CurrentOfferings.com Story:

BioMed joings other REITs eyeing IPOs

Mike Freeman, San Diego Union Tribune, May 7, 2004

The window for initial public stock offerings that has opened for biotech and technology companies has attracted another industry: real estate investment trusts.

Several REITs have filed for IPOs this year. One of the latest is San Diego's BioMed Property Trust.

The company, formerly called Bernardo Property Advisors, seeks to raise $225 million in its IPO, according to the company's filing this week with the Securities and Exchange Commission.

It plans to use the money to acquire buildings in the key biotech and pharmaceutical markets of San Diego, San Francisco, Boston and Seattle. It also is targeting sites in Maryland, Pennsylvania and New York/New Jersey, the company said in its filing.

BioMed would be only the second publicly traded REIT in the country to focuses exclusively on biotech and pharmaceutical real estate. The other is Alexandria Real Estate Equities. Two executives at BioMed, chief executive Alan Gold and executive vice president Gary Kreitzer, worked at Alexandria until 1998.

While Google is helping to pry open an IPO window for tech companies, "one other area that has seen increased deal flow is the REIT marketplace," said Jeff Hirschkorn, a senior analyst with Current Offerings, an IPO tracking firm.

Among the offerings filed recently is Kentucky-based hotel owner Eagle Hospitality Properties Trust, which seeks to raise $240 million to buy more lodging properties.

Several mortgage REITs, including Sunset Financial and Bimini Mortgage Management, also have either gone public or are planning to do so soon.

BioMed listed several risks for investors in its shares. It owns just five buildings � four in San Diego totaling 222,000 square feet and one in San Francisco with 171,000 square feet. It has six tenants. That leaves it vulnerable if one of its tenants files for bankruptcy.

Because BioMed focuses solely on life sciences companies, it also is vulnerable during industry slumps. And life sciences buildings typically have high renovation costs to make them ready for tenants, which means they're more expensive to lease than traditional office and industrial buildings.

Last year, the company reported revenue of $13.7 million and net income of $1.67 million. Raymond James in the underwriter for the offering.