BioMed Realty Trust expands San Diego property portfolio to 1.8M rentable square feet

BioMed Realty Trust, Inc. (NYSE: BMR) today announced that it has entered into definitive agreements to acquire five properties, comprised of 14 life science buildings with approximately 405,000 square feet of laboratory and office space, in San Diego's primary life science submarkets of University Towne Centre, Torrey Pines and Sorrento Valley.  The properties are approximately 92% leased on a weighted average basis to a high-quality, diversified tenant roster, which includes Amylin Pharmaceuticals, Inc., Bristol-Myers Squibb Company, the University of California at San Diego, eBioscience, Inc. and Halozyme Therapeutics, Inc.  These acquisitions would increase BioMed's San Diego portfolio to approximately 1.8 million rentable square feet.  

The properties to be acquired include 4570 Executive Drive in University Towne Centre; 10240 Science Center Drive in Torrey Pines; and 11388 Sorrento Valley Road, 11404 and 11408 Sorrento Valley Road and a nine-building business park located between Roselle Street and Flintkote Avenue in Sorrento Valley. The aggregate purchase price for the five properties is approximately $132.9 million, excluding closing costs, with an estimated aggregate cash-basis 2011 net operating income of approximately $10.2 million.  These acquisitions are subject to the satisfaction of customary closing conditions, and BioMed can offer no assurances that any of the acquisitions will close on the terms described herein, or at all.  

"We are excited about these investment opportunities, which serve as prime examples of our consistently disciplined focus and our ability to execute on our strategy of acquiring high-quality properties, well-located within the core life science markets," commented Alan D. Gold, BioMed's Chairman and Chief Executive Officer.  "The tenant rosters at these properties include top caliber life science organizations from each of our primary tenant classifications:  research institutions, A-rated public companies, larger, established public companies, mid-stage life science companies and early stage life science organizations.  We look forward to the opportunity through these acquisitions to extend existing tenant relationships and build new ones with some of the premier life science participants in the San Diego market."

Three of the five properties are to be acquired free of any outstanding mortgage obligations, while two of the properties are subject to existing mortgages to be assumed by BioMed at closing.  The mortgages to be assumed include a $13.3 million mortgage maturing in November, 2011 that bears interest at 7.4% per annum and a $4.4 million mortgage maturing in August, 2013 that bears interest at 5.4% per annum.  The company anticipates funding the balance of the purchase price, approximately $115.2 million, with proceeds from the company's unsecured line of credit.

A portion of the vacancy in the properties is subject to a rent guarantee from the sellers for a period of two years, which has the effect of increasing the portfolio's weighted average leased percentage to approximately 99% and increases the estimated aggregate cash-basis net operating income in 2011 to approximately $11.6 million.