Thank you and good afternoon. This conference call includes forward-looking statements, including earnings guidance within the meanings of federal securities laws. Actual results may differ materially from this projected in the forward-looking statements. Additional information concerning factors could cause actual results to differ materially from those in the forward-looking statements is contained in our annual report on Form 10-K and our other periodic reports filed with the Securities and Exchange Commission. Now I would like to turn the call over to Joel Marcus. Please go ahead.

Thank you, Rhonda and welcome everybody. I have two quick thoughts before we begin a review of the quarter. A close friend reminded me of an old Mark Twain quote, 'Put all your eggs in one basket and watch that basket,' something to think about in these times, and another old proverb says, 'Reason and judgment are the qualities of a leader.' As leaders in the niche that we’ve created, we're exercising reason and very sound judgment in this most difficult period to protect our shareholders, our tenants, and our employees. Let’s get right to it. We are reporting our operational and financial results for the 45th quarter in a row and at a discreet time during the economic perfect storm as described in the October 23rd Wall Street Journal, 'created by a perfect storm of mutually reinforcing trends and policy mistakes, including but not limited to loose monetary policies, socially engineered housing policy, rapid and unchecked growth of leverage, opaque and technically deficient derivatives, shadow banking systems, fragmented regulations, lack of diligence, poor governance, fraud, oil price shock and government incompetence,' and yesterday’s Wall Street Journal’s Op-Ed argued that the markets are weak, as well as the conditions because the candidates are lousy. So we are where we are, but I want to report to you that we at Alexandria have been doing what we’ve been doing with the consequence thereof in a careful, thoughtful, deliberate manner. We are working closely as a management team and also with our board. First of all, we do have substantial liquidity and have sufficient access to capital sources to weather this perfect storm. Second, we have revised our capital plan and have reduced our capital expenditures for the balance of ’08, ’09, ’10, and into ’11. We are also making a concerted effort to work with our tenants to substantially increase their investment in tenant spaces, and a good example is our recent lease with Pfizer. Third, we are currently working intensively to refinance our very modest debt maturities in ’09 and ’10, which Dean will describe in a few moments. Fourth, we’ve revised our operating plan and reduced our operating expenditures for the remainder of ’08, ’09, and ’10. In order to set the proper tone for this internally, I’ve voluntarily reduced my own salary by one-third. Fifth, even though ARE has no reserve for bad debts and has a very low historic level of receivables outstanding, about 6.1% as a percentage of rents and recoveries, which is indeed very low, we are laser-focusing our accounting and finance and Life Sciences teams on continuing constant dialogue with our broad and diverse tenant base, and in fact as of 09/30, we have zero receivables in our Maryland region. Sixth, a very unique and durable business model and roadmap for growth will continue to be adjusted and fine-tuned for this new reality for whatever the duration may be. Our business model has been tested and perfected over the last 10.5 years as an NYSE-listed company, and our model is not dependent upon fee income nor the booking of gains on the sales of assets. Seventh, we continue to be laser-focused on maintaining our high operating margins and our high return on invested capital. Eighth, we are ever-increasing the credit quality of our tenant base by a keen focus through our leasing and the M&A activity going on among the tenants. It’s important to remember these are mission-critical facilities for our clients, and the need is significant, also presenting barriers to exit. Let me move to some key elements of our unique business model as they fared this quarter and possibly beyond. On same-store growth, Dean will highlight some guidance here in a few minutes; ARE is the only office and industrial REIT over a 10 year period never to have a negative same-store quarter. For the third quarter, we posted same-store growth of 5.6% on a GAAP basis and 8.9% on a cash basis, 3.1% GAAP year-to-date and 6.9% cash year-to-date, and we’ve had positive growth for our 45th quarter in a row with both occupancy and rental rate growth. We are continuing to be laser-focused on increasing occupancy while protecting rental rates. As we guide same-store growth into the future, we’re greatly benefited by the fact that our top 10 tenants, which comprise about 30% of our rental revenue, have lease durations of about seven years, and 94% of our leases contain annual rental escalations that should drive same-store growth and protect it. With respect to rental rate increases on renewed or released spaces, ARE is the only office and industrial REIT over an almost 10-year period never to have an overall rental rate decline on renewed or released space. For the third quarter, we posted rental rate increases on renewed and released space, 8.2% on a GAAP basis and 14.9% year-to-date on a GAAP basis. We’re also again laser-focused on leasing space, and we leased the most space during the third quarter than in any previous of the 44 quarters; 41 leases for 618,000 square feet and 1.7 million square feet year-to-date. If you look at our future lease rolls, we’ve got about 282,000 square feet rolling in the fourth quarter, including about 84,000 square feet month-to-month; that’s about 3%. The balance of ‘08, 31% is committed, 42% is anticipated, 0% is going into redevelopment, and only 27% remain uncertain. ‘09 rolls about 7.9% and ‘10, 10.6%, so they’re modest rolls at relatively modest existing rental rates which is good in this environment. On the redevelopments, we have a very keen emphasis on leasing and gradual reduction of our throughput to a more gradual pace. We continue to maintain double-digit returns on invested capital for incremental dollars invested which contributes to our future growth. On the developments, we are blessed with a low historical basis on most of our land, and this is a significant advantage for us. Among the most significant focal points of the company is on leasing and reduction of throughput on the development pipeline; we’ve even deferred two future build-to-suits for credit institutional tenants. Other highlights of our operating and financial performance include a continued positive uptick in occupancy to 95.6%, as you can notice contributed by virtually every region. If you go to ‘09 and look at lease rolls, we have 844,000 square feet, about 8.1% rolling, 15% leased or committed, 50% negotiating or anticipated, 0% into redevelopment, and only 35% continues to be marketed or too early. Remember too that our locations are the best in the industry, so it makes our job in a tougher environment somewhat easier. For ‘10, we have 988,000 square feet, or 9.4% rolling, 3% so far as leased or committed, 67% negotiated or anticipated, 4% will go into redevelopment, and only 26% marketing or too early. 407,000 square feet of lease space related to development, redevelopment, and previously vacant space with very low TIs and commissions, a term approaching almost nine years, 26% from the Massachusetts region and 33% from the Bay region. The largest leases we signed this quarter include Pfizer, Gilead, and Novartis as disclosed. We also delivered 116,000 square feet out of our redevelopment pipeline. When we move to the development pipeline, I’m pleased to report that 1500 owns at Mission Bay; our second building is fully leased or committed to UCSF and a multibillion-dollar equity market cap biotech company. The two developments at South San Francisco haven’t had substantial changes since our last report for the second quarter. The small project we’re building in China, our first development there, with the development costs, I think that should be south of $40 a square foot, which is good, is being repositioned to lease to a single tech user, manufacturer, and we are working through a change of use with Chinese officials. With respect to the 310,000 square feet at East River Science Park, we have no leases signed to date. We do have one lease out for signature somewhere between 16,000 to 35,000 square feet, but awaiting further action by the board and the appointment of the CEO. We have active discussions with biotech, pharma product and service companies, and a variety of institutional users for more than the 310,000 square feet, and we’re actively working very closely with the city, including Mayor Bloomberg himself, regarding the significant Life Sciences anchor tenant. As you know from the recent announcement on the 22nd, we signed a lease with Gilead Sciences, one of the preeminent biotech companies for about 106,000 square feet. Moving to dispositions, we had none in the third quarter. We have one small Massachusetts property in discontinued operations. Interestingly, a number of client tenants have approached Alexandria during this time period asking whether we would consider selling to them to purchase certain mission-critical facilities for their continued use. We have nothing to report, but clearly if we make a decision at any point, that would be a great source of available cash to us and clearly would move lease payments to a capital purchase for a tenant. With respect to tenant matters, let me make a variety of comments and let me describe rental revenues by sector at 09/30/08. The two fastest-growing sectors at the moment are the institutional and the big pharma sector for us. 14% is on a revenue basis. Our institutional is 25%, big pharma 26%, public biotech weighted the big cap. Biotech’s 13% private; Biotech’s well underwritten by our very talented Life Sciences group and about 16% by and large profitable product and service companies, and the remainder is generic office. We have among the highest quality tenants and very well diversified. Only one tenant is on our immediate watch list based on our unique tenant underwriting and understanding capability, coupled with unparalleled relationships that really have enabled us to avoid any serious issues for the last 10.5 years. We are working on a situation intensively, and some of you may have read the press regarding Cell Genesis, a San Francisco Bay tenant, that was a tenant of a key asset we acquired in 2007. They comprise about 2.6% of our annual base rents and they had a key clinical failure and had a press release and are looking for strategic alternatives for the company. They occupy about 155,000 square feet, about 8.4 million square feet, but I’m pleased to report we are very confident that the situation will resolve itself in a satisfactory manner. Before I turn it over to Dean, I think it’s clear that the ARE formula for success in a very stormy environment is the best in class business model, the best assets, the best locations, the best tenant mix, and strength, and by far and away the best team. So I am going to ask Dean now to talk about the all-important matters of liquidity, balance sheet, debt strategy, and guidance.

Thanks, Joel. Let me jump right into liquidity, balance sheet, and debt maturities, and then briefly comment on key operating statistics and the strength of our operating performance in 2008. Let me state what we understand very clearly; the US and world economic, banking, and financial crisis is unprecedented, extraordinary, and has had a severe structural impact resulting in very illiquid debt and equity markets throughout the world. In addition, the consumer-driven economy is at an all-time low, vis-à-vis consumer confidence. Week by week over the past several quarters, and beginning as early as 2007, and more importantly in 2008, we have been modifying our capital plan to address the ongoing extraordinary crisis. As Joel mentioned, we are substantially reducing our construction spending and will not add any new commitments for significant conduct developments or significant redevelopments until there is confirmed proof that liquidity has returned to the marketplace. We believe we will be able to lower our quarterly construction spending by more than 40% on average for 2009. We continue to be very prudent with our precious capital, and we have a long and continuous history of taking appropriate action to address changing environments. This environment is abnormally challenging, but again, we believe we are taking appropriate, thoughtful, deliberate, and careful actions. Some of these actions are in process, and other key actions will be implemented over the coming weeks. We further believe that our assumption in the current unprecedented environment is that there will be no equity or debt capital available for the next year and possibly longer. It is imperative that we plan for this set of assumptions to provide us with the best path to successfully navigate through this worldwide crisis. Our substantially updated and modified capital plan will allow us to manage our balance sheet capacity over the next two and possibly three years. The primary sources of capital beyond our modified capital plan are from our $1.9 billion credit facility and potential asset sales to users that have approached us and other opportunistic sales of buildings or land. We will continue to monitor the capital markets and pursue appropriate debt capital, but our assumption at the moment is that the market remains frozen for some time. Next, let me cover certain key items regarding our $1.9 billion unsecured revolving line of credit and term facilities. As of 09/30, we had approximately $1.27 billion outstanding of the $1.9 billion unsecured term and revolving facilities. Our credit facility and term loan both have one-year extension options that are sole election, but these extension options will push the maturity dates of our revolving line of credit to October 2011 and our term loan to October 2012. Our credit facility allows us to select our interest rate based on LIBOR, plus a spread of 1% to 1.45%, depending on leverage or the higher of the federal funds rate, plus 50 basis points, or be it base prime rate plus the spread of zero to 25 basis points, again depending on our leverage. A portion of our outstanding borrowings under our credit facilities is based on one-month LIBOR, and we have interest rate swap agreements in place to mitigate our risk to variable interest rates. In addition to our interest rate swap agreements, we have benefited from borrowings based on BofA’s prime rate under our credit facilities. In October, while LIBOR base rates were increasing, the fed funds rate and BofA’s prime rate were both decreased by 100 basis points to 1% and 4% respectively. As a result, we have elected to set a portion of our un-hedged outstanding borrowings at a prime base rate, which has allowed us to lower interest expense. Additionally, in October of 2008, we executed a total of three interest rate swap agreements effective in October, aggregating notional of $275 million at rates ranging from 2.75% to 3.12% and with maturities ranging from December of ’09 through January of 2011. As mentioned on prior calls, another key attribute of our credit facilities is our ability to receive similar advance rates on our construction projects to what is typically provided under construction loans. When the liquidity of some sort returns to the markets, we will be prepared to take advantage of financing opportunities with our existing lenders and our key relationship banks. The majority of our assets are unencumbered, located in the very best Life Science submarkets occupied by high-quality Life Science entities with high occupancy, as noted by our overall occupancy of almost 96%. Our unencumbered asset is valued in the 40% range. As such, on average, future refinancing results in net proceeds to the company versus additional equity contributions from the company. Next, let me briefly turn to debt maturities. As you are aware, in the first quarter of 2008, we resolved our debt maturities for 2008. For ’09, we have an aggregate of about $234 million of debt maturities, net of approximately $20 million of debt related to minority interests. The exception to my prior comments is that we are working with our key relationship banks and the existing lenders on the refinancing of the 2009 maturity, approximating $175 million. For 2010, we have a relatively nominal amount of debt maturing at approximately $75 million, spread over six loans after we exercise our sole option to extend our maturity dates on our unsecured revolving line of credit to October of 2011 and our unsecured term loans to 2012. Debt to total market cap was approximately 41%, and our unhedged variable rate debt was approximately 26% of total debt. Next, let me turn to certain highlights of our important statistics reflecting our strong third quarter and 2008 performance. The third quarter of 2008 represented our 45th consecutive quarter in growth in FFO per share diluted, 45th consecutive quarter of positive same property growth on a GAAP basis of 5.6% and strong leasing activity aggregating approximately 1.7 million square feet in the nine months ended 09/30, up 43% over 2007, with increases in rental rates of approximately 15% on a GAAP basis. Third-quarter FFO per share diluted was reported at $1.53, up approximately 6% over the third quarter of ’07. Occupancy per operating assets again realized solid gains for the fourth consecutive quarter to 95.6%. As mentioned on prior calls, certain assets contain spaces for future redevelopment and currently contain vacancy. These spaces have a negative impact on our occupancy statistics, operating margins, and operating results, but clearly provide for future growth for our value-added redevelopment program. With that said, margins were solid at approximately 74%. On a prospective basis, we are projecting margins to be in the 74% to 76% range. Straight-line rent adjustments for the quarter were approximately $3.3 million, and $3.5 million per quarter is a good run rate. Lastly, let me turn to our guidance for ’08, after supplemental adjustments for non-cash impairment charges. Our guidance is reflective of the ongoing strength of our core operations, as shown in the operating results for the quarter and for the nine months ended 09/30. While we are extremely cautious about the overall macro environment, we are comfortable with our various assumptions underlying our realized guidance for 2008. Our core operations continue to generate a consistent and predictable operating result which is a key component for our updated guidance for ’08. From our solid leasing activity year after year, deposit of same-property performance quarter after quarter, the solid quadruple net lease structure to our unique ability to underwrite the Life Science Industry and client tenants. These key attributes have proven to be an important component for a strong and consistent operating performance and will provide a solid base going forward. Our updated guidance assumes no acquisitions; other asset sales may occur over the next 12 to 18 months, but no additional properties qualify as held for sale as of quarter-end. Our guidance for same-property growth NOI growth for 2008 and ’09 remains in the 3% to 4% range. Our guidance for growth in rental rates for 2008 on our leasing activity for renewed and released spaces remains well north of 10% as a result of our strong rental rate increase of 15% through 09/30. Additionally, our ’09 guidance for growth in rental rates remains in the 5% to 10% range, reflecting the strength of our recent and strong leasing activity this year, moderated with some costs due to the ongoing worldwide crisis. Our updated guidance is based on various assumptions, including the key points I just summarized. This FFO per share diluted is $6.06 after supplemental adjustments for non-cash impairment charges and earnings per share diluted of $3.10. Our guidance for FFO per share diluted was reduced $0.01 this quarter reflecting the impact of higher interest rates for the fourth quarter to date. Consistent with last year, we plan to issue our guidance for 2009 with our earnings results for the fourth quarter of 2008. With that, I’ll turn that back to Joel.

It's Irwin Guzman here; Michael’s on the phone also. Dean, you mentioned in prior calls that the original capital plan was to spend about $100 million a quarter in 2009 and you just said that you are going to be reducing that by about 40%. I was wondering if you could give a little bit more detail about where that reduction would come out of, and in particular, I’m curious as to how you can reduce CapEx by so much without abandoning certain projects that are in your existing pipeline.

Yes, that’s a good question; some of which we are not prepared at the moment to go into a lot of detail about our plan, as quite a bit of it is working through our strategy right now, but as we sit here today, we feel fairly comfortable in being able to reduce our capital plan significantly. Part of it honestly had to do with the fact that within our capital plan, we had assumed certain projects going forward and a recurring amount of capital needs in certain areas of our construction business. Some of which we have been able to challenge very significantly over the last couple of months and most recently the last few weeks, and we found some great opportunities where we were conservatively forecasting construction spending for obvious reasons, but as we got through the details we felt very comfortable scaling that.

So would it be safe to assume that the reduction is driven by efficiency and at the expense of new starts, as opposed to taking things that are in your under-construction pipeline and effectively pushing them off or abandoning them?

Yes, by and large, that’s correct.

One other question; in terms of the lower TIs, is that on developments as well as the operating portfolio, and what does that imply for asking rents and yields?

Yes, Irwin, that does apply to both and I think it’s very much a case-by-case basis. The example I cited was an example where in dealing with a major big pharma client, it was much easier to offer the opportunity for that client to add a certain amount of the generic infrastructure into the facility at its own cost, and they were very willing to do that. Obviously, that amount of capital that we would have put in, we wouldn’t now get a return on, but clearly our land base is still very low, and when we couple it with the building that we will deliver, we are still able to achieve 10% to 12% un-levered yields on our developments. The same may be true on redevelopments, although the cost investment there is a lot less and many of the spaces are much smaller, but where we have the opportunity to do that, we not only will do it but we have already been doing it.

And maybe just going back to sort of the capital plan, you’re about $1.4 billion which is all the stuff that you were drawing up on plan and you are capitalizing the interest on. As you look at the next 12 months, are you going to make the decision saying, 'You know what, $500 million for these projects today are going to be much further out and we are going to stop and we’ll roll it back into just running effectively the carry-through earnings rather the cost of the project.'

Real good question, Michael. Obviously the restructuring process is lengthy, which we plan to continue with since it really adds significant value for our land holdings. As such we plan to continue with these very important and meaningful activities. We do not anticipate any significant impact to capitalization for the majority of our projects. Certain projects are scheduled to come off capitalization based on our current estimate of completion of construction activities, again which is in line with our estimated end service dates, and we will as usual continue to assess the status of our projects as we have historically quarter-to-quarter and make adjustments as necessary.

And the last question is on international. You changed to China; I know it’s a very, very small piece, but you talked a little bit about the international part of the strategy in Scotland; you had stuff going on down in India and China and how does everything that happen to impact that?

Yes, I think what we’ve done clearly in a very deliberate and methodical fashion since the collapse of Bear Stearns back in March, we clearly have focused on the relationships and the entitlements that we are working on in a variety of locations, and we’ll continue as Dean just mentioned to pursue adding value to these opportunities by entitlements and by working with tenants to create future build-to-suit opportunities. So that’s kind of how we are moving on the international scene in both Asia and Europe, and I think with respect to the small project in China, our partner there has decided that it would prefer to not take the time and spend the money to build out what was going to be a pretty expensive interior fit-out in about 18% of that space, and so as a consequence there, we decided jointly to reposition the property rather than for partial owner occupancy for hopefully a single tenant manufacturing or high-tech opportunity. There is a very large nearby high-tech park that is full and has a large overflow of tenants that they cannot accommodate. So it appears we will have a good opportunity to capture either one or possibly a set of significant tenants. There’s a pretty great location in the Pearl River delta of China, and so we don’t see any issues in our costs. We’re projecting we’ll be less than $40 that I think are highlighted on page 17 of the supplemental.

Joel, just one final question; there’s been a lot of news flow about the impact that this capital environment is having on the ability of smaller biotech companies to access the capital they need to continue funding their research. You mentioned that there was one tenant that was on your watch list. Can you talk a little bit about what you’re sort of seeing out of your tenant pool and what your level of exposure is there?

Yes, as I said I think one of the things that we’ve been very greatly benefited by is over a long period of time, this isn’t something new to us. The capital cycles in the biotech industry have been kind of boom and bust frankly over a four to five year period ever since I started in the industry; in 1983. We don’t know if this is the worst, but people are thinking this is going to be the worst macro environment for most industries. We have clearly and deliberately moved over a long period of time to focus our tenant base more on the multinational pharmas and the institutional side. We only have about 12% to 13% of our spaces leased to private biotech companies, and again because of our unique relationships and I think world-class underwriting capability, when we recruit tenants, we do a very, very thorough job of not only underwriting them but monitoring them and working with them throughout their entire cycle of growth. Where we run into trouble occasionally and we have successfully dealt with it is when we acquire a property with one or two tenants that we didn’t choose, and you are stuck with that situation. You have to play the cards that you are dealt, but luckily in the 45 quarters we’ve had, we haven’t had any blowups and again we have no reserves for bad debts, but we are realists. The market is tough, and there are a lot of articles written. We think there will be a whole bunch of companies that probably go out of existence. Again, we’re focused on the companies that have stellar backing, have big market opportunities and have differentiated science and a great model, and those are the ones that are likely, as proven quite a bit in our asset base, to be acquired by big pharma or grow up to be independent profitable companies. So I mean, we are very realistic that the market is tough and is going to get tougher for this industry and all industries by and large, but we’ve been very deliberate and very focused in how we are dealing with it.

Can you talk about the two South San Francisco developments since those are your two closest to completion and just prospects that access potentially taking the rest of their ability and trafficking in the other space?

Okay Tony, with respect to those two properties, let me maybe take the two buildings that sit on the water; they actually sit on a great water use site, two buildings comprising about 162,000 square feet. We obviously have one lease signed for about 16%. We are in discussions with a number of companies for more than 50% of the remaining, but we do know that South San Francisco has been a soft, slow market. The good thing is that property sits virtually adjacent to the campus of Genentech and that’s a good thing. We don’t have any news to report that updates from the second quarter, as I indicated. So we’ll just have to see how things shake out, but again, this is a AAA location. We have a pretty favorable basis in the land and the construction, and I think that we will be successful there. With respect to the other South San Francisco building for 130,000 square feet, the current tenant as you know has a lease and occupies 55%. They have an option which they’ve extended for the balance through the end of ’09, and we’re cautiously optimistic that with some favorable partnering opportunities that hopefully they’ll end up taking the rest of the building, but again, we don’t know that today.

Okay. Which two build-to-suits did you decide to push off that you mentioned earlier?

Right. Those were opportunities in the Mission Bay area. I can’t identify the tenants for obvious reasons, but they are credit institutional tenants that need to be at Mission Bay. One actually needs to be there for a variety of obvious reasons to them and to the nature of the institution. The other has a major collaboration with UCSF and has a strong desire to be there. So they were flexible in their need but would have liked us to pull the trigger, and we decided that we would defer and revisit this; come next year and we’ll see what the markets are like, but again, as Dean said and I’ve said, we are assuming this is a prolonged downturn. So we are going to be very cautious about making any new commitments.

Okay and even with potentially having leases from strong institutions in hand for build-to-suits, would there be any capital out there available for construction financing with those leases in hand? It sounds like that may not even be there if you are pushing those off.

Yes, I mean our view of that, and we’re giving you anecdotal evidence from our discussions with a variety of construction lenders; very little, if anything, is moving through the current pipeline. We were with one lender; obviously, I won’t tell you the name. This is a top-tier bank. A name you would instantly recognize, and they indicated that they had three or four major construction projects, all fully leased to credit tenants, and none of those were currently being funded. Again, part of the problem is the credit seizure situation. We don’t know when that's going to loosen up.

Okay and then Dean, what percent of your NOI is unencumbered?

Good question Tony, I don’t have that with me, but it’s definitely north of 50%.

Dean, I think you said you’re looking at ’09 same-store or rent growth of 5% to 10%. I assume that’s like leasing spreads. I’m just wondering what gives you that kind of conviction, and it sounds like you need to focus a little bit more on internal growth going forward than we do on development, so I just wanted to kind of get a feel for how you get comfortable with those numbers.

Before Dean answers Jamie, let me just say one thing. I think that given the rental rate that we currently have on those rolls, what we view in each of the markets at a pretty low level, it’s not that we think rents are going to be going up in a recessionary time, but because of our very low current existing rents, we have a feeling that even if rents moderate or even if they start to come down a bit, we still got some pretty good cushion, but I’ll let Dean answer the question.

Yes, Joel hit it right on the head, and the additional color I want to add is that the analysis we built to give that guidance is really based on a lease-by-lease analysis, very carefully looking at expiring rents and giving our best estimate for renewal rates where we stand today.

And then do you guys provide the economics behind the Pfizer and the Gilead leases?

We do not do that.

And then finally, can you talk a little bit more about New York City and the progress you’re making and then potential for a JV partner?

When you say progress, well that will describe the leasing update in pretty great depth. We would love to try at some point to get a construction loan on that project, but as I just described, given the current environment with construction lenders, virtually no construction financing is going forward that’s new. There may be some existing commitments that are being met, but even those we understand are few and far between. As soon as the credit markets either loosen or un-seize in a more dramatic fashion, we have had a number of discussions we had with a variety of lenders, one in particular who’s indicated a very substantial interest in putting together a syndicate and putting together a facility for this project, but I mean, as realists, my view is that that’s not going to happen until the banks have a comfort level until inter-bank lending and overall liquidity has come back to the market to a point where the banks are not worried. I mean, I kind of have said that it used to be banks used to monitor borrowers for default; now borrowers monitor banks for default. It’s an odd juxtaposition here, and until that remedies itself, I think we’ll not be able to get a construction loan, but once we do, then I think we will be looking at something in the 60% to 65% loan-to-value. My guess is that pricing is probably 300 above what may be ultimately a more stable LIBOR environment, and then hopefully we’ll be able to parlay that into a joint venture that we have had lots of discussions with to partners that we have term sheets with, and even those entities obviously at this point, nobody’s willing to put up much money in today’s market.

A couple of questions here; all my capital or the balance sheet questions have been answered, but Dean just on the $175 million 2009 maturity, what’s the timing of that?

Timing of the maturity is right about mid-year.

Okay. So that’s mid-year. In discussing and talking with the banks on the refinancing, what kind of an assumed cap rate are they looking at, and I guess what I’m trying to get at, are there assumptions way off from a year or two ago?

Well, we are actually looking at a refinancing as opposed to a new financing. So I think our expectation is to keep the principal amount in the refinancing on par with the current outstanding balance of $175 million.

Okay and they’re not giving you too much push back on that?

Fortunately, in this particular case, no. I think in other financing discussions we’ve had, a lot is being driven by cap rate and value assumptions but in this particular case, we are working with some key relationship banks and the existing lenders, and our best guess right now is that we are looking at a refinancing of the entire amount.

On other properties, are cap rate assumptions from the lenders, specifically with the type of asset in your portfolio, changing significantly? I mean I would have to think a lot has to do with the quality of the asset, the location, the tenant, etc.

Yes, I think it’s really difficult. I think any company or borrower would probably tell you this. It’s difficult to answer that question today, because the market changes so quickly. From pre-Lehman to post-Lehman, the environment’s changed, and although you may get color from a lender on what they may think they can do, until they close the loan with you, you’re not really sure where you’re going to end up. I think the best indicator for firms have been the few deals that you have read about post-Lehman, which actually be interestingly enough somewhat positive, because you have seen sub 7% interest rates and you’ve seen loan-to-values on par, meaning generally on par in the 60% to 65% range. So those deals are obviously in the hoppers over the last few months, but they got to closing at fairly reasonable terms.

Yes, Philip. A member of our group just was commenting that, and I think it’s good to keep in mind, given our annual escalations and overall rent growth, those oftentimes can at least offset or even more than make up sometimes higher assumed cap rates.

Exactly. That’s balancing a lot of different things and certainly expectations of the lenders as well, and also a lot of the lenders you may have been dealing with a couple of years ago may not even be there in terms of the actual personnel, let alone the banks, but in terms of the $175 million as well, did you say Dean earlier that the loan-to-value right now is in the 40% to 50% range? Did I hear that?

No, it’s a little bit higher than that; it’s actually meaningfully higher than that, but on average, all of our encumbered assets on a conservative valuation today is down in the low 40% range.

Okay, and the loan-to-value on this is where? 60%, 65%?

Yes; right in that range; right about in the 60% range.

Okay. Again, just to make sure I understand, on the CapEx, the capital expenditures over the next 12 months, you’ve obviously adjusted those downward. It sounds like again it’s more efficiency-related than anything, but is it in the $50 million to $60 million a quarter range; that’s kind of where we are at now?

Yes, correct on average for ‘09, that’s correct.

Okay. Then in terms of your niche, Joel, certainly times are difficult, a lot of uncertainty, etc, but given your niche, how does Alexandria exploit this or what opportunities could you see within your niche in this environment?

Well, I think it’s hard to imagine the exploitation in this environment. I think what we will look to do is to create a future pipeline. We really have a world-class, as Dean described, development pipeline and we have quite a bit in the redevelopment process. That’s where dramatic future growth can come from, as well as overseas opportunities that we’re working through the entitlements and kind of the nurturing. So it seems to me as we get beyond this time, which none of us know whether this is four quarters, eight quarters, or 12 quarters; who knows? We think that by continuing to add value on this very low basis pipeline on the development side and in tremendous locations, and with the nurturing of the relationships we have focused really more at the top tier institutionally and big pharma and high market cap other Life Science companies, we think that that when we come out of this, we will be well positioned to continue to post the kind of growth that we’ve had over the last 10.5 years. That’s kind of how we are viewing it. For the moment, I think the relationships, you can tell. I mean, it’s not easy to do over 600,000 square feet in a quarter of leases. That’s really attributable to again the greatest team, great locations, the state-of-the-art knowledge of what we are doing and how we are doing it, and I think that’s where the differentiation is on those relationships, the knowledge and expertise we bring, and the relationships we have with the tenants, understanding their situation. I think as things will sort out among a number of different relationships, I think those will be the key. I mean, again, Pfizer moving to Mission Bay. They could have stayed in South San Francisco. They came to Mission Bay because of a phenomenal relationship with UCSF, but we also had a very, very excellent relationship with Pfizer. We had brought them to Cambridge back in 1998 and ultimately sold that building to them. So we have long-term relationships. So I think it’s those factors that I talk about that I think make the difference now.

And to that point, the pullback that Alexandria is doing from a capital expenditure standpoint, is more Alexandria driven rather than the tenants saying, 'look we have to slow this down.'

Absolutely; as I think I just described to Tony, we could be teaming up two new construction starts at Mission Bay for something in the range of 200,000 to 300,000 square feet and have no leasing challenges other than the negotiation of the lease, but we are simply not doing that. We don’t think it’s prudent, and clearly the capital markets are such that that would not be a smart move. When we are ready, we will be able to seize that opportunity, and maybe that’s the exploitation factor you asked about.

The last question just Dean, in terms of potential net sale proceeds over the next 12 months, and I’m just looking at kind of from a sources and uses standpoint, what’s something good to assume? I know that might be somewhat difficult, but Joel in his remarks mentioned that you are seeing some interest from users to purchase the stabilized buildings, etc. What would be a good assumption?

Philip, it’s such a difficult question that you asked. We are focused on that opportunity. I can remind you that I think historically over the last 12 months, we’ve generated asset sales very opportunistically, and we’ve raised well north of $100 million, getting close to $115 million over the last four quarters through very opportunistic sales. Our hopes are to find those opportunities to ease some of the capital needs over the coming two years or so, and I think the best we can tell you at the moment is stay tuned, and we’ll give you some color as we can call by call.

Yes. I mean, I’ll give you an example. In our mid-Atlantic region, we were approached by a top-tier foreign pharma firm to buy the space that they leased through an acquisition of a biotech company. They came to us and back about six months ago, we said 'well, we’re not interested, but we will come back to you and we’ll talk about it.' We’ve now gone back to them and said, we might be interested, but let’s talk about value. So that’s how those discussions tend to go. So as Dean said, so stay tuned. I’m not sure we can give you a target yet.

What sort of resolution should we anticipate, or are you underwriting on the cell Genesis? I mean, should you expect a lease termination fee or some sort of cash payment there, Joel?

Yes, unfortunately I can't comment, but we will keep you abreast as soon as we can for obvious reasons.

In your opinion, do you feel like there’s viable technology there that someone else can assume at lease to sell the lease and the space?

Well, I guess we have a pretty detailed view of that company, as you could imagine. They did partner with Takeda earlier in the year and received a $50 million upfront payment in their milestone for the GVAX product, and they have other things going on. I assume the management of that company is not inexperienced. It’s a very experienced management team; we know them very well for more than 15 years, and my sense is that there’s value beyond what would be their rather small market cap today.

And keep in mind they have significant cash on hand today.

So among the strategic alternatives that they would be looking at potentially would be not only a potentially sale merger or something like that, but they could use that cash to acquire licensed end products or opportunities or even M&A with another company. So I'm not the management of that company, so I don’t want to predict, but I think there are clearly opportunities. This is not a company that has nothing going, simply as cash and is about to go out of business. That’s really not the case here.

Okay. How much space in your portfolio right now is subleased, and do you anticipate that increasing?

I’m not sure. We would have to check and come back to you. I’m not sure I could give you a number, but I don’t think it is very large.

Looking back too, I haven’t sensed any real significant change in the overall subleasing environment.

Do you still anticipate asset sales in the $200 million range?

I think like we said earlier, it’s difficult to peg a number, and you know us; we don’t put unreasonable acquisition or disposition targets into our guidance.

But the environment hasn’t caused you to change your view of how much of your portfolio you would like to sell.

I don’t think it’s up for sale, and we don’t have a target of $200 million; I don’t think we’ve ever used that target, but as Dean said over the last couple of quarters, I think since September of ’07, through 09/30/08, we’ve made asset sales totaling $114 million. Part of that was our exit from the East Bay of San Francisco, which we thought was strategically wise, and it turned out to be a great move. We have a number of assets that for a variety of reasons might be attractive to other folks, particularly users, and so I think we’ll just have to see what develops there. We have no need to create a fire sale for any assets. We don’t plan to do that. We have pretty low bases in most of our assets, and we’ll see.

I was referring to $200 million was the number you guys gave which also included our new mortgages and some refinancing. Dean, any line covenants that you think may be closer to just watching for yourselves as well as the rest of the street?

No, not at all. We’ve got fairly traditional covenants under our credit facility, including fixed storages and leverage and a variety of other financial covenants, but in running our sensitivity and our periodic review of the covenants, I don’t see any near-term issues.

And I think you said in your prepared remarks Dean, that a portion of your un-hedged line was switched to prime?

Yes, at our election there was a unique trend between prime plus the spread under our facility and LIBOR plus the spread where prime-based rates were inside of LIBOR-based rates, resulting in almost a little bit of a hedge against LIBOR volatility recently, and it has more to do with the illiquidity in the marketplace. What has tended to be a little more stability has been the prime-based rates. So we have the flexibility of picking and choosing between the two, and we have done so.

And is that $739 million on your supplemental floating rate debt un-hedged? Is that all line of credit and how much have you switched to prime?

It is all substantially all LIBOR based or prime based alternatives that we can choose between, and I believe today almost all of it is probably based at a prime base rate.

So most of the $739 million has been switched to prime at this point?

Yes, the majority of it because the prime-based rate is inside of LIBOR. LIBOR dropped about 25 or so basis points this morning. So there’s an opportunity to switch back to LIBOR, but it all depends on once you lock in the LIBOR, you are locked in for 30 days. So if we think that LIBOR will remain at that point for the next 30 days or go up, we could switch back to LIBOR. My current sense is there’s not enough of a dip in LIBOR to convert off of that at the moment, and if LIBOR drops further, we will be able to take advantage of it.

Your development scheduled notes that you are working with New York City to potentially attract an anchor tenant to the aero project. Is the city’s primarily involvement in the process the offering of tax breaks or other incentives?

Actually it is a very wide range of situations from political influence and contacts at the very highest levels of target companies and in this particular case, some very senior officials in New York as well as Mayor Bloomberg have been involved in helping us to try to recruit this particular tenant. There are a range of incentives based on the location of the project and also there is some TI dollars out there that can be accessed through kind of a low rate loan opportunity. So there’s a variety of things that sit out there.

And the incentives are as of REIT or they have to be granted further by the city?

Some of both.

Okay and what percentage of the asset would be tenant lease?

That I don’t know yet. It could be anywhere from 50,000 to 125,000 feet, not sure.

Okay, operator we’ll open it up for Q-and-A, please.

(Operator Instructions) Your first question comes from Michael Bilerman - Citi. That does conclude today’s presentation. Thank you for attending and have a nice day.