BioMed Realty Trust took a $32 million loss on the sale
of 145 King of Prussia Road in Radnor, Pa.
The San Diego, Calif., real estate investment trust said
in documents filed with Securities and Exchange Commission that the charge
"represents the excess of the book value of the [King of Prussia Road]
Property over the net proceeds from the sale."
BioMed closed Friday on a transaction in which the
University of Pennsylvania Health System acquired the 18.2-acre parcel for $35
million.
The property currently consists of five buildings with
374,387-square-feet of lab, office and warehouse space. The buildings were
constructed between 1952 and 1982. When BioMed (NYSE: BMR) bought the site in
2004, it paid $87.9 million for it.
When BioMed bought the property, the buildings were
leased to Centocor and that was reflected in the original sales price. However,
Centocor vacated the property, making it less valuable than when BioMed
initially bought it. In light of that vacancy, the value of the buildings were
dramatically reduced and the real value that remained was in the land, which
sold for roughly $2 million an acre. Based on those variables and BioMed’s
calculations, it lost $32 million when it sold the property to Penn.
The property would have gained additional value had
BioMed been successful in getting it approved for a large development but
Radnor officials never signed off on those plans. BioMed said it would take the
charge in the second quarter.
Source: Philadelphia
Business Journal
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