaults Upon Senior Securities			24
Item 4 Submission of Matters to a Vote of Security Holders			25
Item 5 Other Information			25
Item 6 Exhibits			25
SIGNATURES			26
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1

PART 1 — FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BIOMED REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

		September 30, 2005				December 31, 2004
		(In thousands, except share data)
ASSETS
Investments in real estate, net		$	1,072,427			$	468,488
Investment in unconsolidated partnership			2,492				2,470
Cash and cash equivalents			74,495				27,869
Restricted cash			5,866				2,470
Accounts receivable, net			5,819				1,837
Accrued straight-line rents, net			7,166				3,306
Acquired above market leases, net			7,437				8,006
Deferred leasing costs, net			138,008				61,503
Deferred loan costs, net			5,196				1,700
Prepaid expenses			5,216				1,531
Other assets			6,359				2,543
Total assets		$	1,330,481			$	581,723
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable, net		$	248,004			$	102,236
Secured term loan			250,000				—
Security deposits			6,222				4,831
Due to affiliates			—				53
Dividends and distributions payable			13,367				9,249
Accounts payable and accrued expenses			25,234				7,529
Acquired lease obligations, net			30,822				13,741
Total liabilities			573,649				137,639
Minority interests			21,278				22,267
Stockholders’ equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized, none issued or outstanding			—				—
Common stock, $.01 par value, 100,000,000 shares authorized, 46,635,890 and 31,386,333 shares issued and outstanding at September 30, 2005 and December 31, 2004, respectively			466				314
Additional paid-in capital			760,834				434,075
Deferred compensation			(4,066	)			(4,182	)
Accumulated other comprehensive income			3,802				—
Dividends in excess of earnings			(25,482	)			(8,390	)
Total stockholders’ equity			735,554				421,817
Total liabilities and stockholders’ equity		$	1,330,481			$	581,723

See accompanying notes to consolidated financial statements.

BIOMED REALTY TRUST, INC. AND
INHALE 201 INDUSTRIAL ROAD, L.P. (PREDECESSOR)

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

										INHALE 201
										INDUSTRIAL ROAD,
										L.P.
		BIOMED REALTY TRUST, INC.								(PREDECESSOR)
		Three Months				Period August 11, 2004				Period July 1, 2004
		Ended				through				through
		September 30, 2005				September 30, 2004				August 17, 2004
		(In thousands, except per share data)
Revenues:
Rental		$	28,593			$	6,107			$	796
Tenant recoveries			12,225				2,878				76
Other income			512				—				—
Total revenues			41,330				8,985				872
Expenses:
Rental operations			9,763				2,739				5
Real estate taxes			3,573				800				41
Depreciation and amortization			12,164				2,251				122
General and administrative			3,756				1,195				—
Total expenses			29,256				6,985				168
Income from operations			12,074				2,000				704
Equity in net income of unconsolidated partnership			20				—				—
Interest income			807				124				—
Interest expense			(7,422	)			(218	)			(312	)
Income before minority interests			5,479				1,906				392
Minority interest in consolidated partnership			45				58				—
Minority interests in operating partnership			(323	)			(137	)			—
Net income		$	5,201			$	1,827			$	392
Basic earnings per share		$	0.11			$	0.06
Diluted earnings per share		$	0.11			$	0.06
Weighted-average common shares outstanding:
Basic			46,287,617				30,673,883
Diluted			49,444,409				30,754,840

See accompanying notes to consolidated financial statements.

BIOMED REALTY TRUST, INC. AND
INHALE 201 INDUSTRIAL ROAD, L.P. (PREDECESSOR)

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

										INHALE 201
										INDUSTRIAL ROAD,
		BIOMED REALTY TRUST, INC.								L.P. (PREDECESSOR)
										Period January 1,
		Nine Months				Period August 11, 2004				2004
		Ended				through				through
		September 30, 2005				September 30, 2004				August 17, 2004
		(In thousands, except per share data)
Revenues:
Rental		$	62,821			$	6,107			$	3,933
Tenant recoveries			28,035				2,878				375
Other income			3,508				—				—
Total revenues			94,364				8,985				4,308
Expenses:
Rental operations			22,879				2,739				131
Real estate taxes			7,836				800				222
Depreciation and amortization			26,832				2,251				600
General and administrative			9,001				1,195				—
Total expenses			66,548				6,985				953
Income from operations			27,816				2,000				3,355
Equity in net income of unconsolidated partnership			91				—				—
Interest income			987				124				—
Interest expense			(15,645	)			(218	)			(1,700	)
Income before minority interests			13,249				1,906				1,655
Minority interest in consolidated partnership			219				58				—
Minority interests in operating partnership			(991	)			(137	)			—
Net income		$	12,477			$	1,827			$	1,655
Basic earnings per share		$	0.34			$	0.06
Diluted earnings per share		$	0.34			$	0.06
Weighted-average common shares outstanding:
Basic			36,406,068				30,673,883
Diluted			39,545,665				30,754,840

See accompanying notes to consolidated financial statements.

BIOMED REALTY TRUST, INC. AND
INHALE 201 INDUSTRIAL ROAD, L.P. (PREDECESSOR)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

						BIOMED REALTY
						TRUST, INC. AND
		BIOMED				INHALE 201
		REALTY				INDUSTRIAL ROAD,
		TRUST, INC.				L.P. (PREDECESSOR)
		Nine Months Ended				Nine Months Ended
		September 30, 2005				September 30, 2004
		(in thousands)
Operating activities:
Net income		$	12,477			$	3,482
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interest in consolidated partnership			(219	)			(58	)
Minority interests in operating partnership			991				137
Depreciation and amortization			26,832				2,851
Bad debt expense			171				—
Revenue reduction attributable to acquired above market leases			1,189				160
Revenue recognized attributable to acquired lease obligations			(2,157	)			(49	)
Vesting of restricted common stock			3,007				328
Amortization of loan costs			2,675				49
Interest expense reduction for amortization of debt premium			(1,280	)			—
Income from unconsolidated partnership			(91	)			—
Distributions received from unconsolidated partnership			69				—
Changes in operating assets and liabilities:
Restricted cash			(3,396	)			(854	)
Accounts receivable			(4,153	)			(1,074	)
Due from affiliates			—				(32	)
Accrued straight-line rents			(3,860	)			(830	)
Deferred leasing costs			(1,239	)			—
Prepaid expenses			(3,685	)			(1,601	)
Other assets			(3,816	)			(272	)
Security deposits			683				—
Due to affiliates			(53	)			91
Accounts payable and accrued expenses			15,274				5,861
Net cash provided by operating activities			39,419				8,189
Investing activities:
Purchases of interests in and additions to investments in real estate and related intangible assets			(539,003	)			(396,457	)
Security deposits received from prior owners of real estate			708				3,258
Accrued construction and tenant improvement costs			6,233				—
Receipts of master lease payments (reduction to investments in real estate)			1,664				—
Funds held in escrow for acquisitions			—				(1,850	)
Repayment of related party payables			—				(3,000	)
Net cash used in investing activities			(530,398	)			(398,049	)
Financing activities:
Proceeds from common stock offering			340,256				465,753
Payment of offering costs			(16,236	)			(36,734	)
Payment of loan costs			(6,171	)			(1,222	)
Line of credit proceeds			227,175				—
Line of credit payments			(227,175	)			—
Secured term loan proceeds			250,000				—
Unsecured term loan proceeds			100,000				—
Unsecured term loan payments			(100,000	)			—
Principal payments on mortgage notes payable			(2,468	)			(44	)
Distributions to operating partnership unit holders			(2,325	)			—
Dividends paid			(25,451	)			—
Distributions to owners of Predecessor			—				(1,187	)
Net cash provided by financing activities			537,605				426,566
Net increase in cash and cash equivalents			46,626				36,706
Cash and cash equivalents at beginning of period			27,869				157
Cash and cash equivalents at end of period		$	74,495			$	36,863
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $446 and $0, respectively)		$	12,827			$	1,995
Supplemental disclosure of non-cash investing and financing activities:
Accrual for dividends declared			12,592				4,698
Accrual for distributions declared for operating partnership unit holders			775				357
Restricted stock awards			2,891				4,997
Mortgage loans assumed (includes premium of $11,312 and $4,730, respectively)			149,516				47,642
Historic cost basis of assets transferred from Predecessor (including $2,061 of accrued straight-line rents as of August 17, 2004)			—				49,592
Operating partnership units issued for interests in certain contributed properties			—				21,666
Investment in unconsolidated partnership acquired by issuing operating partnership units			—				2,508
Distributions in excess of equity balance to owners of Predecessor			—				7,061
Accrual for offering costs			—				(602	)

See accompanying notes to consolidated financial statements.

BIOMED REALTY TRUST, INC. AND
INHALE 201 INDUSTRIAL ROAD, L.P. (PREDECESSOR)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

     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 (our “Operating Partnership”), and 201 Industrial Road, L.P. (“Industrial Road” or our “Predecessor”). We operate 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. The Company’s tenants include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. The Company’s current properties and its primary acquisition targets are located in markets with well established reputations as centers for scientific research, including Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey.

     The Company was incorporated in Maryland on April 30, 2004. On August 11, 2004, the Company commenced operations after completing its initial public offering (the “Offering”) of 27,000,000 shares of its common stock, par value $.01 per share. The Offering price was $15.00 per share resulting in gross proceeds of $405.0 million. On August 16, 2004, in connection with the exercise of the underwriters’ over-allotment option, the Company issued an additional 4,050,000 shares of common stock and received gross proceeds of $60.8 million. The aggregate proceeds to the Company, net of underwriting discounts and commissions and Offering costs, were approximately $429.3 million. The Company issued a stock warrant in connection with the Offering to the lead underwriter for the right to purchase 270,000 common shares at $15.00 per share, which equals the estimated fair value at the date of grant. The warrant became exercisable six months after the Offering date and expires five years after the Offering date. From inception through August 11, 2004, neither the Company nor its Operating Partnership had any operations. Simultaneously with the Offering, the Company obtained a $100.0 million revolving unsecured credit facility (Note 5), which was used to finance acquisitions and for other corporate purposes prior to being replaced on May 31, 2005 with a $250.0 million revolving unsecured credit facility with KeyBank National Association and other lenders (Note 5).

     On June 27, 2005, we completed a follow-on common stock offering of 15,122,500 shares at $22.50 per share, resulting in gross proceeds of $340.3 million. The net proceeds of $324.0 million were used to repay the outstanding balance on our revolving credit facility (Note 5), to repay our $100.0 million unsecured term loan (Note 5), to acquire properties and for other corporate purposes. The Company expects to use the remaining proceeds for future property acquisitions and for other general corporate and working capital purposes.

     As of September 30, 2005, we owned or had interests in 36 properties, located principally in Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania, New York and New Jersey, consisting of 59 buildings with approximately 4.4 million rentable square feet of laboratory and office space, which was approximately 90.6% leased to 81 tenants. Of the remaining unleased space, 269,316 square feet, or 6.1% of our total rentable square footage, was under redevelopment. We also owned undeveloped land that we estimate can support up to 600,000 rentable square feet of laboratory and office space.

     Industrial Road was the largest of the properties contributed in the Offering and therefore has been identified as the accounting acquirer pursuant to paragraph 17 of Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations (“SFAS 141”). As such, the historical financial statements presented herein for Industrial Road were prepared on a stand-alone basis up to and including the acquisition date, August 17, 2004. Upon completion of the Offering, the interest in the Predecessor acquired from affiliates was recorded at historic cost. The acquisitions of the unaffiliated interests in the Predecessor and the interests in all of the other properties have been accounted for as a purchase in accordance with SFAS 141.

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 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 necessary for a fair presentation of the financial statements for these interim periods have been included. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2004.

Principles of Consolidation

     The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and partnerships and limited liability companies it controls. All material intercompany transactions and balances have been eliminated. The Company consolidates entities the Company controls and records a minority 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 shareholder. If the minority shareholder holds substantive participation rights, it overcomes the presumption of control by the majority voting interest holder. In contrast, if the minority shareholder 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. With respect to the partnerships and limited liability companies, the Company determines control through a consideration of each party’s financial interests in profits and losses and the ability to participate in major decisions such as the acquisition, sale or refinancing of principal assets.

Investments in Real Estate

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

		September 30, 2005				December 31, 2004
Land		$	122,984			$	68,762
Ground lease			14,210				14,210
Buildings and improvements			917,977				388,502
Construction in process			19,478				—
Tenant improvements			13,199				283
			1,087,848				471,757
Accumulated depreciation			(15,421	)			(3,269	)
		$	1,072,427			$	468,488

     The purchase prices of our acquisitions completed in 2005 have been allocated on a preliminary basis to the assets acquired and the liabilities assumed. We expect to finalize our purchase price allocation no later than 12 months from the date of acquisition.

Revenue Recognition

     Lease termination fees are recognized when the related leases are canceled and we have no continuing obligation to provide services to former tenants. A gain on early termination of lease of $3.2 million for the nine months ended September 30, 2005 is included in other income on the consolidated statements of income and was primarily due to the early termination of a portion of the Nektar Therapeutics lease at our Industrial Road property. Accordingly, the related lease commissions and other related intangible assets have been fully amortized.

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. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows,

undiscounted and without interest, expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Income Taxes

     We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with our taxable year ended December 31, 2004. We believe we have qualified and continue to qualify as a REIT. As a REIT, we will be permitted to deduct distributions paid to our stockholders and generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

Management’s Estimates

     Management of the Company 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 financial statements and the reporting of revenue and expenses during the reporting period to prepare these 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. Minority Interests

     Minority interests on the consolidated balance sheets relate to the limited partnership units in the Operating Partnership (“Units”) that are not owned by the Company, which at September 30, 2005 amounted to 5.84% of Units outstanding. In conjunction with the formation of the Company, certain persons and entities contributing interests in properties to the Operating Partnership received Units. Limited partners who were issued Units in the formation transactions have the right, commencing on October 1, 2005, to require the Operating Partnership to redeem part or all of their Units. The Company may elect to acquire those Units in exchange for shares of the Company’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events, or pay cash based upon the fair market value of an equivalent number of shares of the Company’s common stock at the time of redemption. Minority interests also include the 11% interest of a limited partner in the limited partnership that owns the King of Prussia property and the 10% interest of a member in the limited liability company that owns the Waples property, which are consolidated entities of the Company.

4. Mortgage Notes Payable

     A summary of our outstanding consolidated secured indebtedness as of September 30, 2005 is as follows (in thousands):

		Stated
		Fixed				Effective								Unamortized				Carrying				Carrying
		Interest				Interest				Principal				Premium				Value at				Value at
		Rate				Rate				Amount				Amount				September 30, 2005				December 31, 2004				Maturity Date
Ardentech Court			7.25	%			5.06	%		$	4,767			$	552			$	5,319			$	5,440			July 1, 2012
Bayshore Boulevard			4.55	%			4.55	%			16,199				—				16,199				16,438			January 1, 2010
Bridgeview			8.07	%			5.04	%			11,759				1,627				13,386				13,681			January 1, 2011
Eisenhower Road			5.80	%			4.63	%			2,218				61				2,279				2,331			May 5, 2008
Elliott Avenue			7.38	%			4.63	%			16,646				829				17,475				18,107			November 24, 2007
40 Erie Street			7.34	%			4.90	%			19,810				1,193				21,003				—			August 1, 2008
Kendall Square D			6.38	%			5.45	%			72,739				5,384				78,123				—			December 1, 2018
Lucent Drive			5.50	%			5.50	%			5,943				—				5,943				—			January 21, 2015
Monte Villa Parkway			4.55	%			4.55	%			9,861				—				9,861				10,007			January 1, 2010
Nancy Ridge Drive			7.15	%			5.57	%			6,971				725				7,696				—			September 1, 2012
Science Center Drive			7.65	%			5.04	%			11,610				1,485				13,095				13,376			July 1, 2011
Sidney Street			7.23	%			5.11	%			31,592				3,510				35,102				—			June 1, 2012
Towne Centre Drive			4.55	%			4.55	%			22,523				—				22,523				22,856			January 1, 2010
										$	232,638			$	15,366			$	248,004			$	102,236

     Premiums were recorded upon assumption of the mortgage notes payable at the time of acquisition to account for above-market interest rates. Amortization of these premiums is recorded as a reduction to interest expense over the remaining term of the respective note.

5. Credit Facilities

     On August 11, 2004, the Company entered into a $100.0 million revolving unsecured loan agreement, which bore interest at LIBOR plus 1.20%, or higher depending on the leverage ratio of the Company, or a reference rate, and was scheduled to expire on August 11, 2007. This credit facility was fully repaid and terminated on May 31, 2005 with funds drawn on our new credit facilities as discussed below. Accordingly, the related unamortized loan costs of $900,000 were fully amortized in the three months ended June 30, 2005.

     On May 31, 2005, we entered into three credit facilities with KeyBank National Association and other lenders under which we initially borrowed $485.0 million of a total of $600.0 million available under these facilities. The credit facilities include an unsecured revolving credit facility of $250.0 million, under which we initially borrowed $135.0 million, an unsecured term loan of $100.0 million and a secured term loan of $250.0 million. We borrowed the full amounts under the unsecured term loan and secured term loan. The unsecured revolving credit facility has a maturity date of May 30, 2008 and bears interest at a floating rate equal to, at our option, either (1) reserve adjusted LIBOR plus a spread which ranges from 120 to 200 basis points, depending on our leverage, or (2) the higher of (a) the prime rate then in effect plus a spread which ranges from 0 to 50 basis points and (b) the federal funds rate then in effect plus a spread which ranges from 50 to 100 basis points, in each case, depending on our leverage. We may extend the maturity date of the unsecured credit facility to May 30, 2009 after satisfying certain conditions and paying an extension fee, and we may increase the amount of the revolving credit facility to $400.0 million upon satisfying certain conditions. The secured term loan, which has a maturity date of May 30, 2010, is secured by 13 of our properties and bears interest at a floating rate equal to, at our option, either (1) reserve adjusted LIBOR plus 225 basis points or (2) the higher of (a) the prime rate then in effect plus 50 basis points and (b) the federal funds rate then in effect plus 100 basis points. The secured term loan is also secured by our interest in any distributions from these properties and a pledge of the equity interests in a subsidiary owning one of these properties. We may not prepay the secured term loan prior to May 31, 2006. We entered into an interest rate swap agreement in connection with the closing of the credit facilities, which will have the effect of fixing the interest rate on the secured term loan at 6.4%. The $100.0 million unsecured term loan facility was fully repaid with the proceeds from our follow-on common stock offering (Note 1) and terminated on June 27, 2005. Accordingly, related loan costs of $1.1 million were fully amortized in the three months ended June 30, 2005. At September 30, 2005, we had no outstanding borrowings on our unsecured revolving credit facility.

     The terms of the credit agreements include certain restrictions and covenants, which limit, among other things, the payment of dividends, and the incurrence of additional indebtedness and liens. The terms also require compliance with financial ratios relating to the minimum amounts of net worth, fixed charge coverage, unsecured debt service coverage, interest coverage, the maximum amount of secured, variable-rate and recourse indebtedness, leverage ratio, and certain investment limitations. The dividend restriction referred to above provides that, except to enable the Company to continue to qualify as a REIT for federal income tax purposes, the Company will not for any fiscal quarter ending on or prior to September 30, 2005 or during any four consecutive quarters thereafter, make distributions with respect to common stock or other equity interests in an aggregate amount in excess of 95% of funds from operations, as defined, for such period, subject to other adjustments or make distributions in excess of 100% of funds available for distribution, as defined, for such period, subject to other adjustments. Management believes that it was in compliance with the covenants as of September 30, 2005.

6. Earnings Per Share

     Earnings per share is calculated based on the weighted-average number of shares of our common stock outstanding during the period. The effect of the outstanding Units, vesting of unvested restricted stock that has been granted, and the assumed exercise of the stock warrant, using the treasury method, were dilutive and included in the calculation of diluted weighted-average shares for the three months and for the nine months ended September 30, 2005.

     The following sets forth information related to the computations of basic and diluted earnings per share in accordance with SFAS No. 128, Earnings per Share (in thousands, except per share amounts):

										Period
		For the Nine				For the Three				August 11, 2004
		Months Ended				Months Ended				through
		September 30, 2005				September 30, 2005				September 30, 2004
Net income attributable to common shares		$	12,477			$	5,201			$	1,827
Operating partnership unit share in earnings of minority interest			991				323				137
Adjusted net income attributable to common shares		$	13,468			$	5,524			$	1,964
Weighted-average common shares outstanding:
Basic			36,406,068				46,287,617				30,673,883
Incremental shares from assumed conversion/exercise:
Stock warrant			87,038				103,123				34,170
Vesting of restricted stock			181,995				183,105				46,787
Operating partnership units (1)			2,870,564				2,870,564				—
Diluted			39,545,665				49,444,409				30,754,840
Earnings per share — basic and diluted		$	0.34			$	0.11			$	0.06

7. Incentive Award Plan

     During the three and nine months ended September 30, 2005 and for the period from August 11, 2004 through September 30, 2004, the Company granted 71,449, 129,674, and 333,333 shares of restricted stock, respectively, under the BioMed Realty Trust, Inc. and BioMed Realty, L.P. 2004 Incentive Award Plan (the “Plan”). As a result, an additional $2.9 million and $5.0 million, respectively, was added to deferred compensation in 2005 and 2004. For the three and nine months ended September 30, 2005 and for the period from August 11, 2004 through September 30, 2004, $1.5 million, $3.0 million, and $328,000, respectively, of stock-based compensation expense was recognized in general and administrative expense.

     The three months ended September 30, 2005 included a $619,000 increase to general and administrative expense resulting from a correction to the expensing of restricted stock grants awarded to the Company’s executive officers and other employees at the time of the Company’s initial public offering in August 2004 that occurred in the periods prior to September 30, 2005. Of this amount, $823,000 relates to the year ended December 31, 2004, which was partially offset by a decrease of $204,000 for the six months ended June 30, 2005. We do not believe that the correction to this expensing of restricted stock grants is material to previous quarters in 2005 or to our 2004 consolidated financial statements.

8. Segment Information

     The Company’s segments are based on its method of internal reporting which classifies its operations by geographic area. The Company’s segments by geographic area are Boston, San Francisco, San Diego, Seattle, New York and New Jersey, Pennsylvania and Maryland. The rental operations expenses at the “Corporate and Other” segment consist primarily of the corporate level management of the properties.

     The principal financial measure of the performance of a segment used by the Company is Net Operating Income. Net Operating Income is not a measure of operating results or cash flows from operating activities as measured by GAAP, and it is not indicative of cash available to fund cash needs and should not be considered as an alternative to cash flows as a measure of liquidity. All companies may not calculate Net Operating Income in the same manner. The Company considers Net Operating Income to be an appropriate supplemental measure to net income because it helps both investors and management to understand the core operations of the Company’s properties. Net Operating Income is derived by deducting rental operations and real estate tax expenses from rental revenues and tenant recoveries.

     The Predecessor operated in one geographic area — San Francisco.

     Information by geographic area (dollars in thousands):

     For the nine months ended September 30, 2005:

																		New York												Corporate
						San												and												and
		Boston				Francisco				San Diego				Seattle				New Jersey				Pennsylvania				Maryland				Other				Total
Rental revenues and tenant recoveries		$	22,855			$	11,153			$	11,925			$	6,594			$	24,929			$	10,357			$	3,062			$	(19	)		$	90,856
Rental operations and real estate tax expenses			5,112				1,510				2,618				866				16,421				4,666				300				(778	)			30,715
Net operating income			17,743				9,643				9,307				5,728				8,508				5,691				2,762				759				60,141
Equity in net income of unconsolidated partnership			—				—				91				—				—				—				—				—				91
Other income			—				3,290				211				—				—				—				—				7				3,508
Interest income			28				98				16				4				12				17				2				810				987
Depreciation and amortization			(7,072	)			(3,973	)			(5,111	)			(2,388	)			(4,788	)			(2,971	)			(529	)			—				(26,832	)
General and administrative			—				—				—				—				—				—				—				(9,001	)			(9,001	)
Interest expense			(2,458	)			(1,028	)			(1,293	)			(1,000	)			—				(81	)			—				(9,785	)			(15,645	)
Minority interests			—				—				—				—				—				219				—				(991	)			(772	)
Net income		$	8,241			$	8,030			$	3,221			$	2,344			$	3,732			$	2,875				2,235			$	(18,201	)		$	12,477
Investment in unconsolidated partnership			—				—			$	2,492				—				—				—				—				—			$	2,492
Total assets		$	588,555			$	184,201			$	154,954			$	68,660			$	107,727			$	122,108			$	31,952			$	72,324			$	1,330,481

																		New York												Corporate
						San												and												and
		Boston				Francisco				San Diego				Seattle				New Jersey				Pennsylvania				Maryland				Other				Total
% of total revenues			25.2	%			12.3	%			13.1	%			7.3	%			27.4	%			11.4	%			3.4	%			(0.1	)%			100.0	%
% of total rental operations expenses			16.6	%			4.9	%			8.5	%			2.8	%			53.5	%			15.2	%			1.0	%			(2.5	)%			100.0	%
% of total net operating income			29.5	%			16.0	%			15.5	%			9.5	%			14.1	%			9.5	%			4.6	%			1.3	%			100.0	%

     For the three months ended September 30, 2005:

																		New York												Corporate
						San												and												and
		Boston				Francisco				San Diego				Seattle				New Jersey				Pennsylvania				Maryland				Other				Total
Rental revenues and tenant recoveries		$	16,881			$	3,854			$	4,104			$	2,169			$	8,880			$	3,938			$	1,020			$	(28	)		$	40,818
Rental operations and real estate tax expenses			3,915				255				938				258				6,322				1,690				100				(142	)			13,336
Net operating income			12,966				3,599				3,166				1,911				2,558				2,248				920				114				27,482
Equity in net income of unconsolidated partnership			—				—				20				—				—				—				—				—				20
Other income			—				411				95				—				—				—				—				6				512
Interest income			26				37				10				3				11				11				1				708				807
Depreciation and amortization			(5,184	)			(1,437	)			(1,869	)			(796	)			(1,639	)			(1,063	)			(176	)			—				(12,164	)
General and administrative			—				—				—				—				—				—				—				(3,756	)			(3,756	)
Interest expense			(1,841	)			(248	)			(442	)			(330	)			—				(27	)			—				(4,534	)			(7,422	)
Minority interests			—				—				—				—				—				45				—				(323	)			(278	)
Net income		$	5,967			$	2,362			$	980			$	788			$	930			$	1,214				745			$	(7,785	)		$	5,201

																		New York												Corporate
						San												and												and
		Boston				Francisco				San Diego				Seattle				New Jersey				Pennsylvania				Maryland				Other				Total
% of total revenues			41.4	%			9.4	%			10.1	%			5.3	%			21.8	%			9.6	%			2.5	%			(0.1	)%			100.0	%
% of total rental operations expenses			29.4	%			1.9	%			7.0	%			1.9	%			47.4	%			12.7	%			0.7	%			(1.0	)%			100.0	%
% of total net operating income			47.2	%			13.1	%			11.5	%			7.0	%			9.3	%			8.2	%			3.3	%			0.4	%			100.0	%

9. Property Acquisitions

     The Company acquired interests in 19 properties, including one parking structure, during the nine months ended September 30, 2005:

Market

Acquisition Date

Rentable Square Feet

First Quarter

Waples

San Diego

March 1, 2005

43,036

Bridgeview

San Francisco

March 16, 2005

50,400

Graphics Drive

New Jersey

March 17, 2005

72,300

First Quarter Total

165,736

Second Quarter

Fresh Pond Research Park

Boston

April 5, 2005

90,702

Coolidge Avenue

Boston

April 5, 2005

37,400

Phoenixville Pike

Pennsylvania

April 5, 2005

104,400

Nancy Ridge Drive

San Diego

April 21, 2005

42,138

Market

Acquisition Date

Rentable Square Feet

Dumbarton Circle

San Francisco

May 27, 2005

44,000

Lucent Drive

Boston

May 31, 2005

21,500

21 Erie Street

Boston

May 31, 2005

49,247

Vassar Street

Boston

May 31, 2005

52,520

Albany Street

Boston

May 31, 2005

75,003

40 Erie Street

Boston

May 31, 2005

100,854

Sidney Street

Boston

May 31, 2005

191,904

Kendall Square A

Boston

May 31, 2005

302,919

Kendall Square D

Boston

May 31, 2005

349,325

47 Erie Street Parking Structure

Boston

May 31, 2005

n/a

Second Quarter Total

1,461,912

Third Quarter

Kaiser Drive

San Francisco

August 25, 2005

87,953

Faraday Avenue

San Diego

September 19, 2005

28,704

1000 Uniqema Boulevard

Pennsylvania

September 30, 2005

59,821

Third Quarter Total

176,478

Total

1,804,126

10. Derivative Financial Instruments

     The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

     For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. 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 when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For derivatives not designated as hedges, changes in fair value are recognized in earnings.

     The Company’s objective in using derivatives tied to interest rates is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, the Company primarily uses interest rate swaps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. During 2005, one such derivative has been used to hedge the variable cash flows associated with existing variable-rate debt. We formally documented the hedging relationship and account for our interest rate swap agreement as a cash flow hedge.

     As of September 30, 2005, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. As of September 30, 2005, our one interest rate swap had a notional amount of $250.0 million, whereby we pay a fixed rate of 6.4% and receive the difference between the fixed rate and the one-month LIBOR rate plus 225 basis points. This agreement expires on June 1, 2010, and no initial investment was made to enter into this agreement. At September 30, 2005, the interest rate swap agreement had a fair value of $3.8 million which is included in other assets. The change in net unrealized gains/losses of $3.8 million in 2005 for derivatives designated as cash flow hedges is included separately on the consolidated balance sheet.

     As of September 30, 2005, the net fair value of our financial interest subject to put and call options related to our King of Prussia interest was $302,000, which is recorded as a net accrued liability included in accounts payable and accrued expenses on the consolidated balance sheets. In addition, the net change in fair value of the put and call options is not considered material.

11. Subsequent Events

     During the fourth quarter of 2005, the Company purchased a 71,500 square-foot facility located in the Bridge Business Center in Bristol, Pennsylvania for approximately $14.9 million in cash. The property is fully leased to Rhodia, Inc., a public global specialty chemicals company.

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

     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: general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); adverse economic or real estate developments in the life science industry or the Boston or California regions; risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments; failure to manage effectively our growth and expansion into new markets, or to complete or integrate acquisitions successfully; risks and uncertainties affecting property development and construction; risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets; potential liability for uninsured losses and environmental contamination; risks associated with our potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, and possible adverse changes in tax and environmental laws; and risks associated with our dependence on key personnel whose continued service is not guaranteed. 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, 2004. 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 REIT focused on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry. Our tenants include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. Our current properties and our primary acquisition targets are located in markets with well established reputations as centers for scientific research, including Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey.

     At September 30, 2005, we owned or had interests in 36 properties, located principally in Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania, New York and New Jersey, consisting of 59 buildings with approximately 4.4 million rentable square feet of laboratory and office space. We also owned undeveloped land that we estimate can support up to 600,000 rentable square feet of laboratory and office space.

     We were formed on April 30, 2004 and commenced operations on August 11, 2004, after completing our initial public offering.

Factors Which May Influence Future Operations

     As of September 30, 2005, our property portfolio was 90.6% leased to 81 tenants. Of the remaining unleased space, approximately 269,316 square feet, or 6.1% of the company’s total rentable square footage, was under redevelopment. Approximately 2.7% of our leased square footage expires during the remainder of 2005 and approximately 4.6% of our leased square footage expires during 2006. Our leasing strategy focuses on leasing currently vacant space and 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. Additionally, we will seek to lease space that is currently under master lease arrangements at our Bayshore and King of Prussia properties, which expire in 2006 and 2008, respectively.

     Our corporate strategy is to continue to focus on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry. Our leasing strategy focuses on executing long-term leases with creditworthy tenants. We also intend to proceed with new developments, when prudent.

     The success of our leasing and development strategy will be dependent upon the general economic conditions in the United States and in our target markets of Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey.

Critical Accounting Policies

     A more complete discussion of our critical accounting policies can be found in our annual report on Form 10-K for the year ended December 31, 2004.

     In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123R, Share-Based Payment (“SFAS 123R”). SFAS 123R replaces SFAS 123. SFAS 123R requires the compensation cost relating to share-based payment transactions be recognized in financial statements and be measured based on the fair value of the equity instrument issued. SFAS 123R is effective in annual reporting periods beginning after December 15, 2005. As of September 30, 2005, our equity issuances for compensation have consisted entirely of restricted stock grants to directors and employees. We do not believe that the treatment of our restricted stock grants under SFAS 123R differs from the treatment under SFAS 123. As a result, we do not expect the adoption of SFAS 123R to have a material impact on our results of operations, financial position or liquidity.

Results of Operations

     The following is a comparison of the consolidated operating results of BioMed Realty Trust, Inc. for the three months ended September 30, 2005 to the combined operating results of 201 Industrial Road, L.P., our predecessor, for the period July 1, 2004 through August 17, 2004 and BioMed Realty Trust, Inc. for the period from August 11, 2004 through September 30, 2004. As part of our formation transactions, our predecessor was contributed to us in exchange for 1,461,451 units in our Operating Partnership.

     Our predecessor is considered for accounting purposes to be our acquirer. As such, the historical financial statements presented herein for our predecessor were prepared on a stand-alone basis. Management does not consider the operating results of our predecessor on a stand-alone basis to be indicative of the historical operating results of our company taken as a whole.

Comparison of Three Months Ended September 30, 2005 to Three Months Ended September 30, 2004

     The following table sets forth the basis for presenting the historical financial information.

										Inhale 201
										Industrial Road L.P.
		BioMed Realty Trust, Inc.								(Predecessor)
		Three Months				Period August 11,				Period July 1, 2004
		Ended				2004 through				through				Combined
		September 30, 2005				September 30, 2004				August 17, 2004				Total				Change
Revenues:
Rental		$	28,593			$	6,107			$	796			$	6,903			$	21,690
Tenant recoveries			12,225				2,878				76				2,954				9,271
Other income			512				—				—				—				512
Total revenues			41,330				8,985				872				9,857				31,473
Expenses:
Rental operations			9,763				2,739				5				2,744				7,019
Real estate taxes			3,573				800				41				841				2,732
Depreciation and amortization			12,164				2,251				122				2,373				9,791
General and administrative			3,756				1,195				—				1,195				2,561
Total expenses			29,256				6,985				168				7,153				22,103
Income from operations			12,074				2,000				704				2,704				9,370
Equity in net income of unconsolidated partnership			20				—				—				—				20
Interest income			807				124				—				124				683
Interest expense			(7,422	)			(218	)			(312	)			(530	)			(6,892	)
Income before minority interests			5,479				1,906				392				2,298				3,181
Minority interest in consolidated partnership			45				58				—				58				(13	)
Minority interests in operating partnership			(323	)			(137	)			—				(137	)			(186	)
Net income		$	5,201			$	1,827			$	392			$	2,219			$	2,982

     Rental Revenues. Rental revenues increased $21.7 million to $28.6 million for the three months ended September 30, 2005 compared to $6.9 million for the three months ended September 30, 2004. The increase was primarily due to the inclusion of rental revenues for the properties acquired in connection with our initial public offering as well as acquisitions subsequent to our initial public offering.

     Tenant Recoveries. Revenues from tenant reimbursements increased $9.3 million to $12.2 million for the three months ended September 30, 2005 compared to $2.9 million for the three months ended September 30, 2004. The increase was primarily due to the inclusion of tenant reimbursements for the properties acquired in connection with our initial public offering as well as acquisitions subsequent to our initial public offering.

     Other Income. Other income for the three months ended September 30, 2005 is comprised primarily of a portion of a gain on early lease termination of the Nektar Therapeutics lease at our Industrial Road property of $386,000.

     Rental Operations Expense. Rental operations expense increased $7.0 million to $9.7 million for the three months ended September 30, 2005 compared to $2.7 million for the three months ended September 30, 2004. The increase was primarily due to the inclusion of rental property operations expense for the properties acquired in connection with our initial public offering as well as acquisitions subsequent to our initial public offering.

     Real Estate Tax Expense. Real estate tax expense increased $2.7 million to $3.6 million for the three months ended September 30, 2005 compared to $841,000 for the three months ended September 30, 2004. The increase was primarily due to the inclusion of property taxes for the properties acquired in connection with our initial public offering as well as additional property acquisitions subsequent to our initial public offering.

     Depreciation and Amortization Expense. Depreciation and amortization expense increased $9.8 million to $12.2 million for the three months ended September 30, 2005 compared to $2.4 million for the three months ended September 30, 2004. The increase was primarily due to the inclusion of depreciation and amortization expense for the properties acquired in connection with our initial public offering as well as acquisitions subsequent to our initial public offering.

     General and Administrative Expenses. General and administrative expenses increased $2.6 million to $3.8 million for the three months ended September 30, 2005 compared to $1.2 million for the three months ended September 30, 2004. The increase was primarily due to the hiring of new personnel after our initial public offering, the addition of expenses relating to operating as a public company, compensation expense related to vesting of restricted stock compensation awards expensed during the three months ended September 30, 2005 and higher consulting and professional fees associated with corporate governance and Sarbanes-Oxley Section 404 implementation. The three months ended September 30, 2005 included a $619,000 increase to general and administrative expense resulting from a correction to the expensing of restricted stock grants awarded to the company’s executive officers and other employees at the time of the company’s initial public offering in August 2004 that occurred in the periods prior to September 30, 2005.

     Interest Income. Interest income increased $683,000 to $807,000 for the three months ended September 30, 2005 compared to $124,000 for the three months ended September 30, 2004. This is primarily due to interest earned on an increase of funds held by us during the three months ended September 30, 2005.

     Interest Expense. Interest expense increased $6.9 million to $7.4 million for the three months ended September 30, 2005 compared to $530,000 for the three months ended September 30, 2004. The increase in interest is a result of increased overall debt outstanding in 2005 partially offset by a reduction of interest expense in 2005 due to the accretion of debt premium, which decreased interest expense by $630,000.

     Minority Interests. Minority interests increased $199,000 to $278,000 for the three months ended September 30, 2005 compared to $79,000 for the three months ended September 30, 2004. The minority interest allocations for the three months ended September 30, 2005 and 2004 are not comparable due to the initial public offering.

Comparison of Nine Months Ended September 30, 2005 to Nine Months Ended September 30, 2004

     The following is a comparison of the consolidated operating results of BioMed Realty Trust, Inc. for the nine months ended September 30, 2005, to the combined operating results of 201 Industrial Road, L.P., our predecessor, for the period January 1, 2004 through August 17, 2004 and BioMed Realty Trust, Inc. for the period from August 11, 2004 through September 30, 2004.

     The following table sets forth the basis for presenting the historical financial information.

										Inhale 201
										Industrial Road
										L.P.
		BioMed Realty Trust, Inc.								(Predecessor)
						Nine Months Ended September 30, 2004
										Period
		Nine Months				Period August 11,				January 1, 2004
		Ended				2004 through				through
		September 30, 2005				September 30, 2004				August 17, 2004				Combined Total				Change
Revenues:
Rental		$	62,821			$	6,107			$	3,933			$	10,040			$	52,781
Tenant recoveries			28,035				2,878				375				3,253				24,782
Other income			3,508				—				—				—				3,508
Total revenues			94,364				8,985				4,308				13,293				81,071
Expenses:
Rental operations			22,879				2,739				131				2,870				20,009
Real estate taxes			7,836				800				222				1,022				6,814
Depreciation and amortization			26,832				2,251				600				2,851				23,981
General and administrative			9,001				1,195				—				1,195				7,806
Total expenses			66,548				6,985				953				7,938				58,610
Income from operations			27,816				2,000				3,355				5,355				22,461
Equity in net income of unconsolidated partnership			91				—				—				—				91
Interest income			987				124				—				124				863
Interest expense			(15,645	)			(218	)			(1,700	)			(1,918	)			(13,727	)
Income before minority interests			13,249				1,906				1,655				3,561				9,688
Minority interest in consolidated partnership			219				58				—				58				161
Minority interests in operating partnership			(991	)			(137	)			—				(137	)			(854	)
Net income		$	12,477			$	1,827			$	1,655			$	3,482			$	8,995