8-K - ARE - Equibles

UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): August 6, 2009

ALEXANDRIA REAL ESTATE EQUITIES,INC.

(Exact name of registrant as specified in its charter)

Maryland	1-12993	95-4502084
(State or other<br> jurisdiction of incorporation)	(Commission File<br> Number)	(I.R.S. Employer<br> Identification No.)
385 East Colorado Boulevard, Suite 299 Pasadena, California		91101
(Address of<br> 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<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material<br> pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17<br> CFR 240.14d-2(b))
o	Pre-commencement<br> communications pursuant to Rule 13e-4 (c) under the Exchange Act<br> (17 CFR 240.13e-4 (c))

Item2.02. Results of Operations andFinancial Condition.

On August 6, 2009, we issued a press release entitled “Alexandria Real Estate Equities, Inc. Reports Second Quarter 2009 Operating and Financial Results” which sets forth our results of operations for the second quarter ended June 30, 2009. A copy of that press release is attached hereto as Exhibit 99.1.

Item9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release dated August 6, 2009.

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<br> EQUITIES, INC.
August 6, 2009	By:	/s/ Joel S. Marcus
		Joel S. Marcus
		Chairman/Chief<br> Executive Officer
		(Principal Executive<br> Officer)
	By:	/s/ Dean A. Shigenaga
		Dean A. Shigenaga
		Chief Financial Officer
		(Principal Financial<br> and Chief Accounting Officer)

EXHIBITINDEX

Exhibit Number	Exhibit Title
99.1	Press Release dated<br> August 6, 2009

Exhibit99.1

Contact:	Joel S. Marcus
****	Chairman/Chief Executive Officer
****	Alexandria Real Estate Equities, Inc.
****	(626) 578-9693

ALEXANDRIAREAL ESTATE EQUITIES, INC.

REPORTSSECOND QUARTER 2009

OPERATINGAND FINANCIAL RESULTS

Highlights

SecondQuarter 2009:

· Second Quarter 2009 Funds from Operations Per Share (Diluted) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders of $1.59, up 10%, Compared to Second Quarter 2008 Funds from Operations Per Share (Diluted) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders of $1.44

· Second Quarter 2009 Earnings Per Share (Diluted) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders of $0.82, up 34%, Compared to Second Quarter 2008 Earnings Per Share (Diluted) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders of $0.61

· Second Quarter 2009 GAAP Same Property Revenues Less Operating Expenses up 2.2%

· Executed 49 Leases for 473,000 Rentable Square Feet; Six Months Ended June 30, 2009 Executed 82 Leases for 936,000 Rentable Square Feet

· Second Quarter 2009 GAAP Rental Rate Increase of 3.3% on Renewed/Released Space

· Second Quarter Occupancy Increases to 94.5%

· Operating Margins Steady at 74%

· Closed 8% Unsecured Convertible Notes Offering with Net Proceeds of $233 Million

· Repurchased, in Privately Negotiated Transactions, $75 Million (Par Value) of Our 3.70% Unsecured Convertible Notes

· Reduced $100 Million of Secured Debt Obligations

· Extended 2009 Maturity to 2012 of a Secured Note Payable Aggregating $38 Million; Since January 1, 2008, Extended or Refinanced $448 Million of Secured Notes Payable

July 2009:

· Entered Into 15-Year Lease with Eli Lilly and Company as Anchor Tenant at Alexandria Center for Science and Technology at East River Science Park, New York City

· Executed Term Sheet for 10-Year Secured Loan for $120 Million

· Krupal Raval Joins Alexandria as Vice President – Capital Markets, Former Fidelity Management and Research Analyst and Citi/Smith Barney REIT Equity Research Analyst

PASADENA, CA. – August 6, 2009 – Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the second quarter ended June 30, 2009.

For the second quarter of 2009, we reported Funds from Operations (“FFO”) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $68,401,000, or $1.59 per share (diluted), compared to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $45,779,000, or $1.44 per share (diluted), for the second quarter of 2008. Comparing the second quarter of 2009 to the second quarter of 2008, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders and FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders per share (diluted) increased 49% and 10%, respectively. For the six months ended June 30, 2009, we reported Funds from Operations (“FFO”) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $129,764,000, or $3.43 per share (diluted), compared to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $84,047,000, or $2.65 per share (diluted), for six months ended June 30, 2008. Comparing the six months

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ALEXANDRIAREAL ESTATE EQUITIES, INC. REPORTS SECOND QUARTER 2009 RESULTS

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ended June 30, 2009 to the six months ended June 30, 2008, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders and FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders per share (diluted) increased 54% and 29%, respectively. In the second quarter of 2009, we recognized a gain on early extinguishment of debt of approximately $11,254,000 related to the repurchase, in privately negotiated transactions, of approximately $75 million (par value) of our 3.70% unsecured convertible notes. Additionally, during the second quarter of 2009, we recognized income of approximately $7,242,000 for a cash payment related to real estate acquired in November 2007. For purposes of this paragraph, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders includes the effect of the assumed conversion of our 8% unsecured convertible notes.

FFO is a non-GAAP measure widely used by publicly traded real estate investment trusts. 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. A reconciliation of GAAP net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders is included in the financial information accompanying this press release. The primary reconciling item between GAAP net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders and FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders is depreciation and amortization expense. Depreciation and amortization expense for the three months ended June 30, 2009 and 2008 was $29,722,000 and $27,003,000, respectively. Depreciation and amortization expense for the six months ended June 30, 2009 and 2008 was $61,168,000 and $52,813,000, respectively. Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders for the second quarter of 2009 was $35,498,000, or $0.82 per share (diluted), compared to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $19,421,000, or $0.61 per share (diluted), for the second quarter of 2008. Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders for the six months ended June 30, 2009 was $68,287,000, or $1.81 per share (diluted), compared to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders of $52,195,000, or $1.65 per share (diluted), for the six months ended June 30, 2008. For purposes of this paragraph, net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders includes the effect of the assumed conversion of our 8% unsecured convertible notes.

For the second quarter of 2009, we executed a total of 49 leases for approximately 473,000 rentable square feet of space at 27 different properties (excluding month-to-month leases). Of this total, approximately 368,000 rentable square feet related to new or renewal leases of previously leased space and approximately 105,000 rentable square feet related to developed, redeveloped or previously vacant space. Of the 105,000 rentable square feet, approximately 65,000 rentable square feet were delivered from our development or redevelopment programs, with the remaining approximately 40,000 rentable square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 3.3% higher (on a GAAP basis) than rental rates for expiring leases.

For the six months ended June 30, 2009, we executed a total of 82 leases for approximately 936,000 rentable square feet of space at 38 different properties (excluding month-to-month leases). Of this total, approximately 618,000 rentable square feet related to new or renewal leases of previously leased space and approximately 318,000 rentable square feet related to developed, redeveloped or previously vacant space. Of the 318,000 rentable square feet, approximately 108,000 rentable square feet were delivered from our development or redevelopment programs, with the remaining approximately 210,000 rentable square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 4.0% higher (on a GAAP basis) than rental rates for expiring leases.

During the six months ended June 30, 2009, we sold three properties aggregating 64,218 rentable square feet to a life science user. These properties were located in San Diego and were sold for approximately $14,449,000 at a gain of approximately $2,234,000. As of June 30, 2009, one property with approximately 92,711 rentable square feet was classified as “held for sale” and is expected to be sold to a life science user.

In July 2009, we announced that we entered into a 15-year lease with Eli Lilly and Company (“Lilly”) as the anchor tenant at the Alexandria Center for Science and Technology at East River Science Park (“the Alexandria Center”), a highly advanced state-of-the-art urban science park. Lilly has leased approximately 91,000 rentable square feet, as well as an additional approximately 9,000 rentable **** square feet **** of core services space, at the Alexandria Center, which will become the new research headquarters for ImClone Systems, a wholly-owned subsidiary of Lilly, and New York City’s life science collaboration and translational research epicenter.

In July 2009, we executed a term sheet with an insurance company for a secured loan approximating $120 million. The term sheet includes a 10-year term and is secured by several operating properties.

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ALEXANDRIAREAL ESTATE EQUITIES, INC. REPORTS SECOND QUARTER 2009 RESULTS

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Additionally in July 2009, we announced that Krupal Raval will join the Company as Vice President – Capital Markets. Mr. Raval joins the Company with seven solid years as a real estate equity research analyst. Mr. Raval’s career experience includes being a top ranked research analyst at Fidelity Management and Research and Citi/Smith Barney in addition to recognition as a National Scholar from Cornell University. While at Citi/Smith Barney, the REIT equity research team was ranked number one for several years by Institutional Investors.

As of June 30, 2009, approximately 89% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, approximately 8% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses. Additionally, approximately 92% of our leases (on a rentable square footage basis) provided for the recapture of certain capital expenditures, and approximately 93% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed or indexed based on the consumer price index or another index.

Based on our current view of existing market conditions and certain current assumptions, our updated guidance for FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders and earnings per share (diluted) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders are as follows:

****	2009
FFO per share (diluted) (1)	$5.60 (1)
Earnings per share (diluted) (1)	$2.58 (1)
(1)	Our guidance for 2009<br> has been updated to reflect the $7.2 million gain for a cash payment related<br> to real estate acquired in November 2007 and also reflects the $11.3<br> million gain on early extinguishment of debt. Our guidance for FFO per share<br> (diluted) for the twelve months ended December 31, 2009 assumes<br> conversion of our 8% unsecured convertible notes as the impact of the notes<br> is expected to be dilutive under the “if-converted” method pursuant to<br> Statement of Financial Accounting Standards No. 128, “Earnings per<br> Share”. Our guidance for earnings per share (diluted) for the twelve months<br> ended December 31, 2009, however, does not assume conversion as the<br> “if-converted” method for our 8% unsecured convertible notes is expected to<br> be anti-dilutive.
---	---

Alexandria Real Estate Equities, Inc. (“Alexandria”) has a very broad and diversified quality client tenant base. As of June 30, 2009, on a rental revenue basis by sector, Alexandria’s multinational pharmaceutical client tenants represented approximately 27% of its client tenant mix, led by its top three client tenants Novartis AG, GlaxoSmithKline plc and Roche Holding Ltd; public biopharmaceutical companies represented approximately 21% and included the three largest in the sector, Amgen Inc., Gilead Sciences, Inc. and Celgene Corporation; revenue producing life science product and service companies represented approximately 17%, led by Quest Diagnostics Incorporated, Laboratory Corporation of America Holdings and Qiagen N.V.; government agencies and renown medical and research institutions represented approximately 14%, including The Scripps Research Institute, Massachusetts Institute of Technology, Fred Hutchinson Cancer Research Center, University of Washington, the Burnham Institute for Medical Research and the United States Government; private biopharmaceutical companies represented approximately 13% and were dominated by high-quality, leading-edge companies with blue chip venture and institutional investors, including Ambrx, Inc., BrainCells Inc., Ikaria Holdings, Inc., Macrogenics Inc. and Proteostatsis Therapeutics, Inc.; the remaining approximately 8% consisted of traditional office tenants. The two fastest growing sectors by revenue currently include leading institutional and multinational pharmaceutical client tenants. Alexandria’s innovative business model, very strong and unique life sciences and underwriting skills with substantial experience and expertise, long-term life science industry relationships and sophisticated management with both real estate and life science operating experience and expertise, set Alexandria apart from all other publicly-traded real estate investment trusts (“REITs”).

Alexandria Real Estate Equities, Inc., Landlord of Choice to the Life Science Industry®, is the largest owner and pre-eminent first-in-class REIT focused principally on science-driven cluster formation. Alexandria is the leading provider of high-quality environmentally sustainable real estate, technical infrastructure, and services to the broad and diverse life science industry. Client tenants include institutional (universities and independent not-for-profit institutions), pharmaceutical, biopharmaceutical, medical device, product, service and translational entities, as well as government agencies. Alexandria’s operating platform is based on the principle of “clustering,” with assets and operations located in key life science markets. Our asset base approximates 12.8 million rentable square feet consisting of 156 properties approximating 11.7 million rentable square feet (including spaces undergoing active redevelopment) and properties undergoing ground-up development approximating an additional 1.1 million rentable square feet.

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ALEXANDRIAREAL ESTATE EQUITIES, INC. REPORTS SECOND QUARTER 2009 RESULTS

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This press release 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 2009 earnings per share (diluted) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders, 2009 FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders and our redevelopment and development projects. Our actual results may differ materially from those projected in such 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 or increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, general and local economic conditions and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission (“SEC”). All forward-looking statements are made as of today, and we assume no obligation to update this information. 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.

(Tables follow)

ALEXANDRIAREAL ESTATE EQUITIES, INC.

CondensedConsolidated Income Statements

(Dollarsin thousands, except per share data)

(Unaudited)

****	Three Months Ended June 30,					Six Months Ended June 30,
	2009		****	2008 (1)		2009		2008 (1)
Income statement data
Total revenues	$	121,432		$	108,778	$	253,303	$	217,465
Expenses
Rental operations	29,059			27,145		61,189		55,029
General and administrative	8,803			8,447		18,219		17,232
Interest	21,063			18,739		40,956		41,885
Depreciation and amortization	29,525			26,735		60,794		52,122
Non-cash impairment on investments	–			–		–		1,985
Total expenses	88,450			81,066		181,158		168,253
Gain on early extinguishment of debt	11,254			–		11,254		–
Income from continuing operations	44,236			27,712		83,399		49,212
(Loss) income from discontinued operations, net	(120		)	64		1,966		15,715
Net income	44,116			27,776		85,365		64,927
Net income attributable to noncontrolling interests	4,362			948		5,237		1,899
Dividends on preferred stock	7,089			7,118		14,178		10,046
Net income attributable to unvested restricted stock<br> awards	367			290		868		790
Net income attributable to Alexandria Real Estate<br> Equities, Inc.’s common stockholders	$	32,298		$	19,420	$	65,082	$	52,192
Earnings per share attributable to Alexandria Real<br> Estate Equities, Inc.’s common stockholders – basic
Continuing operations	$	0.83		$	0.61	$	1.77	$	1.16
Discontinued operations, net	–			–		0.05		0.49
Earnings per share – basic	$	0.83		$	0.61	$	1.82	$	1.65
Earnings per share attributable to Alexandria Real<br> Estate Equities, Inc.’s common stockholders – diluted
Continuing operations	$	0.82		$	0.61	$	1.76	$	1.16
Discontinued operations, net	–			–		0.05		0.49
Earnings<br> per share – diluted	$	0.82		$	0.61	$	1.81	$	1.65
(1)	Includes the<br> retrospective impact of FASB Staff Position No. APB 14-1, “Accounting<br> for Convertible Debt Instruments That May Be Settled in Cash Upon<br> Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”), FASB Staff<br> Position No. EITF 03-6-1, “Determining Whether Instruments Granted in<br> Share-Based Payment Transactions Are Participating Securities” (“FSP EITF<br> 03-6-1”) and Statement of Financial Accounting Standards No. 160,<br> “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”).
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ALEXANDRIAREAL ESTATE EQUITIES, INC.

CondensedConsolidated Balance Sheets

(Inthousands)

(Unaudited)

****	June 30,		****	December 31,		****
****	2009		****	2008 (1)		****
Assets			****	****		****
Rental<br> properties, net	$	3,483,679		$	3,325,201
Properties<br> undergoing development and redevelopment, and land held for development	1,406,451			1,398,895
Cash<br> and cash equivalents	70,313			71,161
Tenant<br> security deposits and other restricted cash	51,683			67,782
Tenant<br> receivables	4,665			6,453
Deferred<br> rent	87,697			85,733
Investments	66,068			61,861
Other<br> assets	116,097			114,991
Total<br> assets	$	5,286,653		$	5,132,077
Liabilities and Equity
Secured<br> notes payable	$	941,600		$	1,081,963
Unsecured<br> line of credit and unsecured term loan	1,307,000			1,425,000
Unsecured<br> convertible notes	577,984			431,145
Accounts<br> payable, accrued expenses and tenant security deposits	312,313			386,801
Dividends<br> payable	20,005			32,105
Total<br> liabilities	3,158,902			3,357,014
Redeemable **** noncontrolling interests	41,012			33,963
Alexandria<br> Real Estate Equities, Inc. stockholders’ equity:
Series C<br> preferred stock	129,638			129,638
Series D<br> cumulative convertible preferred stock	250,000			250,000
Common<br> stock	390			319
Additional<br> paid-in capital	1,718,737			1,407,294
Accumulated<br> other comprehensive loss	(53,013		)	(87,241		)
Total<br> Alexandria Real Estate Equities, Inc. stockholders’ equity	2,045,752			1,700,010
Noncontrolling<br> interests	40,987			41,090
Total<br> equity	2,086,739			1,741,100
Total	$	5,286,653		$	5,132,077
(1)	Includes the<br> retrospective impact of FSP APB 14-1, FSP EITF 03-6-1 and SFAS 160.
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ALEXANDRIAREAL ESTATE EQUITIES, INC.

Earningsper Share

(Unaudited)

Earningsper Share (“EPS”)

The following table presents the computation of basic and diluted EPS for the three and six months ended June 30, 2009 and 2008 (in thousands, except share and per share data):

****	Three Months ** Ended June 30, 2009**		Three Months Ended June 30, 2008 (1)		Six Months ** Ended June 30, 2009**		Six Months Ended June 30, 2008 (1)
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – numerator for<br> basic earnings per share	$	32,298	$	19,420	$	65,082	$	52,192
Assumed<br> conversion of 8% unsecured convertible notes (2)	3,197		–		3,197		–
Net<br> income attributable to unvested restricted stock awards	3		1		8		3
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – numerator for<br> diluted earnings per share	$	35,498	$	19,421	$	68,287	$	52,195
Weighted<br> average shares of common stock outstanding for calculating earnings per share<br> attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – denominator for basic earnings per share	38,929,971		31,615,359		35,722,375		31,580,974
Effect<br> of dilutive securities and assumed conversion:
Dilutive<br> effect of stock options	1,167		124,932		6,662		133,225
Assumed<br> conversion of 8% unsecured convertible notes (2)	4,140,787		–		2,081,832		–
Weighted<br> average shares of common stock outstanding for calculating earnings per share<br> attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – denominator for diluted earnings per share	43,071,925		31,740,291		37,810,869		31,714,199
Earnings<br> per share attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders
Basic	$	0.83	$	0.61	$	1.82	$	1.65
Diluted	$	0.82	$	0.61	$	1.81	$	1.65
(1)	Includes the<br> retrospective impact of FSP APB 14-1, FSP EITF 03-6-1 and SFAS 160.
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(2)	We applied the<br> “if-converted” method of accounting in accordance with Statement of Financial<br> Accounting Standards No. 128, “Earnings per Share” (“SFAS 128)” for our<br> 8% unsecured convertible notes.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Fundsfrom Operations

(Unaudited)

Fundsfrom Operations (“FFO”) (1)

The following table presents a reconciliation of net income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders, the most directly comparable GAAP financial measure to FFO, to FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders for the three and six months ended June 30, 2009 and 2008 (in thousands, except share and per share data):

****	Three Months ** Ended June 30, 2009**		****	Three Months Ended June 30, 2008 (2)		****	Six Months ** Ended June 30, 2009**		****	Six Months Ended June 30, 2008 (2)		****
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders	$	32,298		$	19,420		$	65,082		$	52,192
Add:<br> Depreciation and amortization (3)	29,722			27,003			61,168			52,813
Add:<br> Net income attributable to noncontrolling interests	4,362			948			5,237			1,899
Add:<br> Net income attributable to unvested restricted stock awards	367			290			868			790
Subtract:<br> Gain on sales of property (4)	–			(182		)	(2,234		)	(20,395		)
Subtract:<br> FFO attributable to noncontrolling interests	(842		)	(1,018		)	(1,919		)	(1,985		)
Subtract:<br> FFO attributable to unvested restricted stock awards	(740		)	(684		)	(1,687		)	(1,272		)
FFO<br> attributable to Alexandria Real Estate, Inc.’s **** common stockholders – numerator for basic FFO per share	65,167			45,777			126,515			84,042
Add:<br> Assumed conversion of 8% unsecured convertible notes (5)	3,197			–			3,197			–
Add:<br> FFO attributable to unvested restricted stock awards	37			2			52			5
FFO<br> attributable to Alexandria Real Estate, Inc.’s **** common stockholders assuming effect of dilutive securities<br> and assumed conversion – numerator for diluted FFO per share	$	68,401		$	45,779		$	129,764		$	84,047
Weighted<br> average shares of common stock outstanding for calculating FFO per share<br> attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – denominator for basic FFO per share	38,929,971			31,615,359			35,722,375			31,580,974
Effect<br> of dilutive securities and assumed conversion:
Dilutive<br> effect of stock options	1,167			124,932			6,662			133,225
Assumed<br> conversion of 8% unsecured convertible notes (5)	4,140,787			–			2,081,832			–
Weighted<br> average shares of common stock outstanding for calculating FFO per share<br> attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – denominator for diluted FFO per share	43,071,925			31,740,291			37,810,869			31,714,199
FFO<br> per share attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders
Basic	$	1.67		$	1.45		$	3.54		$	2.66
Diluted	$	1.59		$	1.44		$	3.43		$	2.65
(1)	See definition on<br> page 34.
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(2)	Includes the<br> retrospective impact of FSP APB 14-1, FSP EITF 03-6-1 and SFAS 160.
(3)	Includes depreciation<br> and amortization for assets “held for sale” reflected as discontinued<br> operations (for the periods prior to when such assets were designated as<br> “held for sale”).
(4)	Gain on sales of<br> property relates to the disposition of three properties sold during the first<br> quarter 2009, one property sold during the second quarter 2008 and six<br> properties sold during the first quarter 2008. Gain on sales of property is<br> included in the income statement in income from discontinued operations, net.
(5)	We applied the<br> “if-converted” method of accounting in accordance with Statement of Financial<br> Accounting Standards No. 128, “Earnings per Share” (“SFAS 128)” for our 8%<br> unsecured convertible notes.

ALEXANDRIAREAL ESTATE EQUITIES, INC.2009 Guidance Summary

June 30,2009*(Unaudited)*

Event	FFO per Share (Diluted) Attributable to Common Stockholders		****
Guidance as reported on February 9, 2009 in<br> connection with our fourth quarter 2008 earnings call	$	6.26
Follow-on<br> common equity offering on March 19, 2009	(0.74		)
Issuance of 8% $240 million unsecured convertible<br> notes on April 21, 2009	(0.38		)
Estimate of gain on early extinguishment of debt	0.28
Other	0.01
Guidance provided on April 23, 2009	5.43
Other income related to cash payment for asset<br> acquired in 2007	0.17
Guidance<br> as reported on August 6, 2009 in connection with our second quarter 2009<br> earnings call	$	5.60

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Reported FFO per Share (Diluted)

June 30,2009

(Unaudited)

The following table presents a summary of reported FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders for the fourth quarter of 2008, first quarter of 2009 and the second quarter of 2009 and the impact of certain items in reported FFO per share (diluted) from quarter to quarter. Various items impact actual FFO per share (diluted) results period to period including, among many others, capital events, non-recurring items, leasing activity, timing of lease commencement and lease end dates, operating expenses, cost of borrowings and general and administrative expenses. The table also presents FFO per share (diluted), as adjusted for certain items to exclude the gain on early extinguishment of debt, cash payment for asset acquired in 2007 and full weighting of the assumed conversion of our 8% unsecured convertible notes.

Event	FFO per Share (Diluted) Attributable to Common Stockholders		****
Fourth quarter 2008 FFO<br> per share (diluted), as reported	$	1.55
Impact of adoption of<br> FSP APB 14-1 and FSP EITF 03-6-1	(0.07		)
Fourth quarter 2008 FFO<br> per share (diluted) including the adoption of FSP APB 14-1 and FSP EITF<br> 03-6-1	1.48
1Q09 additional income<br> related to a modification of a lease	0.55
4Q08 rent related to<br> South San Francisco property prior to lease modification	(0.05		)
Follow-on common equity<br> offering in March 2009	(0.03		)
Decrease in other<br> income	(0.05		)
Other	(0.01		)
First quarter 2009 FFO<br> per share (diluted), as reported	$	1.89
Additional income<br> related to a modification of a lease	(0.55		)
Adjusted first quarter<br> 2009 FFO per share (diluted)	$	1.34
Partial period impact<br> of common equity offering, assumed conversion of our 8% unsecured convertible<br> notes and repurchase of portion of our 3.7% unsecured convertible notes	(0.27		)
Gain on early<br> extinguishment of debt	0.26
Other income related to<br> cash payment for asset acquired in 2007	0.17
Increase in net<br> operating income	0.07
Other	0.02
Second quarter 2009 FFO<br> per share (diluted), as reported	$	1.59
Gain on early<br> extinguishment of debt	(0.26		)
Other income related to<br> cash payment for asset acquired in 2007	(0.17		)
Adjusted second quarter<br> 2009 FFO per share (diluted)	$	1.16
Impact of fully<br> weighted assumed conversion of our 8% unsecured convertible notes	(0.03		)
FFO per share<br> (diluted), as adjusted for certain items	$	1.13

ALEXANDRIAREAL ESTATE EQUITIES, INC.Adjusted Funds from Operations*(Dollars in thousands)(Unaudited)*

AdjustedFunds from Operations (1)

The following table presents a reconciliation of FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders assuming effect of dilutive securities to adjusted funds from operations (“AFFO”) attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders assuming effect of dilutive securities:

****	For the Three Months Ended														****
****	6/30/2009		****	3/31/2009		****	12/31/2008		****	9/30/2008		****	6/30/2008		****
FFO attributable to Alexandria Real Estate<br> Equities, Inc.’s **** common<br> stockholders assuming effect of dilutive securities	$	68,401		$	61,329		$	47,190		$	46,273		$	45,779
Add/(deduct):
Capital expenditures (2)	(270		)	(492		)	(202		)	(197		)	(461		)
Second generation tenant improvements and leasing<br> costs (2)	(894		)	(691		)	(1,931		)	(762		)	(1,008		)
Amortization of loan fees	2,023			1,793			1,710			1,683			1,659
Amortization of debt premiums/discounts	2,605			2,262			2,106			1,989			1,899
Amortization of acquired above and below market<br> leases	(1,736		)	(4,745		)	(4,066		)	(1,814		)	(1,815		)
Deferred rent	(2,700		)	(1,509		)	(2,547		)	(3,274		)	(3,437		)
Stock compensation	3,694			3,022			3,563			3,523			3,055
Capitalized income from development projects	1,631			1,662			1,659			1,725			1,976
Deferred rent on ground leases	1,458			1,104			1,083			1,281			1,352
Impairment<br> charges	–			–			11,266			–			–
Gain on early extinguishment of debt	(11,254		)	–			–			–			–
Allocation to unvested restricted stock awards	55			(37		)	(184		)	(56		)	(47		)
AFFO attributable to Alexandria Real<br> Estate, Inc.’s **** common<br> stockholders assuming effect of dilutive securities	$	63,013		$	63,698		$	59,647		$	50,371		$	48,952
(1)	See definition of FFO<br> and AFFO on page 34.
---	---
(2)	See Summary of Capital<br> Expenditures on page 32 for further details.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Quarterly Financial Highlights*(Dollars in thousands, except per share data)(Unaudited)*

****	For the Three Months Ended													****
Operational data	6/30/2009		****	3/31/2009		****	12/31/2008		****	9/30/2008		6/30/2008		****
Rental income	$	87,825		$	104,375	(a)	$	97,273	(a)	$	84,817	$	82,247
Tenant recoveries	24,697			26,743			26,236			26,472		23,640
Other income	8,910		(b)	753			2,452			2,640		2,891
Total revenues (continuing operations)	$	121,432		$	131,871		$	125,961		$	113,929	$	108,778
FFO per share (diluted) attributable to Alexandria<br> Real Estate Equities, Inc.’s common stockholders (c)	$	1.59		$	1.89		$	1.48		$	1.45	$	1.44
Dividends per share on common stock	$	0.35		$	0.80		$	0.80		$	0.80	$	0.80
Dividend payout ratio (common stock) (d)	21.2%			51.4%			54.8%			55.6%		56.1%
Straight-line rent	$	2,700		$	1,509		$	2,547		$	3,274	$	3,437
Capitalized<br> interest (c)	$	18,240	(e)	$	16,919		$	19,764		$	17,781	$	19,272
Number<br> of properties (f)
Acquired/added/completed during period	–			–			–			–		2
Sold/transferred (g)	–			(3		)	(1		)	–		(1		)
At end of period	156			156			159			160		160
Rentable<br> square feet (f)
Acquired/added/completed during period	–			–			–			–		60,000
Sold/transferred (g)	–			(64,218		)	(24,867		)	–		(49,437		)
At end of period	11,697,992			11,697,992			11,762,210			11,787,077		11,787,077
(a)	Rental income for the<br> three months ended March 31, 2009 and December 31, 2008 includes<br> approximately $18.5 million and $11.3 million, respectively, of additional<br> income related to a modification of a lease for a property in South San<br> Francisco, California.
---	---
(b)	Includes other income of<br> approximately $7.2 million for a cash payment related to real estate acquired<br> in November 2007.
(c)	The historical results<br> above include the retrospective impact of FSP APB 14-1, FSP EITF 03-6-1 and<br> SFAS 160. See page 8 for a<br> reconciliation of net income attributable to Alexandria Real Estate<br> Equities, Inc.’s common stockholders to FFO attributable to Alexandria<br> Real Estate Equities, Inc.’s common stockholders assuming effect of<br> dilutive securities.
(d)	Dividend payout ratio<br> (common stock) is the ratio of the absolute dollar amount of dividends on our<br> common stock (common stock shares outstanding on the respective record date<br> multiplied by the related dividend per share) to FFO attributable to<br> Alexandria Real Estate Equities, Inc.’s common stockholders. The<br> historical ratios above include the retrospective impact of FSP APB 14-1, FSP<br> EITF 03-6-1 and SFAS 160.
(e)	Represents capitalized<br> interest assuming conversion of our 8% unsecured convertible notes pursuant<br> to SFAS 128. As of June 30, 2009,<br> assets for which capitalization of interest is required pursuant to Statement<br> of Financial Accounting Standards No. 34, “Capitalization of Interest<br> Cost” (“SFAS 34”), approximated $1.4 billion. <br> This amount is classified as properties undergoing development and<br> redevelopment, and land held for development on our balance sheet. The weighted average interest rate used in<br> the calculation of capitalized interest required pursuant to SFAS 34 assuming<br> conversion of our 8% unsecured convertible notes was approximately 5.23% and<br> 4.84% for the three months ended June 30, 2009 and March 31, 2009,<br> respectively. The majority of the<br> increase in interest capitalized in the second quarter of 2009 as compared to<br> first quarter 2009 is due to the increase in our weighted average interest<br> rate used for capitalization. SFAS 34<br> requires the interest rate for capitalization to be based on applicable<br> interest costs related to borrowings outstanding during the period, including<br> the impact of interest rate swap agreements, debt premiums/discounts and<br> amortization of loan fees.
(f)	Includes properties<br> “held for sale” during the applicable periods such assets were “held for<br> sale.”
(g)	During the first quarter<br> of 2009, we sold three assets located in the San Diego market. During the fourth quarter of 2008, we sold<br> one asset located in the Eastern Massachusetts market. During the second quarter of 2008, we sold<br> one asset located in the San Diego market.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Summary of DebtJune 30, 2009*(Dollars in thousands)(Unaudited)*

DebtMaturities / Rates

****	Secured Debt									Unsecured Debt
Year	Our Share		Noncontrolling Interests’ Share		Total		Weighted Average Interest Rate			Credit Facility		****	Unsecured Convertible Notes
2009	$	5,382	$	129	$	5,511	5.28	%	(1)	$	–		$	–
2010	133,917		269		134,186		5.36		(2)	–			–
2011	133,931		284		134,215		5.82		(2)	557,000		(3)	–
2012	42,589		300		42,889		6.34		(2)	750,000		(3)	364,242
2013	72,533		17,617		90,150		6.57		(2)	–			–
Thereafter	513,803		20,846		534,649		6.75		(2)	–			213,742
Total	$	902,155	$	39,445	$	941,600				$	1,307,000		$	577,984

Securedand Unsecured Debt Analysis

****	Balance		Percentage ** of Balance**		Weighted ** Average Interest Rate (4)**		Weighted ** Average Maturity**	****
Secured Debt	$	941,600	33.3	%	5.28	%	6.0 Years
Unsecured Line of Credit	557,000		19.7		2.01		2.3 Years	(5)
Unsecured Term Loan	750,000		26.5		6.00		3.3 Years	(5)
Unsecured Convertible Notes	364,242		12.9		3.70		2.5 Years
Unsecured Convertible Notes	213,742		7.6		8.00		4.8 Years
Total<br> Debt	$	2,826,584	100.0	%	4.83	%	4.0 Years
(1)	The weighted average<br> interest rate is calculated based on outstanding debt as of June 30,<br> 2009.
---	---
(2)	The weighted average<br> interest rate is calculated based on outstanding debt as of December 31st of the year<br> immediately preceding the year presented.
(3)	Assumes we exercise our<br> sole right to extend the maturity date of our unsecured line of credit from<br> October 2010 to October 2011 and our unsecured term loan from<br> October 2011 to October 2012. <br> Our multi-year capital plan assumes that we will successfully amend<br> and renegotiate our $1.9 billion unsecured credit facility to a significant<br> availability level that will consider our business needs, including a portion<br> of the total commitment allocated to an unsecured line of credit and an<br> unsecured term loan. The lead lenders<br> under our $1.9 billion unsecured credit facility expect that we will be able<br> to amend and renegotiate our total credit to include approximately 66%-75% of<br> the current $1.9 billion capacity. See<br> our 2008 Form 10-K for additional disclosures on our unsecured line of<br> credit and unsecured term loan. As of<br> June 30, 2009, cash and cash equivalents were approximately $70.3<br> million. Additionally, as of June 30, 2009 restricted cash to fund<br> certain construction costs was approximately $28.8 million.
(4)	Represents the weighted<br> average contractual interest rate plus the impact of debt premiums/discounts<br> and our interest rate swap agreements on our secured debt, unsecured line of<br> credit and unsecured term loan and the contractual rates of 3.7% and 8% on<br> our unsecured convertible notes. The<br> weighted average interest rate excludes bank fees and amortization of loan<br> fees. See page 16 for further details of our interest rate swap<br> agreements.
(5)	Assumes we exercise our<br> sole right to extend the maturity date of our unsecured line of credit and<br> unsecured term loan to October 2011 and October 2012,<br> respectively. The interest rate<br> related to outstanding borrowings for our unhedged floating rate debt is<br> based upon one-month LIBOR. The<br> interest rate resets periodically and will vary in future periods.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Summary of Secured Debt Principal Maturities By Maturity Date Through 2013June 30, 2009

(Unaudited,in thousands)

Secured Debt Principal Maturities	Maturity Date	Type	Stated Rate		Effective Rate (1)		Balance at June 30, 2009 (2)
2009 Total	None	N/A	N/A		N/A		$	–
Eastern Massachusetts #1	3/11/2010	Bank	2.47	%	2.47	%	$	7,234	(3)
California – San Francisco Bay #1	4/26/2010	Bank	2.46		2.46		99,000		(3)(4)
Washington – Seattle #1	7/1/2010	CMBS	7.40		5.21		3,576
California – San Diego #1	10/1/2010	CMBS	8.23		5.71		13,946
2010 Total							$	123,756
California – San Francisco Bay #2	1/3/2011	Bank	1.61	%	1.61	%	$	30,500	(3)
Eastern Massachusetts #2	2/1/2011	Bank	7.52		5.82		5,324
California – San Diego #2	8/2/2011	Not-for-Profit	7.50		7.50		9,239
Eastern Massachusetts #3	10/1/2011	Bank	8.10		5.69		2,403
Suburban Washington, D.C. #1	11/1/2011	CMBS	7.25		5.82		3,117
Suburban Washington, D.C. #2	12/22/2011	Bank	3.57		3.57		76,000		(4)
2011 Total							$	126,583
Washington – Seattle #2	1/1/2012	Bank	1.47	%	6.15	%	$	28,500	(3)(5)
Eastern Massachusetts #4	3/1/2012	Insurance Co.	7.14		5.83		1,611
Other	5/16/2012	Other	2.10		2.10		2,700		(3)
2012 Total							$	32,811
California – San Diego #3	3/1/2013	Insurance Co.	6.21	%	6.21	%	$	8,930
Eastern Massachusetts #5	4/6/2013	Bank	4.32		4.32			38,444	(3)(6)
Suburban Washington, D.C. #3	9/1/2013	CMBS	6.36		6.36		27,832
California<br> – San Francisco Bay #3	11/16/2013	Other	6.14		6.14		7,527
2013<br> Total							$	82,733
(1)	Represents the weighted<br> average contractual interest rate plus the impact of debt premiums/discounts<br> and interest rate swap agreements. The effective rate excludes bank fees and<br> amortization of loan fees.
---	---
(2)	Represents the<br> June 30, 2009 balances for secured debt maturing in each respective<br> year.
(3)	Variable rate loan<br> based on LIBOR plus an applicable spread.
(4)	We have ongoing<br> discussions with lenders to extend or refinance.
(5)	Assumes we exercise our<br> sole right to extend the maturity date of this secured from January 1, 2011 to<br> January 1, 2012.
(6)	Assumes we exercise our<br> sole right to extend the maturity date of this secured from January 2, 2012<br> to April 6, 2013.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Total Market Cap and Fixed/Floating Rate Debt Analysis*(Dollars in thousands, except per share data)(Unaudited)*

TotalMarket Capitalization

****	****		****	****		****	As of		****	****		****	****		****
****	6/30/2009		****	3/31/2009		****	12/31/2008		****	9/30/2008		****	6/30/2008		****
Number of shares of common stock outstanding	39,040,518			38,974,166			31,899,037			31,839,622			31,773,117
Closing price of common stock	$	35.79		$	36.40		$	60.34		$	112.50		$	97.34
Total debt	$	2,826,584		$	2,830,262		$	2,938,108		$	2,773,548		$	2,660,214
Less: debt attributable to noncontrolling interests	(39,445		)	(45,484		)	(44,984		)	(42,384		)	(40,762		)
Less: cash, cash equivalents and escrowed cash<br> related to construction projects	(99,155		)	(160,090		)	(120,660		)	(60,300		)	(50,747		)
Our share of total debt	2,687,984			2,624,688			2,772,464			2,670,864			2,568,705
Preferred stock	356,562			351,117			353,658			368,489			377,616
Common stock market capitalization	1,397,260			1,418,660			1,924,788			3,581,957			3,092,795
Total market capitalization (a)	$	4,441,806		$	4,394,465		$	5,050,910		$	6,621,310		$	6,039,116
Debt<br> to gross assets (excluding cash) (b)	47.5%			47.4%			51.0%			50.6%			50.0%
Unencumbered<br> net operating income as a percentage of total net operating income	60.8%			65.3%			64.9%			60.3%			60.3%

Fixed/FloatingRate Debt Analysis

****	June 30, 2009 Balance		Percentage ** of Balance**		Weighted Average ** Interest Rate (c)**		Weighted ** Average Maturity**	****
Fixed<br> Rate Debt	$	1,311,886	46.4	%	5.62	%	5.5 Years
Floating<br> Rate Debt – Hedged	941,944		33.3		5.65		3.2 Years	(d)
Floating<br> Rate Debt – Unhedged	572,754		20.3		1.67		2.0 Years	(d)
Total<br> Debt	$	2,826,584	100.0	%	4.83	%	4.0 Years	(d)

(a)	Total market<br> capitalization is equal to outstanding shares of series C preferred stock and<br> common stock multiplied by the related closing price at the end of each<br> period presented, plus series D cumulative convertible preferred stock at<br> liquidation value, plus our share of total debt (secured notes payable,<br> unsecured line of credit, unsecured term loan and unsecured convertible notes<br> less cash, cash equivalents and escrowed cash related to construction<br> projects). Historical amounts have<br> been adjusted to include the effects of adopting FSP APB 14-1.
(b)	Debt to gross assets is<br> the ratio of our share of total debt (secured notes payable, unsecured line<br> of credit, unsecured term loan and unsecured convertible notes less cash,<br> cash equivalents and escrowed cash related to construction projects) to gross<br> assets (excluding cash, cash equivalents and escrowed cash related to<br> construction projects). Gross assets<br> is equal to total assets plus accumulated depreciation.
(c)	Represents the weighted<br> average contractual interest rate plus the impact of debt premiums/discounts<br> and our interest rate swap agreements on our secured debt, unsecured line of<br> credit and unsecured term loan and the contractual rates of 3.7% and 8% on<br> our unsecured convertible notes. The<br> weighted average interest rate excludes bank fees and amortization of loan<br> fees. See page 16 for further details of our interest rate swap<br> agreements.
(d)	Assumes we exercise our<br> sole right to extend the maturity date of our unsecured line of credit and<br> unsecured term loan to October 2011 and October 2012,<br> respectively. The interest rate<br> related to outstanding borrowings for our unhedged floating rate debt is<br> based upon one-month LIBOR. The<br> interest rate resets periodically and will vary in future periods.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Interest Rate Swap Agreements

June 30,2009

(Dollarsin thousands)

(Unaudited)

Transaction Dates	Effective Dates	Termination Dates	Interest Pay Rates		Notional Amounts		Effective at ** June 30, 2009**
June 2006	June 30,<br> 2006	September 30,<br> 2009	5.299	%	$	125,000	$	125,000
December 2005	December 29,<br> 2006	November 30,<br> 2009	4.730		50,000		50,000
December 2005	December 29,<br> 2006	November 30,<br> 2009	4.740		50,000		50,000
December 2006	December 29,<br> 2006	March 31,<br> 2014	4.990		50,000		50,000
December 2006	January 2,<br> 2007	January 3,<br> 2011	5.003		28,500		28,500
October 2007	October 31,<br> 2007	September 30,<br> 2012	4.546		50,000		50,000
October 2007	October 31,<br> 2007	September 30,<br> 2013	4.642		50,000		50,000
December 2005	January 2,<br> 2008	December 31,<br> 2010	4.768		50,000		50,000
June 2006	June 30,<br> 2008	June 30,<br> 2010	5.325		50,000		50,000
June 2006	June 30,<br> 2008	June 30,<br> 2010	5.325		50,000		50,000
October 2007	July 1,<br> 2008	March 31,<br> 2013	4.622		25,000		25,000
October 2007	July 1,<br> 2008	March 31,<br> 2013	4.625		25,000		25,000
October 2008	October 10,<br> 2008	December 31,<br> 2009	2.750		75,000		75,000
October 2008	October 16,<br> 2008	January 31,<br> 2010	2.755		100,000		100,000
June 2006	October 31,<br> 2008	December 31,<br> 2010	5.340		50,000		50,000
June 2006	October 31,<br> 2008	December 31,<br> 2010	5.347		50,000		50,000
May 2005	November 28,<br> 2008	November 30,<br> 2009	4.615		25,000		25,000
October 2008	September 30,<br> 2009	January 31,<br> 2011	3.119		100,000		–
December 2006	November 30,<br> 2009	March 31,<br> 2014	5.015		75,000		–
December 2006	November 30,<br> 2009	March 31,<br> 2014	5.023		75,000		–
December 2006	December 31,<br> 2010	October 31,<br> 2012	5.015		100,000		–
Total							$	903,500

Interest pay rates represent the interest rate we will pay for one month LIBOR under the respective interest rate swap agreement. These rates do not include any spread in addition to one month LIBOR that is due monthly as interest expense.

In May 2009, we entered into an interest rate cap agreement with a notional amount approximating $38.4 million effective May 15, 2009 and terminating on January 3, 2012. The agreement sets a ceiling on one month LIBOR at 2.50% related to one secured note.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Properties

(Dollarsin thousands)

(Unaudited)

****	June 30, 2009							March 31, 2009
****	Number of	Rentable Square Feet			Annualized		Occupancy	Occupancy
Markets	Properties	Operating	Redevelopment	Total	Base Rent(1)		Percentage(1) (2)	Percentage(3)(4)
California – San Diego	32	1,525,894	137,319	1,663,213	$	44,879	90.9%	92.7%
California – San Francisco Bay	17	1,424,680	53,980	1,478,660	49,084		96.5	96.7
Eastern Massachusetts	37	3,088,791	274,886	3,363,677	114,470		95.7	95.6
New Jersey/Suburban Philadelphia	8	459,904	–	459,904	8,708		88.0	88.0
Southeast	13	715,839	40,725	756,564	15,950		94.9	96.4
Suburban Washington, D.C.	31	2,385,836	109,265	2,495,101	48,722		92.2	89.8
Washington – Seattle	13	1,045,768	–	1,045,768	32,939		99.2	99.0
International – Canada	4	342,394	–	342,394	7,700		100.0	100.0
Total<br> Properties (Continuing Operations)	155	10,989,106	616,175	11,605,281	$	322,452	94.5%	94.3%
(1)	Excludes spaces at<br> properties totaling approximately 616,175 rentable square feet undergoing a<br> permanent change in use to office/laboratory space through redevelopment,<br> including the conversion of single tenancy space to multi-tenancy spaces, and<br> one property with approximately 92,711 rentable square feet that is<br> classified as “held for sale,” which we expect to sell to a life science<br> user.
---	---
(2)	Including spaces<br> undergoing a permanent change in use to office/laboratory space through<br> redevelopment, including the conversion of single tenancy space to<br> multi-tenancy spaces, occupancy as of June 30, 2009 was 89.4%. See page 26 for additional information<br> on our redevelopment program.
(3)	Excludes spaces at<br> properties totaling approximately 586,738 rentable square feet undergoing a<br> permanent change in use to office/laboratory space through<br> redevelopment. Including spaces<br> undergoing a permanent change in use to office/laboratory space through<br> redevelopment, occupancy as of March 31, 2009 was 89.6%. See page 26 for additional information<br> on our redevelopment program.
(4)	Average occupancy rate<br> as of December 31 from 1997 to 2008 was approximately 95.5%.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Same Property Comparisons

(Dollarsin thousands)

(Unaudited)

****	GAAP Basis					Cash Basis
	Quarter Ended					Quarter Ended
	6/30/2009		6/30/2008		% Change	6/30/2009		6/30/2008		% Change
Revenue	$	98,360	$	96,748	1.7%	$	97,043	$	93,043	4.3%
Operating expenses	24,660		24,648		–	24,660		24,648		–
Revenue less operating expenses	$	73,700	$	72,100	2.2%	$	72,383	$	68,395	5.8%
****	GAAP Basis					Cash Basis
---	---	---	---	---	---	---	---	---	---	---
	Six Months Ended					Six Months Ended
	6/30/2009		6/30/2008		% Change	6/30/2009		6/30/2008		% Change
Revenue	$	194,623	$	187,279	3.9%	$	191,980	$	180,730	6.2%
Operating expenses	50,866		49,032		3.7	50,866		49,032		3.7
Revenue less operating expenses	$	143,757	$	138,247	4.0%	$	141,114	$	131,698	7.1%

This summary represents operating data for all properties that were fully operating for the entire periods presented for the quarter periods (the “Second Quarter Same Properties”) and for the Six Month periods (the “Six Months Same Properties”). Same property occupancy for the quarters ended June 30, 2009 and 2008 was 94.8% and 95.5%, respectively. Same Property Occupancy for the six months ended June 30, 2009 and 2008 was 94.9% and 95.0%, respectively. Properties undergoing redevelopment are excluded from same property results.

Revenue less operating expenses computed in accordance with GAAP is total revenue associated with the Second Quarter Same Properties and Six Months Same Properties, as applicable (excluding lease termination fees, if any), less property operating expenses. Under GAAP, rental revenue is recognized on a straight-line basis over the respective lease terms. Revenue less operating expenses on a cash basis is total revenue associated with the Second Quarter Same Properties and Six Months Same Properties (excluding lease termination fees, if any), less property operating expenses, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. Straight-line rent adjustments for the quarters ended June 30, 2009 and 2008 for the Second Quarter Same Properties were $1,317,000 and $3,705,000, respectively. Straight-line rent adjustments for the six months ended June 30, 2009 and 2008 for the Six Months Same Properties were $2,644,000 and $6,549,000, respectively. We believe that revenue less operating expenses 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.

Fees received from tenants in connection with termination of their leases, if any, are excluded from revenue in the Summary of Same Property Comparisons. As of June 30, 2009, approximately 89% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, approximately 8% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses.

In the first quarter of 2009, we recognized additional rental income related to a modification of a lease for a property in South San Francisco. The operating results of this property have been excluded from the same property results for the six months ended June 30, 2009. Including the results of this property, six months 2009 GAAP same property revenue less operating expenses would have increased 14.2%.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Leasing Activity

Forthe Quarter Ended June 30, 2009

****	****	****	****	****	****	TI’s/Lease	****
****	****	Rentable	****	****	Rental	Commissions	Average
****	Number	Square	Expiring	New	Rate	Per	Lease
****	of Leases	Footage	Rates	Rates	Changes	Square Foot	Terms (1)
Leasing Activity
Lease<br> Expirations
Cash<br> Basis	51	487,334	$31.96	–	–	–	–
GAAP<br> Basis	51	487,334	$31.10	–	–	–	–
Renewed/Released<br> Space Leased
Cash<br> Basis	37	367,445	$34.48	$35.22	2.1%	$2.39	3.2 years
GAAP<br> Basis	37	367,445	$33.48	$34.59	3.3%	$2.39	3.2 years
Developed/Redeveloped/<br><br> Vacant Space Leased
Cash<br> Basis	12	105,377	–	$34.42	–	$10.95	7.8 years
GAAP<br> Basis	12	105,377	–	$34.63	–	$10.95	7.8 years
Month-to-Month<br> Leases in Effect
Cash<br> Basis	7	52,292	$15.95	$15.95	–	–	–
GAAP<br> Basis	7	52,292	$15.93	$15.95	–	–	–
Leasing Activity Summary
Excluding<br> Month-to-Month Leases
Cash<br> Basis	49	472,822	–	$35.04	–	$4.30	4.2 years
GAAP<br> Basis	49	472,822	–	$34.60	–	$4.30	4.2 years
Including<br> Month-to-Month Leases
Cash<br> Basis	56	525,114	–	$33.14	–	–	–
GAAP<br> Basis	56	525,114	–	$32.74	–	–	–
(1)	Quarterly leasing<br> statistic (shorter lease terms) may be impacted by certain leasing activity<br> in an individual quarter period. Leasing statistics over a longer period of<br> time (6-12 months) generally are a better indicator of leasing trends for our<br> business. Average lease terms over the past five years (2004-2008) averaged<br> approximately 4.5 years and 7.4 years for renewed/released space leased and<br> developed/redeveloped/ vacant space leased, respectively.
---	---

In December 2008, the Company entered into a modification of a lease in South San Francisco resulting in the recognition of additional rental income approximating $11.3 million and $18.5 million in the fourth quarter of 2008 and the first quarter of 2009, respectively. The Company completed the lease modification in December 2008 in order to lease the space to a high quality life science company. The leasing activity above excludes the impact of activity at this property due to the significance of the additional rental income recognized pursuant to the lease modification.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Leasing Activity

Forthe Six Months Ended June 30, 2009

****	****	****	****	****	****	TI’s/Lease	****
****	****	Rentable	****	****	Rental	Commissions	Average
****	Number	Square	Expiring	New	Rate	Per	Lease
****	of Leases	Footage	Rates	Rates	Changes	Square Foot	Terms
Leasing Activity
Lease<br> Expirations
Cash<br> Basis	83	1,027,682	$32.81	–	–	–	–
GAAP<br> Basis	83	1,027,682	$33.54	–	–	–	–
Renewed/Released<br> Space Leased
Cash<br> Basis	60	617,551	$30.79	$31.55	2.5%	$2.57	2.6 years
GAAP<br> Basis	60	617,551	$29.64	$30.83	4.0%	$2.57	2.6 years
Developed/Redeveloped/<br><br> Vacant Space Leased
Cash<br> Basis	22	318,029	–	$27.83	–	$9.47	4.9 years
GAAP<br> Basis	22	318,029	–	$31.00	–	$9.47	4.9 years
Month-to-Month<br> Leases in Effect
Cash<br> Basis	7	52,292	$15.95	$15.95	–	–	–
GAAP<br> Basis	7	52,292	$15.93	$15.95	–	–	–
Leasing Activity Summary
Excluding<br> Month-to-Month Leases
Cash<br> Basis	82	935,580	–	$30.29	–	$4.91	3.4 years
GAAP<br> Basis	82	935,580	–	$30.89	–	$4.91	3.4 years
Including<br> Month-to-Month Leases
Cash<br> Basis	89	987,872	–	$29.53	–	–	–
GAAP<br> Basis	89	987,872	–	$30.10	–	–	–

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Lease Expirations

June 30,2009

****	****		Rentable Square		Percentage of	Annualized Base Rent of Expiring Leases
Year of Lease	Number of		Footage of		Aggregate	(per rentable
Expiration	Leases Expiring		Expiring Leases		Leased Square Feet	square foot)
2009	36	(1)	557,120	(1)	5.4%	$28.37
2010	74		989,656		9.5	24.99
2011	74		1,824,648		17.6	29.86
2012	62		1,357,118		13.1	33.59
2013	48		987,478		9.5	30.02
2014	37		978,025		9.4	28.48
2015	24		634,090		6.1	29.22
2016	16		925,660		8.9	30.41
2017	12		601,300		5.8	36.85
2018	11		739,640		7.1	44.56
****	2009			2010
---	---	---	---	---	---
Markets	Rentable Square Footage of Expiring Leases	****	Annualized Base Rent of Expiring Leases ** (per rentable square foot)**	Rentable Square Footage of Expiring Leases	Annualized Base Rent of Expiring Leases ** (per rentable square foot)**
California<br> – San Diego	148,060		$31.59	152,667	$24.37
California<br> – San Francisco Bay	51,856		34.82	294,746	26.47
Eastern<br> Massachusetts	178,470		31.33	195,995	29.90
New<br> Jersey/Suburban Philadelphia	21,000		20.74	42,460	15.21
Southeast	37,336		19.26	122,217	21.42
Suburban<br> Washington, D.C.	120,398		21.42	43,426	14.96
Washington<br> – Seattle	–		–	138,145	24.85
International<br> – Canada	–		–	–	–
Total	557,120	(1)	$28.37	989,656	$24.99

(1) Excludes seven month-to-month leases for approximately 52,000 rentable square feet.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

20Largest Tenants

June 30,2009

(Unaudited)

Tenant	Number ** of Leases**	Remaining Lease Term in Years (1)	Remaining Lease Term in Years (2)	Approximate Aggregate Rentable Square Feet	Percentage of Aggregate Leased Square Feet	Annualized Base Rent (3) (in thousands)		Percentage of Aggregate Annualized Base Rent
Novartis AG	4	6.5	6.9	400,255	3.9%	$	24,071	7.5%
GlaxoSmithKline plc	6	5.9	6.7	345,521	3.3	14,016		4.4
Roche Holding Ltd	5	5.6	6.7	387,813	3.7	12,748		4.0
ZymoGenetics, Inc. (4)	2	9.9	9.9	203,369	2.0	8,747		2.7
United States Government	6	4.1	4.1	308,205	3.0	8,359		2.6
Massachusetts Institute of Technology	3	2.8	3.1	178,952	1.7	7,899		2.4
Theravance, Inc. (5)	2	2.8	2.8	170,244	1.6	6,136		1.9
Dyax Corp.	1	2.7	2.7	91,527	0.9	5,774		1.8
Amylin Pharmaceuticals, Inc.	3	6.9	7.1	158,983	1.5	5,467		1.7
The Scripps Research Institute	2	7.4	7.4	96,500	0.9	5,193		1.6
Forrester Research, Inc.	1	2.3	2.3	145,551	1.4	4,987		1.5
Alnylam Pharmaceuticals, Inc.	1	7.3	7.3	95,410	0.9	4,466		1.4
Quest Diagnostics Incorporated	1	7.5	7.5	248,186	2.4	4,341		1.3
Infinity Pharmaceuticals, Inc.	2	3.5	3.5	67,167	0.6	4,302		1.3
Johnson & Johnson	2	4.2	3.7	170,451	1.6	3,917		1.2
Fred Hutchinson Cancer Research Center	2	5.0	5.1	123,322	1.2	3,853		1.2
Merck & Co., Inc.	2	3.9	4.6	102,196	1.0	3,847		1.2
Monsanto Company	3	8.7	11.1	120,050	1.2	3,757		1.2
Telik, Inc.	1	4.9	4.9	91,644	0.9	3,716		1.2
Qiagen N.V.	2	6.9	6.9	153,288	1.5	3,706		1.1
Total/Weighted Average:	51	5.6	5.9	3,658,634	35.2%	$	139,302	43.2%
(1)	Represents remaining<br> lease term in years based on percentage of leased square feet.
---	---
(2)	Represents remaining<br> lease term in years based on percentage of annualized base rent.
(3)	Annualized base rent<br> means the annualized fixed base rental amount in effect as of June 30,<br> 2009 (using rental revenue computed on a straight-line basis in accordance<br> with GAAP).
(4)	As of March 31,<br> 2009, Novo A/S owned approximately 30% of ZymoGenetics, Inc.
(5)	As of April 30,<br> 2009, GlaxoSmithKline plc owned 15% of the outstanding stock of<br> Theravance, Inc.

As of June 30, 2009, annualized base rent for Oscient Pharmaceuticals Corporation (“Oscient”) was approximately 1.4% of total annualized base rent. In July 2009, Oscient filed for Chapter 11 bankruptcy. We are in the process of transferring four subleases into direct leases aggregating approximately 78% of the Oscient space.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

LifeScience Client Tenant Mix

AnnualizedBase Rent by Tenant Business Type

June 30,2009

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Additions and Dispositions of Properties

Forthe Quarter Ended June 30, 2009

(Dollarsin thousands)

****	Acquisition	Month of	Rentable
Markets	Amount	Acquisition	Square Feet
Additions to Operating Properties:	N/A	N/A	N/A
****	Acquisition	Month of	Developable
Markets	Amount	Acquisition	Square Feet
Additions to Land:	N/A	N/A	N/A
****	Disposition	Month of	Rentable
Markets	Amount	Disposition	Square Feet
Dispositions:	N/A	N/A	N/A

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

Construction in progress includes the following value add activities as of June 30, 2009 (in thousands):

Value Add Activities	Amount
Redevelopment projects	$	149,510
Development projects	410,316
Preconstruction projects	597,149
New markets and other projects	249,476
Total	$	1,406,451

A key component of our business is our value add redevelopment and development programs. These programs are focused on providing high quality generic office/laboratory space to meet the real estate requirements of various life science industry tenants. Redevelopment projects consist of the permanent change in use of office, warehouse and shell space into generic office/laboratory space, including the conversion of single tenancy space to multi-tenancy spaces. Development projects consist of the ground-up development of generic office/laboratory facilities. We also have certain significant value add projects undergoing important and substantial preconstruction activities to bring these assets to their intended use. These critical activities add significant value for future ground-up development (which are projected to yield substantial revenues) and are required for the ultimate vertical construction of buildings. Pursuant to SFAS 34 and SFAS 67, we are required to capitalize construction and preconstruction costs directly related and essential to the construction of a project while activities are ongoing to prepare an asset for its intended use. Capitalized interest assuming conversion of our 8% unsecured convertible notes for the three months ended June 30, 2009 was approximately $18.2 million. Pursuant to SFAS 34, the interest rate required for the purpose of calculating capitalization of interest was approximately 5.23% for the three months ended June 30, 2009 assuming conversion of our 8% unsecured convertible notes.

Our remaining aggregate costs under contracts for the construction projects, including properties undergoing redevelopment and development and infrastructure improvements under the terms of leases, aggregated approximately $177 million. We expect payments for these obligations to occur over the next one to three years, subject to capital planning adjustments from time to time. Our final costs for these projects will ultimately depend on many factors, including construction requirements for each tenant, final lease negotiations and the amount of costs funded by each tenant.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

The following table summarizes total rentable square footage undergoing redevelopment as of June 30, 2009:

Markets/Submarkets	Placed in ** Redevelopment**	Estimated In-Service ** Dates**	Estimated Investment ** Per Square Foot**	Rentable Square Footage Undergoing Redevelopment/ Total Property	Status
California – San<br> Diego/Torrey Pines	2007	2010	$100-120	84,504 / 84,504	Construction
California – San<br> Diego/Torrey Pines	2006	2009	$80-100	13,591 / 43,600	Construction
California – San<br> Diego/Torrey Pines	2007	2009	$80-100	39,224 / 76,084	Construction
California – San<br> Francisco Bay	2009	2011	$50-70	53,980 / 53,980	Design/Construction
Eastern<br> Massachusetts/Cambridge	2006	2009	$120-175	41,000 / 177,101	Construction
Eastern<br> Massachusetts/Cambridge	2007	2010	$100-130	90,841 / 369,831	Design/Construction
Eastern<br> Massachusetts/Suburban	2007	2010	$70-80	113,045 / 113,045	Construction
Eastern<br> Massachusetts/Suburban	2008	2010	$120-140	30,000 / 30,000	Design/Construction
Southeast/Florida	2006	2009	$80-100	40,725 / 44,855	Construction
Suburban<br> Washington, D.C./Shady Grove	2009	2010	$80-90	58,632 / 58,632	Design/Construction
Suburban<br> Washington, D.C./Shady Grove	2007	2009	$70-80	50,633 / 123,501	Construction
****				616,175 /<br> 1,175,133

As of June 30, 2009, our estimated cost to complete was approximately $85 per rentable square foot for the 616,175 rentable square feet undergoing a permanent change in use to office/laboratory space through redevelopment, including the conversion of single tenancy space to multi-tenancy spaces.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

The following table summarizes our properties undergoing ground-up development as of June 30, 2009:

Markets/Submarkets	Building ** Descriptions**	Construction ** Start Dates**	Estimated ** In-Service Dates**		Estimated ** Investment Per Square Foot**	Rentable ** Square Feet**	Development ** Status**	Leasing Status
California – San Francisco Bay/Mission Bay	Multi-tenant Bldg.	2007	2010		$350	158,000	Construction	158,000 Rentable<br> Square Feet Leased or Committed to UCSF and a Large Cap Life Science Company
California – San Francisco Bay/Mission Bay	Single Tenant Bldg.<br><br> with 4% Retail	2009	2010		$300	105,000	Construction	101,000 Rentable<br> Square Feet Leased to Pfizer Inc.
California – San Francisco Bay/Mission Bay	Single or Multi-tenant<br><br> Bldg.	2009	2011		$350	105,000	Construction	Marketing
California – San Francisco Bay/So. San Francisco	Two Bldgs.,<br><br> Single or Multi-tenant	2006	2009		$350	162,000	Construction	162,000 Rentable<br> Square Foot Lease Being Finalized for Execution
California – San Francisco Bay/So. San Francisco	Single Tenant Bldg.	2006	2009		$350	130,000	Construction	72,000 Rentable<br> Square Feet Leased to Exelixis Inc. with Option for Remaining Space Through<br> 2009
New York – New York City – East Tower	Multi-tenant Bldg.	2007	2010/2011		$500	310,000	Construction	100,000 Rentable<br> Square Feet Leased to Eli Lilly and Company; In Negotiations: leasing significant space<br> on three floors for food, conference and core services; Current Laboratory/Office<br> Requirements: 150,000 Rentable Square Feet
Washington – Seattle	Single Tenant<br><br> Bldg. with 5% Retail	2007	2010	(1)	$390	115,000	Construction	106,000 Rentable<br> Square Feet Leased to Gilead Sciences, Inc.
Total Properties Undergoing Ground-Up Development						1,085,000

(1) We anticipate delivery of this space to Gilead Sciences, Inc. in the first quarter of 2010.

As of June 30, 2009, our estimated committed costs to complete the approximately 1.1 million rentable square feet undergoing ground-up development was approximately $70 per rentable square foot.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

The following table summarizes our embedded future development and redevelopment square footage including preconstruction projects. Preconstruction projects include significant value add projects undergoing important and substantial activities to bring these assets to their intended use. These critical activities add significant value for future ground-up development (which are projected to yield substantial revenues) and are required for the ultimate vertical construction of buildings. Pursuant to SFAS 34 and SFAS 67, we are required to capitalize construction and preconstruction costs directly related and essential to the construction of a project while activities are ongoing to prepare an asset for its intended use.

Markets	Development/ ** Preconstruction Square Footage**	Land Square Footage	Total Embedded Development Square Footage	****	Embedded Future Redevelopment Square Footage	Total
California<br> – San Diego	298,000	145,000	443,000		178,000	621,000
California<br> – San Francisco Bay/Mission Bay	2,320,000	–	2,320,000		–	2,320,000
California<br> – San Francisco Bay/So. San Francisco	144,000	1,051,000	1,195,000		25,000	1,220,000
Eastern<br> Massachusetts	2,050,000	225,000	2,275,000		540,000	2,815,000
Suburban<br> Washington, D.C.	–	787,000	787,000		475,000	1,262,000
Washington<br> – Seattle	248,000	1,049,000	1,297,000		165,000	1,462,000
International<br> – Canada	–	827,000	827,000		–	827,000
New<br> Markets/Other	565,000	740,000	1,305,000		222,000	1,527,000
Total	5,625,000	4,824,000	10,449,000	(1)	1,605,000	12,054,000
(1)	In addition, we have<br> the right to develop an additional parcel with approximately 442,000 rentable<br> square feet in New York City. We also have the right to purchase 924,000<br> developable square feet in Edinburgh, Scotland. The square footage related to<br> these parcels is not included in the embedded future development square<br> footage shown above.
---	---

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

Our significant value add projects include preconstruction activities at certain land parcels including: a) approximately 2.5 million developable square footage in San Francisco, including approximately 2.3 million developable square footage at Mission Bay, b) approximately 2.1 million developable square footage in Eastern Massachusetts, including approximately 1.7 million developable square footage located along Binney Street in Kendall Square and c) approximately 1.0 million developable square footage located in other key life science cluster markets.

San Francisco Bay – Mission Bay and South San Francisco Value Add Preconstruction Activities

The value add preconstruction activities in Mission Bay and South San Francisco will create high quality space in state-of-the-art environmentally sustainable facilities for our clients generating net operating income for the Company. The entitlement process includes a multitude of activities necessary for the vertical construction of these high quality facilities including, among other items, regulatory approval, mapping, conceptual design, schematic design, design development, permitting, construction drawings and estimating. Our value add projects in Mission Bay and South San Francisco, that have been completed or are now under construction, have attracted Merck & Co., Inc., Celgene Corporation, Pfizer Inc., Roche Holdings Ltd and University of California, San Francisco.

The ability to provide significant additional space in high quality state-of-the-art environmentally sustainable facilities at Mission Bay is a unique opportunity to enhance our current high quality client tenant roster. In addition to the opportunities located at Mission Bay, our asset base contains a broad pipeline of opportunities located in South San Francisco. This includes, among others, a high quality facility with entitlements completed or in process totaling over 275,000 square feet and a four building campus totaling an additional 405,000 square feet located nearby existing well established and emerging life science companies in South San Francisco.

The Alexandria Center for Science and Technology at Mission Bay (“The Alexandria Center”) when completed will consist of 13 high quality facilities totaling approximately 2.7 million rentable square feet. The Alexandria Center is organized into four discrete but highly interactive and collaborative campuses: the north campus which includes the 455 Mission Bay Boulevard project leased to Pfizer, Inc.; the east campus, featuring the ability to accommodate a corporate headquarters facility of more than one million square feet; the south campus which is directly across the street from the UCSF hospital complex and likely to become an important location for physicians, clinicians and translational researchers; and the west campus which features a wide range of unique life science client tenant spaces.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

San Francisco Bay – Mission Bay and South San Francisco Value Add Preconstruction Activities (continued)

At the heart of Mission Bay is UCSF, one of the nation’s top generators of life science commercial enterprises and the number two recipient of grants from the National Institutes of Health. At least 75 California life science companies, including two of the largest, Genentech, Inc. (now a subsidiary of Roche) and Chiron Corporation (now a subsidiary of Novartis AG), have been successfully launched by UCSF faculty or alumni. UCSF’s expansion of major research functions to its Mission Bay campus serves as a hub for basic scientific inquiry and a meeting place for academics from around the world. The wide range of UCSF’s sophisticated laboratories include the Center for Advanced Technology, as well as significant efforts in structural and chemical biology, molecular, cell and developmental biology, advanced microscopy, neurology and cardiology. Finally, the UCSF Mission Bay hospital campus is in the design phase, and will initially offer 280 beds in an integrated facility to serve women, children and cancer patients. The overriding emphasis of this array of diverse life science entities is to translate research discoveries into viable commercial products to solve critical unmet medical needs.

Eastern Massachusetts Value Add Preconstruction Activities

Alexandria’s largest ongoing value add project in Eastern Massachusetts is located along Binney Street in Kendall Square, a five-minute walk from the Massachusetts Institute of Technology (“MIT”) campus. In February 2009, the Cambridge City Council approved Alexandria’s petition for significantly increased zoning density in this location, enabling the future development of up to 1.7 million rentable square feet of office/laboratory space on multiple adjacent sites. These sites currently hold income-producing low-rise buildings and surface parking lots, which, we believe, will eventually be replaced by high quality life science facilities in this desirable, land-constrained location. We will continue to advance our entitlement efforts for this site.

Our significant value add projects in Eastern Massachusetts are located in Cambridge and nearby communities. Cambridge is home to Harvard University (“Harvard”) and MIT, two of world’s leading universities for life science and technology research. Both Harvard and MIT have a long and successful history of translational collaborations between academic scientists and industry. Working with local venture capitalists and experienced entrepreneurs, the universities have created leading biotech companies such as Genzyme Corporation and Biogen Idec and well over a hundred smaller life science firms in Cambridge alone. This fertile science and technology ecosystem has subsequently attracted investment by leading international pharmaceutical companies such as Novartis and GlaxoSmithKline and has led to the creation of important new independent research organizations in Cambridge, such as the Broad Institute and the Whitehead Institute for Biomedical Research. Among the most recent new members of the Cambridge community are: Microsoft’s New England Research and Development Center; Schlumberger-Doll Research Center; a Google engineering unit; and the Koch Center for Integrative Cancer Research at MIT.

Among Alexandria’s completed value add projects in Cambridge is the conversion of an approximately 175,000 square foot office building at Technology Square to office/laboratory use. This space has been substantially leased to Sirtris Pharmaceuticals, a GlaxoSmithKline company, the Novartis Institutes of Biomedical Research, and a unit of Pfizer, Inc. Another suburban building conversion resulted in a 59,000 square foot lease to a research division of Johnson & Johnson.

ALEXANDRIAREAL ESTATE EQUITIES, INC.Value Add ActivitiesJune 30, 2009

(continued)

New Markets and Other Projects

A component of our business also includes ground-up development projects in new markets and other projects. We have two development parcels in China. One development parcel is located in South China for a two-building project aggregating approximately 275,000 rentable square feet. This project is nearing shell completion. The second development parcel is located in North China for a two-building project aggregating approximately 272,000 rentable square feet. As of June 30, 2009, our estimated remaining costs to complete shell construction for these projects in China were approximately $13 million.

Additionally, other projects include two above-ground parking structures under construction at Mission Bay in San Francisco and construction related to site work, plaza, park and underground parking at the Alexandria Center for Science and Technology at East River Science Park, New York City, a unique one-of-a-kind highly advanced state-of-the-art urban science park.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

Summaryof Capital ExpendituresFive Year History

****	****		Six Months		Year Ended December 31,										****
****	Total Weighted ** Average**		Ended June 30, 2009		2008		2007		2006		2005		2004		****
Capital expenditures (1):
Major<br> capital expenditures	$	6,072,000	$	113,000	$	405,000	$	1,379,000	$	575,000	$	972,000	$	2,628,000	(2)
Recurring<br> capital expenditures	$	5,412,000	$	649,000	$	955,000	$	648,000	$	639,000	$	1,278,000	$	1,243,000
Weighted<br> average square feet in portfolio	59,021,757		11,731,948		11,770,769		11,476,217		9,790,326		8,128,690		6,123,807
Per<br> weighted average square foot in portfolio
Major<br> capital expenditures	$	0.10	$	0.01	$	0.03	$	0.12	$	0.06	$	0.12	$	0.43	(2)
Recurring<br> capital expenditures	$	0.09	$	0.06	$	0.08	$	0.06	$	0.07	$	0.16	$	0.20
Tenant improvements and leasing costs:
Retenanted space (3)
Tenant<br> improvements and leasing costs	$	7,991,000	$	657,000	$	3,481,000	$	1,446,000	$	1,370,000	$	324,000	$	713,000
Retenanted<br> square feet	1,344,393		91,306		505,773		224,767		248,846		130,887		142,814
Per<br> square foot leased of retenanted space	$	5.94	$	7.20	$	6.88	$	6.43	$	5.51	$	2.48	$	4.99
Renewal space
Tenant<br> improvements and leasing costs	$	7,906,000	$	928,000	$	2,364,000	$	1,942,000	$	957,000	$	778,000	$	937,000
Renewal<br> square feet	3,626,796		526,245		748,512		671,127		455,980		666,058		558,874
Per<br> square foot leased of renewal space	$	2.18	$	1.76	$	3.16	$	2.89	$	2.10	$	1.17	$	1.68

The table above shows total and weighted average per square foot property-related capital expenditures, tenant improvements and leasing costs (excluding capital expenditures and tenant improvements that are recoverable from tenants, revenue-enhancing or related to properties that have undergone redevelopment).

(1)	Property-related<br> capital expenditures include all major capital and recurring capital<br> expenditures except capital expenditures that are recoverable from tenants,<br> revenue-enhancing capital expenditures, or costs related to the redevelopment<br> of a property. Major capital expenditures consist of roof replacements and<br> HVAC systems that are typically identified and considered at the time a<br> property is acquired.
(2)	Major capital<br> expenditures for 2004 included a one-time HVAC system upgrade at one property<br> totaling $1,551,000 or $0.25 per square foot.
(3)	Excludes space that has undergone redevelopment<br> before retenanting.

(1)

Property-related capital expenditures include all major capital and recurring capital expenditures except capital expenditures that are recoverable from tenants, revenue-enhancing capital expenditures, or costs related to the redevelopment of a property. Major capital expenditures consist of roof replacements and HVAC systems that are typically identified and considered at the time a property is acquired.

(2)

Major capital expenditures for 2004 included a one-time HVAC system upgrade at one property totaling $1,551,000 or $0.25 per square foot.

(3)

Excludes space that has undergone redevelopment before retenanting.

ALEXANDRIAREAL ESTATE EQUITIES, INC.

ConferenceCall Information

Forthe Second Quarter Ended June 30, 2009

Alexandria Real Estate Equities, Inc. will be hosting a conference call to discuss its operating and financial results for the second quarter ended June 30, 2009:

Date:	August 6, 2009
Time:	3:00 P.M. Eastern<br> Time/12:00 P.M. Noon Pacific Time
Phone Number:	(719) 325-4813
Confirmation Code:	4279579

ALEXANDRIA REAL ESTATE EQUITIES, INC. Definitions

June 30,2009

This section contains an explanation of certain non-GAAP financial measures we provide in other sections of this document, as well as the reasons why management believes these measures provide useful information to investors about our financial condition or results of operations. Additional detail can be found in our most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Fundsfrom Operations

United States generally accepted accounting principles (“GAAP”) basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of NAREIT established the measurement tool of Funds from Operations (“FFO”). Since its introduction, FFO has become a widely used non-GAAP financial measure among real estate investment trusts (“REITs”). We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper (the “White Paper”) and related implementation guidance, which may differ from the methodology for calculating FFO utilized by other equity REITs, and, accordingly, may not be comparable to such other REITs. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

FFO 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.

AdjustedFunds from Operations

Adjusted Funds from Operations (“AFFO”) is a non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO attributable to Alexandria Real Estate Equities, Inc’s common stockholders by adding to or deducting from FFO attributable to Alexandria Real Estate Equities, Inc’s common stockholders (i) recurring and non-recurring capital expenditures required to maintain and re-tenant our properties, (ii) second generation tenant improvements and leasing costs on retenanted and renewal space (excludes redevelopment expenditures), (iii) capitalized income from development projects, (iv) gain on early extinguishment of debt, (v) amortization of loan fees, debt premiums/discounts and acquired above and below market leases, (vi) effects of deferred rent, (vii) non-cash compensation expense related to restricted stock awards and (viii) other non-cash income or charges. AFFO is not intended to represent cash flow for the period, and it only provides an additional perspective on our ability to fund cash needs and make distributions to shareholders by adjusting the effect of the non-cash items included in FFO, as well as recurring capital expenditures and leasing costs. We believe that net income attributable to Alexandria Real Estate Equities, Inc’s common stockholders is the most directly comparable GAAP financial measure to AFFO attributable to Alexandria Real Estate Equities, Inc’s common stockholders. We also believe that AFFO attributable to Alexandria Real Estate Equities, Inc’s common stockholders provides useful information to the investment community about our financial position as compared to other REITs since AFFO is a widely reported measure used by other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.