SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

BioMed Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland		1-32261		20-1142292
(State or Other Jurisdiction of Incorporation)		(Commission File No.)		(I.R.S. Employer Identification No.)

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (858) 485-9840

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 8.01 Other Events

     Since May 31, 2005, BioMed Realty Trust, Inc. (“BioMed”), through its operating partnership subsidiary, BioMed Realty, L.P. (the “Operating Partnership”), has announced the acquisition of four properties, and is under contract to acquire a fifth property. BioMed is including the combined financial statements of two of the properties, located on Uniqema Boulevard in New Castle, Delaware, and certain unaudited pro forma consolidated financial statements of BioMed in this Current Report on Form 8-K to satisfy the requirements of Rule 3-14 and Article 11 of Regulation S-X of the Securities and Exchange Commission that relate to the acquisition of one or more properties which in the aggregate are significant to the registrant. None of the properties described below are individually significant according to Rule 3-14. Because changes will likely occur in occupancy, rents and expenses experienced by BioMed and the acquired properties, the historical financial statements and unaudited pro forma financial data presented should not be considered as a projection of future results.

     On August 25, 2005, BioMed, through the Operating Partnership, completed the acquisition of a property located on Kaiser Drive in Fremont, California for approximately $9.5 million in cash. The property, located near the company’s Ardentech Court and Dumbarton Circle properties, is currently under redevelopment.

     On September 19, 2005, BioMed, through the Operating Partnership, completed the acquisition of a property on Faraday Avenue in the Carlsbad submarket of San Diego, California for approximately $8.5 million in cash. The Faraday Avenue property was acquired in a sale-leaseback transaction from Isis Pharmaceuticals, Inc. (“Isis”). Isis will leaseback the property pursuant to a 15-year, triple-net lease.

     On September 30, 2005, BioMed, through the Operating Partnership, completed the acquisition of a property located at 1000 Uniqema Boulevard in New Castle, Delaware for approximately $15.5 million in cash. In addition, on August 10, 2005, the Operating Partnership entered into a purchase agreement to acquire a property located at 900 Uniqema Boulevard in New Castle, Delaware for approximately $4.7 million, including the assumption of approximately $1.8 million of debt. BioMed expects to complete the acquisition of 900 Uniqema following approval of the assumption by the lender of the existing mortgage loan on the property.

     On October 28, 2005, BioMed, through the Operating Partnership, completed the acquisition of a property located in the Bridge Business Center on George Patterson Boulevard in Bristol, Pennsylvania for approximately $14.9 million in cash.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired Under Rule 3-14 of Regulation S-X.

Uniqema Properties:

Independent Auditors’ Report

Combined Statements of Revenues and Certain Expenses for the nine months ended September 30, 2005 (unaudited) and year ended December 31, 2004

Notes to Combined Statements of Revenues and Certain Expenses

(b) Unaudited Pro Forma Consolidated Financial Statements.

Pro Forma Consolidated Balance Sheet as of September 30, 2005

Pro Forma Consolidated Statement of Income for the nine months ended September 30, 2005

Pro Forma Consolidated Statement of Income for the year ended December 31, 2004

Notes to Pro Forma Consolidated Balance Sheet and Statements of Income

(c) The following exhibits are filed herewith:

Exhibit
Number		Description of Exhibit
23.1		Consent of KPMG LLP, independent auditors.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 5, 2005		BIOMED REALTY TRUST, INC.
		By: /s/ GARY A. KREITZER   Name: Gary A. Kreitzer
		Title: Executive Vice President

INDEPENDENT AUDITORS’ REPORT

The Board of Directors
BioMed Realty Trust, Inc.:

     We have audited the accompanying combined statement of revenues and certain expenses of the Uniqema Properties (the Properties) for the year ended December 31, 2004. This statement is the responsibility of the management of BioMed Realty Trust, Inc. Our responsibility is to express an opinion on this statement based on our audit.

     We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties’ internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

     The accompanying combined statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in note 1 to the statements of revenues and certain expenses. It is not intended to be a complete presentation of the Uniqema Properties’ revenues and expenses.

     In our opinion, the statement referred to above presents fairly, in all material respects, the revenues and certain expenses, as described in note 1, of the Uniqema Properties for the year ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

San Diego, California
December 6, 2005

UNIQEMA PROPERTIES

COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(In thousands)

		Nine Months
		Ended				Year Ended
		September 30, 2005				December 31, 2004
		(Unaudited)
Revenues:
Rental		$	1,406			$	1,875
Tenant recoveries			64				83
Total revenues			1,470				1,958
Certain expenses:
Rental operations			29				33
Real estate taxes			44				59
Total certain expenses			73				92
Income from operations			1,397				1,866
Interest expense			(119	)			(167	)
Revenues in excess of certain expenses		$	1,278			$	1,699

See accompanying notes to combined statements of revenues and certain expenses.

UNIQEMA PROPERTIES

NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
Nine Months Ended September 30, 2005 (unaudited) and Year Ended December 31, 2004
(Tabular amounts in thousands)

(1) Basis of Presentation

     The accompanying combined statements of revenues and certain expenses relate to the operations of a portfolio of two life science properties in New Castle County, Delaware (collectively, the “Properties”). The Properties are leased to one tenant.

     On August 10, 2005, BioMed Realty Trust, Inc. (the “Company”), through its operating partnership subsidiary, BioMed Realty, L.P. (the “Operating Partnership”), entered into definitive purchase and sale agreements to purchase the Properties. The total purchase price was approximately $20.2 million plus closing costs. The Operating Partnership will fund the transaction with the assumption of $1.8 million in debt and $18.4 million in cash. The Company completed the acquisition of one of the properties on September 30, 2005. The completion of the acquisition of the remaining property is probable. The Properties included in the accompanying combined statements of revenues and certain expenses have been combined for all periods presented as these entities were under common ownership by EDIS Development Group, LLC.

     The accompanying combined statements of revenues and certain expenses have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and, accordingly, are not representative of the actual results of operations of the Properties for the nine months ended September 30, 2005 (unaudited) or for the year ended December 31, 2004 due to the exclusion of depreciation and amortization and other costs not directly related to the proposed future operations of the Properties, which may not be comparable to the proposed future operation of the Properties.

(2) Summary of Significant Accounting Policies and Practices

   (a) Revenue Recognition

     Rental revenue is recognized on a straight-line basis over the term of the respective leases.

   (b) Use of Estimates

     Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenues and certain expenses during the reporting periods to prepare the combined statements of revenues and certain expenses in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

   (c) Unaudited Interim Combined Statement

     The combined statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited. In the opinion of management, the statement reflects all adjustments necessary for a fair presentation of the results of the interim period. All such adjustments are of a normal recurring nature.

(3) Rental Revenue

     The Properties lease laboratory and office space under lease agreements with the tenant. All leases are accounted for as operating leases. The leases include provisions under which the tenant reimburses for costs of common area expenses, real estate taxes and insurance costs. Revenue related to these reimbursed costs is recognized in the period the applicable costs are incurred and billed to the tenant pursuant to the lease agreements. The leases contain renewal options at various times and rental rates.

UNIQEMA PROPERTIES

NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES — (Continued)

     Minimum rents to be received from the tenant under operating leases, which terms range from 10 to 15 years, in effect at December 31, 2004, are as follows:

Year
2005		$	1,818
2006			1,948
2007			1,971
2008			1,971
2009			1,971
Thereafter			4,199
		$	13,878

(4) Certain Expenses

     Certain expenses include only those costs expected to be comparable to the proposed future operations of the Properties. Repairs and maintenance expense are charged to operations as incurred. Costs such as depreciation and amortization and other costs not directly related to the proposed future operations of the Properties are excluded from the combined statements of revenues and certain expenses.

     In connection with the acquisition of the Properties, the Company will assume a mortgage note amounting to $1.9 million as of December 31, 2004. The mortgage note is secured by one of the Properties and bears interest at a fixed rate of 8.61%. The mortgage requires monthly payments of principal and interest and matures in April 2015.

     Minimum annual principal payments at December 31, 2004 under the terms of the mortgage notes are as follows:

Year
2005		$	117
2006			128
2007			140
2008			152
2009			166
Thereafter			1,191
		$	1,894

(5) Concentration of Credit Risk

     For the year ended December 31, 2004, one tenant accounted for 100% of total revenues.

BIOMED REALTY TRUST, INC.

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     The unaudited pro forma consolidated financial statements of BioMed Realty Trust, Inc. (the “Company”) as of September 30, 2005, and for the nine months ended September 30, 2005 and the year ended December 31, 2004, are presented as if the related transactions had occurred on September 30, 2005 for the unaudited pro forma consolidated balance sheet, and on the first day of the period presented for the unaudited pro forma consolidated statements of income.

     The unaudited pro forma consolidated financial statements should be read in conjunction with the consolidated historical financial statements of the Company and the notes thereto, included in the Company’s Form 10-K for the year ended December 31, 2004, and its Form 10-Q for the quarterly period ended September 30, 2005 filed with the Securities and Exchange Commission. Adjustments have been made to give effect to the operating properties contributed and acquired in connection with and following the Company’s initial public offering in 2004.

     The unaudited pro forma consolidated financial statements do not purport to represent the Company’s financial position or the results of operations that would actually have occurred assuming the contribution and acquisition of properties along with their related financing transactions had all occurred on the dates specified; nor do they purport to project the Company’s financial position or results of operations as of any future date or any future period.

BIOMED REALTY TRUST, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 2005
(Unaudited)
(In thousands)

		Historical
		BioMed				Uniqema								Pro Forma
		Realty				Properties				Bridge Business				BioMed Realty
		Trust, Inc.				Acquisition				Center				Trust, Inc.
						(A)				(B)
ASSETS
Investment in real estate, net		$	1,072,427			$	3,758			$	13,112			$	1,089,297
Investment in unconsolidated partnership			2,492				—				—				2,492
Cash and cash equivalents			74,495				(2,155	)			(14,900	)			57,440
Restricted cash			5,866				—				—				5,866
Accounts receivable, net			5,819				—				—				5,819
Accrued straight-line rents, net			7,166				—				—				7,166
Acquired above market leases, net			7,437				—				—				7,437
Deferred leasing costs, net			138,008				445				1,788				140,241
Deferred loan costs, net			5,196				—				—				5,196
Prepaid expenses			5,216				—				—				5,216
Other assets			6,359				—				—				6,359
Total assets		$	1,330,481			$	2,048			$	—			$	1,332,529
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable, net		$	248,004			$	2,048			$	—			$	250,052
Secured term loan			250,000				—				—				250,000
Unsecured line of credit			—				—				—				—
Unsecured term loan			—				—				—				—
Security deposits			6,222				—				—				6,222
Dividends and distributions payable			13,367				—				—				13,367
Accounts payable and accrued expenses			25,234				—				—				25,234
Acquired lease obligations, net			30,822				—				—				30,822
Total liabilities			573,649				2,048				—				575,697
Minority interests			21,278				—				—				21,278
Stockholders’ equity:
Common stock			466				—				—				466
Additional paid-in capital			760,834				—				—				760,834
Deferred compensation			(4,066	)			—				—				(4,066	)
Accumulated other comprehensive income			3,802				—				—				3,802
Dividends in excess of earnings			(25,482	)			—				—				(25,482	)
Total stockholders’ equity			735,554				—				—				735,554
Total liabilities and stockholders’ equity		$	1,330,481			$	2,048			$	—			$	1,332,529

See accompanying notes to pro forma consolidated balance sheet and statements of income.

BIOMED REALTY TRUST, INC.

PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 2005
(Unaudited)
(In thousands, except share data)

		Historical				First, Second, and																Pro Forma
		BioMed				Third				Uniqema								Second				BioMed
		Realty				Quarter 2005				Properties				Other Financing				Quarter 2005				Realty
		Trust, Inc.				Acquisitions				Acquisition				Transactions				Offering				Trust, Inc.
						(AA)				(BB)				(CC)				(DD)
Revenues:
Rental		$	62,821			$	14,152			$	1,406			$	—			$	—			$	78,379
Tenant recoveries			28,035				4,714				64				—				—				32,813
Other income			3,508				485				—				—				—				3,993
Total revenues			94,364				19,351				1,470				—				—				115,185
Expenses:
Rental operations			22,879				2,149				29				—				—				25,057
Real estate taxes			7,836				2,983				44				—				—				10,863
Depreciation and amortization			26,832				5,107				585				—				—				32,524
General and administrative			9,001				22				—				—				—				9,023
Total expenses			66,548				10,261				658				—				—				77,467
Income from operations			27,816				9,090				812				—				—				37,718
Equity in net income of unconsolidated partnership			91				—				—				—				—				91
Interest income			987				—				—				—				—				987
Interest expense			(15,645	)			(2,141	)			(112	)			(11,262	)			4,509				(24,651	)
Income (loss) before minority interests			13,249				6,949				700				(11,262	)			4,509				14,145
Minority interest in consolidated partnership			219				—				—				—				—			219		(FF)
Minority interests in operating partnership			(991	)			—				—				—				152			(839		)(FF)
Net income(loss)		$	12,477			$	6,949			$	700			$	(11,262	)		$	4,661			$	13,525
Pro forma earnings per share — basic(GG)		$	0.34																			$	0.29
Pro forma earnings per share — diluted(GG)		$	0.34																			$	0.29
Pro forma weighted average common shares outstanding — basic(GG)			36,406,068																				46,289,940
Pro forma weighted average common shares outstanding — diluted(GG)			39,545,665																				49,446,732

See accompanying notes to pro forma consolidated balance sheet and statements of income.

BIOMED REALTY TRUST, INC.

PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 2004
(Unaudited)
(In thousands, except share data)

		Historical				First, Second, and																				Pro Forma
		BioMed				Third				Uniqema				Other								Third and Fourth				BioMed
		Realty				Quarter 2005				Properties				Financing				Second Quarter 2005				Quarter 2004				Realty
		Trust, Inc.				Acquisitions				Acquisition				Transactions				Offering				Acquisitions				Trust, Inc.
						(AA)				(BB)				(CC)				(DD)				(EE)
Revenues:
Rental		$	19,432			$	54,223			$	1,875			$	—			$	—			$	38,937			$	114,467
Tenant recoveries			9,222				15,812				83				—				—				16,216				41,333
Other income			—				1,378				—				—				—				—				1,378
Total revenues			28,654				71,413				1,958				—				—				55,153				157,178
Expenses:
Rental operations			10,030				5,854				33				—				—				17,222				33,139
Real estate taxes			1,589				11,643				59				—				—				3,317				16,608
Depreciation and amortization			7,853				19,172				714				—				—				15,961				43,700
General and administrative			3,130				86				—				—				—				7,141				10,357
Total expenses			22,602				36,755				806				—				—				43,641				103,804
Income from operations			6,052				34,658				1,152				—				—				11,512				53,374
Equity in net loss of unconsolidated partnership			(11	)			—				—				—				—				(33	)			(44	)
Interest income			190				—				—				—				—				306				496
Interest expense			(1,180	)			(8,533	)			(141	)			(27,032	)			8,751				(830	)			(28,965	)
Income (loss) before minority interests			5,051				26,125				1,011				(27,032	)			8,751				10,955				24,861
Minority interest in consolidated partnership			145				—				—				—				—				178			323(FF)
Minority interests in operating partnership			(414	)			—				—				—				(1,057	)			—			(1,471)(FF)
Net income (loss)		$	4,782			$	26,125			$	1,011			$	(27,032	)		$	7,694			$	11,133			$	23,713
Pro forma earnings per share — basic(GG)		$	0.15																							$	0.51
Pro forma earnings per share — diluted(GG)		$	0.15																							$	0.51
Pro forma weighted average common shares outstanding — basic(GG)			30,965,178																								46,087,678
Pro forma weighted average common shares outstanding — diluted(GG)			33,767,575																								48,890,075

See accompanying notes to pro forma consolidated balance sheet and statements of income.

BIOMED REALTY TRUST, INC.

NOTES TO PRO FORMA CONSOLIDATED
BALANCE SHEET AND STATEMENTS OF INCOME
(Unaudited)
(Tabular amounts in thousands)

1. Adjustments to the Pro Forma Consolidated Balance Sheet

Presentation

     The accompanying unaudited pro forma consolidated balance sheet of the Company reflects adjustments for completed and probable acquisitions as if all of the following occurred on September 30, 2005:

	•		The acquisition of the Uniqema Properties for $20,200,000, which included the 1000 Uniqema property acquisition that occurred on September 30, 2005, and the 900 Uniqema property acquisition that is probable to occur; and
	•		The acquisition of the Bridge Business Center property for $14,900,000, which occurred on October 28, 2005 and was under redevelopment at the time of acquisition, for the nine months ended September 30, 2005 and for the year ended December 31, 2004.

     In the opinion of the Company’s management, all material adjustments necessary to reflect the effects of the preceding transactions have been made. The unaudited pro forma consolidated balance sheet is presented for illustrative purposes only and is not necessarily indicative of what the actual financial position would have been had the acquisitions described above occurred on September 30, 2005, nor does it purport to represent the future financial position of the Company.

Adjustments

     The adjustments to the pro forma consolidated balance sheet as of September 30, 2005 are as follows:

     (A) On August 10, 2005, the Company, through its operating partnership subsidiary, BioMed Realty, L.P. (the “Operating Partnership”), entered into a definitive purchase and sale agreement to purchase the Uniqema Properties. The total purchase price was approximately $20,200,000 plus closing costs. The Operating Partnership will fund the transaction with the assumption of $1,800,000 in debt (including premium in the amount of $248,000) and $18,400,000 in cash on hand. The Company completed the acquisition of one of the properties on September 30, 2005. The completion of the remaining property acquisition is probable:

		900 Uniqema (3)				1000 Uniqema (4)				Total
Investment in real estate, net		$	3,758			$	14,241			$	17,999
Intangible assets, net(1)			445				2,004				2,449
Acquired debt premium(2)			(248	)			—				(248	)
Net assets acquired		$	3,955			$	16,245			$	20,200

     (B) Reflects the acquisition of a property from a third party subsequent to September 30, 2005 for approximately $14,900,000, including closing costs. The purchase price was paid with cash on hand:

		Bridge Business Center (1)
Investment in real estate, net		$	13,112
Intangible assets, net(2)			1,788
Net assets acquired		$	14,900
Acquisition date		October 28, 2005

(1)

The Bridge Business Center property was under redevelopment on the date of acquisition, for the nine months ended September 30, 2005 and for the year ended December 31, 2004.

(2)

A portion of the purchase price has been allocated to identified intangible assets for the value of in-place leases in the amount of $1,788,000 which are amortized to depreciation and amortization expense over the remaining non-cancelable terms of the respective leases.

2. Pro Forma Consolidated Statements of Income

     The adjustments to the pro forma consolidated statements of income for the nine months ended September 30, 2005 and for the year ended December 31, 2004 are as follows:

     Adjustments (AA) through (GG) inclusive relate to the pro forma adjustments made to give effect to the acquired properties in accordance with Regulation S-X Rule 11-2 and Rule 3-14. Specifically, in accordance with Rule 3-14(a)(1), audited financial statements of properties acquired should exclude items not comparable to the proposed future operations of the properties including corporate expenses. Prior to the acquisition, the properties were either self-managed or managed by third-party management companies. Following the acquisition, the properties will be managed internally by the Company or managed by third-party managers

under new management contracts. In accordance with Rule 3-14, the related management fee revenues and expenses have either been included or excluded from the historical audited Rule 3-14 financial statements. For properties that will be managed internally by the Company, the property management revenues and costs are excluded in the historical financial statements of the acquired properties. For properties that will be managed by third parties, property management revenues and expenses are included in the historical financial statements of the acquired properties. Pro forma revenue and expense adjustments were made for properties that will be managed internally by the Company.

(AA) Reflects the acquisitions of Waples for approximately $5,300,000, which occurred on March 1, 2005; Bridgeview II for approximately $16,200,000, which occurred on March 16, 2005; Graphics Drive for $7,800,000, which occurred on March 17, 2005; Coolidge Avenue for $10,833,000, which occurred on April 5, 2005; Fresh Pond Research Park for $20,756,000, which occurred on April 5, 2005; Phoenixville for $13,206,000, which occurred on April 5, 2005; Nancy Ridge for $12,800,000 (consideration also included the assumption of $7,870,000 of a mortgage note payable (including premium of $869,000), and, in addition, a $1,177,000 deposit for loan impounds was made by the Company), which occurred on April 21, 2005; Dumbarton Circle for $6,320,000, excluding $2,640,000 paid into escrow for tenant construction allowance, which occurred on May 27, 2005; the Lyme Portfolio for approximately $531,000,000, including closing costs and an advisory fee to Raymond James & Associates, Inc. of $1,375,000 (consideration also included the assumption of $137,517,000 of mortgage notes payable (including premium of $6,313,000)), which occurred on May 31, 2005; Kaiser Drive for $9,500,000, which occurred on August 25, 2005; and Faraday Avenue for $8,500,000, which occurred on September 19, 2005.

		For the Nine Months Ended September 30, 2005
														Adjustments
														Resulting from
						Faraday				Prior				Purchasing				Pro Forma
		Kaiser Drive				Avenue				Acquisitions				the Properties				Adjustment
		(7)				(8)				(9)
Revenues:
Rental(1)		$	—			$	—			$	12,750			$	1,402			$	14,152
Tenant recoveries(2)			—				—				3,404				1,310				4,714
Other income			—				—				485				—				485
Total revenues			—				—				16,639				2,712				19,351
Expenses:
Rental operations(3)			—				—				2,000				149				2,149
Real estate taxes(4)			—				—				1,729				1,254				2,983
Depreciation and amortization(5)			—				—				—				5,107				5,107
General and administrative			—				—				22				—				22
Total expenses			—				—				3,751				6,510				10,261
Income from operations			—				—				12,888				(3,789	)			9,090
Interest expense(6)			—				—				(2,333	)			192				(2,141	)
Net income (loss) before minority interest		$	—			$	—			$	10,555			$	(3,606	)		$	6,949

		For the Year Ended December 31, 2004
														Adjustments
														Resulting from
										Prior				Purchasing				Pro Forma
		Kaiser				Faraday				Acquisitions				the Properties				Adjustment
		(7)				(8)				(9)
Revenues:
Rental(1)		$	—			$	—			$	50,540			$	3,683			$	54,223
Tenant recoveries(2)			—				—				10,273				5,539				15,812
Other income			—				—				1,378				—				1,378
Total revenues			—				—				62,191				9,222				71,413
Expenses:
Rental operations(3)			—				—				5,427				427				5,854
Real estate taxes(4)			—				—				6,230				5,413				11,643
Depreciation and amortization(5)			—				—				—				19,172				19,172
General and administrative			—				—				86				—				86
Total expenses			—				—				11,743				25,012				36,755
Income from operations			—				—				50,448				(15,790	)			34,658
Interest expense(6)			—				—				(9,224	)			691				(8,533	)
Net income (loss) before minority interest		$	—			$	—			$	41,224			$	(15,099	)		$	26,125

     (BB) Reflects the acquisition of the Uniqema Properties:

		For the Nine Months Ended September 30, 2005
		Historical				Adjustments
		Revenue and				Resulting from
		Certain				Purchasing				Pro Forma
		Expenses				the Properties				Adjustment
Revenues:
Rental		$	1,406			$	—			$	1,406
Tenant recoveries			64				—				64
Other income			—				—				—
Total revenues			1,470				—				1,470
Expenses:
Rental operations			29				—				29
Real estate taxes			44				—				44
Depreciation and amortization(1)			—				585				585
Other			—				—				—
Total expenses			73				585				658
Income from operations			1,397				(585	)			812
Interest expense(2)			(119	)			7				(112	)
Net income (loss)		$	1,278			$	(578	)		$	700

		For the Year Ended December 31, 2004
		Historical				Adjustments
		Revenue and				Resulting from
		Certain				Purchasing				Pro Forma
		Expenses				the Properties				Adjustment
Revenues:
Rental		$	1,875			$	—			$	1,875
Tenant recoveries			83				—				83
Total revenues			1,958				—				1,958
Expenses:
Rental operations			33				—				33
Real estate taxes			59				—				59
Depreciation and amortization(1)			—				714				714
Other			—				—				—
Total expenses			92				714				806
Income from operations			1,866				(714	)			1,152
Interest expense(2)			(167	)			26				(141	)
Net income (loss)		$	1,699			$	(688	)		$	1,011

     (CC) Reflects the interest expense as a result of debt incurred in connection with various acquisitions.

										Interest Expense(3)
										For the Nine
		Principal								Months Ended				For the Year Ended
		Amount				Interest Rate				September 30, 2005				December 31, 2004
$250.0 million senior unsecured revolving credit facility(1)		$	112,597				4.46	%		$	2,092			$	5,022
$100.0 million senior unsecured term loan(1)			100,000				4.46	%			1,858				4,460
$250.0 million senior secured term loan(2)			250,000				6.407	%			6,674				16,018
Amortization of loan fees			—								638				1,532
		$	462,597							$	11,262			$	27,032

     (DD) Reflects the net decrease in interest expense as a result of the repayment of certain debt with the proceeds of a public offering of 13,150,000 common shares at $22.50 per share, with net proceeds of $282,061,000 that occurred on June 27, 2005. The following outlines the loans paid off upon completion of the offering and the corresponding interest expense that was eliminated.

										Interest Expense(2)
										For the Nine
										Months Ended				For the Year Ended
		Debt Repaid				Interest Rate				September 30, 2005				December 31, 2004
$250.0 million senior unsecured revolving credit facility(1)		$	132,097				4.46	%		$	2,946			$	5,892
$100.0 million senior unsecured term loan			100,000				4.46	%			2,230				4,460
Write-off of unamortized loan fees			—								(667	)			(1,601	)
		$	232,097							$	4,509			$	8,751

     (EE) Reflects the third and fourth quarter 2004 acquisitions for the period from January 1, 2004 through the date of acquisition:

		For the Year Ended December 31, 2004
		Historical
		Revenue and				Adjustments
		Certain Expenses				Resulting from
		through the Date				Purchasing				Pro Forma
		of Acquisition				the Property				Adjustment
Revenues:
Rental(1)		$	38,863			$	74			$	38,937
Tenant recoveries(2)			16,003				213				16,216
Other income			—				—				—
Total revenues			54,866				287				55,153
Expenses:
Rental operations(3)			17,002				220				17,222
Real estate taxes			3,317				—				3,317
Depreciation and amortization(4)			—				15,961				15,961
General and administrative(5)			—				7,141				7,141
Total expenses			20,319				23,322				43,641
Income from operations			34,547				(23,035	)			11,512
Equity in net loss of unconsolidated partnership			(33	)			—				(33	)
Interest income			306				—				306
Interest expense(6)			(2,716	)			1,886				(830	)
Net income (loss) before minority interest		$	32,104			$	(21,149	)		$	10,955

     (FF) Allocate minority interest in net income:

		For the Nine
		Months Ended				For the Year Ended
		September 30, 2005				December 31, 2004
Total income before allocation to minority interest		$	14,145			$	24,861
Minority interest in loss of King of Prussia			219				323
Adjusted income before allocation to minority interest of operating partnership		$	14,364			$	25,184
Weighted average percentage allocable to minority interest of operating partnership			5.84	%			5.84	%
		$	(839	)		$	(1,471	)

(GG)	The following is a reconciliation to net income:

		For the Nine Months								For the Year Ended
		Ended September 30, 2005								December 31, 2004
		Historical				Pro Forma				Historical				Pro Forma
Net income attributable to common shares		$	12,477			$	13,525			$	4,782			$	23,713
Operating partnership unit share in earnings of minority interest			991				839				414				1,471
Adjusted net income attributable to common shares		$	13,468			$	14,364			$	5,196			$	25,184
Weighted-average common shares outstanding:
Basic(1)			36,406,068				46,289,940				30,965,178				46,087,678
Diluted(1)			39,545,665				49,446,732				33,767,575				48,890,075
Pro forma earnings per share — basic		$	0.34			$	0.29			$	0.15			$	0.51
Pro forma earnings per share — diluted		$	0.34			$	0.29			$	0.15			$	0.51