BioMed Said Exploring Sale, With Interest From Blackstone

Updated on
  • REIT is working with Morgan Stanley to consider options
  • Shares climb as much as 13% for biggest gain since 2009

BioMed Realty Trust Inc., a landlord with properties catering to biotechnology companies, is exploring a sale and has drawn interest from firms including Blackstone Group LP, according to people familiar with the talks.

The San Diego-based real estate investment trust, with a market value of $3.9 billion as of Tuesday, is working with Morgan Stanley on a potential deal, said the people, who asked not to be identified because the negotiations are private. Talks are ongoing and there’s no guarantee a deal will get done, one of the people said.

Peter Rose, a spokesman for New York-based Blackstone, and Heather Dratler, a BioMed representative, declined to comment. Mary Claire Delaney, a spokeswoman for Morgan Stanley, also declined to comment.

BioMed’s shares jumped 11 percent to $21.23 at 10:21 a.m. New York time and earlier climbed as much as 13 percent, the biggest gain since 2009. The stock had declined 6.8 percent in the year through Tuesday, compared with a 2.9 percent increase for the Bloomberg REIT Index.

BioMed, which went public in 2004, controls about $8 billion in high-quality laboratory properties, according to real estate research firm Green Street Advisors LLC. Health-care spending is one of the fastest-growing segments of the U.S. economy, boosting demand for lab space that can accommodate pharmaceutical developers and manufacturers.

‘Demand Drivers’

“Biotechs are raising capital hand over fist and FDA drug approval rates far
exceed the past -- positive demand drivers,” Michael Knott, a Green Street managing director, wrote in a report this month.

Values for all kinds of commercial property types are climbing across the U.S. as investors turn to real estate to boost returns with central banks around the world tamping down interest rates to spur economic growth. Acquiring REITs is a way for buyers such as Blackstone, the world’s largest private equity firm, to put large amounts of cash to work.