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8-K

Alexandria Real Estate Equities, Inc. (ARE)

8-K 2014-11-03 For: 2014-11-03
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 3, 2014

ALEXANDRIA REAL ESTATE EQUITIES, INC.

(Exact name of registrant as specified in its charter)

Maryland 1-12993 95-4502084
(State or other jurisdiction of<br><br>incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
385 East Colorado Boulevard, Suite 299
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Pasadena, California 91101
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (626) 578-0777

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o               Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o               Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o               Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o               Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 2.02.  Results of Operations and Financial Condition.

On November 3, 2014, Alexandria Real Estate Equities, Inc. (the “Company”) issued a press release entitled “Alexandria Real Estate Equities, Inc. Reports Third Quarter Ended September 30, 2014 Financial and Operating Results” which sets forth the Company’s results of operations and financial condition for the third quarter ended September 30, 2014.  The press release referred to certain supplemental information that is available on the Company’s website at www.are.com.  A copy of the press release and supplemental information are attached hereto as Exhibit 99.1.

The information contained in this Item 2.02, including the exhibit referenced herein, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  Such information shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

99.1                Alexandria Real Estate Equities, Inc.’s Earnings Press Release and Supplemental Information for the Third Quarter Ended September 30, 2014.

Forward-looking Statements

This current report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements include words such as “forecast,” “guidance,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” or “will,” or the negative of these words or similar words.  Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in each such statement.  A number of important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking statements, including, but not limited to, the factors described in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.  The Company does not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any other document, whether as a result of new information, future events, or otherwise.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
November 3, 2014 By: /s/ Joel S. Marcus
Joel S. Marcus
Chairman/Chief Executive Officer
(Principal Executive Officer)
By: /s/ Dean A. Shigenaga
Dean A. Shigenaga
Chief Financial Officer
(Principal Financial Officer)

EXHIBIT INDEX

Exhibit<br><br>Number Exhibit Title
99.1 Alexandria Real Estate Equities, Inc.’s Earnings Press Release and Supplemental Information for the Third Quarter Ended September 30, 2014. 
		3Q14 - EX 99.1

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Table of Contents

Page
EARNINGS PRESS RELEASE
Third Quarter Ended September 30, 2014, Financial and Operating Results 1
Guidance 3
Earnings Call Information and About the Company 4
Consolidated Statements of Income 5
Consolidated Balance Sheets 6
Funds From Operations and Adjusted Funds From Operations 7
SUPPLEMENTAL INFORMATION
Company Profile 10
Investor Information 11
Financial and Asset Base Highlights 12
Operating Information
Operating Metrics 14
Same Property Performance 15
Leasing Activity 17
Lease Expirations 18
Top 20 Client Tenants 19
Client Tenant Mix 20
Summary of Properties and Occupancy 21
Page
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SUPPLEMENTAL INFORMATION (continued)
Operating Information (continued)
Property Listing 22
Value-Creation Projects, Acquisitions, and Dispositions
Investments in Real Estate 27
Overview of Value-Creation Pipeline 29
Deliveries of Value-Creation Projects in North America 30
Current Value-Creation Projects in North America 31
Near-Term and Future Value-Creation Projects in North America 35
Unconsolidated Joint Ventures 41
Actual and Projected Construction Spending 42
Acquisitions 43
Dispositions 44
Real Estate Investments in Asia 45
Balance Sheet
Key Credit Metrics 46
Key Earnings and Capital Planning Considerations 47
Summary of Debt 48
Definitions and Reconciliations 51
This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Please see page 4 of the earnings press release for further information.
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This document is not an offer to sell or solicitation to buy securities of Alexandria Real Estate Equities, Inc. Any offers to sell or solicitations to buy our securities shall be made only by means of a prospectus approved for that purpose. Unless otherwise indicated, the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.
ALEXANDRIA REAL ESTATE EQUITIES, INC<br><br>ALL RIGHTS RESERVED © 2014 i
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Alexandria Real Estate Equities, Inc.

Reports

Third Quarter Ended September 30, 2014

Financial and Operating Results

FFO Per Share – Diluted, as Adjusted, for 3Q14 up 14.2% over 3Q13

Strong Demand Drives Strength in Core Operations

and

Accelerating Growth through Value-Creation Projects

FFO Per Share – Diluted, as Adjusted of $1.21

EPS – Diluted of $0.39

Total Revenues of $185.6 Million

NOI of $128.2 Million

PASADENA, CA. – November 3, 2014 – Alexandria Real Estate Equities, Inc. (NYSE:ARE) today announced financial and operating results for the third quarter ended September 30, 2014.

“Our third quarter results highlight our disciplined approach to balance sheet management and capital allocation into our science and technology campuses in urban innovation clusters, combined with continued solid internal growth. We are pleased with the execution of our very successful $700 million bond offering at a weighted average interest rate of 3.50% and a maturity of 9.6 years. This bond offering strategically focused on laddering and extending debt maturities and provided growth capital for our significantly pre-leased value-creation development pipeline. The announcement of our Mission Bay acquisition of the 1455/1515 Third Street land parcels and our strategic joint venture with Uber Technologies, Inc. in September 2014 reinforces Alexandria’s strong emphasis on capital allocation in the core of one of the most desirable urban cluster submarkets. This iconic campus environment, ideally situated within the cross-section of science and technology in the highly collaborative, innovative, and urban Mission Bay ecosystem and adjacent to the planned Golden State Warriors’ new sports complex, provides our tenants a unique advantage for the recruitment and retention of world-class talent. Our high-quality asset base continued to deliver accelerating growth in rental rates, occupancy, and significant earnings growth through the completion of pre-leased value-creation projects,” said Joel S. Marcus, Chairman, Chief Executive Officer, and Founder of Alexandria Real Estate Equities, Inc.

Results

• Funds from operations (“FFO”) attributable to Alexandria Real Estate Equities, Inc.’s (“Alexandria’s”) common stockholders – diluted, as adjusted:
• $1.21 per share for 3Q14, up 14.2%, compared to $1.06 per share for 3Q13
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• $3.57 per share for YTD 3Q14, up 10.5%, compared to $3.23 per share for YTD 3Q13
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• $86.1 million for 3Q14, up $11.1 million, or 14.8%, compared to $75.0 million for 3Q13
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• $253.7 million for YTD 3Q14, up $37.0 million, or 17.1%, compared to
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$216.6 million for YTD 3Q13

• Net income attributable to Alexandria’s common stockholders – diluted:
• $27.6 million, or $0.39 per share, for 3Q14 compared to
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$24.6 million, or $0.35 per share, for 3Q13

• $88.3 million, or $1.24 per share, for YTD 3Q14 compared to

$72.5 million, or $1.08 per share, for YTD 3Q13

Core operating metrics

• Total revenues:
• $185.6 million for 3Q14, up $27.3 million, or 17.2%, compared to $158.3 million for 3Q13
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• $538.2 million for YTD 3Q14, up $75.9 million, or 16.4%, compared to
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$462.3 million for YTD 3Q13

• Net operating income (“NOI”):
• $128.2 million for 3Q14, up $17.6 million, or 15.9%, compared to $110.6 million for 3Q13
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• $375.9 million for YTD 3Q14, up $52.7 million, or 16.3%, compared to
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$323.2 million for YTD 3Q13

• Same property NOI growth:
• Up 5.0% and 5.9% (cash basis) for 3Q14, compared to 3Q13
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• Up 4.5% and 5.2% (cash basis) for YTD 3Q14, compared to YTD 3Q13
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• Leasing activity during 3Q14:
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• Executed leases for 871,416 rentable square feet (“RSF”)
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• 18.6% and 5.6% (cash basis) rental rate growth on 3Q14 lease renewals and re-leasing
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of space

• Leasing activity during YTD 3Q14:
• Executed leases for 2,187,173 RSF
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• 14.1% and 6.2% (cash basis) rental rate growth on YTD 3Q14 lease renewals and re-leasing of space
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• Occupancy for properties in North America, as of 3Q14:
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• 97.3% occupancy for operating properties, up 230 basis points (“bps”) from 3Q13
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• 96.3% occupancy for operating and redevelopment properties, up 180 bps from 3Q13
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• Operating margins solid at 70% for YTD 3Q14
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• 53% of total annualized base rent (“ABR”) from investment-grade client tenants
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 1
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

External growth: value-creation projects and acquisitions

Value-creation projects

• Development and redevelopment value-creation projects were 85% leased or under lease negotiations
• 3Q14 key deliveries of value-creation projects:
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• 154,100 RSF to the Dana-Farber Cancer Institute, Inc., at 360 Longwood Avenue in our Longwood Medical Area submarket
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• 107,250 RSF to Amgen Inc. at 269 East Grand Avenue in our South San Francisco submarket
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• 85,417 RSF to The Regents of the University of California and Medivation, Inc., at 499 Illinois Street in our Mission Bay submarket
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• 3Q14 key commencements of 100% pre-leased value-creation development projects:
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• 422,980 RSF at 1455/1515 Third Street, an unconsolidated joint venture (“JV”) project with Uber Technologies, Inc. (“Uber”) in our Mission Bay submarket; 100% pre-leased to Uber under a 15-year lease
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• 149,663 RSF at 5200 Illumina Way – Building 6 in our University Town Center submarket; 100% pre-leased to Illumina, Inc.
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• Non-income-producing assets (CIP and land) are expected to decrease from 17% as of 3Q14 to 13% of our gross real estate by 1Q15, driven by the completion and delivery of high-value, pre-leased development and redevelopment projects
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Acquisitions

• In September 2014, Alexandria and Uber formed a JV and acquired key land parcels at 1455/1515 Third Street in the Mission Bay submarket of San Francisco, for the ground-up development of two Class A buildings aggregating 422,980 RSF. Alexandria holds a 51% interest in the JV. Additionally, Alexandria executed a 15-year lease with Uber for 100% of the project. The purchase price of the land parcels, including 423 parking structure spaces, foundation piles, plans and permits, was $125.0 million, with 49% funded by Uber. The land parcels are fully entitled, including Proposition M office allocation approvals. The timing of revenue recognition for this lease may begin from 3Q16 to 1Q17, subject to completion of the design and budget of the buildings.

Balance sheet

• In August 2014, Standard & Poor’s Rating Services raised its credit outlook for the Company to Positive from Stable, reflecting continued and further expected improvement in key credit metrics and growth in cash flows. The improvement in the outlook is driven primarily by the near-term completion and delivery of significant rentable square feet of pre-leased value-creation development projects, the lengthening of the weighted average remaining maturity of outstanding debt, and the reduction in unhedged variable-rate debt. As of September 30, 2014, the weighted average remaining maturity of outstanding debt was 5.9 years and our unhedged variable-rate debt as a percentage of total debt was 11%. The Company's credit profile has steadily improved since receipt of its initial credit rating in July 2011.
• We expect our earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to grow significantly in 2015. This growth in EBITDA, plus cash flows from operating activities, after dividends, is expected to allow us to borrow additional debt in 2015 on a leverage neutral basis and allocate $500 million to $600 million of capital to fund value-creation development projects.
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• In July 2014, we completed an offering of $700 million unsecured senior notes payable, consisting of the following:
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• $400 million of 2.75% unsecured senior notes payable due in 2020
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• $300 million of 4.50% unsecured senior notes payable due in 2029
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• Weighted average interest rate of 3.50%
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• Average maturity of 9.6 years
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• Net proceeds of $694 million were used to reduce variable-rate debt, consisting of:
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• $569 million reduction of borrowings outstanding on our unsecured senior line of credit
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• $125 million partial repayment of our 2016 unsecured senior bank term loan (“2016 Unsecured Senior Bank Term Loan”); we recognized a loss on the early extinguishment of debt related to the write-off of unamortized loan fees totaling $0.5 million, or $0.01 per share.
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LEED statistics and other awards

• As of September 30, 2014, 30 LEED certified projects aggregating 4.6 million RSF were complete and 29 additional LEED projects aggregating 5.0 million square feet were

in process.

• In August 2014, our ground-up development of the West Tower at the Alexandria Center™ for Life Science in New York City, at 430 East 29th Street in our Manhattan submarket, achieved LEED Gold certification.
• In August 2014, our 225 Binney Street property at the Alexandria Center™ at Kendall Square, a recently certified LEED Gold development project, was awarded the 2014 Best Projects Award by the Engineering News-Record New England for the best office/retail/mixed-use development in the region.
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• In August 2014, our Alexandria Center™ for Life Science at Campus Pointe in San Diego, a LEED Platinum property, was awarded an Orchid Award for Landscape Architecture by the San Diego Architectural Foundation, for its renovation of a commercial building into a suburban infill project.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 2
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Guidance

The following updated guidance is based on our current view of existing market conditions and other assumptions for the year ended December 31, 2014.  There can be no assurance that actual amounts will be materially higher or lower than these expectations. See our discussion of “forward-looking statements” on the following page.

EPS and FFO Per Share Attributable to Alexandria’s Common Stockholders – Diluted 2014 Guidance
Earnings per share $1.65 – $1.67
Add back: depreciation and amortization 3.16
Other ^(2)^ (0.03)
FFO per share 4.78 – 4.80
Add back: loss on early extinguishment of debt 0.01
FFO per share, as adjusted $4.79 – $4.81 Key Assumptions (Dollars in thousands) Low High
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Occupancy percentage for operating properties in North America at December 31, 2014 96.9% 97.3%
Same property performance:
NOI increase 3.5% 5.0%
NOI increase (cash basis) 4.0% 6.0%
Lease renewals and re-leasing of space:
Rental rate increases 11.0% 14.0%
Rental rate increases (cash basis) 4.0% 6.0%
Three months ended December 31, 2014:
Straight-line rents $ 10,000 $ 11,500
General and administrative expenses $ 12,500 $ 13,500
Capitalization of interest ^(1)^ $ 10,500 $ 12,000
Interest expense ^(1)^ $ 22,000 $ 23,500
Key Credit Metrics As of December 31, 2014
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Net debt to Adjusted EBITDA – 4Q14 annualized ^(1)^ 7.1x
Fixed charge coverage ratio – 4Q14 annualized 3.3x
Unhedged variable-rate debt as a percentage of total debt ^(1)^ 14%
Non-income-producing assets as a percentage of gross real estate ^(1)^ 17% Sources and Uses of Capital<br><br>(Dollars in thousands) Completed as of 9/30/14 Projected for 2014
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Low High
Sources of debt capital:
Unsecured senior notes payable $ 700,000 $ 700,000 $ 700,000
Secured notes payable borrowings ^(3)^ 157,000 161,000 211,000
Secured notes payable repayments (208,000 ) (210,000 ) (210,000 )
Unsecured senior bank term loan repayment (125,000 ) (125,000 ) (125,000 )
Net activity on unsecured senior line of credit (53,000 ) (47,000 ) 18,000
Net sources of debt capital 471,000 479,000 594,000
Other sources of capital:
Land and other sales – completed/under negotiation ^(1)^ 33,000 ^(4)^ 110,000 130,000
Other real estate sales – next one to five quarters ^(5)^ — TBD TBD
Cash provided by operating activities after dividends 85,000 105,000 120,000
Total sources of capital $ 589,000 $ 694,000 $ 844,000
Uses of capital:
Construction $ 382,000 $ 530,000 $ 580,000
Mission Bay pre-leased development JV ^(6)^ 64,000 64,000 64,000
Acquisitions 143,000 100,000 200,000
Total uses of capital $ 589,000 $ 694,000 $ 844,000
(1) In order to maintain maximum strategic optionality and due to extraordinary strong build to suit leasing demand for the Binney Street land parcels and the likely corresponding reduction in lease-up risk, we have updated our strategy noted in 4Q13 to sell a minority interest in the Binney Street land parcels. Our updated guidance assumes we lease 50, 60, and 100 Binney Street in the near term and retain 100% of each project.
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(2) Includes $0.01 per share gain realized on the sales of land parcels in 2Q14 and 3Q14.
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(3) Includes two non-recourse secured notes payable aggregating $48.3 million assumed in connection with the acquisition of two operating assets in 1Q14, as well as borrowings under secured construction loans.
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(4) The amount completed of $33 million includes one asset sold for $3.4 million in October 2014. As of November 3, 2014, pending sales under negotiation aggregated $83.0 million. These sales are subject to, among other steps, completion of due diligence, environmental review including public commentary, and various board and regulatory approvals.
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(5) We expect to identify real estate sales, including land and non-core/“core-like” operating assets, over the next one to five quarters to generate proceeds for reinvestment into high-value Class A pre-leased development projects. Additionally, we will continue to execute our strategy to deliver solid growth in funds from operations per share, as adjusted, and net asset value in 2014 and 2015, including any impact of asset sales.
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(6) Represents our 51% unconsolidated JV share of the land parcels and parking spaces acquired at 1455/1515 Third Street in the Mission Bay submarket of the San Francisco Bay Area.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 3
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Earnings Call Information

We will host a conference call on Monday, November 3, 2014, at 3:00 p.m. Eastern Time (“ET”)/12:00 p.m. noon Pacific Time (“PT”) that is open to the general public to discuss our financial and operating results for the third quarter ended September 30, 2014. To participate in this conference call, dial (877) 874-1563 or (719) 325-4769 and confirmation code 1901197 shortly before 3:00 p.m. ET/12:00 p.m. noon PT. The audio webcast can be accessed at: www.are.com, in the “For Investors” section. A replay of the call will be available for a limited time from 6:00 p.m. ET/3:00 p.m. PT on Monday, November 3, 2014. The replay number is (888) 203-1112 or (719) 457-0820 and the confirmation code is 1901197.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the third quarter ended September 30, 2014, is available in the “For Investors” section of our website at www.are.com or by following this link: http://www.are.com/fs/2014q3.pdf.

For any questions, please contact Joel S. Marcus, Chairman, Chief Executive Officer & Founder, at (626) 578-9693.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is a fully integrated, self-administered, and self-managed REIT uniquely focused on Class A collaborative science and technology campuses in urban innovation clusters including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria is the largest and leading owner, operator, and developer in its niche with a total market capitalization of $9.1 billion as of September 30, 2014, and an asset base of 31.6 million RSF, including 18.5 million RSF of operating and current value-creation projects, as well as an additional 13.1 million RSF in future ground-up development projects.

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This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our 2014 earnings per share attributable to Alexandria’s common stockholders – diluted, 2014 FFO per share attributable to Alexandria’s common stockholders – diluted, NOI, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as “forecast,” “guidance,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” or “will,” or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on, or non-renewal of, leases by client tenants, general and local economic conditions, a favorable capital market environment, performance of our core operations in areas such as delivery of current and future development and redevelopment projects, leasing activity, lease renewals, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission (“SEC”). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this earnings press release, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 4

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended Nine Months Ended
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Revenues:
Rental $ 137,718 $ 134,992 $ 130,570 $ 125,693 $ 116,052 $ 403,280 $ 342,071
Tenant recoveries 45,572 40,944 41,682 39,970 38,691 128,198 110,125
Other income 2,325 466 3,934 3,160 3,572 6,725 10,132
Total revenues 185,615 176,402 176,186 168,823 158,315 538,203 462,328
Expenses:
Rental operations 57,423 52,353 52,507 49,892 47,684 162,283 139,147
General and administrative 12,609 13,836 13,224 12,751 11,666 39,669 35,769
Interest 20,555 17,433 19,123 17,783 16,171 57,111 50,169
Depreciation and amortization 58,388 57,314 50,421 48,084 48,866 166,123 141,039
Loss on early extinguishment of debt 525 — — — 1,432 525 1,992
Total expenses 149,500 140,936 135,275 128,510 125,819 425,711 368,116
Income from continuing operations 36,115 35,466 40,911 40,313 32,496 112,492 94,212
(Loss) income from discontinued operations (180 ) (147 ) (162 ) (143 ) (43 ) (489 ) 1,043
Gain on sales of land parcels 8 797 — 4,052 — 805 772
Net income 35,943 36,116 40,749 44,222 32,453 112,808 96,027
Dividends on preferred stock (6,471 ) (6,472 ) (6,471 ) (6,471 ) (6,472 ) (19,414 ) (19,414 )
Net income attributable to noncontrolling interests (1,340 ) (1,307 ) (1,195 ) (1,110 ) (960 ) (3,842 ) (2,922 )
Net income attributable to unvested restricted stock awards (506 ) (405 ) (374 ) (394 ) (442 ) (1,285 ) (1,187 )
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders $ 27,626 $ 27,932 $ 32,709 $ 36,247 $ 24,579 $ 88,267 $ 72,504
Earnings per share attributable to Alexandria’s common stockholders – basic and diluted:
Continuing operations $ 0.39 $ 0.39 $ 0.46 $ 0.51 $ 0.35 $ 1.25 $ 1.06
Discontinued operations — — — — — (0.01 ) 0.02
Earnings per share – basic and diluted $ 0.39 $ 0.39 $ 0.46 $ 0.51 $ 0.35 $ 1.24 $ 1.08
Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria’s common stockholders – basic and diluted 71,195 71,126 71,073 71,000 70,900 71,121 67,040
Dividends declared per share of common stock $ 0.72 $ 0.72 $ 0.70 $ 0.68 $ 0.68 $ 2.14 $ 1.93
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 5
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Consolidated Balance Sheets

(In thousands)

(Unaudited)

9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Assets
Investments in real estate $ 7,197,630 $ 7,030,117 $ 6,930,262 $ 6,776,914 $ 6,613,761
Cash and cash equivalents 67,023 61,701 74,970 57,696 53,839
Restricted cash 24,245 24,519 30,454 27,709 30,654
Tenant receivables 10,830 10,654 10,619 9,918 8,671
Deferred rent 225,506 214,793 202,087 190,425 182,909
Deferred leasing and financing costs 199,835 193,621 192,618 192,658 179,805
Investments 177,577 174,802 169,322 140,288 129,163
Other assets 117,668 105,442 145,707 134,156 159,567
Total assets $ 8,020,314 $ 7,815,649 $ 7,756,039 $ 7,529,764 $ 7,358,369
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable $ 636,825 $ 615,551 $ 597,511 $ 708,831 $ 708,653
Unsecured senior notes payable 1,747,290 1,048,310 1,048,270 1,048,230 1,048,190
Unsecured senior line of credit 142,000 571,000 506,000 204,000 14,000
Unsecured senior bank term loans 975,000 1,100,000 1,100,000 1,100,000 1,100,000
Accounts payable, accrued expenses, and tenant security deposits 504,535 434,528 443,893 435,342 452,139
Dividends payable 57,549 57,377 55,860 54,420 54,413
Total liabilities 4,063,199 3,826,766 3,751,534 3,550,823 3,377,395
Commitments and contingencies
Redeemable noncontrolling interests 14,348 14,381 14,413 14,444 14,475
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Series D cumulative convertible preferred stock 250,000 250,000 250,000 250,000 250,000
Series E cumulative redeemable preferred stock 130,000 130,000 130,000 130,000 130,000
Common stock 714 713 712 712 711
Additional paid-in capital 3,523,195 3,542,334 3,560,453 3,572,281 3,578,343
Accumulated other comprehensive loss (28,711 ) (16,245 ) (18,429 ) (36,204 ) (40,026 )
Alexandria’s stockholders’ equity 3,875,198 3,906,802 3,922,736 3,916,789 3,919,028
Noncontrolling interests 67,569 67,700 67,356 47,708 47,471
Total equity 3,942,767 3,974,502 3,990,092 3,964,497 3,966,499
Total liabilities, noncontrolling interests, and equity $ 8,020,314 $ 7,815,649 $ 7,756,039 $ 7,529,764 $ 7,358,369
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 6
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Funds From Operations and Adjusted Funds From Operations

(In thousands)

(Unaudited)

The following table presents a reconciliation of net income attributable to Alexandria’s common stockholders – basic, the most directly comparable financial measure presented in accordance with generally accepted accounting principles (“GAAP”), to FFO attributable to Alexandria’s common stockholders – basic and diluted, FFO attributable to Alexandria’s common stockholders – diluted, as adjusted, and AFFO attributable to Alexandria’s common stockholders – diluted.

Three Months Ended Nine Months Ended
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Net income attributable to Alexandria’s common stockholders $ 27,626 $ 27,932 $ 32,709 $ 36,247 $ 24,579 $ 88,267 $ 72,504
Depreciation and amortization 58,388 57,314 50,421 48,101 49,102 166,123 142,677
Loss on sale of real estate — — — — — — 121
Gain on sales of land parcels (8 ) (797 ) — (4,052 ) — (805 ) (772 )
Amount attributable to noncontrolling interests/<br>unvested restricted stock awards:
Net income 1,846 1,712 1,569 1,504 1,402 5,127 4,109
FFO (2,278 ) (1,648 ) (1,629 ) (1,582 ) (1,494 ) (5,570 ) (3,995 )
FFO attributable to Alexandria’s common stockholders – basic 85,574 84,513 83,070 80,218 73,589 253,142 214,644
Assumed conversion of unsecured senior convertible notes — — — — 5 — 15
FFO attributable to Alexandria’s common stockholders – diluted 85,574 84,513 83,070 80,218 73,594 253,142 214,659
Loss on early extinguishment of debt 525 — — — 1,432 525 1,992
Acquisition-related expenses — — — 1,446 — — —
Impairment of investments — — — 853 — — —
Allocation to unvested restricted stock awards (4 ) — — (12 ) (11 ) (4 ) (23 )
FFO attributable to Alexandria’s common stockholders – diluted, as adjusted 86,095 84,513 83,070 82,505 75,015 253,663 216,628
Non-revenue-enhancing capital expenditures:
Building improvements (2,405 ) (1,255 ) (1,780 ) (1,047 ) (1,481 ) (5,440 ) (2,414 )
Tenant improvements and leasing commissions (1,693 ) (3,934 ) (4,053 ) (8,291 ) (3,739 ) (9,680 ) (7,611 )
Straight-line rent revenue (10,892 ) (12,737 ) (11,882 ) (7,928 ) (5,570 ) (35,511 ) (20,007 )
Straight-line rent expense on ground leases 723 697 711 445 374 2,131 1,451
Capitalized income from development projects — — — 72 40 — 71
Amortization of acquired above and below market leases (757 ) (618 ) (816 ) (826 ) (830 ) (2,191 ) (2,490 )
Amortization of loan fees 2,786 2,743 2,561 2,636 2,487 8,090 7,300
Amortization of debt premiums/discounts (36 ) (69 ) 205 146 153 100 383
Stock compensation expense 3,068 3,076 3,228 4,011 3,729 9,372 11,541
Allocation to unvested restricted stock awards 71 90 94 94 28 261 105
AFFO attributable to Alexandria’s common stockholders – diluted $ 76,960 $ 72,506 $ 71,338 $ 71,817 $ 70,206 $ 220,795 $ 204,957
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 7
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Funds From Operations Per Share and Adjusted Funds From Operations Per Share

(Unaudited)

The following table presents a reconciliation of net income per share attributable to Alexandria’s common stockholders – basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO per share attributable to Alexandria’s common stockholders – diluted, FFO per share attributable to Alexandria’s common stockholders – diluted, as adjusted, and AFFO per share attributable to Alexandria’s common stockholders – diluted. For the computation of the weighted average shares used to compute the per share information, refer to the “Definitions and Other Information” section in our supplemental information.

Three Months Ended Nine Months Ended
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Net income per share attributable to Alexandria’s common stockholders – basic and diluted $ 0.39 $ 0.39 $ 0.46 $ 0.51 $ 0.35 $ 1.24 $ 1.08
Depreciation and amortization 0.81 0.81 0.71 0.68 0.69 2.34 2.13
Gain on sale of land parcel — (0.01 ) — (0.06 ) — (0.01 ) (0.01 )
Amount attributable to noncontrolling interests/<br>unvested restricted stock awards — — — — — (0.01 ) —
FFO per share attributable to Alexandria’s common stockholders – basic and diluted 1.20 1.19 1.17 1.13 1.04 3.56 3.20
Loss on early extinguishment of debt 0.01 — — — 0.02 0.01 0.03
Acquisition-related expenses — — — 0.02 — — —
Impairment of investments — — — 0.01 — — —
FFO per share attributable to Alexandria’s common stockholders – diluted, as adjusted 1.21 1.19 1.17 1.16 1.06 3.57 3.23
Non-revenue-enhancing capital expenditures:
Building improvements (0.03 ) (0.02 ) (0.03 ) (0.01 ) (0.02 ) (0.08 ) (0.04 )
Tenant improvements and leasing commissions (0.02 ) (0.06 ) (0.06 ) (0.12 ) (0.05 ) (0.14 ) (0.11 )
Straight-line rent revenue (0.15 ) (0.18 ) (0.17 ) (0.11 ) (0.08 ) (0.50 ) (0.30 )
Straight-line rent expense on ground leases 0.01 0.01 0.01 0.01 0.01 0.03 0.02
Amortization of acquired above and below market leases (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.03 ) (0.04 )
Amortization of loan fees 0.03 0.04 0.04 0.03 0.03 0.11 0.12
Stock compensation expense 0.04 0.05 0.05 0.06 0.05 0.13 0.17
Other — — — — — 0.01 0.01
AFFO per share attributable to Alexandria’s common stockholders – diluted $ 1.08 $ 1.02 $ 1.00 $ 1.01 $ 0.99 $ 3.10 $ 3.06
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 8
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SUPPLEMENTAL

INFORMATION

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Company Profile

Alexandria Real Estate Equities, Inc. (NYSE:ARE), is the largest and leading REIT uniquely focused on collaborative science and technology campuses in urban innovation clusters, with a total market capitalization of $9.1 billion as of September 30, 2014, and an asset base of 31.6 million RSF, including 18.5 million RSF of operating and current value-creation projects, as well as an additional 13.1 million RSF in future ground-up development projects. Alexandria pioneered this niche in 1994 and has since established a dominant market presence in AAA locations including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria is known for its high-quality and diverse client tenant base, with approximately 53% of total ABR resulting from investment-grade client tenants (a REIT industry-leading percentage). Alexandria has a longstanding and proven track record of developing Class A assets clustered in urban science and technology campuses that provide its client tenants with highly collaborative, 24/7 live/work/play ecosystems, as well as the critical ability to successfully recruit and retain best-in-class talent and enhance productivity. We believe these advantages result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.

Unique niche strategy

Alexandria’s primary business objective is to maximize stockholder value by providing its stockholders with the greatest possible total return and long-term asset value

based on a multifaceted platform of internal and external growth. The key elements of our strategy include:

• A consistent focus on Class A collaborative science and technology campuses in urban innovation clusters offering highly dynamic 24/7 live/work/play ecosystems with creative amenities that enhance productivity and foster innovation;
• A unique and proven cluster model concentrating on best-in-class locations, Class A assets, high-quality client tenants, highly skilled scientific and entrepreneurial management talent, and significant and strategic investment risk capital;
--- ---
• First-in-class facilities that complement the cutting-edge scientific and managerial talent, smart capital, and world-renowned academic and medical institutions in our clusters, providing our client tenants with dynamic ecosystems to accelerate discovery and commercialization;
--- ---
• Utilizing our long-term relationships with real estate professionals, top-tier investors, research institutions, and world-class global network in order to develop, acquire, and lease real estate focused on innovative science and technology companies;
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• Drawing upon our broad and meaningful science and technology industry relationships to attract new and leading client tenants; and
--- ---
• Solid and flexible capital structure to enable stable growth.
--- ---

Client tenant base

The impressive quality, diversity, breadth, and depth of our significant relationships with our client tenants provide Alexandria with solid and stable cash flows. Alexandria’s strong underwriting skills and long-term industry relationships positively distinguish Alexandria from all other publicly traded REITs and real estate companies. As of September 30, 2014, our client tenant base included the following:

• Investment-grade client tenants represent 53% of total ABR
• Our ABR consisted of the following client tenant mix:
--- ---
• 22.5% from life science product, service, and device companies
--- ---
• 22.4% from multinational pharmaceutical companies
--- ---
• 21.5% from institutions (academic/medical, non-profit, and U.S. government)
--- ---
• 20.1% from public biotechnology companies
--- ---
• 9.9% from private biotechnology companies
--- ---
• 3.6% from traditional office, tech office, and digital health companies
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Executive/senior management

Alexandria’s executive and senior management team has unique experience and expertise in creating collaborative science and technology campuses in urban innovation clusters. From the development of high-quality, sustainable real estate, to the ongoing cultivation of collaborative ecosystems with unique amenities and events, the Alexandria team has a first-in-class reputation of excellence in its niche. Alexandria’s senior management team averages over 25 years of real estate experience, including over 12 years with Alexandria. Our sophisticated management team also includes regional market directors with leading reputations and longstanding relationships within the science and technology communities in their respective urban innovation clusters. We believe that our unparalleled expertise, experience, reputation, and key relationships with the science and technology industries provide Alexandria significant competitive advantages in attracting new business opportunities.

Executive management

Joel S. Marcus Chairman, Chief Executive Officer & Founder
Dean A. Shigenaga Chief Financial Officer, EVP & Treasurer
Peter M. Moglia Chief Investment Officer
Stephen A. Richardson Chief Operating Officer & Regional Market Director – San Francisco Bay Area
Jennifer J. Banks General Counsel, EVP & Corporate Secretary
Thomas J. Andrews EVP – Regional Market Director – Greater Boston
Daniel J. Ryan EVP – Regional Market Director – San Diego & Strategic Operations
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 10
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Investor Information

Corporate Headquarters Trading Symbols Information Requests
385 East Colorado Boulevard, Suite 299 New York Stock Exchange Phone: (626) 396-4828
Pasadena, California 91101 Common stock: ARE E-mail: corporateinformation@are.com
Series E preferred stock: ARE–E Web: www.are.com
Common stock data (at the end of the quarter unless otherwise noted)
--- --- --- --- --- --- --- --- --- --- ---
3Q14 2Q14 1Q14 4Q13 3Q13
Closing stock price $ 73.75 $ 77.64 $ 72.56 $ 63.62 $ 63.85
Dividend per share – quarter/annualized $ 0.72/2.88 $ 0.72/2.88 $ 0.70/2.80 $ 0.68/2.72 $ 0.68/2.72
Dividend payout ratio for the quarter 60% 61% 60% 59% 65%
Dividend yield – annualized 3.9% 3.7% 3.9% 4.3% 4.3%
Common shares outstanding (in thousands) 71,372 71,318 71,246 71,172 71,081
Market value of outstanding common shares (in thousands) $ 5,263,672 $ 5,537,136 $ 5,169,623 $ 4,527,975 $ 4,538,517
Total market capitalization (in thousands) $ 9,147,179 $ 9,253,401 $ 8,799,376 $ 7,949,276 $ 7,780,208
Equity research coverage
--- Alexandria is currently covered by the following research analysts.  This list may not be complete and is subject to change as firms initiate or discontinue coverage of our company.  Please note that any opinions, estimates, or forecasts regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, or forecasts of Alexandria or its management.  Alexandria does not by its reference or distribution of the information below imply its endorsement of or concurrence with any opinions, estimates, or forecasts of these analysts.  Interested persons may obtain copies of analysts’ reports on their own as we do not distribute these reports.  Several of these firms may from time-to-time own our stock and/or hold other long or short positions in our stock, and may provide compensated services to us.
--- Bank of America Merrill Lynch Cowen and Company, LLC JMP Securities – JMP Group, Inc. Robert W. Baird & Company
--- --- --- ---
Jamie Feldman / Jeffrey Spector James Sullivan / Tom Catherwood Peter Martin / Aaron Hecht David Rodgers / Mathew Spencer
(646) 855-5808 / (646) 855-1363 (646) 562-1380 / (646) 562-1382 (415) 835-8904 / (415) 835-3963 (216) 737-7341 / (414) 298-5053
Barclays Capital Inc. Evercore Partners J.P. Morgan Securities LLC Standard & Poor’s
Ross Smotrich Sheila McGrath / Nathan Crossett Anthony Paolone Cathy Seifert
(212) 526-2306 (212) 497-0882 / (212) 497-0870 (212) 622-6682 (212) 438-9545
Citigroup Global Markets Inc. Green Street Advisors, Inc. RBC Capital Markets UBS Financial Services Inc.
Michael Bilerman / Emmanuel Korchman Michael Knott / Kevin Tyler Michael Carroll / Rich Moore Ross Nussbaum / Nick Yulico
(212) 816-1383 / (212) 816-1382 (949) 640-8780 / (949) 640-8780 (440) 715-2649 / (440) 715-2646 (212) 713-2484 / (212) 713-3402
Rating agencies
--- Moody’s Investors Service Rating Standard & Poor’s Rating
--- --- --- ---
Philip Kibel / Merrie Frankel Baa2 George Skoufis / Jaime Gitler BBB-
(212) 553-4569 / (212) 553-3652 Stable Outlook (212) 438-2608 / (212) 438-5049 Positive Outlook
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 11
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Financial and Asset Base Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended (unless stated otherwise)
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Operating data
Total revenues $ 185,615 $ 176,402 $ 176,186 $ 168,823 $ 158,315
Operating margins 69% 70% 70% 70% 70%
Adjusted EBITDA – quarter annualized $ 473,884 $ 452,568 $ 454,084 $ 449,456 $ 411,548
Adjusted EBITDA – trailing 12 months $ 457,498 $ 441,914 $ 428,699 $ 414,119 $ 403,974
Adjusted EBITDA margins – quarter annualized 64% 64% 65% 67% 65%
General and administrative expense as a percentage of total assets – trailing 12 months 0.7% 0.7% 0.6% 0.6% 0.7%
General and administrative expense as a percentage of total revenues – trailing 12 months 7.4% 7.6% 7.6% 7.7% 7.9%
Capitalized interest $ 12,125 $ 11,302 $ 12,013 $ 14,116 $ 16,788
Weighted average interest rate for capitalization of interest during period 3.73% 3.41% 3.88% 4.09% 4.33%
Net income, FFO, and AFFO
Net income attributable to Alexandria’s common stockholders $ 27,626 $ 27,932 $ 32,709 $ 36,247 $ 24,579
FFO attributable to Alexandria’s common stockholders – diluted $ 85,574 $ 84,513 $ 83,070 $ 80,218 $ 73,594
FFO attributable to Alexandria’s common stockholders – diluted, as adjusted $ 86,095 $ 84,513 $ 83,070 $ 82,505 $ 75,015
AFFO attributable to Alexandria’s common stockholders – diluted $ 76,960 $ 72,506 $ 71,338 $ 71,817 $ 70,206
Per share data
Earnings per share attributable to Alexandria’s common stockholders – basic and diluted $ 0.39 $ 0.39 $ 0.46 $ 0.51 $ 0.35
FFO per share attributable to Alexandria’s common stockholders – diluted $ 1.20 $ 1.19 $ 1.17 $ 1.13 $ 1.04
FFO per share attributable to Alexandria’s common stockholders – diluted, as adjusted $ 1.21 $ 1.19 $ 1.17 $ 1.16 $ 1.06
AFFO per share attributable to Alexandria’s common stockholders – diluted $ 1.08 $ 1.02 $ 1.00 $ 1.01 $ 0.99
Leasing activity and same property performance
Leasing activity – rentable square feet 871,416 752,364 563,394 1,344,687 829,533
Leasing activity – change in average new rental rates over expiring rates:
– Rental rate increases 18.6% 9.9% 18.2% 18.2% 16.5%
– Rental rate increases (cash basis) 5.6% 3.0% 10.4% 2.6% 4.1%
Same property – performance over comparable quarter from prior year:
– Same property NOI 5.0% 5.3% 3.8% 1.4% 1.9%
– Same property NOI (cash basis) 5.9% 5.7% 4.3% 4.6% 4.7%
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 12
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Financial and Asset Base Highlights (continued)

(Dollars in thousands, except per leased RSF amounts)

(Unaudited)

Three Months Ended (unless stated otherwise)
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Asset base statistics – at end of period
Number of properties 194 191 189 184 180
Rentable square feet (operating and current value-creation projects) 18,458,379 17,881,108 17,715,931 17,461,030 17,260,189
Total square footage (including near-term and future developable square feet) 31,617,818 31,378,329 31,239,652 30,934,751 30,883,069
ABR per occupied RSF $ 37.23 $ 36.76 $ 36.18 $ 35.90 $ 35.20
Occupancy of operating properties – North America 97.3% 96.9% 96.6% 95.9% 95.0%
Occupancy of operating and redevelopment properties – North America 96.3% 95.6% 95.1% 95.5% 94.5%
Occupancy of operating properties 94.9% 95.3% 94.9% 94.4% 93.5%
Occupancy of operating and redevelopment properties 94.0% 94.0% 93.5% 93.8% 92.8%
Selected balance sheet information – at end of period
Gross investments in real estate $ 8,280,799 $ 8,069,927 $ 7,923,080 $ 7,729,020 $ 7,529,255
Total assets $ 8,020,314 $ 7,815,649 $ 7,756,039 $ 7,529,764 $ 7,358,369
Gross assets $ 9,103,483 $ 8,855,459 $ 8,748,857 $ 8,481,870 $ 8,273,863
Total unsecured debt $ 2,864,290 $ 2,719,310 $ 2,654,270 $ 2,352,230 $ 2,162,190
Total debt $ 3,501,115 $ 3,334,861 $ 3,251,781 $ 3,061,061 $ 2,870,843
Net debt $ 3,409,847 $ 3,248,641 $ 3,146,357 $ 2,975,656 $ 2,786,350
Total liabilities $ 4,063,199 $ 3,826,766 $ 3,751,534 $ 3,550,823 $ 3,377,395
Common shares outstanding (in thousands) 71,372 71,318 71,246 71,172 71,081
Total market capitalization $ 9,147,179 $ 9,253,401 $ 8,799,376 $ 7,949,276 $ 7,780,208
Key credit metrics
Net debt to Adjusted EBITDA – quarter annualized 7.2x 7.2x 6.9x 6.6x 6.8x
Net debt to Adjusted EBITDA – trailing 12 months 7.5x 7.4x 7.3x 7.2x 6.9x
Fixed charge coverage ratio – quarter annualized 3.3x 3.5x 3.3x 3.2x 2.8x
Fixed charge coverage ratio – trailing 12 months 3.3x 3.2x 3.0x 2.9x 2.8x
Non-income-producing assets as a percentage of gross investments in real estate 17% 17% 17% 17% 20%
Unencumbered NOI as a percentage of total NOI 84% 84% 83% 69% 69%
Dividend payout ratio (common stock) 60% 61% 60% 59% 65%
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 13
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Operating Metrics

(Unaudited)

Occupancy of Operating Properties<br><br>North America Same Property NOI Growth NOI (In millions)
Drivers of Cash NOI Growth Rental Rate Growth:<br><br>Renewed/Re-leased Space Operating Margin
Percentage of leases<br><br>containing annual<br><br>rent escalations 95%
Percentage of<br><br>triple net leases 95%
Percentage of leases<br><br>providing for<br><br>the recapture of<br><br>capital expenditures 93%
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 14
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Same Property Performance

(Dollars in thousands)

(Unaudited)

Same Property Financial Data 3Q14 YTD 3Q14 Same Property Statistical Data 3Q14 YTD 3Q14
Percentage change over comparable period from prior year: Number of same properties 154 153
NOI 5.0% 4.5% Rentable square feet 13,677,346 13,442,099
NOI (cash basis) 5.9% 5.2% Occupancy – current period average 96.9% 96.6%
Operating margin 68% 69% Occupancy – same period prior year average 93.6% 93.3%
Three Months Ended September 30, Nine Months Ended September 30,
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2014 2013 Change % Change 2014 2013 Change % Change
Revenues:
Rental – same properties $ 117,411 $ 111,069 5.7 % $ 333,706 $ 320,053 4.3 %
Rental – non-same properties 20,307 4,983 15,324 307.5 69,574 22,018 47,556 216.0
Total rental 137,718 116,052 21,666 18.7 403,280 342,071 61,209 17.9
Tenant recoveries – same properties 40,890 37,401 3,489 9.3 112,278 103,987 8,291 8.0
Tenant recoveries – non-same properties 4,682 1,290 3,392 262.9 15,920 6,138 9,782 159.4
Total tenant recoveries 45,572 38,691 6,881 17.8 128,198 110,125 18,073 16.4
Other income – same properties 22 10 12 120.0 321 140 181 129.3
Other income – non-same properties 2,303 3,562 (1,259 ) (35.3 ) 6,404 9,992 (3,588 ) (35.9 )
Total other income 2,325 3,572 (1,247 ) (34.9 ) 6,725 10,132 (3,407 ) (33.6 )
Total revenues – same properties 158,323 148,480 9,843 6.6 446,305 424,180 22,125 5.2
Total revenues – non-same properties 27,292 9,835 17,457 177.5 91,898 38,148 53,750 140.9
Total revenues 185,615 158,315 27,300 17.2 538,203 462,328 75,875 16.4
Expenses:
Rental operations – same properties 51,229 46,465 4,764 10.3 139,759 130,937 8,822 6.7
Rental operations – non-same properties 6,194 1,219 4,975 408.1 22,524 8,210 14,314 174.3
Total rental operations 57,423 47,684 9,739 20.4 162,283 139,147 23,136 16.6
Net operating income:
NOI – same properties 107,094 102,015 5,079 5.0 306,546 293,243 13,303 4.5
NOI – non-same properties 21,098 8,616 12,482 144.9 69,374 29,938 39,436 131.7
Total NOI $ 128,192 $ 110,631 15.9 % $ 375,920 $ 323,181 16.3 %
NOI – same properties $ 107,094 $ 102,015 5.0 % $ 306,546 $ 293,243 4.5 %
Less: straight-line rent adjustments (4,974 ) (5,596 ) 622 (11.1 ) (15,467 ) (16,575 ) 1,108 (6.7 )
NOI (cash basis) – same properties $ 102,120 $ 96,419 5.9 % $ 291,079 $ 276,668 5.2 %

All values are in US Dollars.

ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 15

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Same Property Performance (continued)

(Unaudited)

The charts below provide two alternative calculations of same property performance in comparison to our historical same property performance. Our reported same property performance has been based upon a pool of operating assets and completed developed and redeveloped assets to the extent that those assets were operating for the entirety of the comparable same property periods presented. The two alternative calculations presented below consist of (i) same property performance for the operating portfolio excluding assets that were recently developed or redeveloped and (ii) the same property performance for the operating portfolio including those assets that were either under current redevelopment or previously completed redevelopments. From 2011 through 2013, our same property performance was generally consistent in each of the three calculations. For the nine months ended September 30, 2014, and the year ended December 31, 2013, same property performance including redevelopment properties, as shown in the table, would have been meaningfully higher than our traditional method of reporting same property performance. Same property performance including redevelopment properties will, from time to time, have significant growth in NOI as a result of the completion of the conversion of non-laboratory space (with lower NOI) to laboratory/office space (with higher NOI) through redevelopment.  We believe our traditional method of reporting same property performance is a more useful presentation since it excludes the potential significant increases in performance as a result of completion of significant redevelopment projects.

| Percentage change in same property NOI over preceding period | | --- || Percentage change in same property NOI over preceding period – cash basis | | --- || | | NOI Included in All Comparative Periods | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | Operating<br><br>Properties | Recently Completed | | Properties Under Active | | | Legend | | | Developments | Redevelopments | Development | Redevelopment | | | Same property data as reported | Yes | Yes^(1)^ | Yes^(1)^ | No | No | | | Same property operating portfolio | Yes | No | No | No | No | | | Same property data including redevelopments | Yes | No | Yes | No | Yes | | (1) | Recently delivered developments and redevelopments are included in the same property data for each of the year-over-year comparison periods only if the property was operating during both entire same property periods. For example, projects completed during 2012 are included in 2014 versus 2013 same property performance (as a percentage change over 2013). | | --- | --- |

The following table reconciles same properties to total properties for the nine months ended September 30, 2014:

Development – current Properties
75/125 Binney Street 1
499 Illinois Street 1
1455/1515 Third Street<br><br>(unconsolidated JV) 2
3013/3033 Science Park Road 2
5200 Illumina Way – Building 6 1
430 East 29th Street 1
360 Longwood Avenue (unconsolidated JV) 1
9
Development – deliveries since January 1, 2013 Properties
225 Binney Street 1
269 East Grand Avenue 1
2
Redevelopment – current Properties
225 Second Avenue 1
11055/11065 Roselle Street 2
3
Redevelopment – deliveries since January 1, 2013 Properties
400 Technology Square 1
1551 Eastlake Avenue East 1
285 Bear Hill Road 1
343 Oyster Point Boulevard 1
1616 Eastlake Avenue East 1
9800 Medical Center Drive 3
4757 Nexus Center Drive 1
11075 Roselle Street 1
10121 Barnes Canyon Road 1
11 Summary Properties
--- ---
Development – current 9
Development – deliveries 2
Redevelopment – current 3
Redevelopment – deliveries 11
Development/redevelopment – Asia 5
Acquisitions in North America since January 1, 2013:
10151 Barnes Canyon Road 1
407 Davis Drive 1
150 Second Street 1
3545 Cray Court 1
4025/4031/4045 Sorrento Valley Boulevard 3
Properties “held for sale” 4
Total properties excluded from same properties 41
Same properties 153
Total properties as of September 30, 2014 194
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 16
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Leasing Activity

(Unaudited)

Three Months Ended<br><br>September 30, 2014 Nine Months Ended<br><br>September 30, 2014 Year Ended<br><br>December 31, 2013
Including<br><br>Straight-line Rent Cash Basis Including <br>Straight-line Rent Cash Basis Including<br><br>Straight-line Rent Cash Basis
Leasing activity:
Renewed/re-leased space ^(1)^
Rental rate changes 18.6% 5.6% 14.1% 6.2% 16.2% 4.0%
New rates $ 36.42 $ 36.40 $ 41.05 $ 41.51 $ 32.00 $ 31.04
Expiring rates $ 30.70 $ 34.47 $ 35.97 $ 39.07 $ 27.53 $ 29.84
Rentable square footage 169,248 1,129,082 1,838,397
Number of leases 25 99 120
TIs/lease commissions per square foot $ 6.78 $ 8.57 $ 8.65
Average lease terms 2.3 years 3.3 years 5.2 years
Developed/redeveloped/previously vacant space leased
New rates $ 45.19 $ 39.15 $ 41.84 $ 37.18 $ 44.63 $ 41.86
Rentable square footage 702,168 1,058,091 1,806,659
Number of leases 19 47 92
TIs/lease commissions per square foot $ 13.07 $ 13.86 $ 19.16
Average lease terms 13.8 years 11.8 years 10.0 years
Leasing activity summary (totals):
New rates $ 43.49 $ 38.61 $ 41.43 $ 39.42 $ 38.26 $ 36.40
Rentable square footage 871,416 2,187,173 ^(2)^ 3,645,056
Number of leases 44 146 212
TIs/lease commissions per square foot $ 11.85 $ 11.13 $ 13.86
Average lease terms 11.6 years 7.4 years 7.6 years
Lease expirations ^(1)^
Expiring rates $ 29.75 $ 33.55 $ 34.11 $ 36.99 $ 27.74 $ 30.16
Rentable square footage 198,961 1,279,634 2,127,190
Number of leases 34 117 151
(1) Leasing activity and lease expirations exclude month to month leases. The respective leasing activity was 19 month-to-month leases for 92,087 RSF at September 30, 2014, and 13 month-to-month leases for 22,172 RSF at December 31, 2013.
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(2) During the nine months ended September 30, 2014, we granted tenant concessions/free rent averaging approximately 2.9 months with respect to the 2,187,173 RSF leased.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 17
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Lease Expirations

(Unaudited)

Year of Lease Expiration Number of Leases Expiring RSF of Expiring Leases Percentage of<br><br>Aggregate Total RSF ABR of<br><br>Expiring Leases (per RSF)
2014 16 ^(1)^ 222,245 ^(1)^ 1.4 % $ 31.78
2015 87 1,156,406 7.4 % $ 28.24
2016 88 1,386,496 8.9 % $ 34.81
2017 83 1,684,354 10.8 % $ 28.39
2018 63 1,586,679 10.1 % $ 40.19
2019 54 1,306,795 8.3 % $ 36.15
2020 33 1,144,822 7.3 % $ 37.21
2021 31 1,125,173 7.2 % $ 38.90
2022 17 633,004 4.0 % $ 29.45
2023 21 1,076,027 6.9 % $ 35.40
Thereafter 41 3,302,422 21.1 % $ 44.61
2014 RSF of Expiring Leases ABR of<br><br>Expiring Leases<br><br>(per RSF) 2015 RSF of Expiring Leases ABR of<br>Expiring Leases<br>(per RSF)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Leased Negotiating/<br><br>Anticipating Targeted for<br><br>Redevelopment Remaining<br><br>Expiring Leases Total ^(1)^ Leased Negotiating/<br>Anticipating Targeted for<br>Redevelopment Remaining<br>Expiring Leases Total
Market
Greater Boston 51,270 — — 13,111 64,381 $ 36.01 13,320 32,271 — 265,844 311,435 $ 34.76
San Francisco Bay Area — 2,894 — — 2,894 34.23 71,746 47,610 — 76,441 195,797 34.22
New York City 49,550 — — 21,712 71,262 31.05 — — — 9,380 9,380 N/A
San Diego — — — — — — 51,768 — 48,880 ^(2)^ 96,083 196,731 22.25
Seattle 5,991 — — 900 6,891 N/A — 21,811 — 44,883 66,694 25.45
Maryland — — — 67,012 ^(3)^ 67,012 28.30 — 36,576 — 131,158 167,734 20.04
Research Triangle Park — — — 249 249 N/A — 38,274 — 158,321 196,595 20.43
Non-cluster markets — — — 5,487 5,487 24.86 — — — 7,117 7,117 21.48
Asia — 4,069 — — 4,069 11.64 — — — 4,923 4,923 17.08
Total 106,811 6,963 — 108,471 222,245 $ 31.78 136,834 176,542 48,880 794,150 1,156,406 $ 28.24
Percentage of expiring leases 48 % 3 % — % 49 % 100 % 12 % 15 % 4 % 69 % 100 %
(1) Excludes 19 month-to-month leases for 92,087 RSF.
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(2) Represents the RSF at 10151 Barnes Canyon Road, which was acquired in 3Q13. This property will undergo conversion into tech office space through redevelopment in 4Q15 upon expiration of the lease that has been in place since the acquisition of the property.
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(3) Includes a 54,906 RSF lease expiration in 4Q14 at our 5 Research Court project in Rockville.  Subject to local market conditions, this property may undergo conversion from non-laboratory into laboratory/office through redevelopment upon rollover.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 18
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Top 20 Client Tenants

(Dollars in thousands)

(Unaudited)

Remaining Lease Term in Years^(1)^ Aggregate<br><br>RSF ABR Percentage of Aggregate ABR Investment-Grade Ratings
Client Tenant Fitch Moody’s S&P
1 Novartis AG 2.9 699,071 $ 34,030 6.2 % AA Aa3 AA-
2 Illumina, Inc. 15.9 569,294 25,649 4.7 — — —
3 New York University 16.0 207,777 19,778 3.6 — Aa3 AA-
4 Roche 5.3 409,734 18,656 3.4 AA A1 AA
5 United States Government 8.8 399,633 17,923 3.3 AAA Aaa AA+
6 Eli Lilly and Company 9.1 257,119 15,257 2.8 A A2 AA-
7 Amgen Inc. 9.0 401,623 14,404 2.6 BBB Baa1 A
8 FibroGen, Inc. 9.1 234,249 14,197 2.6 — — —
9 Biogen Idec Inc. 13.7 313,872 13,707 2.5 — Baa1 A-
10 Dana-Farber Cancer Institute, Inc. 15.5 154,100 11,483 2.1 — A1 —
11 Bristol-Myers Squibb Company 4.3 251,316 10,087 1.8 A- A2 A+
12 Celgene Corporation 6.9 268,836 10,024 1.8 — Baa2 BBB+
13 The Scripps Research Institute 2.0 218,031 9,965 1.8 AA- Aa3 —
14 The Regents of the University of California 8.7 230,446 9,960 1.8 AA Aa2 AA
15 GlaxoSmithKline plc 4.8 208,394 9,944 1.8 A+ A2 A+
16 Massachusetts Institute of Technology 3.2 202,897 9,535 1.7 — Aaa AAA
17 Alnylam Pharmaceuticals, Inc. 7.0 129,424 6,955 1.3 — — —
18 AstraZeneca PLC 2.3 218,308 6,835 1.2 AA- A2 AA-
19 Pfizer Inc. 5.1 128,348 6,396 1.2 A+ A1 AA
20 Gilead Sciences, Inc. 5.8 109,969 5,824 1.1 — Baa1 A-
Total/weighted average 8.4 5,612,441 $ 270,609 49.3 % Investment-Grade Client Tenants:
---
53%
of ARE’s<br><br>Total ABR
(1) Represents remaining lease term in years based on percentage of aggregate ABR in effect as of September 30, 2014.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 19
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Client Tenant Mix

(Unaudited)

(By ABR)
Multinational Pharmaceutical Institutions (Academic/Medical,<br><br>Non-Profit, and U.S. Government) Life Science Product, Service, and Device Biotechnology: Public & Private
--- --- --- ---
• Astellas Pharma Inc.<br><br>• AstraZeneca PLC<br><br>• Bayer AG<br><br>• Bristol-Myers Squibb Company<br><br>• Eisai Co., Ltd.<br><br>• Eli Lilly and Company<br><br>• GlaxoSmithKline plc<br><br>• Merck & Co., Inc.<br><br>• Novartis AG<br><br>• Pfizer Inc.<br><br>• Roche<br><br>• Sanofi<br><br>• Shire plc<br><br>• UCB S.A. • Dana-Farber Cancer Institute, Inc.<br><br>• Duke University<br><br>• Environmental Protection Agency<br><br>• Fred Hutchinson Cancer Research Center<br><br>• Massachusetts Institute of Technology<br><br>• National Institutes of Health<br><br>• New York University<br><br>• Partners HealthCare System, Inc.<br><br>• Sanford-Burnham Medical Research Institute<br><br>• Stanford University<br><br>• The Regents of the University of California<br><br>• The Scripps Research Institute<br><br>• UMass Memorial Health Care, Inc.<br><br>• University of North Carolina Health Care System<br><br>• United States Government<br><br>• University of Washington • Aramco Services Company<br><br>• BASF Corporation<br><br>• Canon U.S. Life Sciences, Inc.<br><br>• Covance Inc.<br><br>• DSM N.V.<br><br>• Fluidigm Corporation<br><br>• Foundation Medicine, Inc.<br><br>• Google Inc.<br><br>• Illumina, Inc.<br><br>• Laboratory Corporation of America Holdings<br><br>• Monsanto Company<br><br>• Myriad Genetics, Inc.<br><br>• Quest Diagnostics Incorporated<br><br>• Sigma-Aldrich Corporation<br><br>• Thermo Fisher Scientific Inc. • Alnylam Pharmaceuticals, Inc.<br><br>• Amgen Inc.<br><br>• Biogen Idec Inc.<br><br>• bluebird bio, Inc.<br><br>• Celgene Corporation<br><br>• Constellation Pharmaceuticals, Inc.<br><br>• Epizyme, Inc.<br><br>• FibroGen, Inc.<br><br>• FORMA Therapeutics, Inc.<br><br>• Gilead Sciences, Inc.<br><br>• Medivation, Inc.<br><br>• Nektar Therapeutics<br><br>• Principia Biopharma Inc.<br><br>• Proteostasis Therapeutics, Inc.<br><br>• Quanticel Pharmaceuticals, Inc.<br><br>• Theravance Biopharma, Inc.<br><br>• Warp Drive Bio, LLC
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 20
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Summary of Properties and Occupancy

(Unaudited)

Summary of properties

RSF Number of Properties ABR<br><br>(Dollars in thousands)
Market Operating Development Redevelopment Total % Total
Greater Boston 3,701,814 647,706 112,500 4,462,020 24 % 39 $ 162,524 30 %
San Francisco Bay Area 2,805,096 484,921 — 3,290,017 18 28 116,755 21
New York City 725,099 188,196 — 913,295 5 6 51,507 9
San Diego 2,897,492 315,601 31,277 3,244,370 18 47 98,747 18
Seattle 746,260 — — 746,260 4 10 29,941 6
Maryland 2,156,196 — — 2,156,196 12 29 50,449 9
Research Triangle Park 1,025,786 — — 1,025,786 6 15 21,631 4
Canada 1,103,507 — — 1,103,507 6 5 9,031 2
Non-cluster markets 60,178 — — 60,178 — 2 997 —
North America 15,221,428 1,636,424 143,777 17,001,629 93 181 541,582 99
Asia 1,067,702 304,762 — 1,372,464 7 9 6,359 1
Continuing operations 16,289,130 1,941,186 143,777 18,374,093 100 190 $ 547,941 100 %
Properties “held for sale” 84,286 — — 84,286 — 4
Total 16,373,416 1,941,186 143,777 18,458,379 100 % 194

Summary of occupancy percentages

Operating Properties Operating and Redevelopment Properties
Market 9/30/14 6/30/14 9/30/13 9/30/14 6/30/14 9/30/13
Greater Boston 98.6 % 98.5 % 96.3 % 95.7 % 95.5 % 96.3 %
San Francisco Bay Area 99.0 98.4 96.1 99.0 98.4 96.1
New York City 98.4 98.4 98.4 98.4 98.4 98.4
San Diego 97.1 97.2 95.0 96.1 94.4 92.7
Seattle 94.7 93.3 90.1 94.7 93.3 90.1
Maryland 93.8 92.7 93.7 93.8 92.7 93.7
Research Triangle Park 96.7 97.3 92.0 96.7 97.3 92.0
Canada 97.6 97.6 96.8 97.6 97.6 96.8
Non-cluster markets 93.9 93.9 91.7 93.9 93.9 91.7
North America 97.3 96.9 95.0 96.3 95.6 94.5
Asia 62.8 69.1 63.9 62.8 69.1 59.8
Continuing operations 94.9 % 95.3 % 93.5 % 94.0 % 94.0 % 92.8 %
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 21
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Property Listing

(Dollars in thousands)

(Unaudited)

RSF Number of Properties Occupancy Percentage
ABR Operating Operating and Redevelopment
Market / Submarket / Address Operating Development Redevelopment Total
Greater Boston
Cambridge/Inner Suburbs
Alexandria Center™ at Kendall Square 973,464 388,270 — 1,361,734 6 $ 44,661 99.4 % 99.4 %
75/125 and 225 Binney Street, 161 and 215 First Street,<br><br>150 Second Street, and 300 Third Street
Alexandria Technology Square^®^ 1,181,635 — — 1,181,635 7 67,252 100.0 100.0
100, 200, 300, 400, 500, 600, and 700 Technology Square
480/500 Arsenal Street 234,260 — — 234,260 2 8,281 100.0 100.0
780/790 Memorial Drive 99,350 — — 99,350 2 6,623 96.0 96.0
167 Sidney Street/99 Erie Street 54,549 — — 54,549 2 2,712 100.0 100.0
79/96 Thirteenth Street Charlestown Navy Yard 25,309 — — 25,309 1 620 100.0 100.0
Longwood Medical Area
360 Longwood Avenue<br>(Unconsolidated JV – 27.5% ownership) 154,100 259,436 — 413,536 1 11,483 100.0 100.0
Route 128
Alexandria Park at 128 343,882 — — 343,882 8 8,225 87.3 87.3
3, 6, and 8 Preston Court; 29, 35, and 44 Hartwell Avenue;<br><br>35, 45, and 47 Wiggins Avenue; and 60 Westview Street
19 Presidential Way 128,325 — — 128,325 1 3,398 100.0 100.0
100 Beaver Street 82,330 — — 82,330 1 2,303 100.0 100.0
285 Bear Hill Road 26,270 — — 26,270 1 801 100.0 100.0
225 Second Avenue^(1)^ — — 112,500 112,500 1 — N/A —
Rte 495/Worcester
111/130 Forbes Boulevard 155,846 — — 155,846 2 1,415 100.0 100.0
20 Walkup Drive 91,045 — — 91,045 1 670 100.0 100.0
306 Belmont Street and 350 Plantation Street 90,690 — — 90,690 2 1,315 100.0 100.0
30 Bearfoot Road 60,759 — — 60,759 1 2,765 100.0 100.0
Greater Boston 3,701,814 647,706 112,500 4,462,020 39 $ 162,524 98.6 % 95.7 %
(1) Redevelopment property acquired in March 2014 to accommodate expansion requirement of existing tenant.
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 22
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Property Listing

(Dollars in thousands)

(Unaudited)

RSF Number of Properties Occupancy Percentage
ABR Operating Operating and Redevelopment
Market / Submarket / Address Operating Development Redevelopment Total
San Francisco Bay Area
Mission Bay
409/499 Illinois Street 391,882 61,941 — 453,823 2 $ 22,954 100.0 % 100.0 %
455 Mission Bay Boulevard South 210,398 — — 210,398 1 9,671 100.0 100.0
1500 Owens Street 158,267 — — 158,267 1 7,107 100.0 100.0
1700 Owens Street 157,340 — — 157,340 1 9,420 100.0 100.0
1455/1515 Third Street<br><br>(Unconsolidated JV – 51.0% ownership) — 422,980 — 422,980 2 — N/A N/A
South San Francisco
Alexandria Technology Center – Gateway 448,175 — — 448,175 6 16,815 100.0 100.0
600, 630, 650, 681, 901, and 951 Gateway Boulevard
249/259/269 East Grand Avenue 407,369 — — 407,369 3 16,489 100.0 100.0
400/450 East Jamie Court 163,035 — — 163,035 2 5,890 100.0 100.0
500 Forbes Boulevard 155,685 — — 155,685 1 5,540 100.0 100.0
7000 Shoreline Court 136,395 — — 136,395 1 4,391 100.0 100.0
341/343 Oyster Point Boulevard 107,960 — — 107,960 2 3,313 100.0 100.0
Palo Alto/Stanford Research Park
849/863 Mitten Road and 866 Malcolm Road 103,611 — — 103,611 1 2,415 96.2 96.2
2425 Garcia Avenue and 2400/2450 Bayshore Parkway 98,446 — — 98,446 1 3,869 100.0 100.0
3165 Porter Drive 91,644 — — 91,644 1 3,885 100.0 100.0
75/125 Shoreway Road 82,815 — — 82,815 1 1,408 71.0 71.0
3350 West Bayshore Road 60,000 — — 60,000 1 1,919 100.0 100.0
2625/2627/2631 Hanover Street 32,074 — — 32,074 1 1,669 100.0 100.0
San Francisco Bay Area 2,805,096 484,921 — 3,290,017 28 $ 116,755 99.0 % 99.0 %
New York City
Manhattan
Alexandria Center™ for Life Science 539,584 188,196 — 727,780 2 $ 44,940 99.2 % 99.2 %
430 and 450 East 29th Street
Bergen County
100 Phillips Parkway 78,501 — — 78,501 1 2,213 90.8 90.8
Pennsylvania
102 Witmer Road 50,000 — — 50,000 1 3,345 100.0 100.0
701 Veterans Circle 35,155 — — 35,155 1 735 100.0 100.0
5100 Campus Drive 21,859 — — 21,859 1 274 100.0 100.0
New York City 725,099 188,196 — 913,295 6 $ 51,507 98.4 % 98.4 %
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 23
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Property Listing

(Dollars in thousands)

(Unaudited)

RSF Number of Properties Occupancy Percentage
ABR Operating Operating and Redevelopment
Market / Submarket / Address Operating Development Redevelopment Total
San Diego
Torrey Pines
ARE Nautilus 241,191 — — 241,191 4 $ 7,899 90.3 % 90.3 %
3530/3550 John Hopkins Court and<br><br>3535/3565 General Atomics Court
ARE Sunrise 215,931 — — 215,931 3 7,999 98.1 98.1
10931, 10933, and 10975 North Torrey Pines Road and<br><br>3010 Science Park Road
ARE Spectrum 158,645 165,938 — 324,583 4 7,132 100.0 100.0
3115/3215 Merryfield Row and 3013/3033 Science Park Road
11119 North Torrey Pines Road 72,506 — — 72,506 1 2,570 100.0 100.0
3545 Cray Court 116,556 — — 116,556 1 4,765 100.0 100.0
University Town Center
5200 Illumina Way 497,078 149,663 — 646,741 6 21,431 100.0 100.0
10300 Campus Point Drive 449,759 — — 449,759 1 16,446 100.0 100.0
ARE Esplanade 180,208 — — 180,208 3 6,737 93.1 93.1
4755, 4757, and 4767 Nexus Center Drive
ARE Towne Centre 138,578 — — 138,578 3 3,835 95.9 95.9
9363, 9373, and 9393 Towne Centre Drive
9880 Campus Point Drive 71,510 — — 71,510 1 2,774 100.0 100.0
Sorrento Mesa
5810/5820/6138/6150 Nancy Ridge Drive 143,996 — — 143,996 2 2,817 73.6 73.6
ARE Portola 105,812 — — 105,812 3 1,746 100.0 100.0
6175, 6225, and 6275 Nancy Ridge Drive
10121/10151 Barnes Canyon Road^(1)^ 102,392 — — 102,392 2 1,881 100.0 100.0
7330 Carroll Road 66,244 — — 66,244 1 2,452 100.0 100.0
5871 Oberlin Drive 33,817 — — 33,817 1 973 100.0 100.0
Sorrento Valley
11025/11035/11045/11055/11065/11075 Roselle Street 90,378 — 31,277 121,655 6 2,253 100.0 74.3
3985/4025/4031/4045 Sorrento Valley Boulevard 103,111 — — 103,111 4 2,542 100.0 100.0
I-15 Corridor
13112 Evening Creek Drive 109,780 — — 109,780 1 2,495 100.0 100.0
San Diego 2,897,492 315,601 31,277 3,244,370 47 $ 98,747 97.1 % 96.1 %
(1) We acquired these properties in 3Q13 with in-place leases. We completed the redevelopment of 53,512 RSF at 10121 Barnes Canyon Road in 3Q14. Includes 48,880 RSF at 10151 Barnes Canyon Road. This property will undergo conversion into tech office space through redevelopment in 4Q15 upon expiration of the lease that was in place since the acquisition of the property.
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 24
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Property Listing

(Dollars in thousands)

(Unaudited)

RSF Number of Properties Occupancy Percentage
ABR Operating Operating and Redevelopment
Market / Submarket / Address Operating Development Redevelopment Total
Seattle
Lake Union
1201/1208 Eastlake Avenue East 203,369 — — 203,369 2 $ 8,748 100.0 % 100.0 %
1616 Eastlake Avenue East 168,708 — — 168,708 1 6,251 83.8 83.8
1551 Eastlake Avenue East 117,482 — — 117,482 1 3,108 89.4 89.4
199 East Blaine Street 115,084 — — 115,084 1 6,163 100.0 100.0
219 Terry Avenue North 30,705 — — 30,705 1 1,519 100.0 100.0
1600 Fairview Avenue East 27,991 — — 27,991 1 1,266 100.0 100.0
Elliott Bay
3000/3018 Western Avenue 47,746 — — 47,746 1 1,839 100.0 100.0
410 West Harrison/410 Elliott Avenue West 35,175 — — 35,175 2 1,047 100.0 100.0
Seattle 746,260 — — 746,260 10 $ 29,941 94.7 % 94.7 %
Maryland
Rockville
9800 Medical Center Drive 282,436 — — 282,436 4 $ 12,596 100.0 % 100.0 %
1330 Piccard Drive 131,511 — — 131,511 1 3,125 100.0 100.0
1500/1550 East Gude Drive 90,489 — — 90,489 2 1,524 90.5 90.5
14920/15010 Broschart Road 86,703 — — 86,703 2 1,944 100.0 100.0
1405 Research Boulevard 71,669 — — 71,669 1 2,091 100.0 100.0
5 Research Place 63,852 — — 63,852 1 2,373 100.0 100.0
9920 Medical Center Drive 58,733 — — 58,733 1 455 100.0 100.0
5 Research Court 54,906 — — 54,906 1 1,598 100.0 100.0
12301 Parklawn Drive 49,185 — — 49,185 1 1,169 100.0 100.0
Gaithersburg
Alexandria Technology Center – Gaithersburg I 377,401 — — 377,401 4 6,784 83.9 83.9
9 West Watkins Mill Road and 910, 930, and<br><br>940 Clopper Road
Alexandria Technology Center – Gaithersburg II 237,137 — — 237,137 5 5,308 95.4 95.4
708 Quince Orchard Road, 1300 Quince Orchard Boulevard, and 19, 20, and 22 Firstfield Road
16020 Industrial Drive 71,000 — — 71,000 1 1,048 100.0 100.0
401 Professional Drive 63,154 — — 63,154 1 1,105 86.2 86.2
950 Wind River Lane 50,000 — — 50,000 1 1,082 100.0 100.0
620 Professional Drive 27,950 — — 27,950 1 1,190 100.0 100.0
Beltsville
8000/9000/10000 Virginia Manor Road 191,884 — — 191,884 1 1,919 77.3 77.3
Northern Virginia
14225 Newbrook Drive 248,186 — — 248,186 1 5,138 100.0 100.0
Maryland 2,156,196 — — 2,156,196 29 $ 50,449 93.8 % 93.8 %
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 25
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Property Listing

(Dollars in thousands)

(Unaudited)

RSF Number of Properties Occupancy Percentage
ABR Operating Operating and Redevelopment
Market / Submarket / Address Operating Development Redevelopment Total
Research Triangle Park
Research Triangle Park
Alexandria Technology Center – Alston 186,870 — — 186,870 3 $ 3,040 95.3 % 95.3 %
100, 800, and 801 Capitola Drive
108/110/112/114 TW Alexander Drive 158,417 — — 158,417 1 4,955 100.0 100.0
Alexandria Innovation Center – Research Triangle Park 135,677 — — 135,677 3 2,856 99.7 99.7
7010, 7020, and 7030 Kit Creek Road
6 Davis Drive 100,000 — — 100,000 1 1,062 100.0 100.0
7 Triangle Drive 96,626 — — 96,626 1 3,157 100.0 100.0
407 Davis Drive 81,956 — — 81,956 1 1,644 100.0 100.0
2525 East NC Highway 54 81,580 — — 81,580 1 1,686 100.0 100.0
601 Keystone Park Drive 77,395 — — 77,395 1 1,308 100.0 100.0
5 Triangle Drive 32,120 — — 32,120 1 824 100.0 100.0
6101 Quadrangle Drive 30,122 — — 30,122 1 530 100.0 100.0
Palm Beach
555 Heritage Drive 45,023 — — 45,023 1 569 44.4 44.4
Research Triangle Park 1,025,786 — — 1,025,786 15 $ 21,631 96.7 % 96.7 %
Canada^(1)^ 1,103,507 — — 1,103,507 5 $ 9,031 97.6 % 97.6 %
Non-Cluster Markets 60,178 — — 60,178 2 $ 997 93.9 % 93.9 %
North America 15,221,428 1,636,424 143,777 17,001,629 181 $ 541,582 97.3 % 96.3 %
Asia 1,067,702 304,762 — 1,372,464 9 $ 6,359 62.8 % 62.8 %
Continuing Operations 16,289,130 1,941,186 143,777 18,374,093 190 $ 547,941 94.9 % 94.0 %
Properties “held for sale” 84,286 — — 84,286 4
Total 16,373,416 1,941,186 143,777 18,458,379 194
(1) Includes land and improvements subject to a ground lease with a client tenant aggregating 780,540 RSF. This RSF has been excluded for occupancy purposes.
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 26
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Investments in Real Estate

(Dollars in thousands, except per square foot amounts)

(Unaudited)

Investment in Real Estate
Consolidated Pro Rata Share of Unconsolidated JV Total Square Feet
Unconsolidated JV Per SF ^(1)^
Page Amount % Consolidated Total
Rental properties 21, 32 $ 6,849,966 $ 43,535 $ 6,893,501 83 % 16,219,316 154,100 16,373,416 $ 427
Construction in progress (“CIP”)/current value-creation projects:
Current development in North America 31, 32 532,053 110,264 642,317 954,008 682,416 1,636,424 514
Current redevelopment in North America 34 32,661 — 32,661 143,777 — 143,777 227
Current development in Asia 45 35,602 — 35,602 304,762 — 304,762 117
600,316 110,264 710,580 9 % 1,402,547 682,416 2,084,963 436
Rental properties and current value-creation projects 7,450,282 153,799 7,604,081 17,621,863 836,516 18,458,379 428
Near-term value-creation projects in North America (CIP):
50, 60, and 100 Binney Street 35 313,379 — 313,379 4 % 1,062,180 — 1,062,180 295
Other projects 35 90,843 — 90,843 1 % 864,151 — 864,151 105
404,222 — 404,222 1,926,331 — 1,926,331 210
Future value-creation projects:
North America 35 221,572 — 221,572 2 % 4,563,401 ^(2)^ — 4,563,401 ^(2)^ 49
Asia 45 78,319 — 78,319 1 % 6,419,707 — 6,419,707 12
299,891 — 299,891 10,983,108 — 10,983,108 27
Land under sales contract 44 12,236 — 12,236 — % 250,000 — 250,000 49
Near-term and future value-creation projects 716,349 — 716,349 13,159,439 — 13,159,439 54
Current, near-term and future value-creation projects 1,316,665 110,264 1,426,929 17 % 14,561,986 682,416 15,244,402 107
Gross investments in real estate 8,166,631 153,799 $ 8,320,430 100 % 30,781,302 836,516 31,617,818 $ 273
Less: accumulated depreciation (1,083,169 ) (22 )
Equity method of accounting – unconsolidated JV ^(3)^ 41 114,168 N/A
Investments in real estate $ 7,197,630 $ 153,777
(1) Represents the total cost of our rental properties and value-creation projects, including outside partners’ share in the case of JVs, divided by the total rentable or developable square feet of the respective real estate.
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(2) Includes 1,185,000 RSF attributable to embedded land, which generally represents adjacent land acquired in connection with the acquisition of operating properties. As a result, the real estate basis attributable to these land parcels is classified in rental properties.
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(3) Represents our equity method of accounting for investment in unconsolidated JVs and includes costs incurred directly by us outside of the JV. See page 32 for further detail of the unconsolidated JV development projects.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 27
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Investments in Real Estate (continued)

(Unaudited)

(1) Represents non-income-producing assets as a percentage of gross investments in real estate. See pre-leasing of current projects on pages 31, 32, and 34.
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 28
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Overview of Value-Creation Pipeline

Square<br><br>Feet Leased/Negotiating % Year of NOI Contribution – Forecast
Market Submarket Address 2014 2015 2016 2017 and Beyond
Current value-creation development and redevelopment projects
Greater Boston Longwood Medical Area 360 Longwood Avenue 413,536 49%
San Francisco Bay Area Mission Bay 499 Illinois Street 219,574 100%
New York City Manhattan 430 East 29th Street 418,638 83%
San Diego Sorrento Valley 11055/11065/11075 Roselle Street 55,213 75%
Greater Boston Cambridge 75/125 Binney Street 388,270 99%
San Diego Torrey Pines 3013/3033 Science Park Road 165,938 63%
Greater Boston Route 128 225 Second Avenue 112,500 100%
San Diego University Town Center 5200 Illumina Way – Building 6 149,663 100%
San Francisco Bay Area Mission Bay 1455/1515 Third Street 422,980 100%
Total/weighted average 2,346,312 85%
Near-term value-creation development projects ^(1)^ Square<br><br>Feet Negotiating %
San Diego University Town Center 5200 Illumina Way 140,000 100% ^(2)^
San Diego University Town Center 10300 Campus Point Drive 140,000 76% ^(2)^
Greater Boston Cambridge 50 Binney Street 276,371 100% ^(2)^
Greater Boston Cambridge 60 Binney Street 264,150 100% ^(2)^
San Diego University Town Center 5200 Illumina Way 178,151 —%
Seattle Lake Union 1165 Eastlake Avenue East 106,000 100% ^(2)^
Greater Boston Cambridge 100 Binney Street 416,788 100% ^(2)^
San Francisco Bay Area SoMa 510 Townsend Street 300,000 100% ^(2)^
(1) See page 18 for RSF targeted for redevelopment.<br><br>(2) Under negotiation or subject to letter of intent. Value-Creation Development Projects
Value-Creation Redevelopment Projects
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 29
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Deliveries of Value-Creation Development and Redevelopment Projects in North America

(Dollars in thousands)

(Unaudited)

Property 499 Illinois Street 269 East Grand Avenue 360 Longwood Avenue 10121 Barnes Canyon Road
Project Type Development Development Unconsolidated JV Development Redevelopment
Photograph/ <br>Rendering
Delivery Summary Alexandria delivered an additional 85,417 RSF in September 2014, in addition to the 72,216 RSF delivered to Illumina, Inc. in 2Q14. The remaining 61,941 RSF under development is expected to be delivered in 4Q14. Alexandria delivered the entire 107,250 RSF of this project in September 2014 to Amgen Inc. Alexandria delivered 154,100 RSF, or 37%, of this project at the end of September 2014 to Dana-Farber Cancer Institute, Inc. Alexandria delivered the entire 53,512 RSF of this project in September 2014 to Outerwall Inc.
Client Tenants Illumina, Inc. / Medivation, Inc. /<br><br>The Regents of the University of California Amgen Inc. Dana-Farber Cancer Institute, Inc. Outerwall Inc. RSF % of Project<br><br>Delivered Occupancy at<br><br>September 30, 2014 Total Project Investment Unlevered
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Average<br><br>Cash<br><br>Yield Initial Stabilized Yield<br><br>(Cash Basis) Initial Stabilized Yield
3Q14 Delivery Delivered Prior to 3Q14 Total Delivered
Address/Market – Submarket Date RSF
Development projects in North America
499 Illinois Street/San Francisco Bay Area – Mission Bay September 2014 85,417 72,216 157,633 72% 72% $ 202,900 ^(1)^ 7.3 % ^(2)^ 6.4 % ^(2)^ 7.2 % ^(2)^
269 East Grand Avenue/<br><br>San Francisco Bay Area – So. San Francisco September 2014 107,250 — 107,250 100% 100% $ 49,600 9.7 % ^(3)^ 8.4 % ^(3)^ 9.7 % ^(3)^
Unconsolidated joint venture development projects in North America
360 Longwood Avenue/<br><br>Greater Boston – Longwood Medical Area End of<br><br>September 2014 154,100 — 154,100 37% 37% $ 350,000 ^(1)^ 9.3 % ^(2)^ 8.3 % ^(2)^ 8.9 % ^(2)^
Redevelopment projects in North America
10121 Barnes Canyon Road/San Diego – Sorrento Mesa September 2014 53,512 — 53,512 100% 100% $ 18,000 8.9 % ^(4)^ 7.8 % ^(4)^ 7.9 % ^(4)^

(1)    Represents 100% of investment at completion for the entire project. Only a portion of the project was placed into operations during 3Q14. See pages 31 and 32 for portion of development still in progress.

(2)    Consistent with previously disclosed yields.

(3)    Increased from estimated yields at commencement of project of 9.3% for average cash yield, 8.1% for initial stabilized yield (cash basis), and 9.3% for initial stabilized yield.

(4)    Increased from estimated yields at commencement of project of 8.8% for average cash yield, 7.7% for initial stabilized yield (cash basis), and 7.7% for initial stabilized yield.

ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 30

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Current Value-Creation Development Projects in North America – Consolidated

(Dollars in thousands)

(Unaudited)

Leased Status Project Start<br><br>Date Initial Occupancy Date Stabilized Occupancy Date
Project RSF Leased Negotiating Total Leased/Negotiating
Property/Market – Submarket In Service CIP Total RSF % RSF % RSF %
Consolidated development projects in North America
75/125 Binney Street/<br><br>Greater Boston – Cambridge — 388,270 388,270 386,111 99 % — — % 386,111 99 % 1Q13 1Q15 2015
499 Illinois Street/<br><br>San Francisco Bay Area – Mission Bay 157,633 61,941 219,574 219,574 100 % — — % 219,574 100 % 2Q11 2Q14 2014
430 East 29th Street/<br>New York City – Manhattan 230,442 188,196 418,638 256,212 61 % 91,055 22 % 347,267 83 % 4Q12 4Q13 2015
3013/3033 Science Park Road/<br><br>San Diego – Torrey Pines — 165,938 165,938 105,047 63 % — — % 105,047 63 % 2Q14 1Q15 2016
5200 Illumina Way – Building 6/<br><br>San Diego – University Town Center — 149,663 149,663 149,663 100 % — — % 149,663 100 % 3Q14 2Q16 2016
Consolidated development projects in North America 388,075 954,008 1,342,083 1,116,607 83 % 91,055 7 % 1,207,662 90 %
Investment
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Cost to Complete Unlevered
September 30, 2014 2014 Thereafter Average Cash<br><br>Yield Initial Stabilized Yield <br>(Cash Basis) Initial Stabilized Yield
Property/Market – Submarket Construction<br>Financing Internal Funding Construction<br>Financing Internal Funding Total at Completion
In Service CIP
Consolidated development projects in North America
75/125 Binney Street/<br><br>Greater Boston – Cambridge $ — $ 250,116 $ 18,240 $ — $ 83,083 $ — $ 351,439 ^(1)^ 9.1% 8.0% 8.2%
499 Illinois Street/<br><br>San Francisco Bay Area – Mission Bay $ 136,815 $ 49,430 $ — $ 16,655 $ — $ — $ 202,900 7.3% 6.4% 7.2%
430 East 29th Street/<br>New York City – Manhattan $ 219,498 $ 185,532 $ — $ 11,539 $ — $ 46,676 $ 463,245 7.1% 6.6% 6.5%
3013/3033 Science Park Road/<br><br>San Diego – Torrey Pines $ — $ 43,764 $ — $ 6,033 $ — $ 54,994 $ 104,791 7.7% 7.2% 7.1%
5200 Illumina Way – Building 6/<br><br>San Diego – University Town Center $ — $ 3,211 $ — $ 3,533 $ — $ 28,556 $ 35,300 8.6% 7.0% 8.5%
Consolidated development projects in North America $ 356,313 $ 532,053 $ 18,240 $ 37,760 $ 83,083 $ 130,226 $ 1,157,675
(1) In 3Q13, we completed the preliminary design and budget for interior improvements for use by ARIAD Pharmaceuticals, Inc. (“ARIAD”). Based upon our lease with ARIAD, we expect an increase in both estimated NOI and estimated cost at completion, with no significant change in our estimated yields. In light of certain changes in ARIAD’s business, ARIAD is reassessing its plans to occupy the entire facility. As a result, plans and drawings for the interior improvements for the project have not been approved by ARIAD in accordance with the timelines specified in the lease. We expect ARIAD to finalize the design and budget for all or a portion of the interior improvements in the future and will provide an update on our estimated cost at completion and targeted yields. Pursuant to the terms of the lease, we expect rent to commence in late March 2015.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Current Value-Creation Development Projects in North America – Unconsolidated Joint Ventures

(Dollars in thousands)

(Unaudited)

Leased Status Project Start<br><br>Date Initial Occupancy Date Stabilized Occupancy Date
Project RSF Leased Negotiating Total Leased/Negotiating
Property/Market – Submarket In Service CIP Total RSF % RSF % RSF %
Unconsolidated JV development projects
360 Longwood Avenue/<br><br>Greater Boston – Longwood Medical Area 154,100 259,436 413,536 154,100 37 % 49,471 12 % 203,571 49 % 2Q12 3Q14 2016
1455/1515 Third Street/<br><br>San Francisco Bay Area – Mission Bay — 422,980 422,980 422,980 100 % — — % 422,980 100 % 3Q14 3Q16-1Q17 2016/2017
Total 154,100 682,416 836,516 577,080 69 % 49,471 6 % 626,551 75 %
Investment
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Cost to Complete Unlevered ^(1)^
September 30, 2014 2014 Thereafter Average Cash<br><br>Yield Initial Stabilized Yield <br>(Cash Basis) Initial Stabilized Yield
Property/Market – Submarket Construction<br>Financing Internal Funding Construction<br>Financing Internal Funding Total at Completion
In Service CIP
Unconsolidated JV development projects ^(2)^
100% of JV: 360 Longwood Avenue/<br><br>Greater Boston – Longwood Medical Area $ 105,599 $ 179,804 $ 21,180 $ — $ 43,417 $ — $ 350,000
100% of JV: 1455/1515 Third Street/<br><br>San Francisco Bay Area – Mission Bay ^(3)^ $ 21,150 $ 105,608 $ — $ 6,458 $ — TBD TBD
ARE share of unconsolidated JV development projects ^(2)^
27.5% of JV: 360 Longwood Avenue/<br><br>Greater Boston – Longwood Medical Area $ 32,748 $ 55,759 $ 5,825 $ 374 $ 11,939 $ 2,320 $ 108,965 9.3% 8.3% 8.9%
51.0% of JV: 1455/1515 Third Street/<br><br>San Francisco Bay Area – Mission Bay $ 10,787 $ 54,505 $ — $ 4,126 $ — TBD TBD TBD TBD TBD
Total ARE share of unconsolidated JV development projects $ 43,535 $ 110,264 $ 5,825 $ 4,500 $ 11,939 TBD TBD
(1) Our projected unlevered initial stabilized cash yield is based upon our share of the $109.0 million investment in real estate by the JV, including costs incurred directly by us outside of the JV. Development management fees earned from this development have been excluded from our estimate of unlevered yields.
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(2) See page 41 for additional information regarding our unconsolidated JVs.
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(3) In 3Q14, we completed the acquisition of 1455/1515 Third Street and commenced development. The design and budget of this project are in process, and the estimated project cost with related yields will be disclosed in the near future.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 32
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Current Value-Creation Development Projects in North America

Property 75/125 Binney Street 499 Illinois Street 430 East 29th Street 3013/3033 Science Park Road
Submarket/<br><br>Market Cambridge/<br><br>Greater Boston Mission Bay/<br><br>San Francisco Bay Area Manhattan/<br>New York City Torrey Pines/<br>San Diego
RSF (in progress) 388,270 61,941 188,196 165,938
Project Type Development Development Development Development
Client Tenants ARIAD Pharmaceuticals, Inc. Illumina, Inc./Medivation, Inc./The Regents of the University of California Roche/New York University/Others Receptos, Inc./<br>The Medicines Company
Photograph/ <br>Rendering
Property 5200 Illumina Way – Building 6 360 Longwood Avenue 1455/1515 Third Street
Submarket/<br><br>Market University Town Center/<br>San Diego Longwood Medical Area/<br><br>Greater Boston Mission Bay/<br><br>San Francisco Bay Area
RSF (in progress) 149,663 259,436 422,980
Project Type Development Unconsolidated JV Development Unconsolidated JV Development
Client Tenants Illumina, Inc. Dana-Farber Cancer Institute, Inc. Uber Technologies, Inc. ^(1)^
Photograph/ <br>Rendering
(1) We are currently working closely with Uber in the process to revise the core and exterior architecture of the building design.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 33
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Current Value-Creation Redevelopment Projects in North America

(Dollars in thousands)

(Unaudited)

Leased Status Project Start <br>Date Initial Occupancy Date Stabilized Occupancy Date
Project RSF Leased Negotiating Total Leased/Negotiating
Property/Market – Submarket In Service CIP Total RSF % RSF % RSF %
Consolidated redevelopment projects in North America
225 Second Avenue/<br><br>Greater Boston – Route 128 ^(1)^ — 112,500 112,500 112,500 100 % — — % 112,500 100 % 1Q14 2Q15 2015
11055/11065/11075 Roselle Street/<br><br>San Diego – Sorrento Valley ^(1)^ 23,936 31,277 55,213 41,163 ^(2)^ 75 % — — % 41,163 75 % 4Q13 2Q14 2015
Consolidated redevelopment projects in North America 23,936 143,777 167,713 153,663 92 % — — % 153,663 92 %
Investment Unlevered
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Property/Market – Submarket September 30, 2014 Cost to Complete Total at Completion Average <br>Cash<br><br>Yield Initial <br>Stabilized Yield <br>(Cash Basis) Initial Stabilized Yield
In Service CIP 2014 Thereafter
Consolidated redevelopment projects in North America
225 Second Avenue/<br><br>Greater Boston – Route 128 $ — $ 26,244 $ 6,577 $ 13,850 $ 46,671 9.0% 8.3% 8.3%
11055/11065/11075 Roselle Street/<br><br>San Diego – Sorrento Valley $ 7,232 $ 6,417 $ 1,423 $ 3,278 $ 18,350 8.0% 7.8% 7.9%
Consolidated redevelopment projects in North America $ 7,232 $ 32,661 $ 8,000 $ 17,128 $ 65,021
(1) Acquired 225 Second Avenue and 11055/11065/11075 Roselle Street in March 2014 and November 2013, respectively, to accommodate expansion requirements of existing tenants.
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(2) In 2Q14, we delivered 23,936 RSF to a life science company. We expect to deliver the remaining pre-leased 17,227 RSF in 2Q15.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 34
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term and Future Value-Creation Development Projects in North America

(Dollars in thousands, except per square foot amounts)

(Unaudited)

Embedded Land ^(1)^ Total
Property – Market Book Value Square<br><br>Feet Cost Per<br><br>Square Foot Square<br><br>Feet Book Value Square<br><br>Feet Cost Per<br><br>Square Foot
Near-Term Value-Creation Development Projects – Land undergoing predevelopment activities (CIP)
Alexandria Center™ at Kendall Square (“ACKS”) – Greater Boston:
50, 60, and 100 Binney Street ^(2)^ $ 313,379 1,062,180 $ 295 — $ 313,379 1,062,180 $ 295
510 Townsend Street – San Francisco Bay Area 55,537 300,000 185 — 55,537 300,000 185
5200 Illumina Way – San Diego ^(3)^ 12,955 318,151 41 — 12,955 318,151 41
10300 Campus Point Drive – San Diego ^(3)^ 4,958 140,000 35 — 4,958 140,000 35
1165 Eastlake Avenue East – Seattle ^(4)^ 17,393 106,000 164 — 17,393 106,000 164
Near-term value-creation development projects $ 404,222 1,926,331 $ 210 — 404,222 1,926,331 210
Future Value-Creation Development Projects – Land held for development
Alexandria Technology Square^®^ – Greater Boston $ 7,721 100,000 $ 77 — 7,721 100,000 77
ACKS – 50 Rogers Street Residential – Greater Boston 4,118 150,000 27 — 4,118 150,000 27
Grand Avenue – San Francisco Bay Area 45,056 397,132 113 — 45,056 397,132 113
Rozzi/Eccles – San Francisco Bay Area 73,035 514,307 142 — 73,035 514,307 142
East 29th Street – New York City — — — 420,000 ^(5)^ — 420,000 —
Executive Drive/Other – San Diego 4,443 49,920 89 279,000 4,443 328,920 14
400/416/430 Dexter Avenue North – Seattle 16,088 253,000 64 — 16,088 253,000 64
1150/1166 Eastlake Avenue East – Seattle 15,250 160,266 95 — 15,250 160,266 95
9800/9950 Medical Center Drive – Maryland 8,397 321,721 26 — 8,397 321,721 26
Research Boulevard – Maryland 7,637 347,000 22 — 7,637 347,000 22
Firstfield Road – Maryland 4,056 95,000 43 — 4,056 95,000 43
Other 35,771 990,055 36 486,000 35,771 1,476,055 24
Future value-creation development projects $ 221,572 3,378,401 $ 66 1,185,000 221,572 4,563,401 49
Total near-term and future value-creation development projects 1,185,000 $ 625,794 6,489,732 $ 96
(1) Embedded land generally represents adjacent land acquired in connection with the acquisition of operating properties. As a result, the real estate basis attributable to these land parcels is classified in rental properties.
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(2) Includes a residential building totaling approximately 105,000 gross square feet and infrastructure related costs consisting of: utility access and roads, installation of storm drain systems, infiltration systems, traffic lighting/signals, streets, and sidewalks related to 50, 60, and 100 Binney Street.
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(3) See information on pre-leasing and letter of intent negotiations on pages 38 and 39.
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(4) The cost per square foot for 1165 Eastlake Avenue East includes an existing structure that can substantially be incorporated into the development plans.
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(5) We hold a right to ground lease a parcel supporting the future ground-up development of approximately 420,000 RSF at the Alexandria Center™ for Life Science pursuant to an option under our ground lease. We have begun discussions regarding this option and the future ground-up development project.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 35
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term Value-Creation Development Projects

Greater Boston

| Operating/Development Project | Near-Term Value-Creation Project | | --- | --- || Property | Alexandria Center™ at Kendall Square | | --- | --- | | Submarket/Market | Cambridge/Greater Boston | | Aerial | | | Background | Alexandria received final approval from the City of Cambridge to develop the Alexandria Center™ at Kendall Square, a fully integrated campus featuring four world-class laboratory/office and tech office buildings, high-quality amenities, and green space. Alexandria’s entitlement efforts resulted in an increase of 1.2 million developable square feet over the original entitlements in place at acquisition. | | Near-Term Opportunity | Our near-term development opportunity consists of 50, 60, and 100 Binney Street aggregating approximately 1.1 million RSF. We have commenced below grade site work for 50 and 60 Binney Street related to the foundation and subterranean parking garage in order to reduce the time to deliver these buildings for occupancy. Subject to market conditions, we expect to commence vertical above-ground construction of 50 and 60 Binney Street in early 2015 and 100 Binney Street in mid-2015. 50, 60, and 100 Binney Street are subject to negotiations or letter of intent, each with a separate full building life science entity. The timing of revenue recognition for 50 and 60 Binney may begin in late 2016 or in 2017, subject to final lease negotiation. In order to maintain maximum strategic optionality and due to extraordinary strong build to suit leasing demand for the Binney Street land parcels and the likely corresponding reduction in lease-up risk, we have updated our strategy noted in 4Q13 to sell a minority interest in the Binney Street land parcels. Our updated guidance assumes we lease 50, 60, and 100 Binney Street in the near term and retain 100% of each project. See page 47 for key capital planning considerations for 2015. | | ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 | 36 | | --- | --- |

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term Value-Creation Development Projects

San Francisco Bay Area

| Operating/Development Project | Near-Term Value-Creation Project | | --- | --- || Property | 510 Townsend Street | | --- | --- | | Submarket/Market | SoMa/San Francisco Bay Area | | Aerial | | | Background | Alexandria’s 510 Townsend Street project was acquired in April 2014 and represents an expansion of our successful Mission Bay science and technology campus into the SoMa submarket.  The site is ideally located at the corner of Townsend and 6th Streets, placing it within close proximity to public transportation.  The site is also adjacent to one of Interstate 280’s key arrival points into San Francisco and is only blocks away from Interstate 80 and the US 101 Freeway. Furthermore, with its highly strategic location at the intersection of Alexandria’s Mission Bay science and technology campus and the SoMa technology district, the 510 Townsend Street site, and this key cluster expansion, mirrors the convergence of life science, technology, and healthcare occurring with the digital health revolution. | | Current Development | In September 2014, Alexandria and Uber formed a JV and acquired key land parcels at 1455/1515 Third Street in our Mission Bay submarket of San Francisco, for the ground-up development of two Class A buildings aggregating 422,980 RSF. Alexandria holds a 51% interest in the JV. Additionally, Alexandria executed a 15-year lease with Uber for 100% of the project. The purchase price of the land parcels, including 423 parking structure spaces, foundation piles, plans and permits, was $125.0 million, with 49% funded by Uber. The land parcels are fully entitled, including Proposition M office allocation approvals. The timing of revenue recognition for this lease may begin from 3Q16 to 1Q17, subject to completion of the design and budget of the buildings. | | Near-Term Opportunity | Ground-up development of a laboratory/office or technology office building at 510 Townsend Street aggregating approximately 300,000 gross square feet for either single or multi-tenancy to strategically capture strong demand from high-quality science and digital health companies in our world-class urban campus in the heart of San Francisco.  We are in the process of perfecting entitlements, negotiating with full building users, and subject to market conditions, we plan to commence construction as soon as possible in 2015.  We expect to disclose the estimated investment and yields upon commencement of ground-up development. | | ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 | 37 | | --- | --- |

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term Value-Creation Development Projects

San Diego

| Operating/Development Project | Near-Term Value-Creation Project | | --- | --- || Property | 5200 Illumina Way | | --- | --- | | Submarket/Market | University Town Center/San Diego | | Aerial | | | Background | Alexandria owns and operates the headquarters campus of Illumina, Inc., the leading developer, manufacturer, and marketer of life science tools and integrated systems for large-scale analysis of genetic variation and function with a market capitalization of $24.9 billion as of June 30, 2014. We previously delivered two build-to-suit projects, building 4 and building 5, to Illumina, Inc. in 4Q12 and 1Q13, respectively. | | Current Development | In 3Q14 we commenced development of 5200 Illumina Way – Building 6, a 149,663 RSF project that is 100% pre-leased to Illumina, Inc. | | Near-Term Opportunity | Ground-up development of additional laboratory/office buildings aggregating 318,151 RSF, of which we are currently in negotiations with an existing tenant for further expansion of approximately 140,000 RSF. The timing of revenue recognition for the initial delivery of this additional 140,000 RSF is expected to be 2Q16, subject to final letter of intent and lease negotiations as well as the completion of the design and budget for the project. Subject to market conditions, we expect to commence development of at least one additional building over the next one to three years as we expect expansion requirements from Illumina, Inc.  We expect to disclose the estimated investment and yields upon commencement of ground-up development. We are currently seeking approval to increase the site density. | | ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 | 38 | | --- | --- |

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term Value-Creation Development Projects

San Diego

| Operating | Near-Term Value-Creation Project | | --- | --- || Property | 10300 Campus Point Drive | | --- | --- | | Submarket/Market | University Town Center/San Diego | | Aerial | | | Background | 10300 Campus Point Drive is Alexandria’s flagship 449,759 RSF, multi-tenant laboratory/office campus in University Town Center with additional developable square footage. | | Near-Term Opportunity | Ground-up development of one building aggregating approximately 140,000 RSF.  We are currently negotiating a letter of intent with an existing tenant for an expansion into the majority of a new building. We expect to commence construction of this building in 2015. The timing of revenue recognition for the initial delivery of this project is expected to be 3Q16, subject to final letter of intent and lease negotiations as well as completion of the design and budget for the project. We also expect to disclose the estimated investment and yields upon commencement of ground-up development. We are currently seeking approval to increase the site density. | | ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 | 39 | | --- | --- |

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Near-Term and Future Value-Creation Development Projects

Seattle

| Operating | Near-Term and Future Value-Creation Project | | --- | --- || Property | 1165 Eastlake Avenue East | | --- | --- | | Submarket/Market | Lake Union/Seattle | | Aerial | | | Background | Alexandria’s Eastlake Avenue East assets are located in Lake Union, home to numerous highly renowned medical research institutions, including the Fred Hutchinson Cancer Research Center and the University of Washington, as well as the corporate headquarters for Amazon.com, Inc. | | Near-Term Opportunity | Ground-up development of a laboratory/office or tech office building for 106,000 RSF for single or multi-tenancy. We are currently negotiating for single-tenant occupancy.  Subject to market conditions, we expect to commence construction of this project over the next one to three years as we have a tenant identified for this project. We expect to disclose the estimated investment and yields upon commencement of ground-up development. | | ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 | 40 | | --- | --- |

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Unconsolidated Joint Ventures

(Dollars in thousands)

(Unaudited)

360 Longwood Avenue 1455/1515 Third Street Total<br><br>ARE Share
100.0% ARE’s<br><br>27.5% Share ^(1)^ 100.0% ARE’s<br><br>51.0% Share ^(1)^
Rental properties $ 105,599 $ 32,748 $ 21,150 $ 10,787 $ 43,535
Construction in progress 179,804 55,759 105,608 54,505 110,264
Investment in real estate 285,403 88,507 126,758 65,292 153,799
Less: accumulated depreciation — — (44 ) (22 ) (22 )
Investment in real estate, net 285,403 88,507 126,714 65,270 153,777
Other assets 6,278 1,726 4,566 2,327 4,053
Total assets $ 291,681 $ 90,233 $ 131,280 $ 67,597 $ 157,830
Debt $ 143,464 ^(2)^ $ 39,453 $ — $ — $ 39,453
Other liabilities 8,205 2,256 3,830 1,953 4,209
Total liabilities 151,669 41,709 3,830 1,953 43,662
Equity 140,012 48,524 127,450 65,644 114,168
Total liabilities and equity $ 291,681 $ 90,233 $ 131,280 $ 67,597 $ 157,830
Square Feet Square Feet
Rental properties ^(3)^ 154,100 —
Active development (CIP) ^(4)^ 259,436 422,980
Investment in real estate 413,536 422,980
(1) Amounts include costs incurred directly by us outside of the JVs. We believe the pro rata basis in our investments in unconsolidated JVs is useful information for investors as it provides our proportional share of the investment in real estate from all properties, including our share of the assets and liabilities of our unconsolidated JVs, which cannot be readily determined under GAAP consolidated financial statements or related notes. The pro rata basis allows investors to estimate the impact of real estate investments and debt financing at the JV level.
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(2) Secured construction loan with an aggregate commitment of $213.2 million, which bears interest at LIBOR+3.75%, with a floor of 5.25%. The maturity date of the loan is April 1, 2017, with two, one-year options to extend the stated maturity date to April 1, 2019, subject to certain conditions.
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(3) Delivery of RSF occurred in late September 2014.
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(4) See page 32 for further detail of the unconsolidated JV development projects.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 41
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Actual and Projected Construction Spending

(Dollars in thousands, except per square foot amounts)

(Unaudited)

Projected Construction Spending Three Months Ended December 31, 2014 2014 Guidance Range
Current value-creation projects in North America:
Development (Consolidated) $ 56,000
Development (Unconsolidated JV) 4,500
Redevelopment 8,000
Developments/redevelopments recently transferred to rental properties 22,000 ^(1)^
Generic laboratory infrastructure/building improvement projects 18,000 ^(2)^
Current value-creation projects in North America 108,500
Near-term value-creation projects:
Predevelopment/development 59,000 59,000 ^(3)^
Value-creation projects 167,500
Non-revenue-enhancing capital expenditures 5,500
Projected construction spending $ 173,000 $ 148,000 – 198,000
Actual construction spending for the nine months ended September 30, 2014 382,081
Guidance range for the year ended December 31, 2014 $ 530,000 – 580,000
(1) Represents spending for recently delivered projects, including 4757 Nexus Center Drive, 1616 Eastlake Avenue East, and 1551 Eastlake Avenue East, that may require additional construction prior to occupancy, generally ranging from 15,000 to 30,000 RSF of the project.
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(2) Includes, among others, 3535 General Atomics Court, 3000/3018 Western Avenue, 5810/5820 Nancy Ridge Drive, 8000 Virginia Manor Road, 125 Shoreway Road, and 44 Hartwell Avenue.
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(3) Includes costs related to: (i) approximately $19 million in connection with site excavation and construction of the slurry wall and building foundation related to 50 and 60 Binney Street, (ii) approximately $4 million of site and infrastructure costs for the 1.1 million RSF related to the Alexandria Center™ at Kendall Square, including utility access and roads, installation of storm drain systems, infiltration systems, traffic lighting/signals, streets, and sidewalks (excluding the portion related to 75/125 Binney Street, which is included in the projected development spending), and (iii) other predevelopment costs related to 10300 Campus Point Drive, 510 Townsend Street, and 1165 Eastlake Avenue East.
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Actual Construction Spending Nine Months Ended September 30, 2014
--- --- ---
Development – North America $ 238,035
Redevelopment – North America 47,458
Predevelopment 43,017
Generic laboratory infrastructure/building improvement projects in North America ^(1)^ 42,993
Development and redevelopment – Asia 10,578
Total construction spending $ 382,081
(1) Includes revenue-enhancing projects and amounts shown in the table to the right related to non-revenue-enhancing capital expenditures.
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Non-revenue-enhancing Capital Expenditures, Tenant Improvements, and Leasing Costs ^(1)^ Nine Months Ended<br><br>September 30, 2014 5 Year ^(2)^ Average<br><br>Per RSF
--- --- --- --- --- --- --- ---
Amount RSF Per RSF
Non-revenue-enhancing capital expenditures $ 5,440 14,888,722 $ 0.37 $ 0.24
Tenant improvements and leasing costs:
Re-tenanted space $ 4,486 252,223 $ 17.79 $ 9.66
Renewal space 5,194 876,859 $ 5.92 $ 5.40
Total tenant improvements and leasing costs/weighted average $ 9,680 1,129,082 $ 8.57 $ 6.57
(1) Excludes amounts that are recoverable from client tenants, revenue-enhancing, or related to properties that have undergone redevelopment.
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(2) Represents the average of the years ended December 31, 2010, through December 31, 2013, and the nine months ended September 30, 2014, annualized.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 42
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Acquisitions

(Dollars in thousands)

(Unaudited)

Unlevered
Property/Market – Submarket Type Date Acquired Number of Properties Purchase Price Loan Assumption SF Leased<br><br>% Negotiating<br><br>% Average <br>Cash Yield Initial <br>Stabilized Yield (Cash) Initial <br>Stabilized Yield
3545 Cray Court/<br><br>San Diego – Torrey Pines Operating 1/30/14 1 $ 64,000 $ 40,724 ^(1)^ 116,556 100% —% 7.2% 7.0% 7.2%
4025/4031/4045 Sorrento Valley Boulevard/ San Diego – Sorrento Valley Operating 3/17/14 3 12,400 7,605 ^(2)^ 42,566 100% —% 8.2% 7.8% 8.2%
225 Second Avenue/<br><br>Greater Boston – Route 128 Redevelopment 3/27/14 1 16,330 — 112,500 100% ^(3)^ —% 9.0% 8.3% 8.3%
510 Townsend Street/<br><br>San Francisco Bay Area – SoMa Land 4/18/14 — 50,000 — 300,000 —% 100% TBD TBD TBD
1455/1515 Third Street/<br><br>San Francisco Bay Area – Mission Bay ^(4)^ Land 9/4/14 — 125,000 — 422,980 100% —% TBD TBD TBD
Total 5 $ 267,730 $ 48,329
(1) Secured note payable with a contractual rate of 4.66% and a maturity date of January 1, 2023.
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(2) Secured note payable with a contractual rate of 5.74% and a maturity date of April 15, 2016.
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(3) Acquired vacant. We subsequently leased 100% of the project to accommodate the expansion requirements of an existing tenant.
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(4) In 3Q14, Alexandria and Uber formed a JV and acquired key land parcels for the ground-up development of two Class A buildings. Alexandria holds a 51% interest in the JV and Uber holds a 49% interest. Additionally, Alexandria executed a 15-year lease with Uber. The purchase price of the land parcels, includes 423 parking structure spaces, foundation piles, plans and permits, and was funded by pro rata contributions from Uber and Alexandria. The land parcels are fully entitled, and include Proposition M office allocation approvals. See page 32 for details of this development project. The design and budget of this project are in process, and the estimated project cost with related yields will be disclosed in the near future.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Dispositions

(In thousands)

(Unaudited)

Asset Dispositions

Amount
Completed asset sales as of November 3, 2014 $ 33,000
Pending asset sales under contract or subject to advanced negotiations ^(1)^ 83,000
$ 116,000
Total projected asset sales in 2014 $ 110,000 – 130,000
Other real estate sales – next one to five quarters ^(2)^ $ TBD
(1) At contractual or estimated sales price. Assets under sales contract may be subject to, among other steps, completion of due diligence, environmental review including public commentary, and various board and regulatory approvals.
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(2) We expect to identify real estate sales, including land and non-core/“core-like” operating assets, over the next one to five quarters to generate proceeds for reinvestment into high-value Class A pre-leased development projects. Additionally, we will continue to execute our strategy to deliver solid growth in funds from operations per share, as adjusted, and net asset value in 2014 and 2015, including any impact of asset sales.
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Discontinued Operations

Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014
Total revenues $ — $ —
Operating expenses 180 489
NOI from discontinued operations (180 ) (489 )
Depreciation expense — —
Loss from discontinued operations ^(1)^ $ (180 ) $ (489 )
(1) Loss from discontinued operations includes the results of operations for four operating properties that were classified as “held for sale” as of September 30, 2014. In October 2014, we completed the sale of one property which was classified as “held for sale” as of September 30, 2014.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Real Estate Investments in Asia

(Unaudited)

Number of Properties^^ ABR<br><br>(in thousands) Occupancy Percentage Book Value<br><br>(in thousands) Square Feet
Rental properties, net, in China 2 $ 1,229 53.8 % $ 83,166 632,078
Rental properties, net, in India 7 5,130 75.8 52,159 435,624
Rental properties, net, in Asia 9 $ 6,359 62.8 % ^(1)^ 135,325 1,067,702
Construction in progress: current development projects in India 35,602 304,762
Land held for future development in India 78,319 6,419,707
Total investments in real estate, net, in Asia $ 249,246 7,792,171
(1) Decrease in occupancy primarily due to the completion and delivery during 3Q14 of a development project in China, aggregating 160,694 RSF, consisting of 39,676 leased RSF and 121,018 RSF that are subject to marketing for lease.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Key Credit Metrics

(Unaudited)

Net Debt to Adjusted EBITDA Fixed Charge Coverage Ratio Target
Net Debt to<br><br>Adjusted EBITDA <6.5x
Fixed Charge<br><br>Coverage Ratio >3.0x
High-Quality Tenancy Pre-Leased Deliveries Drive Decline in <br>Non-Income-Producing Assets^(1)^ Liquidity
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Investment-Grade<br>Client Tenants:
53%
of ARE's <br>Total ABR
(1) Represents non-income-producing assets (CIP and land) as a percentage of gross investments in real estate.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Key Earnings and Capital Planning Considerations

(Unaudited)

(1) Represents non-income-producing assets as a percentage of gross investments in real estate. See pre-leasing of current projects on pages 31, 32, and 34.
(2) Free cash flow (“FCF”) represents estimated net cash provided by operating activities after dividends.
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(3) Represents amount of construction that can be funded by debt on a leverage neutral basis through growth in Adjusted EBITDA of a range from approximately $60 million to $70 million.
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(4) Selective asset sales are expected to provide additional equity-type capital for 2015, in addition to forecasted internal debt funding capacity generated by EBITDA growth and cash flows from operating activities after dividends. Additionally, we will continue to execute our strategy to deliver solid growth in funds from operations per share, as adjusted, and net asset value in 2014 and 2015, including any impact in asset sales.
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 47
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Summary of Debt

(Dollars in thousands)

(Unaudited)

Fixed-rate/hedged and unhedged variable-rate debt Fixed Rate/Hedged<br><br>Variable Rate Unhedged<br><br>Variable Rate Total<br><br>Consolidated Percentage of<br><br>Total Debt Weighted Average<br><br>Interest Rate at<br><br>End of Period ^(1)^ Weighted Average<br><br>Remaining Term<br><br>(in years)
Secured notes payable $ 406,125 $ 230,700 $ 636,825 18.2 % 4.67 % 2.9
Unsecured senior notes payable 1,747,290 — 1,747,290 49.9 3.98 8.6
$1.5 billion unsecured senior line of credit — 142,000 142,000 4.1 1.25 4.3
2016 Unsecured Senior Bank Term Loan 350,000 25,000 375,000 10.7 1.42 1.8
2019 Unsecured Senior Bank Term Loan 600,000 — 600,000 17.1 2.05 4.3
Total/weighted average $ 3,103,415 $ 397,700 $ 3,501,115 100.0 % 3.39 % 5.9
Percentage of total debt 89% 11% 100%
(1) Represents the weighted average interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted average interest rate excludes bank fees and amortization of loan fees.
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Debt maturities chart<br><br>(In millions)
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ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 48
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Summary of Debt (continued)

(Dollars in thousands)

(Unaudited)

Stated<br><br>Rate Weighted Average<br><br>Interest Rate ^(1)^ Maturity Date ^(2)^ Principal Payments Remaining for the Period Ending December 31,
Debt 2014 2015 2016 2017 2018 Thereafter Total
Secured notes payable
Seattle 6.00 % 6.00 % 11/18/14 $ 60 $ — $ — $ — $ — $ — $ 60
Maryland 5.64 4.50 6/1/15 34 5,777 — — — — 5,811
San Francisco Bay Area L+1.50 1.66 7/1/15 — 46,596 — — — — 46,596
Greater Boston, San Francisco Bay Area, and San Diego 5.73 5.73 1/1/16 440 1,816 75,501 — — — 77,757
Greater Boston, San Diego, and New York City 5.82 5.82 4/1/16 234 988 29,389 — — — 30,611
San Diego 5.74 3.00 4/15/16 42 175 6,916 — — — 7,133
San Francisco Bay Area L+1.40 1.56 6/1/16 — — 17,952 — — — 17,952
San Francisco Bay Area 6.35 6.35 8/1/16 619 2,652 126,715 — — — 129,986
Maryland 2.14 2.14 1/20/17 — — — 76,000 — — 76,000
Greater Boston L+1.35 1.50 8/23/17 — — — 90,092 — — 90,092
San Diego, Maryland, and Seattle 7.75 7.75 4/1/20 374 1,570 1,696 1,832 1,979 106,490 113,941
San Diego 4.66 4.66 1/1/23 337 1,402 1,464 1,540 1,614 33,367 39,724
San Francisco Bay Area 6.50 6.50 6/1/37 — 18 19 20 22 751 830
Unamortized premiums 54 218 60 — — — 332
Secured notes payable average/subtotal 4.71 % 4.67 2,194 61,212 259,712 169,484 3,615 140,608 636,825
2016 Unsecured Senior Bank Term Loan L+1.20 % 1.42 7/31/16 — — 375,000 — — — 375,000
2019 Unsecured Senior Bank Term Loan L+1.20 % 2.05 1/3/19 — — — — — 600,000 600,000
$1.5 billion unsecured senior line of credit L+1.10 % ^(3)^ 1.25 1/3/19 — — — — — 142,000 142,000
Unsecured senior notes payable 2.75 % 2.79 1/15/20 — — — — — 400,000 400,000
Unsecured senior notes payable 4.60 % 4.61 4/1/22 — — — — — 550,000 550,000
Unsecured senior notes payable 3.90 % 3.94 6/15/23 — — — — — 500,000 500,000
Unsecured senior notes payable 4.50 % 4.51 7/30/29 — — — — — 300,000 300,000
Unamortized discounts (79 ) (326 ) (337 ) (350 ) (362 ) (1,256 ) (2,710 )
Unsecured debt average/subtotal 3.11 (79 ) (326 ) 374,663 (350 ) (362 ) 2,490,744 2,864,290
Average/total 3.39 % $ 2,115 $ 60,886 $ 634,375 $ 169,134 $ 3,253 $ 2,631,352 $ 3,501,115
Balloon payments $ — $ 52,336 $ 629,851 $ 166,092 $ — $ 2,622,238 $ 3,470,517
Principal amortization 2,115 8,550 4,524 3,042 3,253 9,114 30,598
Total consolidated debt $ 2,115 $ 60,886 $ 634,375 $ 169,134 $ 3,253 $ 2,631,352 $ 3,501,115
Fixed-rate/hedged variable-rate debt $ 2,055 $ 14,290 $ 591,423 $ 3,042 $ 3,253 $ 2,489,352 $ 3,103,415
Unhedged variable-rate debt 60 46,596 42,952 166,092 — 142,000 397,700
Total consolidated debt $ 2,115 $ 60,886 $ 634,375 $ 169,134 $ 3,253 $ 2,631,352 $ 3,501,115
(1) Represents the weighted average contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted average interest rate excludes bank fees and amortization of loan fees.
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(2) Includes any extension options that we control.
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(3) In addition to the stated rate, the unsecured senior line of credit is subject to an annual facility fee of 0.20%.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Summary of Debt (continued)

(Dollars in thousands)

(Unaudited)

Secured construction loans
Address Market Stated Rate Maturity Date Outstanding<br><br>Balance Remaining Commitment Total Aggregate Commitments
259 East Grand Avenue San Francisco Bay Area L+1.50% 7/1/15 (1) $ 46,596 $ 8,404 $ 55,000
269 East Grand Avenue San Francisco Bay Area L+1.40% 6/1/16 (2) 17,952 18,048 36,000
75/125 Binney Street Greater Boston L+1.35% 8/23/17 (3) 90,092 160,308 250,400
$ 154,640 $ 186,760 $ 341,400
(1) We have two, one-year options to extend the stated maturity date to July 1, 2017, subject to certain conditions.
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(2) We have two, one-year options to extend the stated maturity date to June 1, 2018, subject to certain conditions.
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(3) We have a one-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.
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Debt covenants Unsecured Senior Notes Payable Unsecured Senior Line of Credit and<br><br>Unsecured Senior Bank Term Loans
--- --- --- --- ---
Debt Covenant Ratios Requirement Actual Requirement Actual
Total Debt to Total Assets ≤ 60% 39% ≤ 60.0% 34.9%
Secured Debt to Total Assets ≤ 40% 7% ≤ 45.0% 6.4%
Consolidated EBITDA to Interest Expense ≥ 1.5x 6.0x ≥ 1.50x 3.06x
Unencumbered Total Asset Value to Unsecured Debt ≥ 150% 257% N/A N/A
Unsecured Leverage Ratio N/A N/A ≤ 60.0% 37.8%
Unsecured Interest Coverage Ratio N/A N/A ≥ 1.50x 8.64x
Interest rate swap agreements
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Number of Contracts Weighted Average Interest Pay Rate ^(1)^ Fair Value as of 9/30/14 Notional Amount in Effect as of
Effective Date Maturity Date 9/30/14 12/31/14 12/31/15 12/31/16
December 31, 2013 December 31, 2014 2 0.98% $ (1,051 ) $ 500,000 $ — $ — $ —
December 31, 2013 March 31, 2015 2 0.23% (110 ) 250,000 250,000 — —
March 31, 2014 March 31, 2015 4 0.21% (61 ) 200,000 200,000 — —
December 31, 2014 March 31, 2016 3 0.53% (23 ) — 500,000 500,000 —
March 31, 2016 March 31, 2017 3 1.40% 958 — — — 500,000
Total $ (287 ) $ 950,000 $ 950,000 $ 500,000 $ 500,000
(1) In addition to the interest pay rate, borrowings outstanding as of September 30, 2014, under our unsecured senior bank term loans include an applicable margin of 1.20% and borrowings outstanding under our unsecured senior line of credit include an applicable margin of 1.10%.
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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Definitions and Reconciliations

(Unaudited)

This section contains additional information for sections throughout this supplemental information package as well as explanations of certain non-GAAP financial measures and the reasons why we use these supplemental measures of performance. Our computation of non-GAAP measures may not be comparable to similar measures reported by other companies.  Additional detail can be found in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Adjusted EBITDA

The following table reconciles net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to EBITDA and Adjusted EBITDA:

Three Months Ended Nine Months Ended
(In thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Net income $ 35,943 $ 36,116 $ 40,749 $ 44,222 $ 32,453 $ 112,808 $ 96,027
Interest expense 20,555 17,433 19,123 17,783 16,171 57,111 50,169
Depreciation and amortization:
Continuing operations 58,388 57,314 50,421 48,084 48,866 166,123 141,039
Discontinued operations — — — 17 236 — 1,638
EBITDA 114,886 110,863 110,293 110,106 97,726 336,042 288,873
Stock compensation expense 3,068 3,076 3,228 4,011 3,729 9,372 11,541
Loss on early extinguishment of debt 525 — — — 1,432 525 1,992
Loss on sale of real estate — — — — — — 121
Gain on sales of land parcels (8 ) (797 ) — (4,052 ) — (805 ) (772 )
Impairment of investments — — — 853 — — —
Deal costs — — — 1,446 — — —
Adjusted EBITDA $ 118,471 $ 113,142 $ 113,521 $ 112,364 $ 102,887 $ 345,134 $ 301,755

EBITDA represents earnings before interest, taxes, depreciation, and amortization, a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance.  We use adjusted EBITDA (“Adjusted EBITDA”) to assess the performance of our core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis.  Adjusted EBITDA is calculated as EBITDA, excluding stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate and land parcels, deal costs, and impairments.  We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from our operations on an unleveraged basis before the effects of taxes, depreciation and amortization, stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate and land parcels, deal costs, and impairments.

Adjusted EBITDA margins

Our total revenues exclude revenues from discontinued operations, and for the purposes of calculating the adjusted EBITDA margin ratio, we exclude adjusted EBITDA generated by our discontinued operations to improve the consistency and comparability from period to period.

The following table reconciles adjusted EBITDA to adjusted EBITDA – excluding discontinued operations:

Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Adjusted EBITDA $ 118,471 $ 113,142 $ 113,521 $ 112,364 $ 102,887 $ 345,134 $ 301,755
Add back: operating (income) loss from discontinued operations 180 147 162 126 (193 ) 489 (2,802 )
Adjusted EBITDA – excluding discontinued operations $ 118,651 $ 113,289 $ 113,683 $ 112,490 $ 102,694 $ 345,623 $ 298,953
Total revenues $ 185,615 $ 176,402 $ 176,186 $ 168,823 $ 158,315 $ 538,203 $ 462,328
Adjusted EBITDA margins 64% 64% 65% 67% 65% 64% 65%

Adjusted funds from operations

Adjusted funds from operations (“AFFO”) is a non-GAAP financial measure that we use as a supplemental measure of our performance.  AFFO excludes certain items that are not representative of our core operating results because such items are dependent upon historical costs or are subject to judgmental valuation inputs and the timing of our decisions.

AFFO is not intended to represent cash flow for the period, and is intended only to provide an additional measure of performance.  We believe that net income attributable to Alexandria’s common stockholders is the most directly comparable GAAP financial measure to AFFO.  We believe that AFFO is a widely recognized measure of the operations of equity REITs, and presenting AFFO will enable investors to assess our performance in comparison to other equity REITs.  However, other equity REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to AFFO calculated by other equity REITs.  AFFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.

Annualized base rent

Annualized base rent means the annualized fixed base rental amount in effect as of the end of the period, related to our operating rentable square feet (using rental revenue computed on a straight-line basis in accordance with GAAP).

Average cash yield

See definition of initial stabilized yield (unlevered).

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ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Definitions and Reconciliations (continued)

(Unaudited)

Cash interest

Cash interest is equal to interest expense calculated in accordance with GAAP, plus capitalized interest, less amortization of loan fees and debt premiums/discounts. See definition of fixed charge coverage ratio for a reconciliation of interest expense, the most directly comparable GAAP financial measure, to cash interest.

Construction in progress

A key component of our business model is our value-creation development and redevelopment projects.  These projects are focused on providing high-quality, generic, and reusable science and technology space to meet the real estate requirements of and are reusable by a wide range of client tenants.  We also have certain significant value-creation projects undergoing important and substantial predevelopment activities to bring these assets to their intended use.  These critical activities add significant value and are required for the construction of buildings.  Upon completion, each value-creation project is expected to generate significant revenues and cash flows.  Our development and redevelopment projects are generally in locations that are highly desirable to high-quality science and technology entities, which we believe results in higher occupancy levels, longer lease terms, and higher rental income and returns.  Development projects consist of the ground-up development of generic and reusable facilities.  We generally will not commence new development projects for above-ground construction of Class A science and technology space without first securing pre-leasing for such space except when there is significant market demand for high-quality Class A facilities.  Redevelopment projects consist of the permanent change in use of office, warehouse, and shell space into science and technology space.

Land undergoing predevelopment activities (CIP)

Land undergoing predevelopment activities is classified as construction in progress and is undergoing activities prior to commencement of construction of aboveground building improvements.  If aboveground construction is not initiated at completion of predevelopment activities, the land parcel will be classified as land held for future development.  Our objective with predevelopment is to reduce the time it takes to deliver projects to prospective client tenants.

We are required to capitalize project costs, including interest, property taxes, insurance, and other costs directly related and essential to the development or construction of a project during periods when activities necessary to prepare an asset for its intended use are in progress.  Predevelopment costs generally include the following activities prior to commencement of vertical construction:

Ÿ Traditional preconstruction costs including entitlement, design, construction drawings, Building Information Modeling (3-D virtual modeling), budgeting, sustainability and energy optimization reviews, permitting, and planning for all aspects of the project.
Ÿ Site and infrastructure construction costs including belowground site work, utility connections, land grading, drainage, egress and regress access points, foundation, and other costs to prepare the site for construction of aboveground building improvements.
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Land held for future development

All predevelopment efforts have been advanced to appropriate stages and no further predevelopment activities are ongoing and therefore, interest, property taxes, and other costs related to these assets are expensed as incurred.

Dividend payout ratio

Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (shares of common stock outstanding on the respective record date multiplied by the related dividend per share) to FFO attributable to Alexandria’s common stockholders on a diluted basis, as adjusted.

Dividend yield

Dividend yield for the quarter represents the annualized quarter dividend divided by the closing common stock price at the end of the quarter.

Fixed charge coverage ratio

The fixed charge coverage ratio is a supplemental measure of our ability to satisfy fixed financing obligations and preferred stock dividends.  The following table presents a reconciliation of interest expense, the most directly comparable GAAP financial measure to cash interest and fixed charges:

Three Months Ended
(Dollars in thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Adjusted EBITDA $ 118,471 $ 113,142 $ 113,521 $ 112,364 $ 102,887
Interest expense $ 20,555 $ 17,433 $ 19,123 $ 17,783 $ 16,171
Add: capitalized interest 12,125 11,302 12,013 14,116 16,788
Less: amortization of loan fees (2,786 ) (2,743 ) (2,561 ) (2,636 ) (2,487 )
Less: amortization of debt premiums (discounts) 36 69 (205 ) (146 ) (153 )
Cash interest 29,930 26,061 28,370 29,117 30,319
Dividends on preferred stock 6,471 6,472 6,471 6,471 6,472
Fixed charges $ 36,401 $ 32,533 $ 34,841 $ 35,588 $ 36,791
Fixed charge coverage ratio:
– quarter annualized 3.3x 3.5x 3.3x 3.2x 2.8x
– trailing 12 months 3.3x 3.2x 3.0x 2.9x 2.8x

Funds from operations and funds from operations, as adjusted

FFO is a widely used non-GAAP financial measure among equity REITs.  We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT.  Moreover, we believe that FFO, as adjusted, is also helpful because it allows investors to compare our performance to the performance of other real estate companies on a consistent basis, without having to account for differences caused by investment and disposition decisions, financing decisions, terms of securities, capital structures, and capital market transactions.  We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in its April 2002 White Paper and related implementation guidance. Neither FFO nor FFO, as adjusted, should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity, nor are they indicative of the availability of funds for our cash needs, including funds available to make distributions.

ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 52

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Definitions and Reconciliations (continued)

(Unaudited)

Initial stabilized yield (unlevered)

Initial stabilized yield is calculated as the quotient of the estimated amounts of NOI and our investment in the property.  Our initial stabilized yield excludes the impact of leverage.  Our cash rents related to our value-creation projects are expected to increase over time and our average cash yields are expected, in general, to be greater than our initial stabilized yields on a cash basis.  Our estimates for initial yields, initial yields on a cash basis, and total costs at completion, represent our initial estimates at the commencement of the project.  We expect to update this information upon completion of the project, or sooner, if there are significant changes to the expected project yields or costs.

Ÿ Initial stabilized yield: reflects rental income less straight-line rent, including contractual rent escalations and any rent concessions over the term(s) of the lease(s), calculated on a straight-line basis.
Ÿ Initial stabilized yield – cash basis: reflects cash rents at the stabilization date after initial rental concessions, if any, have elapsed.
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Average cash yield reflects cash rents, including contractual rent escalations after initial rental concessions have elapsed, calculated on a straight-line basis.

Net debt to Adjusted EBITDA

Net debt to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure in evaluating our balance sheet leverage.  The following table reconciles net debt to Adjusted EBITDA: (Dollars in thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Secured notes payable $ 636,825 $ 615,551 $ 597,511 $ 708,831 $ 708,653
Unsecured senior notes payable 1,747,290 1,048,310 1,048,270 1,048,230 1,048,190
Unsecured senior line of credit 142,000 571,000 506,000 204,000 14,000
Unsecured senior bank term loans 975,000 1,100,000 1,100,000 1,100,000 1,100,000
Less: cash and cash equivalents (67,023 ) (61,701 ) (74,970 ) (57,696 ) (53,839 )
Less: restricted cash (24,245 ) (24,519 ) (30,454 ) (27,709 ) (30,654 )
Net debt $ 3,409,847 $ 3,248,641 $ 3,146,357 $ 2,975,656 $ 2,786,350
Adjusted EBITDA:
– quarter annualized $ 473,884 $ 452,568 $ 454,084 $ 449,456 $ 411,548
– trailing 12 months $ 457,498 $ 441,914 $ 428,699 $ 414,119 $ 403,974
Net debt to Adjusted EBITDA:
– quarter annualized 7.2 x 7.2 x 6.9 x 6.6 x 6.8 x
– trailing 12 months 7.5 x 7.4 x 7.3 x 7.2 x 6.9 x

NOI

The following table reconciles total NOI from continuing operations to income from continuing operations:

Three Months Ended Nine Months Ended
(In thousands) 9/30/14 9/30/13 9/30/14 9/30/13
Income from continuing operations $ 36,115 $ 32,496 $ 112,492 $ 94,212
Add back other expenses:
General and administrative 12,609 11,666 39,669 35,769
Interest 20,555 16,171 57,111 50,169
Depreciation and amortization 58,388 48,866 166,123 141,039
Loss on early extinguishment of debt 525 1,432 525 1,992
Total other expenses 92,077 78,135 263,428 228,969
Total NOI from continuing operations $ 128,192 $ 110,631 $ 375,920 $ 323,181

NOI is a non-GAAP financial measure equal to income from continuing operations, the most directly comparable GAAP financial measure, excluding loss on early extinguishment of debt, impairment of land parcel, depreciation and amortization, interest expense, and general and administrative expense.  We believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects primarily those income and expense items that are incurred at the property level.  Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets.  NOI on a cash basis is NOI, adjusted to exclude the effect of straight-line rent adjustments required by GAAP.  We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent adjustments to rental revenue.

Further, we believe NOI is useful to investors as a performance measure, because when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.  NOI presented by us may not be comparable to NOI reported by other equity REITs that define NOI differently.  We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with income from continuing operations as presented in our consolidated statements of income.  NOI should not be considered as an alternative to income from continuing operations as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions.

ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 53

ALEXANDRIA REAL ESTATE EQUITIES, INC.

September 30, 2014

Definitions and Reconciliations (continued)

(Unaudited)

Same property comparisons

As a result of changes within our total property portfolio during the comparative periods presented, including assets acquired, properties placed into development and redevelopment, and projects delivered into operations from development and redevelopment, the consolidated total rental revenues, tenant recoveries and rental operating expenses in our operating results can show significant changes from period to period. In order to supplement an evaluation of our results of operations over a given period, we analyze the operating performance for all properties that were fully operating for the entirety of the comparative periods presented separately from properties acquired subsequent to the first day in the earliest comparable period presented, properties that underwent development or redevelopment at any time during the comparative periods, and corporate entities (legal entities performing general and administrative functions), which are excluded from same property results. Additionally, rental revenues from lease termination fees, if any, are excluded from the results of the same properties.

Stabilized occupancy date

The stabilized occupancy date represents the estimated date on which the project is expected to reach occupancy of 95% or greater.

Total market capitalization

Total market capitalization is equal to the sum of outstanding shares of series E cumulative convertible preferred stock and common stock multiplied by the related closing price of each class at the end of each period presented, the liquidation value of the series D cumulative convertible preferred stock, and total debt.

Unencumbered NOI as a percentage of total NOI from continuing operations

Unencumbered NOI as a percentage of total NOI from continuing operations is a non-GAAP financial measure that we believe is useful to investors as a performance measure of the results of operations of our unencumbered real estate assets, as it reflects primarily those income and expense items that are incurred at the unencumbered property level.  We use unencumbered NOI as a percentage of total NOI from continuing operations in order to assess our compliance with our financial covenants under our debt obligations because the measure serves as a proxy for a financial measure under such debt obligations.  Unencumbered NOI is derived from assets classified in continuing operations which are not subject to any mortgage, deed of trust, lien, or other security interest as of the period for which income is presented. Unencumbered NOI for periods prior to the three months ended September 30, 2014, has been reclassified to conform to current period presentation related to discontinued operations.

Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Unencumbered NOI $ 108,155 $ 103,951 $ 103,096 $ 82,267 $ 76,607 $ 315,202 $ 222,716
Encumbered NOI 20,037 20,098 20,583 36,664 34,024 60,718 100,465
Total NOI from continuing operations $ 128,192 $ 124,049 $ 123,679 $ 118,931 $ 110,631 $ 375,920 $ 323,181
Unencumbered NOI as a percentage of total NOI 84% 84% 83% 69% 69% 84% 69%

Weighted average interest rate for capitalization of interest

The weighted average interest rate required for calculating capitalization of interest pursuant to GAAP represents a weighted average rate based on the rates applicable to borrowings outstanding during the period and includes the impact of our interest rate swap agreements, amortization of debt discounts/premiums, amortization of loan fees, and other bank fees.  A separate calculation is performed to determine our weighted average interest rate for capitalization for each month.  The rate will vary each month due to changes in variable interest rates, outstanding debt balances, the proportion of variable-rate debt to fixed-rate debt, the amount and terms of effective interest rate swap agreements, and the amount of loan fee amortization.

The following table presents the weighted average interest rate for capitalization of interest:

Three Months Ended
9/30/14 6/30/14 3/31/14 12/31/13 9/30/13
Weighted average interest rate 3.73% 3.41% 3.88% 4.09% 4.33%

Weighted average shares for calculating FFO, FFO, as adjusted, and AFFO per share

Weighted average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria’s common stockholders represent the weighted average of common shares outstanding during the period, calculated as follows:

Three Months Ended Nine Months Ended
(In thousands) 9/30/14 6/30/14 3/31/14 12/31/13 9/30/13 9/30/14 9/30/13
Weighted average shares – basic 71,195 71,126 71,073 71,000 70,900 71,121 67,040
Assumed conversion of 8.00% unsecured senior convertible notes — — — — 5 — 6
Weighted average shares – diluted 71,195 71,126 71,073 71,000 70,905 71,121 67,046
ALEXANDRIA REAL ESTATE EQUITIES, INC<br>ALL RIGHTS RESERVED © 2014 54
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