BioMed Realty Trust Management Discusses Q3 2010 Results – Earnings Call Transcript
BioMed Realty Trust, Inc. (
)
Q3 2010 Earnings Call
November 4, 2010; 12:00 pm ET
Executives
Alan Gold - Chief Executive Officer
Greg Lubushkin - Chief Financial Officer
Kent Griffin - President
Matt McDevitt - Executive Vice President, Real Estate
Rick Howe - Director of Corporate Communications
Analysts
Brendan Maiorana - Wells Fargo
William Crow - Raymond James
Jordan Sadler - KeyBanc Capital Markets
John Stewart - Green Street Advisors
John Guinee - Stiefel Nicolaus
Suzanne Kim - Credit Suisse
Chris Katen - Morgan Stanley
Presentation
Operator
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Good day, ladies and gentlemen and welcome to the quarter three 2010 BioMed Realty Trust Incorporated earnings conference call. My name is Jennifer, and I will be your operator for today. At this time, all participants are on a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.
I would now like to hand the call over to Mr. Rick Howe, Director of Corporate Communications. Please proceed.
Rick Howe
Thank you, Jennifer, and welcome everyone. Today’s third quarter 2010 earnings call includes a slide presentation to accompany our prepared remarks. If you are not currently viewing the slides and would like to, please go to www.biomedrealty.com, click on the Investor Relations tab on the left and then click the Q2 2010 BioMed Realty Trust, Inc. earnings conference call link. We have also posted these slides included in the presentation November 2010 on the Investor Relations tab of our website.
Presenting today are Alan Gold, Chief Executive Officer; Kent Griffin, President; Matt McDevitt, Executive Vice President, Real Estate; and Greg Lubushkin, Chief Financial Officer.
Before we begin, I would like to remind everyone of the Safe Harbor statement included in yesterday’s news release. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for certain forward-looking statements, including statements made during the course of today’s conference call. These forward-looking statements are based on the company’s current expectations and involve significant risks and uncertainties, some of which are beyond the control of the company and are subject to change based on various factors.
Actual results may differ materially from those expressed or implied by the forward-looking statements. For a detailed discussion of some of the ongoing risks and uncertainties of the company’s business, I refer you to the news release issued yesterday and filed with the SEC on Form 8-K as well as the company’s other SEC filings including its most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
I will now turn the call over to Alan Gold. Alan?
Alan Gold
Thank you, Rick, and welcome to BioMed’s third quarter 2010 earnings call and presentation. Yesterday, we reported yet another exceptional quarter. FFO per diluted share was inline with expectations at $0.28 it was underscored by the highest quarterly revenues in the company’s history. These results are directly attributable to our steady execution of BioMed’s robust business model combined with an opportunistic growth strategy focused on the life science industry in the United States, which continues to grow and to perform as one of the stronger economic engine domestically and globally throughout a turbulent macroeconomic environment.
Reporting the top line results for the third quarter there were many highlights, which in the aggregate demonstrate that BioMed is firing on all cylinders as we enter the fourth quarter and look forward to 2011.
First and foremost, was approximately 232,000 square feet of new and extended leases in the third quarter, our best leasing quarter of 2010. As we have now surpassed our five quarter goal of 1 million square feet of leasing with one quarter still remaining. We made selective investments aggregating 335,000 square feet of high quality, well located life science laboratory and office space during the quarter, plus an additional 684,000 square feet, which we had announced and closed since quarter end.
We entered into new relationships with important life science organizations across the spectrum, including Elan Pharmaceuticals, Amylin Pharmaceuticals, Halozyme Therapeutics, the University of California, San Diego, Bristol-Myers Squibb and Bayer CropSciences. We fortified our balance sheet and liquidity position to a follow-on common stock offerings raising $290 million in net proceeds to take advantage of current and future investment opportunities.
Our common stock dividend was increased by 13% in the third quarter, the second consecutive quarterly increase to an annualized rate of $0.68 per share. And we enhanced our senior management team with the promotion of John Bonanno to Senior Vice President Development as well as the addition of Bruce Gale as Managing Director, business development and Anne Hoffman as Senior Vice President, development.
Now, looking to the state of the industry, contrary to the soft economic results for the U.S. economy, capital raising activity in the life science industry and in particular among our tenants continues at a healthy cliff. Total financing and partnering transactions produced funding of $19.1 billion in the third quarter, up 42% over the third quarter of 2009. Even more surprising, after the first three quarters of 2010, we’re actually on pace to meet or potentially exceed the extraordinary results for 2009.
The Amex Biotech Index was up approximately 13% over the second quarter and is now up almost 23% for the year. Partnering transactions increased modestly over Q3 2009 to $9.6 million, which included a $295 million extension of our license agreement between Astellas Pharma and our tenant Regeneron through 2023.
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