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UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly periodended March 31, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-12993

ALEXANDRIA REAL ESTATEEQUITIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	95-4502084
(State<br> or other jurisdiction of<br><br> incorporation or organization)	(I.R.S.<br> Employer Identification Number)

385East Colorado Boulevard, Suite 299, Pasadena, California 91101

(Address of principal executive offices)(Zip Code)

(626)578-0777

(Registrant’s telephone number, including area code)

N/A(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See the definitions of `“large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated<br> filer x	Accelerated filer o
Non-accelerated filer o (Do<br> not check if a smaller reporting company)	Smaller reporting<br> company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No x

As of April 26, 2010, 44,297,646 shares of common stock, par value $.01 per share, were outstanding.

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TABLE OF CONTENTS

****	****	Page
PART I–FINANCIAL<br> INFORMATION
Item<br> 1.	FINANCIAL STATEMENTS<br> (UNAUDITED)	3
	Condensed Consolidated Balance Sheets–As of<br> March 31, 2010 and December 31, 2009	4
	Condensed Consolidated Income Statements–For the Three<br> Months Ended March 31, 2010 and 2009	5
	Condensed Consolidated Statement of Changes in<br> Stockholders’ Equity and Noncontrolling Interests–For the Three Months Ended<br> March 31, 2010	6
	Condensed Consolidated Statements of Cash Flows–For<br> the Three Months Ended March 31, 2010 and 2009	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	MANAGEMENT’S<br> DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
Item 3.	QUANTITATIVE<br> AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
Item 4.	CONTROLS AND<br> PROCEDURES	46
PART II–OTHER<br> INFORMATION		46
Item<br> 1A.	RISK<br> FACTORS	46
Item<br> 6.	EXHIBITS	47
Signatures		49

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PART I- FINANCIAL INFORMATION

Item 1. **** FINANCIAL STATEMENTS (UNAUDITED)

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Alexandria Real Estate Equities, Inc.Condensed Consolidated Balance Sheets*(Inthousands)* (Unaudited)

****	March 31,		****	December 31,		****
****	2010		****	2009		****
Assets			****	****		****
Investments in real estate:
Rental properties	$	3,937,876		$	3,903,955
Less: accumulated depreciation	(538,570		)	(520,647		)
Rental properties, net	3,399,306			3,383,308
Land held for future development	294,631			255,025
Construction in progress	1,326,865			1,400,795
Investment in unconsolidated real estate entity	34,421			–
Investments in real estate, net	5,055,223			5,039,128
Cash and cash equivalents	70,980			70,628
Restricted cash	35,832			47,291
Tenant receivables	2,710			3,902
Deferred rent	99,248			96,700
Investments	76,918			72,882
Other assets	127,623			126,696
Total assets	$	5,468,534		$	5,457,227
Liabilities and Equity
Secured notes payable	$	884,839		$	937,017
Unsecured line of credit and unsecured term loan	1,291,000			1,226,000
Unsecured convertible notes	586,975			583,929
Accounts payable, accrued expenses, and tenant<br> security deposits	284,830			282,516
Dividends payable	21,709			21,686
Total liabilities	3,069,353			3,051,148
Redeemable **** noncontrolling<br> interests	17,490			41,441
Alexandria Real Estate Equities, Inc.<br> stockholders’ equity:
Series C preferred stock	129,638			129,638
Series D convertible preferred stock	250,000			250,000
Common stock	439			438
Additional paid-in capital	1,987,512			1,977,062
Accumulated other comprehensive loss	(26,990		)	(33,730		)
Total Alexandria Real Estate Equities, Inc.<br> stockholders’ equity	2,340,599			2,323,408
Noncontrolling interests	41,092			41,230
Total equity	2,381,691			2,364,638
Total	$	5,468,534		$	5,457,227

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements

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Alexandria Real Estate Equities, Inc.Condensed Consolidated Income Statements*(Dollarsin thousands, except per share amounts)*

(Unaudited)

****	Three Months Ended March 31,
****	2010		2009
Revenues
Rental	$	88,858	$	104,011
Tenant<br> recoveries	26,558		26,796
Other income	1,071		752
Total<br> revenues	116,487		131,559
Expenses
Rental<br> operations	31,651		32,434
General<br> and administrative	9,481		9,418
Interest	17,562		20,199
Depreciation<br> and amortization	29,735		31,242
Total<br> expenses	88,429		93,293
Income<br> from continuing operations	28,058		38,266
Income<br> from discontinued operations, net	727		2,983
Net<br> income	28,785		41,249
Net<br> income attributable to noncontrolling interests	935		875
Dividends<br> on preferred stock	7,089		7,089
Net<br> income attributable to unvested restricted stock awards	219		517
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders	$	20,542	$	32,768
Earnings<br> per share attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – basic
Continuing<br> operations	$	0.45	$	0.92
Discontinued<br> operations, net	0.02		0.09
Earnings<br> per share – basic	$	0.47	$	1.01
Earnings<br> per share attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – diluted
Continuing<br> operations	$	0.45	$	0.92
Discontinued<br> operations, net	0.02		0.09
Earnings per<br> share – diluted	$	0.47	$	1.01

The accompanying notes are an integral part of thesecondensed consolidated financial statements

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Alexandria RealEstate Equities, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity andNoncontrolling Interests

(Dollars in thousands)

(Unaudited)

****	Alexandria Real Estate Equities, Inc. Stockholders															****		****	****		****	****		****
****	Series C ** Preferred Stock**		Series D Convertible ** Preferred Stock**		Number of ** Common Shares**	Common ** Stock**		Additional Paid-In Capital		Retained ** Earnings**		****	Accumulated Other ** Comprehensive Loss**		****	Noncontrolling Interests		****	Total Equity		****	Redeemable Noncontrolling Interests		****
Balance at December 31, 2009	$	129,638	$	250,000	43,846,050	$	438	$	1,977,062	$	-	****	$	(33,730	)	$	41,230	****	$	2,364,638		$	41,441
Net income	-		-		-	-		-		27,850		****	-		****	613		****	28,463			322
Unrealized gain on marketable securities	-		-		-	-		-		-		****	337		****	-		****	337			-
Unrealized gain on interest rate hedge agreements	-		-		-	-		-		-		****	1,027		****	-		****	1,027			80
Foreign currency translation	-		-		-	-		-		-		****	5,376		****	(1		)	5,375			-
Distributions to noncontrolling interests	-		-		-	-		-		-		****	-		****	(750		)	(750		)	(348		)
Deconsolidation of investment in real estate entity (see Note 3)	-		-		-	-		-		-		****	-		****	-		****	-			(24,005		)
Issuances pursuant to stock plan	-		-		73,918	1		5,193		-		****	-		****	-		****	5,194			-
Dividends declared on preferred stock	-		-		-	-		-		(7,089		)	-		****	-		****	(7,089		)	-
Dividends declared on common stock	-		-		-	-		-		(15,504		)	-		****	-		****	(15,504		)	-
Earnings in excess of distributions	-		-		-	-		5,257		(5,257		)	-		****	-		****	-			-
Balance at March 31, 2010	$	129,638	$	250,000	43,919,968	$	439	$	1,987,512	$	-	****	$	(26,990	)	$	41,092	****	$	2,381,691		$	17,490

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements

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Alexandria Real Estate Equities, Inc.Condensed Consolidated Statements of Cash Flows*(Inthousands)*

(Unaudited)

****	Three Months Ended					****
****	March 31,					****
****	2010		****	2009		****
Operating Activities	****		****	****		****
Net<br> income	$	28,785		$	41,249
Adjustments<br> to reconcile net income to net cash provided by operating activities:
Depreciation<br> and amortization	29,738			31,446
Amortization<br> of loan fees and costs	2,072			1,319
Amortization<br> of debt premiums/discount	3,026			2,262
Amortization<br> of acquired above and below market leases	(2,247		)	(4,745		)
Deferred<br> rent	(4,135		)	(1,509		)
Stock<br> compensation expense	2,731			3,022
Equity<br> in income related to investments	(48		)	(40		)
Gain<br> on sales of investments	(528		)	(109		)
Loss<br> on sales of investments	7			489
Gain<br> on sales of property	(24		)	(2,234		)
Changes<br> in operating assets and liabilities:
Restricted<br> cash	2,179			(334		)
Tenant<br> receivables	1,187			461
Other<br> assets	(14,898		)	(1,974		)
Accounts<br> payable, accrued expenses, and tenant security deposits	3,289			(14,528		)
Net<br> cash provided by operating activities	51,134			54,775
Investing Activities	****		****	****		****
Additions<br> to properties	(96,322		)	(132,788		)
Proceeds<br> from sales of properties	10,514			11,929
Change<br> in restricted cash related to construction projects	9,048			14,690
Contributions<br> to unconsolidated real estate entity	(764		)	–
Transfer<br> of cash to unconsolidated real estate entity upon deconsolidation	(154		)	–
Additions<br> to investments	(4,201		)	(2,822		)
Proceeds<br> from investments	1,071			246
Net<br> cash used in investing activities	(80,808		)	(108,745		)
Financing Activities	****		****	****		****
Proceeds<br> from secured notes payable	–			1,082
Principal<br> reductions of secured notes payable	(13,714		)	(41,190		)
Change<br> in restricted cash related to financings	(2,786		)	(1,344		)
Principal<br> borrowings from unsecured line of credit and term loan	80,000			206,000
Repayments<br> of borrowings from unsecured line of credit	(15,000		)	(276,000		)
Proceeds<br> from issuance of common stock	–			254,630
Proceeds<br> from exercise of stock options	5,194			30
Dividends<br> paid on common stock	(15,481		)	(25,900		)
Dividends<br> paid on preferred stock	(7,089		)	(7,089		)
Distributions<br> to redeemable noncontrolling interests	(348		)	(351		)
Redemption<br> of redeemable noncontrolling interests	–			(1,052		)
Distributions<br> to noncontrolling interests	(750		)	(726		)
Net<br> cash provided by financing activities	30,026			108,090
Net<br> increase in cash and cash equivalents	352			54,120
Cash<br> and cash equivalents at beginning of period	70,628			71,161
Cash and cash<br> equivalents at end of period	$	70,980		$	125,281

The accompanying notes are an integral part of thesecondensed consolidated financial statements

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Alexandria Real Estate Equities, Inc.

Notes to Condensed Consolidated FinancialStatements

(Unaudited)

1. **** Background

As used in this quarterly report on Form 10-Q, references to the “Company,” “we,” “our,” and “us” refer to Alexandria Real Estate Equities, Inc. and its subsidiaries.

Alexandria Real Estate Equities, Inc., Landlord of Choice to the Life Science Industry®, is the largest owner and preeminent real estate investment trust (“REIT”) focused principally on cluster development through the ownership, operation, management, selective redevelopment, development, and acquisition of properties containing life science laboratory space. We are 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, biotechnology, medical device, product, service, and translational entities, as well as government agencies. Our operating platform is based on the principle of “clustering,” with assets and operations located in key life science markets. Our asset base contains 161 properties approximating 12.7 million rentable square feet consisting of 156 properties approximating 11.8 million rentable square feet (including spaces undergoing active redevelopment) and five properties undergoing ground-up development approximating an additional 865,000 rentable square feet. In addition, our asset base will enable us to grow to approximately 24.0 million rentable square feet through additional ground-up development of approximately 11.3 million rentable square feet.

2. **** Basis of presentation

We have prepared the accompanying interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, the interim condensed consolidated financial statements presented herein reflect all adjustments, consisting solely of normal and recurring adjustments, which are necessary to fairly present the interim condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2009.

The accompanying condensed consolidated financial statements include the accounts of Alexandria Real Estate Equities, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

We hold interests, together with certain third parties, in a limited partnership and in limited liability companies which we consolidate in our financial statements. We consolidate the limited partnership and limited liability companies because we exercise significant control over major decisions by these entities, such as investment activity and changes in financing.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

International operations

The functional currency for our subsidiaries operating in the United States is the United States dollar. We have four operating properties and one development parcel in Canada and two development parcels in China. The functional currency for our foreign subsidiaries operating in Canada and China is the local currency. The assets and liabilities of our foreign subsidiaries are translated into United States dollars at the exchange rate in effect as of the financial statement date. Income statement accounts of our foreign subsidiaries are translated using the average exchange rate for the periods presented. Gains or losses resulting from the translation are included in accumulated other comprehensive income (loss) as a separate component of total equity.

The appropriate amounts of foreign exchange rate gains or losses included in accumulated other comprehensive income (loss) will be reflected in income when there is a sale or partial sale of our investment in these operations or upon a complete or substantially complete liquidation of the investment.

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2. **** Basis of presentation (continued)

Rental properties, net, land heldfor future development, and construction in progress

We recognize assets acquired (including the intangible values to above or below market leases, acquired in-place leases, tenant relationships and other intangible assets or liabilities), liabilities assumed and any noncontrolling interest in an acquired entity at their fair value as of the acquisition date. The value of tangible assets acquired is based upon our estimation of value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated carrying costs during the hypothetical lease-up period and other costs that would have been incurred to execute similar leases, considering market conditions at the acquisition date of the acquired in-place lease.**** The values of acquired in-place leases are classified as leasing costs, included in other assets in the accompanying condensed consolidated balance sheets and amortized over the remaining terms of the related leases. We assess the fair value of tangible and intangible assets based on numerous factors, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and market/economic conditions that may affect the property. We also recognize the fair values of assets acquired, the liabilities assumed, and any noncontrolling interests in acquisitions of less than a 100% interest when the acquisition constitutes a change in control of the acquired entity. In addition, acquisition-related costs and restructuring costs are expensed as incurred.

We are required to capitalize construction, redevelopment, and development costs, including preconstruction costs, interest, property taxes, insurance, and other costs directly related and essential to the project while activities are ongoing to prepare an asset for its intended use. Capitalization of interest and other direct project costs ceases after a project is substantially complete and ready for its intended use. In addition, should activities necessary to prepare an asset for its intended use cease, interest, taxes, insurance, and certain other costs would be expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred.

Rental properties, net, land held for future development, construction in progress, and intangibles are individually evaluated for impairment when conditions exist that may indicate that it is probable that the sum of expected future undiscounted cash flows is less than the carrying amount. Impairment indicators for our rental properties, land held for future development, and construction in progress are assessed by project and include, but are not limited to, significant fluctuations in estimated net operating income, occupancy changes, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, historical operating results, known trends, and market/economic conditions that may affect the property and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recorded to reduce the carrying amount to its estimated fair value. We did not incur impairment charges for the three months ended March 31, 2010 and 2009.

Variable interest entity

In June 2009, the Financial Accounting Standards Board (the “FASB”) issued new accounting literature with respect to variable interest entities (“VIEs”). The new guidance impacts the consolidation guidance applicable to VIEs and among other things requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE, continuous assessments of whether a company is the primary beneficiary of a VIE, and enhanced disclosures about a company’s involvement with a VIE. We prospectively adopted the new guidance on January 1, 2010.

We consolidate a VIE if it is determined that we are the primary beneficiary, an evaluation that we perform on an ongoing basis. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We use qualitative analyses when determining whether or not we are the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, the purpose and design of the VIE, risks that the VIE was designed to create and pass through, the form of our ownership interest, our representation of the entity’s governing body, the size and seniority of our investment, our ability to participate in policy making decisions, and the rights of the other investors to participate in the decision making process, and to replace us as manager and/or liquidate the venture, if applicable. Our ability to correctly assess our influence or control over an entity at the inception of our involvement with the entity or upon reevaluation of the entity’s continuing status as a VIE and determine the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. See Note 3, Investments in Real Estate, Net.

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2. **** Basis of presentation (continued)

Interestrate hedge agreements

We utilize interest rate hedge agreements, including interest rate swap agreements, to hedge a portion of our exposure to variable interest rates primarily associated with our unsecured line of credit and unsecured term loan. We recognize our interest rate hedge agreements as either assets or liabilities on the balance sheet at fair value. The accounting for changes in fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the hedged exposure, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. Our interest rate hedge agreements are considered cash flow hedges as they are designated and qualify as hedges of the exposure to variability in expected future cash flows. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the earnings effect of the hedged forecasted transactions in a cash flow hedge.

Accumulatedother comprehensive loss

Accumulated other comprehensive loss attributable to Alexandria Real Estate Equities, Inc. consists of the following (in thousands):

	March 31,		****	December 31,		****
	2010		****	2009		****
Unrealized gain<br> on marketable securities	$	7,617		$	7,280
Unrealized loss<br> on interest rate hedge agreements	(49,016		)	(50,043		)
Unrealized gain<br> on foreign currency translation	14,409			9,033
	$	(26,990	)	$	(33,730	)

The following table provides a reconciliation of comprehensive income attributable to Alexandria Real Estate Equities, Inc. (in thousands):

	Three Months Ended				****
	March 31,				****
	2010		2009		****
Net<br> income	$	28,785	$	41,249
Unrealized<br> gain on marketable securities	337		692
Unrealized<br> gain on interest rate hedge agreements	1,107		11,331
Unrealized<br> gain (loss) on foreign currency translation	5,375		(4,658		)
Comprehensive<br> income	35,604		48,614
Comprehensive<br> income attributable to noncontrolling interests	1,014		867
Comprehensive<br> income attributable to Alexandria Real Estate Equities, Inc.	$	34,590	$	47,747

IncomeTaxes

We are organized and qualify as a REIT pursuant to the Internal Revenue Code of 1986, as amended (the “Code”). Under the Code, a REIT that distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and that meets certain other conditions is not subject to federal income taxes, but is subject to certain state and local taxes. We generally distribute 100% or more of our taxable income. Therefore, no provision for Federal income taxes is required. We file tax returns, including returns for our subsidiaries, with federal, state and local jurisdictions, including jurisdictions located in the United States, Canada, China and other international locations. Our tax returns are subject to examination in various jurisdictions for the calendar years 2005 through 2009.

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2. **** Basis of presentation (continued)

IncomeTaxes (continued)

We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. The measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority having full knowledge of all the relevant information. As of March 31, 2010, there were no unrecognized tax benefits. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

Interest expense and penalties, if any, would be recognized in the first period the interest or penalty would begin accruing according to the provisions of the relevant tax law at the applicable statutory rate of interest. We did not incur any tax related interest expense or penalties for the three months ended March 31, 2010 and 2009.

Earnings per share and dividendsdeclared

We account for unvested restricted stock awards which contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of earnings per share using the two-class method. Under the two-class method, we allocate net income after preferred stock dividends and amounts attributable to noncontrolling interests to common stockholders and unvested restricted stock awards based on their respective participation rights to dividends declared (or accumulated) and undistributed earnings. Diluted earnings per share is computed using the weighted average shares of common stock outstanding determined for the basic earnings per share computation plus the effect of any dilutive securities, including the dilutive effect of stock options using the treasury stock method.

The following table shows the computation of earnings per share and dividends declared per common share (dollars in thousands, except per share amounts):

	Three Months Ended March 31,
Numerator:	2010		2009
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – numerator for basic earnings per share	$	20,542	$	32,768
Assumed<br> conversion of 8.00% Unsecured Convertible Notes	–		–
Effect<br> of dilutive securities and assumed conversion attributable to unvested<br> restricted stock awards	–		1
Net<br> income attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – numerator for diluted earnings per share	$	20,542	$	32,769
Denominator:			****
Weighted<br> average shares of common stock outstanding – basic	43,821,765		32,478,671
Effect<br> of dilutive securities:			****
Dilutive<br> effect of stock options	35,748		19,436
Assumed<br> conversion of 8.00% Unsecured Convertible Notes	–		–
Weighted<br> average shares of common stock outstanding – diluted	43,857,513		32,498,107
Earnings<br> per share attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders:			****
Basic	$	0.47	$	1.01
Diluted	$	0.47	$	1.01
Dividends<br> declared per common share	$	0.35	$	0.80

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2. **** Basis of presentation (continued)

Earnings per share and dividendsdeclared (continued)

We applied the if-converted method for our 8.00% unsecured senior convertible notes (“8.00% Unsecured Convertible Notes”). In applying the if-converted method, conversion is assumed for purposes of calculating diluted earnings per share if the effect would be dilutive to earnings per share. If the assumed conversion pursuant to the if-converted method is dilutive, diluted earnings per share would be calculated by adding back interest charges applicable to our 8.00% Unsecured Convertible Notes to the numerator and our 8.00% Unsecured Convertible Notes would be assumed to have been converted at the beginning of the period presented (or from the date of issuance, if occurring on a date later than the date that the period begins) and the resulting incremental shares associated with the assumed conversion would be included in the denominator. For purposes of calculating diluted earnings per share, we did not assume conversion of our 8.00% Unsecured Convertible Notes for the three months ended March 31, 2010 since they were anti-dilutive to earnings per share during that period. We did not assess the impact of our 8.00% Unsecured Convertible Notes for the three months ended March 31, 2009 since we did not issue the notes until April 2009.

The dilutive effect of our series D cumulative convertible preferred stock (“Series D Convertible Preferred Stock”) will be reflected in diluted earnings per share by application of the if-converted method. For purposes of calculating diluted earnings per share, we did not assume conversion of our Series D Convertible Preferred Stock since the impact was anti-dilutive to earnings per share for the three months ended March 31, 2010 and 2009.

Our calculation of weighted average diluted shares will include additional shares related to our 3.70% unsecured senior convertible notes (“3.70% Unsecured Convertible Notes”) when the average market price of our common stock is higher than the conversion price ($117.36 as of March 31, 2010). The number of additional shares that will be included in the weighted average diluted shares is equal to the number of shares that would be issued upon the settlement of the 3.70% Unsecured Convertible Notes assuming the settlement occurred on the end of the reporting period pursuant to the treasury stock method. For the three months ended March 31, 2010 and 2009, the weighted average shares of common stock related to our 3.70% Unsecured Convertible Notes have been excluded from diluted weighted average shares of common stock as the average market price of our common stock was lower than the conversion price of $117.36 as of March 31, 2010 related to our 3.70% Unsecured Convertible Notes and the impact of conversion would have been anti-dilutive.

Net income attributable toAlexandria Real Estate Equities, Inc.

The following table shows income attributable to Alexandria Real Estate Equities, Inc. (in thousands):

	Three Months Ended
	March 31,
	2010		2009
Net income<br> attributable to Alexandria Real Estate Equities, Inc.:
Income from<br> continuing operations	$	27,123	$	37,391
Income from<br> discontinued operations, net	727		2,983
Net income<br> attributable to Alexandria Real Estate Equities, Inc.	$	27,850	$	40,374

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2. **** Basis of presentation (continued)

Stock-based compensation expense

We have historically issued two forms of stock-based compensation under our equity incentive plan: options to purchase common stock (“options”) and restricted stock awards. We have not granted any options since 2002. We recognize all stock-based compensation in the income statement based on the grant date fair value. The fair value is based on the market value of the common stock on the grant date and such cost is then recognized on a straight-line basis over the period during which the employee is required to provide services in exchange for the award (the vesting period). We compute stock-based compensation based on awards that are ultimately expected to vest and as a result, future forfeitures of awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. No compensation cost is recognized for equity instruments that are forfeited or are anticipated to be forfeited.

Fair value

We are required to disclose fair value information about all financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. We measure and disclose the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels as follows: 1) using quoted prices in active markets for identical assets or liabilities, 2) “significant other observable inputs,” and 3) “significant unobservable inputs.” “Significant other observable inputs” can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. “Significant unobservable inputs” are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The carrying amounts of cash and cash equivalents, restricted cash, tenant receivables, other assets, accounts payable, accrued expenses, and tenant security deposits approximate fair value. As described in Note 7, our interest rate hedge agreements have been recorded at fair value. The fair values of our secured notes payable, unsecured line of credit, unsecured term loan, and unsecured convertible notes were estimated using “significant other observable inputs” such as available market information and discounted cash flows analyses based on borrowing rates we believe we could obtain with similar terms and maturities. Because the valuations of our financial instruments are based on these types of estimates, the actual fair values of our financial instruments may differ materially if our estimates do not prove to be accurate. Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. As of March 31, 2010 and December 31, 2009, the book and fair values of our secured notes payable, unsecured line of credit, unsecured term loan, and unsecured convertible notes were as follows (in thousands):

	March 31, 2010				December 31, 2009
	Book Value		Fair Value		Book Value		Fair Value
Secured notes<br> payable	$	884,839	$	924,961	$	937,017	$	909,367
Unsecured line<br> of credit and unsecured term loan	1,291,000		1,243,241		1,226,000		1,175,512
Unsecured<br> convertible notes	586,975		634,370		583,929		615,572

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2. **** Basis of presentation (continued)

Impact of recently issuedaccounting standards

In January 2010, the FASB issued an Accounting Standard Update to address implementation issues associated with the accounting for decreases in the ownership of a subsidiary. The new guidance clarified the scope of the entities covered by the guidance related to accounting for decreases in the ownership of a subsidiary and specifically excluded in-substance real estate or conveyances of oil and gas mineral rights from the scope. Additionally, the new guidance expands the disclosures required for a business combination achieved in stages and deconsolidation of a business or nonprofit activity. The new guidance was effective for interim and annual periods ending on or after December 31, 2009 and must be applied on a retrospective basis to the first period that an entity adopted the new guidance related to noncontrolling interests. The adoption of this new guidance did not have an impact on our consolidated financial statements.

3. **** Investmentsin real estate, net

Our real estate investments consisted of the following (in thousands):

	March 31,		****	December 31,		****
	2010		****	2009		****
Land	$	470,976		$	474,859
Buildings and<br> building improvements	3,290,318			3,249,866
Other<br> improvements	176,582			179,230
Gross book value<br> of rental operating properties	3,937,876			3,903,955
Less:<br> accumulated depreciation	(538,570		)	(520,647		)
Rental properties,<br> net	3,399,306			3,383,308
Land held for<br> future development	294,631			255,025
Construction in<br> progress	1,326,865			1,400,795
Investment in<br> unconsolidated real estate entity	34,421			–
Investments in<br> real estate, net	$	5,055,223		$	5,039,128

Rental properties, net, land held for future development, andconstruction in progress

As of March 31, 2010 and December 31, 2009, we had approximately $3.4 billion of rental properties, net aggregating 11.2 million rentable square feet as of the end of each period. Additionally, as of March 31, 2010 and December 31, 2009, we had approximately $294.6 million and $255.0 million, respectively, of land held for future development aggregating 5.1 million and 4.8 million rentable square feet, respectively. Land held for future development represents real estate we plan to develop in the future but as of each period presented, no construction activities were ongoing. As a result, interest, property taxes, insurance, and other costs are expensed as incurred.

As of March 31, 2010 and December 31, 2009, we had approximately $1.3 billion and $1.4 billion undergoing preconstruction and construction activities, including development and redevelopment, respectively. These projects are classified in the accompanying condensed consolidated balance sheets as construction in progress. As of March 31, 2010 and December 31, 2009, we had 648,031 and 575,152 rentable square feet, respectively, undergoing active redevelopment through a permanent change in use to life science laboratory space, including conversion of single-tenancy space to multi-tenancy space or multi-tenancy space to single-tenancy space. In addition, as of March 31, 2010 and December 31, 2009, we had 865,000 and 980,000 rentable square feet, respectively, undergoing active ground-up development consisting of vertical aboveground construction of life science laboratory properties. Additionally, as of March 31, 2010 and December 31, 2009, we had an aggregate of 5.7 million and 6.3 million rentable square feet, respectively, undergoing preconstruction activities (entitlements, permitting, design, and site work; activities prior to commencement of vertical construction of aboveground shell and core) and new markets and other projects. We are required to capitalize interest during the period an asset is undergoing activities to prepare it for its intended use. Capitalization of interest ceases after a project is substantially complete and ready for its intended use. In addition, should construction activity cease, interest would be expensed as incurred. Total interest capitalized for the three months ended March 31, 2010 and 2009, was approximately $21.5 million and $16.9 million, respectively.

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3. **** Investmentsin real estate, net (continued)

Investment in unconsolidated realestate entity

In 2007, we formed an entity with a development partner for the purpose of owning, developing, leasing, managing, and operating a development parcel supporting a future building aggregating 428,000 rentable square feet. The development parcel serves as collateral for a non-recourse secured loan due in 2012 with a $38.4 million loan balance as of March 31, 2010 and December 31, 2009. In 2009, the entity entered into an interest rate cap agreement related to the secured note 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 the secured note. Prior to the adoption of the new VIE literature, we determined that the entity qualified as a VIE for which we were also the entity’s primary beneficiary since we would absorb the majority of the entity’s expected losses and receive a majority of the entity’s expected residual returns. As a result, we had consolidated the entity since its inception in 2007. The new VIE literature cites two criteria to determine the primary beneficiary of a VIE, both of which must be met to be deemed the primary beneficiary of a VIE. Upon adoption of the new VIE literature on January 1, 2010, we determined that we did not meet both criteria since we do not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. The decisions that most significantly impact the VIE’s economic performance require both our consent and that of our partner, including all major operating, investing, and financing decisions as well as decisions over major expenditures. Because we share power over the decisions that most significantly impact the VIE’s economic performance, we determined that we are not the primary beneficiary of the VIE. As of January 1, 2010, we prospectively deconsolidated the VIE at its carrying amounts, including a decrease of approximately $92.3 million of construction in progress, approximately $3.0 million of restricted cash, approximately $38.4 million of secured notes payable, and $24.0 million of redeemable noncontrolling interests, with a corresponding increase to investment in unconsolidated real estate entity pursuant to the equity method of approximately $33.7 million which is classified as investment in unconsolidated real estate entity on the condensed consolidated balance sheets. There was no adjustment to retained earnings upon adoption. As of March 31, 2010, our investment in the unconsolidated entity was approximately $34.4 million.

Our investment in unconsolidated real estate entity is adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. Distrtributions, profits, and losses related to this entity are allocated in accordance with the respective operating agreement. When circumstances indicate there may have been a reduction in value of an equity investment, we evaluate the equity investment and any advances made for impairment by estimating our ability to recover our investment from future expected cash flows. If we determine the loss in value is other than temporary, we recognize an impairment charge to reflect the equity investment and any advances made at fair value. For the three months ended March 31, 2010, there were no indications of a reduction in the value of our investment in the unconsolidated real estate entity.

4. **** Investments

We hold equity investments in certain publicly traded companies and privately held entities primarily involved in the life science industry. All of our investments in publicly traded companies are considered “available for sale” and are recorded at fair value. Fair value of our investments in publicly traded companies has been determined based upon the closing price as of the balance sheet date, with unrealized gains and losses shown as a separate component of total equity. The classification of each investment is determined at the time each investment is made, and such determination is reevaluated at each balance sheet date. The cost of each investment sold is determined by the specific identification method, with net realized gains and losses included in other income. Investments in privately held entities are generally accounted for under the cost method when our interest in the entity is so minor that we have virtually no influence over the entities’ operating and financial policies. Additionally, we limit our ownership percentage in the voting stock of each individual entity to less than 10%. As of March 31, 2010 and December 31, 2009, our ownership percentage in the voting stock of each individual entity was less than 10%.

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4. **** Investments (continued)

Individual investments are evaluated for impairment when changes in conditions exist that may indicate an impairment exists. The factors that we consider in making these assessments include, but are not limited to, market prices, market conditions, available financing, prospects for favorable or unfavorable clinical trial results, new product initiatives and new collaborative agreements. If there are no identified events or changes in circumstances that would have an adverse effect on our cost method investments, we do not estimate its fair value. For all of our investments, if a decline in the fair value of an investment below the carrying value is determined to be other-than-temporary, such investment is written down to its estimated fair value with a non-cash charge to current earnings. We use “significant other observable inputs” and “significant unobservable inputs” to determine the fair value of privately held entities. We did not recognize impairment charges related to our investments for the three months ended March 31, 2010 and 2009.

The following table summarizes our “available for sale” securities (in thousands):

	March 31,		****	December 31,		****
	2010		****	2009		****
Adjusted cost of<br> “available for sale” securities	$	2,220		$	1,518
Gross unrealized<br> gains	7,773			7,417
Gross unrealized<br> losses	(156		)	(137		)
Fair value of<br> “available for sale” securities	$	9,837		$	8,798

We believe that the gross unrealized losses related to our “available for sale” securities as of March 31, 2010 shown above are temporary.

Our investments in privately held entities as of March 31, 2010 and December 31, 2009 totaled approximately $67,081,000 and $64,084,000, respectively. Of these totals, approximately $66,999,000 and $64,050,000, respectively, are accounted for under the cost method. The remainder (approximately $82,000 and $34,000 as of March 31, 2010 and December 31, 2009, respectively) are accounted for under the equity method. As of March 31, 2010 and December 31, 2009, there were no unrealized losses in our investments in privately held entities.

5. **** Unsecured line of credit andunsecured term loan

Our $1.9 billion in unsecured credit facilities consist of a $1.15 billion unsecured line of credit and a $750 million unsecured term loan. We may in the future elect to increase commitments under our unsecured credit facilities by up to an additional $500 million. As of March 31, 2010, we had borrowings of $541 million and $750 million outstanding under our unsecured line of credit and unsecured term loan, respectively, with a weighted average interest rate, including the impact of our interest rate swap agreements, of approximately 3.67%.

Our unsecured line of credit and unsecured term loan, as amended, bear interest at a floating rate based on our election of either (1) a London Interbank Offered Rate (“LIBOR”) based rate plus 1.00% to 1.45% depending on our leverage or (2) the higher of a rate based upon Bank of America’s prime rate plus 0.0% to 0.25% depending on our leverage and the Federal Funds rate plus 0.50%. For each LIBOR-based borrowing, we must elect a LIBOR period of one, two, three or six months. Our unsecured line of credit matures in October 2010 and may be extended at our sole option for an additional one-year period to October 2011. Our unsecured term loan matures in October 2011 and may be extended at our sole option for an additional one-year period to October 2012.

Our unsecured line of credit and unsecured term loan contain financial covenants, including, among others, the following (as defined under the terms of the agreement):

· leverage ratio less than 65.0%;

· fixed charge coverage ratio greater than 1.40;

· minimum book value of $1.6 billion; and

· secured debt ratio less than 55.0%.

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5. **** Unsecured line of credit andunsecured term loan (continued)

6. **** Unsecuredconvertible notes

The following tables summarize the balances, significant terms, and components of interest cost recognized (excluding amortization of loan fees and before the impact of capitalized interest) on our unsecured convertible notes outstanding as of March 31, 2010 and December 31, 2009 (dollars in thousands, except conversion rates):

	8.00%<br> Unsecured<br> Convertible Notes			3.70%<br> Unsecured<br> Convertible Notes
	March 31,	December 31,		March 31,	December 31,
	2010	2009		2010	2009
Principal amount		$	240,000		$	384,700
Unamortized<br> discount	22,986	24,098		14,739	16,673
Net carrying<br> amount of liability component		$	215,902		$	368,027
Carrying amount<br> of equity component		$	26,216		$	43,538
Issuance date	April 2009			January 2007
Stated coupon<br> interest rate	8.00%			3.70%
Effective<br> interest rate	11.0%			5.96%
Conversion rate<br> per $1,000 principal value of unsecured convertible notes, as adjusted	41.40			117.36
Number of shares<br> on which the aggregate consideration to be delivered on conversion is<br> determined	5,797,101			N/A (1)
	8.00%<br> Unsecured<br> Convertible Notes			3.70%<br> Unsecured<br> Convertible Notes
	Three<br> Months Ended			Three<br> Months Ended
	March 31,			March 31,
	2010	2009		2010	2009
Contractual<br> interest coupon		$	–		$	4,255
Amortization of<br> discount on liability component	1,112	–		1,934	2,263
Total interest<br> cost		$	–		$	6,518

All values are in US Dollars.

(1) Our 3.70% Unsecured Convertible Notes require that upon conversion, the entire principal amount is to be settled in cash, and any excess value above the principal amount, if applicable, is to be settled in shares of our common stock. Based on the March 31, 2010 closing stock price of our common stock of $67.60 and the March 31, 2010 conversion price of the 3.70% Unsecured Convertible Notes of $117.36, the if-converted value of the notes did not exceed the principal amount as of March 31, 2010, and accordingly, no shares of our common stock would have been issued if the notes were settled on March 31, 2010.

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6. **** Unsecuredconvertible notes (continued)

8.00% Unsecured Convertible Notes

In April 2009, we completed a private offering of $240 million principal amount of 8.00% Unsecured Convertible Notes. Prior to April 20, 2014, we will not have the right to redeem the 8.00% Unsecured Convertible Notes, except to preserve our qualification as a REIT. On and after that date, we have the right to redeem the 8.00% Unsecured Convertible Notes, in whole or in part, at any time and from time to time, for cash equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the 8.00% Unsecured Convertible Notes may require us to repurchase their notes, in whole or in part, on April 15, 2014, 2019 and 2024 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Holders of the 8.00% Unsecured Convertible Notes may require us to repurchase all or a portion of their notes upon the occurrence of specified corporate transactions (each, a “Fundamental Change”), at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Holders of the 8.00% Unsecured Convertible Notes may convert their notes prior to the stated maturity date of April 15, 2029 only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending June 30, 2009, if the closing sale price of our common stock for each of 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds or is equal to 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (the “8.00% Unsecured Convertible Note Measurement Period”) in which the average trading price per $1,000 principal amount of the 8.00% Unsecured Convertible Notes was equal to or less than 98% of the average conversion value of the 8.00% Unsecured Convertible Notes during the 8.00% Unsecured Convertible Note Measurement Period; (3) upon the occurrence of a Fundamental Change; (4) if we call the 8.00% Unsecured Convertible Notes for redemption; and (5) at any time from, and including, March 15, 2029 until the close of business on the business day immediately preceding April 15, 2029 or earlier redemption or repurchase. Upon conversion, holders of the 8.00% Unsecured Convertible Notes will receive cash, shares of our common stock, or a combination thereof, as the case may be, at our election.

At issuance, the 8.00% Unsecured Convertible Notes had an initial conversion rate of approximately 24.1546 shares of common stock per $1,000 principal amount of the 8.00% Unsecured Convertible Notes, representing a conversion price of approximately $41.40 per share of our common stock. This initial conversion price represented a premium of 15% based on the last reported sale price of $36.00 per share of our common stock on April 21, 2009. The conversion rate of the 8.00% Unsecured Convertible Notes is subject to adjustments for certain events, including, but not limited to, certain cash dividends on our common stock in excess of $0.35 per share per quarter and dividends on our common stock payable in shares of our common stock. As of March 31, 2010, there was no change from the initial conversion rate of our 8.00% Unsecured Convertible Notes.

Our 8.00% Unsecured Convertible Notes have been separated into their liability and equity components as of the issuance date by recording the liability component at the fair value of a similar liability that does not have an associated equity component and attributing the remaining proceeds from issuance to the equity component. The excess of the principal amount of the liability component over its initial fair value will be amortized to interest expense using the effective interest method over a period of five years through April 2014 (the first date the holders of the 8.00% Unsecured Convertible Notes may require us to repurchase their notes).

3.70% Unsecured Convertible Notes

In January 2007, we completed a private offering of $460 million principal amount of 3.70% Unsecured Convertible Notes. Prior to January 15, 2012, we will not have the right to redeem the 3.70% Unsecured Convertible Notes, except to preserve our qualification as a REIT. On and after that date, we have the right to redeem the 3.70% Unsecured Convertible Notes, in whole or in part, at any time and from time to time, for cash equal to 100% of the principal amount of the 3.70% Unsecured Convertible Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the 3.70% Unsecured Convertible Notes may require us to repurchase their notes, in whole or in part, on January 15, 2012, 2017 and 2022 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Holders of the 3.70% Unsecured Convertible Notes may require us to

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6. **** Unsecuredconvertible notes (continued)

3.70% Unsecured Convertible Notes(continued)

repurchase all or a portion of their notes upon the occurrence of a Fundamental Change, including a change in control, certain merger or consolidation transactions or the liquidation of the Company, at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

At issuance, the 3.70% Unsecured Convertible Notes had an initial conversion rate of approximately 8.4774 shares of common stock per $1,000 principal amount of the 3.70% Unsecured Convertible Notes, representing a conversion price of approximately $117.96 per share of our common stock. This initial conversion price represented a premium of 20% based on the last reported sale price of $98.30 per share of our common stock on January 10, 2007. The conversion rate of the 3.70% Unsecured Convertible Notes is subject to adjustments for certain events, including, but not limited to, certain cash dividends on our common stock in excess of $0.74 per share per quarter and dividends on our common stock payable in shares of our common stock. As of March 31, 2010, the 3.70% Unsecured Convertible Notes had a conversion rate of approximately 8.5207 shares of common stock per $1,000 principal amount of the 3.70% Unsecured Convertible Notes, which is equivalent to a conversion price of approximately $117.36 per share of our common stock.

Holders of the 3.70% Unsecured Convertible Notes may convert their notes into cash and, if applicable, shares of our common stock prior to the stated maturity of January 15, 2027 only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending March 31, 2007, if the closing sale price of our common stock for each of 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (the “3.70% Unsecured Convertible Note Measurement Period”) in which the average trading price per $1,000 principal amount of 3.70% Unsecured Convertible Notes was equal to or less than 98% of the average conversion value of the 3.70% Unsecured Convertible Notes during the 3.70% Unsecured Convertible Note Measurement **** Period; (3) upon the occurrence of a Fundamental Change; (4) if we call the 3.70% Unsecured Convertible Notes for redemption; and (5) at any time from, and including, December 15, 2026 until the close of business on the business day immediately preceding January 15, 2027 or earlier redemption or repurchase.

In April 2009, we repurchased, in privately negotiated transactions, certain of our 3.70% Unsecured Convertible Notes aggregating approximately $75 million (par value) at an aggregate cash price of approximately $59.2 million. As a result of the repurchases, we recognized a gain on early extinguishment of debt of approximately $11.3 million, net of approximately $860,000 in unamortized issuance costs. The gain was classified as gain on early extinguishment of debt.

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7. **** Interestrate hedge agreements

We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of interest rate hedge agreements. Specifically, we enter into interest rate hedge agreements to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our interest rate hedge agreements are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our LIBOR-based borrowings. We do not use derivatives for trading or speculative purposes and currently all of our derivatives are designated as hedges. Our objectives in using interest rate hedge agreements are to add stability to interest expense and to manage our exposure to interest rate movements in accordance with our interest rate risk management strategy. Interest rate swap agreements designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. Interest rate cap agreements designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The effective portion of changes in the fair value of our interest rate hedge agreements designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income. The amount is subsequently reclassified into earnings in the period that the hedged forecasted transactions affect earnings. During the three months ended March 31, 2010 and 2009, our interest rate hedge agreements were used to hedge the variable cash flows associated with certain of our existing LIBOR-based variable rate debt, including our unsecured line of credit and unsecured term loan. The ineffective portion of the change in fair value of our interest rate hedge agreements is recognized directly in earnings. During the three months ended March 31, 2010 and 2009, our interest rate hedge agreements were 100% effective. Accordingly, we did not recognize any of the change in fair value of our interest rate hedge agreements directly into earnings.

As of March 31, 2010 and December 31, 2009, our interest rate hedge agreements were classified in accounts payable, accrued expenses, and tenant security deposits based upon their respective fair values aggregating a liability balance of approximately $48.8 million and $49.9 million, respectively, which included accrued interest and adjustments for non-performance risk, with the offsetting adjustment reflected as unrealized gain (loss) in accumulated other comprehensive loss in total equity. We have not posted any collateral related to our interest rate hedge agreements.

Balances in accumulated other comprehensive income are recognized in earnings in the periods that the forecasted hedge transactions affect earnings. For the three months ended March 31, 2010 and 2009 approximately $8.1 million and $9.5 million, respectively, was reclassified from accumulated other comprehensive income to interest expense as an increase to interest expense. During the next twelve months, we expect to reclassify approximately $26.5 million from accumulated other comprehensive loss to interest expense as an increase to interest expense.

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7. **** Interestrate hedge agreements (continued)

As of March 31, 2010, we had the following outstanding interest rate hedge agreements that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Transaction Date	Effective Date	Termination Date	Interest Pay Rate		Notional Amount		Effective at March 31, 2010		Fair Value		****
December 2006	December 29, 2006	March 31, 2014	4.990	%	$	50,000	$	50,000	$	(5,192	)
December 2006	January 2, 2007	January 3, 2011	5.003		28,500		28,500		(1,116		)
October 2007	October 31, 2007	September 30, 2012	4.546		50,000		50,000		(3,808		)
October 2007	October 31, 2007	September 30, 2013	4.642		50,000		50,000		(4,453		)
December 2005	January 2, 2008	December 31, 2010	4.768		50,000		50,000		(1,653		)
June 2006	June 30, 2008	June 30, 2010	5.325		50,000		50,000		(635		)
June 2006	June 30, 2008	June 30, 2010	5.325		50,000		50,000		(635		)
October 2007	July 1, 2008	March 31, 2013	4.622		25,000		25,000		(2,101		)
October 2007	July 1, 2008	March 31, 2013	4.625		25,000		25,000		(2,103		)
June 2006	October 31, 2008	December 31, 2010	5.340		50,000		50,000		(1,869		)
June 2006	October 31, 2008	December 31, 2010	5.347		50,000		50,000		(1,872		)
October 2008	September 30, 2009	January 31, 2011	3.119		100,000		100,000		(2,261		)
December 2006	November 30, 2009	March 31, 2014	5.015		75,000		75,000		(7,874		)
December 2006	November 30, 2009	March 31, 2014	5.023		75,000		75,000		(7,880		)
December 2006	December 31, 2010	October 31, 2012	5.015		100,000		–		(5,397		)
Total							$	728,500	$	(48,849	)

The fair value of our interest rate hedge agreements is determined using widely accepted valuation techniques including discounted cash flow analyses on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities (also referred to as “significant other observable inputs”). The fair values of our interest rate hedge agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default, which we have determined to be insignificant to the overall fair value of our interest rate hedge agreements. In adjusting the fair value of our interest rate hedge agreements for the effect of non-performance risk, we have considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts and guarantees.

8. **** AlexandriaReal Estate Equities, Inc. stockholders’ equity

In September 2009, we sold 4,600,000 shares of our common stock in afollow-on offering (including shares issued upon exercise of the underwriters’over-allotment option). The shares were issued at a price of $53.25 per share, resulting in aggregate proceeds of approximately $233.5 million (after deducting underwriters’ discounts and other offering costs).

In March 2009, we sold 7,000,000 shares of our common stock in afollow-on offering. The shares were issued at a price of $38.25 per share, resulting in aggregate proceeds of approximately $254.6 million (after deducting underwriters’ discounts and other offering costs).

In March 2010, we declared a cash dividend on our common stock aggregating $15,504,000 ($0.35 per share) for the calendar quarter ended March 31, 2010. In March 2010, we also declared cash dividends on our 8.375% series C cumulative redeemable preferred stock (“Series C Preferred Stock”) aggregating $2,714,000 ($0.5234375 per share), for the period from January 15, 2010 through April 15, 2010. Additionally, in March 2010, we declared cash dividends on our Series D Convertible Preferred Stock aggregating approximately $4,375,000 ($0.4375 per share), for the period from January 15, 2010 through April 15, 2010.

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9. **** Noncontrollinginterests

Noncontrolling interests represent the third party interests in certain entities in which we have a controlling interest. These entities own eight properties and two development parcels and are included in our consolidated financial statements. As of December 31, 2009, noncontrolling interests also included a third party interest in a VIE in which we had determined we were the primary beneficiary. On January 1, 2010, we deconsolidated the VIE upon adoption of the new accounting literature related to VIE’s. See “Variable Interest Entity” in Note 2 and “Investment in Unconsolidated Real Estate Entity” in Note 3 for further discussion on the VIE. Noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses and other comprehensive income or loss. Distributions, profits and losses related to these entities are allocated in accordance with the respective operating agreements.

Certain of our noncontrolling interests have the right to require us to redeem their ownership interests in the respective entities. We classify these ownership interests in the entities as redeemable noncontrolling interests outside of total equity in the accompanying condensed consolidated balance sheets. Redeemable noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses and other comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in accordance with the respective operating agreements. If the carrying amount of a redeemable noncontrolling interest is less than the maximum redemption value at the balance sheet date, such amount is adjusted to the maximum redemption value. Subsequent declines in the redemption value are recognized only to the extent previously recorded increases have been recorded pursuant to the preceding sentence. As of March 31, 2010 and December 31, 2009, our redeemable noncontrolling interest balances were approximately $17.5 million and $41.4 million, respectively. Our remaining noncontrolling interests aggregating approximately $41.1 million and $41.2 million as of March 31, 2010 and December 31, 2009, respectively, do not have rights to require us to purchase their ownership interests and are classified in total equity in the accompanying condensed consolidated balance sheets.

10. **** Discontinuedoperations

We classify a property as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) an active program to locate a buyer and other actions required to complete the plan to sell, have been initiated; (4) the sale of the property is probable and is expected to be completed within one year; (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale,” its operations, including any interest expense directly attributable to it, are classified as discontinued operations in our consolidated statements of income, and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. A loss is recognized for any initial adjustment of the asset’s carrying amount to fair value less costs to sell in the period the asset qualifies as “held for sale.”Depreciation of assets ceases upondesignation of a property as “held for sale.” As of March 31, 2010, one land parcel supporting the futureground-up development of an 80,000 rentable square foot building was classifiedas “held for sale.”

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10. **** Discontinuedoperations (continued)

The following is a summary of income from discontinued operations, net and net assets of discontinued operations (in thousands):

****	Three Months Ended
****	March 31,
****	2010		2009
Total<br> revenue	$	800	$	1,239
Operating<br> expenses	94		263
Revenue<br> less operating expenses	706		976
Interest<br> expense	–		23
Depreciation<br> and amortization expense	3		204
Subtotal	703		749
Gain<br> on sales of property	24		2,234
Income<br> from discontinued operations, net	$	727	$	2,983
****	March 31, 2010		December 31, 2009
---	---	---	---	---
Properties<br> “held for sale,” net	$	3,389	$	10,260
Other<br> assets	–		551
Total<br> assets	$	3,389	$	10,811
Total<br> liabilities	25		526
Net<br> assets of discontinued operations	$	3,364	$	10,285

Income from discontinuedoperations, net for the three months ended March 31, 2010 includes theresults of operations of one property that was sold during the first quarter2010 and one land parcel classified as “held for sale” as of March 31,2010. Income from discontinued operations, net for the three months ended March 31,2009 includes the results of operations of one property that was sold duringthe first quarter of 2010, one land parcel classified as “held for sale” as of March 31,2010, one property that was sold in the fourth quarter of 2009, and threeproperties that were sold in the first quarter of 2009. During the first quarter of 2010, we sold oneproperty located in the Seattle market that had been classified as “held forsale” as of December 31, 2009. Thetotal sales price for the property sold in the first quarter of 2010 wasapproximately $11.8 million.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Certain information and statements included in this quarterly report on Form 10-Q, including, without limitation, statements containing the words “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of these words or similar words, constitute “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. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. 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 following:

· negative worldwide economic, financial, and banking conditions;

· worldwide economic recession and lack of confidence;

· financial, banking, and credit market conditions;

· the seizure or illiquidity of credit markets;

· our inability 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;

· significant decreases in our active development, active redevelopment, or preconstruction activities resulting in significant increases in our interest, operating, and payroll expenses;

· our failure to successfully operate or lease acquired properties;

· the financial condition of our insurance carriers;

· general and local economic conditions;

· decreased rental rates or increased vacancy rates/failure to renew or replace expiring leases;

· defaults on or non-renewal of leases by tenants;

· our failure to comply with laws or changes in law;

· compliance with environmental laws;

· our failure to maintain our status as a real estate investment trust (“REIT”);

· certain ownership interests outside the United States may subject us to different or greater risks than those associated with our domestic operations; and

· fluctuations in foreign currency exchange rates.

This list of risks and uncertainties, however, is only a summary and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended December 31, 2009. Readers of this quarterly report on Form 10-Q should also read our Securities and Exchange Commission (“SEC”) and other publicly filed documents for further discussion regarding such factors.

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The following discussion should be read in conjunction with the condensed consolidated financial statements and notes appearing elsewhere in this quarterly report on Form 10-Q.

Overview

We are a Maryland corporation formed in October 1994 that has elected to be taxed as a REIT for federal income tax purposes. We are the largest owner and preeminent REIT focused principally on cluster development through the ownership, operation, management, selective redevelopment, development, and acquisition of properties containing life science laboratory space. We are 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, biotechnology, medical device, product, service, and translational entities, as well as government agencies. Our operating platform is based on the principle of “clustering,” with assets and operations located in key life science markets.

As of March 31, 2010, we had 161 properties approximating 12.7 million rentable square feet consisting of 156 properties approximating 11.8 million rentable square feet (including spaces undergoing active redevelopment) and five properties undergoing ground-up development approximating an additional 865,000 rentable square feet. As of that date, our properties were approximately 94.0% leased, excluding spaces at properties undergoing a permanent change in use to life science laboratory space through redevelopment, including the conversion of single-tenancy space to multi-tenancy space or multi-tenancy space to single-tenancy space. Our primary sources of revenues are rental income and tenant recoveries from leases of our properties. The comparability of financial data from period to period is affected by the timing of our property development, redevelopment, and acquisition activities.

For the three months ended March 31, 2010, we:

· Executed 42 leases for approximately 564,000 rentable square feet.

· Reported occupancy at 94.0%.

· Repaid two secured loans aggregating approximately $11 million.

· Sold one property aggregating approximately 71,000 rentable square feet previously classified as “held for sale.”

· Completed redevelopment of one space aggregating approximately 56,000 rentable square feet; 100% leased.

· Completed ground-up development of one property in Seattle, Washington aggregating approximately 115,000 rentable square feet pursuant to a 10-year lease with Gilead Sciences, Inc.

We continue to demonstrate the strength and durability of our core operations providing life science laboratory space to the broad and diverse life science industry. Our core operating results were steady for the three months ended March 31, 2010. The economic, financial, and banking environment and consumer confidence have improved since the depth of the crisis in the fourth quarter of 2008 and first quarter of 2009. Even with the recent improvements, we remain cautious regarding the economic, financial and banking environment. We intend to continue to focus on the completion of our existing active redevelopment projects aggregating approximately 648,031 rentable square feet and our existing active development projects aggregating approximately an additional 865,000 rentable square feet. Additionally, we intend to continue with preconstruction activities for certain land parcels for future ground-up/vertical aboveground development in order to preserve and create value for these projects. These important preconstruction activities add significant value to our land for future ground-up development and are required for the ultimate vertical construction of the buildings. We also intend to be very careful and prudent with any future decisions to add new projects to our active ground-up/vertical developments. Future ground-up/vertical development projects will likely require significant pre-leasing from high quality and/or creditworthy entities. We also intend to continue to reduce debt as a percentage of our overall capital structure over a multi-year period. During this period, we may also extend and/or refinance certain debt maturities. We expect the source of funds for construction activities and repayment of outstanding debt to be provided over several years by opportunistic sales of real estate, joint ventures, cash flows from operations, new secured or unsecured debt, and the issuance of additional equity securities, as appropriate. During the first quarter of 2010, we sold one property for approximately $11.8 million. In addition, one land parcel supporting the future ground-up development of an 80,000 rentable square foot building was classified as “held for sale” as of March 31, 2010.

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Properties

The locations of our properties are diversified among a number of life science markets. The following table sets forth, as of March 31, 2010, the rentable square footage, annualized base rent and occupancy of our properties in each of our existing markets (dollars in thousands):

****	March 31, 2010
****	Rentable Square Feet				Number of	Annualized		Occupancy
Markets	Operating	Redevelopment	Development	Total	Properties	Base Rent (1)		Percentage (1)(2)
California<br> – San Diego	1,467,228	198,247	–	1,665,475	32	$	40,281	87.4%
California<br> – San Francisco Bay	1,580,943	–	555,000	2,135,943	22	53,854		95.8
Eastern<br> Massachusetts	3,168,242	292,750	–	3,460,992	38	113,643		94.9
New<br> Jersey/Suburban Philadelphia	459,904	–	–	459,904	8	9,302		83.5
New<br> York City	–	–	310,000	310,000	1	–		–
Southeast	741,732	21,191	–	762,923	13	16,144		93.5
Suburban<br> Washington, D.C.	2,311,760	135,843	–	2,447,603	30	48,863		95.4
Washington<br> – Seattle	1,090,205	–	–	1,090,205	13	35,609		98.1
International<br> – Canada	342,394	–	–	342,394	4	8,907		100.0
Total Properties<br> (Continuing Operations)	11,162,408	648,031	865,000	12,675,439	161	$	326,603	94.0%

(1) Annualized base rent means the annualized fixed base rental amount in effect as of March 31, 2010 (using rental revenue computed on a straight-line basis in accordance with GAAP. Represents annualized base rent and occupancy percentages related to our operating properties aggregating 11,162,408 rentable square feet.

(2) Including spaces undergoing a permanent change in use to life science laboratory space through redevelopment, including the conversion of single-tenancy space to multi-tenancy space or multi-tenancy space to single-tenancy space, occupancy as of March 31, 2010 was 88.9%.

Our average occupancy rate of operating properties as of December 31 of each year from 1997 to 2009 was approximately 95.3%. Our average occupancy rate (including redevelopment spaces) as of December 31 of each year from 1997 to 2009 was approximately 89.3%.

Leasing

As of March 31, 2010, approximately 88% 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 94% 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. Our leases also typically give us the right to review and approve tenant alterations to the property. Generally, tenant-installed improvements to the properties remain our property after termination of the lease at our election. However, we are permitted under the terms of most of our leases to require that the tenant, at its expense, remove the improvements and restore the premises to their original condition.

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The following table provides information with respect to lease expirations at our properties as of March 31, 2010:

Year of Lease Expiration	Number of Leases Expiring		Rentable Square Footage of Expiring Leases		Percentage of Aggregate Total Rentable Square Feet		Annualized Base Rent of Expiring Leases (per rentable square foot)
2010	51	(1)	685,496	(1)	5.8	%	$25.93
2011	80		1,753,855		14.9		27.51
2012	70		1,421,922		12.0		32.88
2013	63		1,133,913		9.6		29.02
2014	48		1,102,628		9.3		28.33
2015	35		669,122		5.9		26.55
2016	20		1,033,893		8.8		31.53
2017	13		684,973		5.8		34.63
2018	11		737,172		6.2		44.29
2019	6		254,703		2.2		34.64

(1) Excludes seven month-to-month leases for approximately 21,000 rentable square feet.

ValueAdded Activities

The following table summarizes our current and embedded future development and redevelopment square footage including preconstruction projects. Preconstruction projects include significant value added 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 cash flows) and are required for the ultimate vertical construction of buildings. Amounts are classified as construction in progress as required under GAAP while construction activities are ongoing to bring the asset to its intended use. When construction activities cease, the asset is transferred out of construction in progress and classified as rental properties, net or land held for future development. Land held for future development includes certain land parcels with improvements to the land, including, grading, piles, foundations, and other land improvements.

	Square Footage
	Construction in Progress
Markets	Redevelopment	Development	Preconstruction	New Markets and Other Projects	****	Investment in Unconsolidated Real Estate Entity	****	Land	****	Future Redevelopment	****	Total Value Added Square Footage
California<br> – San Diego	198,247	–	298,000	–		–		145,000		178,000		819,247
California<br> –<br><br> <br>San Francisco<br> Bay/ Mission Bay	–	263,000	2,030,000	–		–		290,000		–		2,583,000
California<br> –<br><br> <br>San Francisco<br> Bay/ So. San Francisco	–	292,000	144,000	–		–		1,051,000		25,000		1,512,000
Eastern<br> Massachusetts	292,750	–	1,669,000	–		428,000		225,000		522,000		3,136,750
Suburban<br> Washington, D.C.	135,843	–	–	–		–		787,000		408,000		1,330,843
Washington<br> – Seattle	–	–	248,000	–		–		1,049,000		318,000		1,615,000
International<br> – Canada	–	–	–	–		–		827,000		–		827,000
Other	21,191	310,000	260,000	1,091,000		–		741,000		222,000		2,645,191
Total	648,031	865,000	4,649,000	1,091,000	(1)	428,000	(2)	5,115,000	(3)	1,673,000	(4)	14,469,031

(1) Includes site of future building approximating 410,000 rentable square feet related to our project in New York City and four buildings aggregating 547,000 rentable square feet related to two ground-up development projects in China.

(2) Represents a land parcel supporting ground-up development of approximately 428,000 rentable square feet in the Longwood Medical Area of Boston held by an unconsolidated real estate entity.

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(3) Our objective is to advance preconstruction efforts to reduce the time to deliver projects to prospective tenants. Since all efforts have been advanced to appropriate stages and no further preconstruction activities are ongoing, interest, property taxes, insurance, and other costs are expensed as incurred. Represents land and land improvements (site work and piles for foundation) related to land parcels that have been advanced through entitlement and certain levels of design. Amounts exclude a parcel supporting ground-up development of approximately 442,000 rentable square feet in New York City that we have an option to ground lease for future development, and land parcels supporting ground-up development of 924,000 rentable square feet in Edinburgh, Scotland that we have a long-term right to purchase.

(4) Square footage related to future redevelopment is included in our operating asset base and represents non-laboratory uses (office, industrial, or warehouse) for future conversion to life science laboratory space.

Our significant value added projects include preconstruction activities at certain land parcels including: a) approximately 2.2 million developable square feet in San Francisco, including approximately 2.0 million developable square feet at Mission Bay, b) approximately 2.1 million developable square feet in Eastern Massachusetts, including approximately 1.7 million developable square feet in Eastern Massachusetts, located along Binney Street in Kendall Square, and c) approximately 0.8 million developable square feet located in other key life science cluster markets.

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

The value added 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 added 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 Holding 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.

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.

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Eastern Massachusetts Value Added Preconstruction Activities

The largest ongoing value added project in Eastern Massachusetts is located on multiple sites along Binney Street in Kendall Square. Located in the eastern part of Cambridge close to downtown Boston, the Kendall Square neighborhood abuts the Massachusetts Institute of Technology (“MIT”) campus and is a short subway or bike ride from Harvard University (“Harvard”). MIT and Harvard are two of the leading universities for life science and technology research, each with 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.

In February 2009, the Cambridge City Council approved our petition to significantly increase the zoning density on our Binney Street holdings, enabling the future development of up to 1.7 million rentable square feet of life science 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 assemblage, including the procurement of a Planned Unit Development Special Permit under the City’s Zoning Ordinance.

Immediately adjacent to the Binney Street sites, we are under construction for the conversion into life science laboratory space of an approximately 85,000 rentable square foot portion of an existing office building known as Athenaeum Center. The balance of the approximately 366,000 rentable square foot office building is substantially leased. Delivery of the life science laboratory conversion space is scheduled to occur in 2010.

Elsewhere in the Eastern Massachusetts region, design activities are ongoing at Longwood Center, our approximately 428,000 rentable square foot life science development located on a 1.0 acre parcel in the heart of Boston’s Longwood Medical Area (“LMA”). This project, partnered with a local development/investment group, has been entitled under the City of Boston’s site plan review process. The LMA is a compact and vibrant district which is home to world-renowned medical and academic institutions such as Harvard Medical School, Brigham & Womens’ Hospital, Dana Farber Cancer Institute, Childrens’ Hospital Boston, Beth Israel Deaconess Medical Center, and Joslin Diabetes Center, among several others. Fully entitled land sites are extremely scarce in the LMA and we believe that Longwood Center is well-positioned to accommodate expected growth within the district.

Among the completed value added projects in this region is the conversion of an approximately 175,000 square foot office building at Technology Square in Cambridge to life science laboratory use. This space has been substantially leased to Sirtris Pharmaceuticals, a GlaxoSmithKline plc, 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.

New Markets and Other Projects

A component of our business model also includes ground-up development projects in new markets and other unique projects. We have two development parcels in China. One development parcel is located in South China where a two-building project aggregating approximately 275,000 rentable square feet is under construction. The second development parcel is located in North China where a two-building project aggregating approximately 272,000 rentable square feet is under construction.

Additionally, other projects include construction related to site work, plaza, park and underground parking at the Alexandria CenterTM for Life Science — New York City, a unique one-of-a-kind highly advanced state-of-the-art urban science park in the city and in the adjoining future building approximating 410,000 rentable square feet.

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Redevelopment

A key component of our business model is redevelopment of existing office, warehouse, shell space, or newly acquired properties into generic life science laboratory space, including the conversion of single-tenancy space to multi-tenancy space or multi-tenancy space to single-tenancy space that can be leased at higher rental rates to our target life science cluster markets. As of March 31, 2010, we had approximately 648,031 rentable square feet undergoing redevelopment at eleven projects. In addition to properties undergoing redevelopment, as of March 31, 2010, our asset base contained embedded opportunities for a future permanent change of use to life science laboratory space through redevelopment aggregating approximately 1.7 million rentable square feet.

The following table summarizes total rentable square footage (“RSF”) undergoing redevelopment as of March 31, 2010:

Markets/Submarkets	Placed in Redevelopment	Estimated In-Service Dates	RSF Undergoing Redevelopment	Total Property RSF	Leased	Negotiating/ Committed	Marketing	Redevelopment/ Leasing Status
California<br> – San Diego/ Torrey Pines	2007	2010	84,504	84,504	–	–	100%	Construction/Marketing;<br> Negotiating
California<br> – San Diego/ Torrey Pines	2007	2010	31,927	76,084	74%	–	26%	Construction/74% Leased;<br> Marketing Remainder
California<br> – San Diego/ Torrey Pines	2010	2012	81,816	81,816	–	–	100%	Design/Marketing
Eastern<br> Massachusetts/ Cambridge	2007	2010	85,091	366,412	61%	39%	–	Construction/Leased;<br> Committed
Eastern<br> Massachusetts/ Cambridge	2009	2011	17,114	194,776	–	–	100%	Design/Marketing
Eastern<br> Massachusetts/ Suburban	2010	2012	47,500	92,500	–	–	100%	Design/Marketing
Eastern<br> Massachusetts/ Suburban	2007	2010	113,045	113,045	–	–	100%	Construction/Marketing
Eastern<br> Massachusetts/ Suburban	2008	2010	30,000	30,000	–	–	100%	Design; Construction/Marketing
Southeast/Florida	2006	2010	21,191	44,855	–	14%	86%	Construction/Marketing;<br> Negotiating
Suburban<br> Washington, D.C./Shady Grove	2009	2010	58,632	58,632	100%	–	–	Design;<br> Construction/Leased
Suburban<br> Washington, D.C./Shady Grove	2009	2011	77,211	225,096	–	100%	–	Design/Negotiating for<br> Full Bldg User
****			648,031	1,367,720	21%	17%	62%

As of March 31, 2010, our estimated cost to complete was approximately $69 per rentable square foot for the 648,031 rentable square feet undergoing a permanent change in use to life science laboratory space through redevelopment. Our final costs for these redevelopment 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.

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Development

Another key component of our business model is ground-up development. Our development strategy is primarily to pursue selective projects where we expect to achieve appropriate investment returns. We generally have undertaken ground-up development projects only if our investment in infrastructure will be substantially made for generic, rather than tenant specific, improvements. As of March 31, 2010, we had five parcels of land undergoing ground-up development in the United States approximating 865,000 rentable square feet of life science laboratory space as summarized in the table below. We also have an embedded pipeline for future ground-up development of approximately 11.3 million developable square feet. Future ground-up/vertical development projects will likely require significant pre-leasing from high quality and/or creditworthy entities.

Markets/Submarkets	Building Description	Estimated In-Service Dates	Leased	Negotiating/ Committed	Marketing	Rentable Square Feet	Leasing Status
California<br> – San Francisco Bay/ Mission Bay	Multi-tenant<br> Bldg. with 3% Retail	2010	71%	29%	–	158,000	158,000 Rentable Square<br> Feet Leased or Committed to UCSF and a Large Cap Life Science Company
California<br> – San Francisco Bay/ Mission Bay	Single<br> or Multi-tenant Bldg. with 4% Retail	2011	47%	23%	30%	105,000	49,000 Rentable Square<br> Feet Leased to a Large Cap Life Science Company
California<br> – San Francisco Bay/ So. San Francisco	Two<br> Bldgs., Single or Multi-tenant	2010	–	–	100%	162,000	Redesign for<br> Multi-Tenancy at Both Buildings/ Marketing
California<br> – San Francisco Bay/ So. San Francisco	Single<br> Tenant Bldg.	2010	55%	45%	–	130,000	72,000 Rentable Square<br> Feet Leased to Exelixis Inc.; Negotiating Lease for All Remaining Space
New<br> York – New York City – East Tower	Multi-tenant<br> Bldg. with 6% Retail	2010/2011	53%	42%	5%	310,000	104,000 Rentable Square<br> Feet Leased to Eli Lilly and Company; Leased 60,000 Rentable Square Feet for<br> Restaurant/Food, Conference Center, and Core Services; Current Life Science<br> Laboratory and Office Negotiations for Substantially All Remaining Space
Total Properties Undergoing Ground-Up Development			46%	30%	24%	865,000

As of March 31, 2010, our estimated cost to complete the approximately 865,000 rentable square feet undergoing ground-up development was approximately $139 per rentable square foot. This estimate includes costs related to tenant infrastructure costs, including requirements for executed leases with Eli Lilly and Company, UCSF, and a large cap life science company. This estimate also includes certain costs related to incremental investment by the Company with incremental returns which are beyond the original estimated investment anticipated at the beginning of each project. Our final costs for these projects will ultimately depend on many factors, including construction and infrastructure requirements for each tenant, final lease negotiations, and the amount of costs funded by each tenant.

Our business model also includes ground-up development projects outside of the United States. We have the ability to develop up to 924,000 rentable square feet in Edinburgh, Scotland. We have a right to purchase the land for this development over the next 13 years. We have a development site in Toronto, Canada for the ground-up development of a multi-story building aggregating 763,000 rentable square feet. This parcel is subject to a 99-year ground lease. We also have two development parcels in China subject to land use rights. One development parcel is located in South China where a two-building project aggregating 275,000 rentable square feet is under construction. The second development parcel is located in North China where a two-building project aggregating 272,000 rentable square feet is under construction. 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. Future ground-up/vertical development projects will likely require significant pre-leasing from high quality and/or creditworthy entities.

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Tenants

Our life science properties are leased principally to a diverse group of tenants, with no tenant accounting for more than 8.0% of our annualized base rent. The chart below shows annualized base rent by tenant business type as of March 31, 2010:

The following table sets forth information regarding leases with our 20 largest tenants based upon annualized base rent as of March 31, 2010:

20 Largest Tenants

	****	****	****			Approximate	Percentage of		****		Percentage		Investment Grade Entities			****
	****	****	Remaining Lease			Aggregate	Aggregate		Annualized		of Aggregate		Fitch	Moody’s	S&P	****
	****	Number	Term in Years			Rentable	Total Square		Base Rent (3)		Annualized		Rating	Rating	Rating	Education/
	Tenant	of Leases	(1)		(2)	Square Feet	Feet		(in thousands)		Base Rent		(4)	(4)	(4)	Research
1	Novartis AG	6	5.9	(5)	6.2	442,621	3.7	%	$	26,246	8.0	%	AA	Aa2	AA-	–
2	Roche Holding Ltd	5	7.5	(6)	7.8	387,813	3.3		14,850		4.5		AA-	A2	AA-	–
3	GlaxoSmithKline<br> plc	6	5.2	(7)	6.2	350,278	3.0		14,456		4.4		A+	A1	A+	–
4	ZymoGenetics, Inc.<br> (8)	2	9.1		9.1	203,369	1.7		8,747		2.7		–	–	–	–
5	United States<br> Government	6	3.4	(9)	3.4	308,205	2.6		8,495		2.6		AAA	AAA	AAA	–
6	Massachusetts<br> Institute of Technology	3	2.2	(10)	2.5	178,952	1.5		7,882		2.4		–	AAA	AAA	ü
7	Gilead Sciences, Inc.	3	8.3	(11)	8.6	131,405	1.1		6,810		2.1		–	–	–	–
8	Theravance, Inc.<br> (12)	2	2.0		2.0	170,244	1.4		6,137		1.9		–	–	–	–
9	Pfizer Inc.	2	9.7	(13)	9.7	120,140	1.0		5,647		1.7		AA	A1	AA	–
10	Amylin Pharmaceuticals, Inc.	3	6.2	(14)	6.4	158,983	1.3		5,467		1.7		–	–	–	–
11	The Scripps<br> Research Institute	2	6.7	(15)	6.6	96,500	0.8		5,193		1.6		–	–	–	ü
12	Forrester<br> Research, Inc.	1	1.5		1.5	145,551	1.2		4,987		1.5		–	–	–	–
13	Alnylam<br> Pharmaceuticals, Inc. (16)	1	6.5		6.5	95,410	0.8		4,466		1.4		–	–	–	–
14	Dyax Corp.	1	1.9		1.9	67,373	0.6		4,361		1.3		–	–	–	–
15	Quest Diagnostics<br> Incorporated	1	6.8		6.8	248,186	2.1		4,341		1.3		BBB+	Baa3	BBB+	–
16	Infinity<br> Pharmaceuticals, Inc.	2	2.8		2.8	67,167	0.6		4,302		1.3		–	–	–	–
17	Johnson &<br> Johnson	2	3.5	(17)	2.9	170,451	1.4		3,917		1.2		AAA	Aaa	AAA	–
18	UMass Memorial<br> Health Care	6	5.9	(18)	5.5	189,722	1.6		3,916		1.2		A+	–	A+	ü
19	Monsanto Company	3	9.1	(19)	10.7	126,409	1.2		3,902		1.2		A+	A2	A+	–
20	Fred Hutchinson<br> Cancer Research Center	2	4.3	(20)	4.4	123,322	1.1		3,854		1.2		–	–	–	ü
	Total/Weighted Average:	59	5.6		5.9	3,782,101	32.0	%	$	147,976	45.2	%

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(1) Represents remaining lease term in years based on percentage of leased square feet.

(2) Represents remaining lease term in years based on percentage of annualized base rent in effect as of March 31, 2010.

(3) Annualized base rent means the annualized fixed base rental amount in effect as of March 31, 2010 (using rental revenue computed on a straight-line basis in accordance with GAAP).

(4) Ratings obtained from each respective rating agency (Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s, respectively).

(5) Amount shown is a weighted average of multiple leases with this tenant for 255,441 rentable square feet, 17,980 rentable square feet, 24,386 rentable square feet, 16,188 rentable square feet, 47,185 rentable square feet, and 81,441 rentable square feet, with remaining lease terms of 8.0 years, 5.7 years, 4.6 years, 4.3 years, 3.5 years, and 1.3 years, respectively.

(6) Amount shown is a weighted average of multiple leases with this tenant for 155,685 rentable square feet, 126,971 rentable square feet, 66,262 rentable square feet, 16,406 rentable square feet, and 22,489 rentable square feet with remaining lease terms of 9.0 years, 8.5 years, 4.6 years, 3.7 years, and 3.5 years, respectively.

(7) Amount shown is a weighted average of multiple leases with this tenant for 128,759 rentable square feet (representing two leases at two properties containing 68,000 and 60,759 rentable square feet, respectively), 52,627 rentable square feet, 17,932 rentable square feet and 150,960 rentable square feet with remaining lease terms of 10.0 years, 7.8 years, 1.5 years, and 0.6 years, respectively.

(8) As of December 31, 2009, Novo A/S owned approximately 30% of ZymoGenetics, Inc.

(9) Amount shown is a weighted average of multiple leases with this tenant for 81,580 rentable square feet, 114,568 rentable square feet (representing three leases at three properties containing 50,325 rentable square feet, 9,337 rentable square feet and, 54,906 rentable square feet, respectively), 105,000 rentable square feet, and 7,057 rentable square feet with remaining lease terms of 5.1 years, 3.5 years, 2.2 years, and 0.4 years, respectively.

(10) Amount shown is a weighted average of multiple leases with this tenant for 86,515 rentable square feet, 8,876 rentable square feet, and 83,561 rentable square feet with remaining lease terms of 3.3 years, 1.5 years, and 1.2 years, respectively.

(11) Amount shown is a weighted average of multiple leases with this tenant for 105,760 rentable square feet and 25,645 rentable square feet (representing two leases at two properties containing 22,749 rentable square feet and 2,896 rentable square feet, respectively) with remaining lease terms of 10.3 years and 0.1 years, respectively.

(12) As of February 16, 2010, GlaxoSmithKline plc owned 15% of the outstanding stock of Theravance, Inc.

(13) Amount shown is a weighted average of multiple leases with this tenant for 102,283 rentable square feet and 17,857 rentable square feet with remaining lease terms of 9.8 years and 9.1 years, respectively.

(14) Amount shown is a weighted average of multiple leases with this tenant for 71,510 rentable square feet and 87,473 rentable square feet (representing two leases at two properties containing 45,030 rentable square feet and 42,443 rentable square feet, respectively) with remaining lease terms of 7.8 years and 4.8 years, respectively.

(15) Amount shown is a weighted average of multiple leases with this tenant for 19,606 rentable square feet and 76,894 rentable square feet with remaining lease terms of 7.6 years and 6.4 years, respectively.

(16) As of December 31, 2009, Novartis AG owned approximately 13% of the outstanding stock of Alnylam Pharmaceuticals, Inc.

(17) Amount shown is a weighted average of multiple leases with this tenant for 111,451 rentable square feet and 59,000 rentable square feet with remaining lease terms of 4.0 years and 2.4 years, respectively.

(18) Amount shown is a weighted average of multiple leases with this tenant for 30,187 rentable square feet, 78,916 rentable square feet, 6,125 rentable square feet, 6,669 rentable square feet, 31,260 rentable square feet, 33,244 rentable square feet, 1,578 rentable square feet, and 1,743 rentable square feet, with remaining lease terms of 7.8 years, 7.7 years, 4.5 years, 4.4 years, 3.7 years, 3.0 years, 0.8 years, and 0.5 years, respectively.

(19) Amount shown is a weighted average of multiple leases with this tenant for 72,078 rentable square feet, 22,555 rentable square feet, and 31,776 rentable square feet with remaining lease terms of 13.9 years, 5.7 years, and 0.6 years, respectively.

(20) Amount shown is a weighted average of multiple leases with this tenant for 106,425 rentable square feet and 16,897 rentable square feet with remaining lease terms of 4.7 years and 1.9 years, respectively.

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Results of operations

Comparison of Three Months Ended March 31,2010 (“First Quarter 2010”) to Three Months Ended March 31, 2009 (“FirstQuarter 2009”)

Rental revenues decreased by $15.2 million, or 15%, to $88.9 million for First Quarter 2010 compared to $104.0 million for First Quarter 2009. Rental revenues for First Quarter 2009 included additional rental income aggregating $18.5 million related to a modification of a lease for a property in South San Francisco, California. The additional rental income includes the fair value of building improvements and equipment which was received in the modification of the lease and recognized over the remaining term of the applicable lease. Excluding the additional rental income, rental revenues for First Quarter 2010 increased compared to First Quarter 2009 as a result of rental revenues from properties placed in service or redeveloped during the periods after January 1, 2009 and increases in rental rates related to renewed and/or releasable space leased.

Tenant recoveries remained relatively steady at $26.6 million for First Quarter 2010 compared to $26.8 million for First Quarter 2009. As of March 31, 2010 and 2009, approximately 88% and 89%, respectively, 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. Additionally, approximately 8% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses as of March 31, 2010 and 2009.

Other income for First Quarter 2010 and First Quarter 2009 of $1.1 million and $752,000, respectively, represented construction management fees, interest, investment income and storage income. The increase in other income is primarily related to increases in investment income for First Quarter 2010 as compared to First Quarter 2009.

Rental operating expenses were relatively consistent at $31.7 million for First Quarter 2010 compared to $32.4 million for First Quarter 2009. The majority of rental operating expenses was recoverable from tenants.

General and administrative expenses remained relatively steady at $9.5 million and $9.4 million for First Quarter 2010 and First Quarter 2009, respectively. As a percentage of total revenues, general and administrative expenses for First Quarter 2010 remained relatively consistent with First Quarter 2009 at approximately 7% to 8% of total revenues.

Interest expense decreased by $2.6 million, or 13%, to $17.6 million for First Quarter 2010 compared to $20.2 million for First Quarter 2009. The decrease resulted from a decrease in London Interbank Offered Rate (“LIBOR”) rates coupled with a decrease in total indebtedness. The weighted average interest rate on our unsecured line of credit and unsecured term loan, including the impact of our interest rate swap agreements, decreased from approximately 4.42% as of March 31, 2009 to approximately 3.67% as of March 31, 2010. We have entered into certain interest rate hedge agreements to hedge a portion of our exposure primarily related to variable interest rates associated with our unsecured line of credit and unsecured term loan (see “Liquidity and Capital Resources - Interest Rate Hedge Agreements”).

Depreciation and amortization was relatively consistent at approximately $30 million for First Quarter 2010 compared to approximately $31 million for First Quarter 2009.

Income from discontinued operations, net of $727,000 for First Quarter 2010 reflects the results of operations and gains on one property sold in First Quarter 2010 and one land parcel classified as “held for sale” as of March 31, 2010. In connection with the property sold in First Quarter 2010, we recorded a gain of approximately $24,000. Income from discontinued operations, net of $3.0 million for First Quarter 2009 reflects the results of operations and gains on one property sold in First Quarter 2010, one land parcel classified as “held for sale” as of March 31, 2010, one property sold in the fourth quarter of 2009, and three properties sold in First Quarter 2009.

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Liquidity and capital resources

Overview

We expect to continue meeting our short term liquidity and capital requirements generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating activities will continue to be sufficient to enable us to make distributions necessary to continue qualifying as a REIT. We also believe that net cash provided by operating activities will be sufficient to fund recurring non-revenue enhancing capital expenditures, tenant improvements, and leasing commissions.

We expect to meet certain long term liquidity requirements, such as for property development, redevelopment, other construction projects, scheduled debt maturities, and non-recurring capital improvements, through net cash provided by operating activities, periodic asset sales, long term secured, and unsecured indebtedness, including borrowings under our unsecured line of credit, unsecured term loan, and the issuance of additional debt and/or equity securities.

Asfurther discussed below, our principal liquidity needs are to fund:

· **** normal recurring expenses;

· **** current development andredevelopment costs;

· **** capital expenditures, includingtenant improvements, and leasing costs;

· **** principal and interest payments dueunder our debt obligations, including balloon payments of principal; and

· **** dividend distributions in order tomaintain our REIT qualification under the Internal Revenue Code of 1986, asamended.

Webelieve that our sources of capital for our principal liquidity needs will besatisfied by:

· **** cash on hand of approximately $71.0million as of March 31, 2010;

· **** restricted cash of approximately$35.8 million as of March 31, 2010;

· **** cash flows generated by operatingactivities (for the three months ended March 31, 2010, we generatedapproximately $51.1 million of cash flows from operating activities);

· **** availability under our $1.9 billionunsecured line of credit and unsecured term loan (approximately $1.3 billionoutstanding as of March 31, 2010);

· **** cash proceeds from new secured orunsecured financings;

· **** cash proceeds generated frompotential asset sales, including the one land parcel that was classified as “heldfor sale” as of March 31, 2010;

· **** cash proceeds from the issuance ofcommon or preferred equity or debt securities; and

· **** cash proceeds from joint ventures.

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Principal liquidity needs

Contractual obligations andcommitments

Contractualobligations as of March 31, 2010 consisted of the following (inthousands):

****	****		Payments by Period
****	Total		2010		2011-2012		****	2013-2014		Thereafter
Secured notes<br> payable (1)	$	884,839	$	22,248	$	176,191		$	269,652	$	416,748
Unsecured<br> line of credit (2)	541,000		–		541,000			–		–
Unsecured term<br> loan (2)	750,000		–		750,000			–		–
Unsecured<br> convertible notes	624,700		–		384,700			240,000		–
Estimated<br> interest payments	563,859		91,678		192,851			113,605		165,725
Ground lease<br> obligations	615,862		5,022		15,839			17,127		577,874
Other<br> obligations	24,097		1,013		23,084		(3)	–		–
Total	$	4,004,357	$	119,961	$	2,083,665		$	640,384	$	1,160,347

(1) Assumes we exercise our sole right to extend the maturity dates of a secured note payable of approximately $28.5 million from January 1, 2011 to January 1, 2012. Amounts include noncontrolling interests’ share of scheduled principal maturities of approximately $22.0 million, of which approximately $20.8 million mature in 2014. Also, the totalamount is net of unamortized discounts of approximately $2.2 million.

(2) Assumes we exercise our sole right to extend the maturity date of our unsecured line of credit from October 2010 to October 2011 and our unsecured term loan from October 2011 to October 2012.

(3) Includes approximately $21.1 million representing our share of a secured note payable held by our unconsolidated real estate entity due in 2012.

Secured notes payable as of March 31, 2010 consisted of 23 notes secured by 55 properties. Our secured notes payable require monthly payments of principal and interest and had weighted average interest rates of approximately 5.93% at March 31, 2010. Noncontrolling interests’ share of secured notes payable aggregated approximately $22.0 million as of March 31, 2010. At March 31, 2010, our secured notes payable were comprised of approximately $825.2 million and $59.6 million of fixed and variable rate debt, respectively.

Our unsecured line of creditmatures in October 2010 and may be extended at our sole option for anadditional one-year period to October 2011. Our unsecured term loanmatures in October 2011 and may be extended at our sole option for anadditional one-year period to October 2012.

In April 2009, we completed a private offering of $240 million principal amount of 8.00% unsecured convertible notes (the “8.00% Unsecured Convertible Notes”). In January 2007, we completed a private offering of $460 million principal amount of 3.70% unsecured convertible notes (“3.70% Unsecured Convertible Notes”). In April 2009, we repurchased, in privately negotiated transactions, approximately $75 million (par value) of certain of our 3.70% Unsecured Convertible Notes. See additional information under Note 6 to our condensed consolidated financial statements regarding our ability to redeem the notes, the ability of the holders to require us to repurchase the notes and circumstances under which the holders may convert the notes.

Estimatedinterest payments on our fixed rate debt and hedged variable rate debt werecalculated based upon contractual interest rates, including the impact ofinterest rate hedge agreements, interest payment dates and scheduled maturitydates. As of March 31, 2010**, approximately77% of our debt was fixed rate debt or variable rate debt subject to interestrate hedge agreements. See additional information regarding our interest ratehedge agreements under “Liquidity and Capital Resources** – Interest Rate Hedge Agreements.” The remaining 23% of our debt is unhedgedvariable rate debt based primarily on LIBOR. Interest payments on our unhedgedvariable rate debt have been excluded from the above table because we cannotreasonably determine the future interest obligations on variable rate debt aswe cannot predict the applicable variable interest rates in the future.

Groundlease obligations as of March 31, 2010 include leases for 19 of ourproperties and three land development parcels. These lease obligations have remaining lease terms from 23 to 96 years,excluding extension options.

In addition to the above, as of March 31, 2010, remaining aggregate costs under contracts for the construction of properties undergoing development, redevelopment, and generic life science laboratory infrastructure improvements under the terms of leases approximated $155.4 million. We expect payments for these obligations to occur over one to three years, subject to

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capital planning adjustments from time to time. We are also committed to fund approximately $48.2 million for certain investments over the next six years.

Off-balance sheet arrangements

Our off-balance sheet arrangementsconsist of our investment in a real estate entity that is a VIE, but for whichwe are not the primary beneficiary. Weaccount for the real estate entity under the equity method. The debt held by the unconsolidated realestate entity is secured by the land parcel owned by the entity, and isnon-recourse to us. See Notes 2 and 3 ofthe notes to the accompanying financial statements for further discussion.

Capital expenditures, tenantimprovements and leasing costs

As of March 31,2010, we had an aggregate of approximately 865,000 rentable square feetundergoing vertical ground-up construction and an aggregate of approximately648,031 rentable square feet undergoing a permanent change in use to lifescience laboratory space through redevelopment including the conversion ofsingle-tenancy space to multi-tenancy space or multi-tenancy space tosingle-tenancy space.

Forthe three months ended March 31, 2010 and 2009, we paid property-related capital expenditures and tenant improvements related to our properties, including expenditures related to our development and redevelopment projects, aggregating approximately $96.3 million and $132.8 million, respectively. These amounts include payments for property-related capital expenditures and tenant improvements presented in the table below including non-revenue enhancing capital expenditures and tenant improvement and leasing costs related to re-tenanted and renewal space.

The following table shows total and the five-year 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) for the three months ended March 31, 2010 and for the years ended December 31, 2009, 2008, 2007, 2006, and 2005:

****	****		Three Months Ended		Year Ended December 31,
****	Average		March 31, 2010		2009		2008		2007		2006		2005
Capital expenditures (1):
Major<br> capital expenditures	$	643,000	$	–	$	529,000	$	405,000	$	1,379,000	$	575,000	$	972,000
Recurring<br> capital expenditures	$	1,023,000	$	303,000	$	1,405,000	$	955,000	$	648,000	$	639,000	$	1,278,000
Square<br> feet in asset base	10,776,882		11,754,295		11,740,993		11,770,769		11,476,217		9,790,326		8,128,690
Per<br> square foot:
Major capital<br> expenditures	$	0.06	$	–	$	0.05	$	0.03	$	0.12	$	0.06	$	0.12
Recurring capital<br> expenditures	$	0.09	$	0.03	$	0.12	$	0.08	$	0.06	$	0.07	$	0.16
Tenant improvements and leasing costs:
Re-tenanted space (2)
Tenant improvements and leasing<br> costs	$	1,767,000	$	626,000	$	1,475,000	$	3,481,000	$	1,446,000	$	1,370,000	$	324,000
Re-tenanted<br> square feet	298,807		117,733		211,638		505,773		224,767		248,846		130,887
Per<br> square foot	$	5.91	$	5.32	$	6.97	$	6.88	$	6.43	$	5.51	$	2.48
Renewal space
Tenant improvements and leasing<br> costs	$	2,123,000	$	859,000	$	3,263,000	$	2,364,000	$	1,942,000	$	957,000	$	778,000
Renewal<br> square feet	740,314		230,655		976,546		748,512		671,127		455,980		666,058
Per<br> square foot	$	2.87	$	3.72	$	3.34	$	3.16	$	2.89	$	2.10	$	1.17

(1) Average includes annualized amounts for the three months ended March 31, 2010.

(2) 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 heavy-duty heating, ventilation, and air conditioning (“HVAC”) systems that are typically identified and considered at the time a property is acquired.

(3) Excludes space that has undergone redevelopment before re-tenanting.

Capital expenditures fluctuate in any given period due to the nature, extent and timing of improvements required and the extent to which they are recoverable from our tenants. As of March 31, 2010 approximately 92% (on a rentable square footage basis) of our leases provide for the recapture of certain capital expenditures (such as HVAC systems maintenance and/or replacement, roof replacement and parking lot resurfacing). In addition, we maintain an active preventative maintenance program at each of our properties to minimize capital expenditures.

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Tenant improvements and leasing costs also fluctuate in any given year depending upon factors such as the timing and extent of vacancies, property age, location and characteristics, the type of lease (renewal tenant or re-tenanted space) the involvement of external leasing agents, and overall competitive market conditions. We expect our future 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) to be approximately in the range as shown in the table immediately above.

Unsecured line of credit and unsecured term loan

We use our unsecured line of credit and unsecured term loan to fund working capital, construction activities and, from time to time, acquisition of properties. Our $1.9 billion unsecured credit facilities consist of a $1.15 billion unsecured line of credit and a $750 million unsecured term loan. We may in the future elect to increase commitments under our unsecured credit facilities by up to an additional $500 million. As of March 31, 2010, we had borrowings of $541 million and $750 million outstanding under our unsecured line of credit and unsecured term loan, respectively, with a weighted average interest rate, including the impact of our interest rate hedge agreements, of approximately 3.67%.

Our unsecured line of credit and unsecured term loan, as amended, bear interest at a floating rate based on our election of either (1) a LIBOR-based rate plus 1.00% to 1.45% depending on our leverage or (2) the higher of a rate based upon Bank of America’s prime rate plus 0.0% to 0.25% depending on our leverage and the Federal Funds rate plus 0.50%. For each LIBOR-based advance, we must elect a LIBOR period of one, two, three or six months. Our unsecured line of credit matures in October 2010 and may be extended at our sole option for an additional one-year period to October 2011. Our unsecured term loan matures in October 2011 and may be extended at our sole option for an additional one-year period to October 2012.

Our unsecured line of credit and unsecured term loan contain financial covenants, including, among others, the following (as defined under the terms of the agreement):

· leverage ratio less than 65.0%;

· fixed charge coverage ratio greater than 1.40;

· minimum book value of $1.6 billion; and

· secured debt ratio less than 55.0%.

As of March 31, 2010, we believe our two most restrictive financial covenants under our unsecured line of credit and unsecured term loan were the leverage and fixed charge ratios. Future changes in interest rates, our outstanding debt balances and other changes in our business, operations or financial statements may result in a default of these and other financial covenants under our unsecured line of credit and unsecured term loan.

In addition, the terms of the unsecured line of credit and unsecured term loan restrict, among other things, certain investments, indebtedness, distributions, mergers, developments, land, and borrowings available under our unsecured line of credit and unsecured term loan for developments, land, encumbered, and unencumbered assets. As of March 31, 2010, we were in compliance with all such covenants. Management continuously monitors the Company’s compliance and projected compliance with the covenants. Our current expectation is that we will continue to meet requirements of our debt covenants in the short and long term. However, in the event of a continued economic slow-down, continued crisis in the credit markets and rising cost of capital, there is no certainty that we will be able to continue to satisfy all of the covenant requirements.

Aggregate unsecured borrowings may be limited to an amount based primarily on the net operating income derived from a pool of unencumbered properties and our cost basis of development assets and land. Aggregate unsecured borrowings may increase as we complete the development, redevelopment, or acquisition of additional unencumbered properties. As of March 31, 2010, aggregate unsecured borrowings were limited to approximately $2.8 billion. If net operating income from properties supporting our borrowing capacity under our unsecured credit facilities decreases, our borrowing capacity under our credit facilities will also decrease. Additionally, we may be required to reduce our outstanding borrowings under our credit facilities in order to maintain compliance with one or more covenants under our credit facilities.

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Interest rate hedge agreements

We utilize interest rate hedge agreements, including interest rate swap agreements, to hedge a portion of our exposure to variable interest rates primarily associated with our unsecured line of credit and unsecured term loan. These agreements involve an exchange of fixed and floating rate interest payments without the exchange of the underlying principal amount (the “notional amount”). Interest received under all of our interest rate hedge agreements is based on the one-month LIBOR rate. The net difference between the interest paid and the interest received is reflected as an adjustment to interest expense.

The following table summarizes our interest rate swap agreements as of March 31, 2010 (dollars in thousands):

Transaction Date	Effective Date	Termination Date	Interest Pay Rate		Notional Amount		Effective at March 31, 2010		Fair Value		****
December 2006	December 29, 2006	March 31, 2014	4.990	%	$	50,000	$	50,000	$	(5,192	)
December 2006	January 2, 2007	January 3, 2011	5.003		28,500		28,500		(1,116		)
October 2007	October 31, 2007	September 30, 2012	4.546		50,000		50,000		(3,808		)
October 2007	October 31, 2007	September 30, 2013	4.642		50,000		50,000		(4,453		)
December 2005	January 2, 2008	December 31, 2010	4.768		50,000		50,000		(1,653		)
June 2006	June 30, 2008	June 30, 2010	5.325		50,000		50,000		(635		)
June 2006	June 30, 2008	June 30, 2010	5.325		50,000		50,000		(635		)
October 2007	July 1, 2008	March 31, 2013	4.622		25,000		25,000		(2,101		)
October 2007	July 1, 2008	March 31, 2013	4.625		25,000		25,000		(2,103		)
June 2006	October 31, 2008	December 31, 2010	5.340		50,000		50,000		(1,869		)
June 2006	October 31, 2008	December 31, 2010	5.347		50,000		50,000		(1,872		)
October 2008	September 30, 2009	January 31, 2011	3.119		100,000		100,000		(2,261		)
December 2006	November 30, 2009	March 31, 2014	5.015		75,000		75,000		(7,874		)
December 2006	November 30, 2009	March 31, 2014	5.023		75,000		75,000		(7,880		)
December 2006	December 31, 2010	October 31, 2012	5.015		100,000		–		(5,397		)
Total							$	728,500	$	(48,849	)

We have entered into master derivative agreements with each counterparty. These master derivative agreements (all of which are adapted from the standard International Swaps & Derivatives Association, Inc. form) define certain terms between the Company and each counterparty to address and minimize certain risks associated with our interest rate hedge agreements. In order to limit our risk of non-performance by an individual counterparty under our interest rate hedge agreements, our interest rate hedge agreements are spread among various counterparties. As of March 31, 2010, the largest aggregate notional amount with an individual counterparty was $175 million. If one or more of our counterparties fail to perform under our interest rate hedge agreements, we may incur higher costs associated with our variable rate LIBOR-based debt than the interest costs we originally anticipated.

As of March 31, 2010, our interest rate hedge agreements were classified in accounts payable, accrued expenses, and tenant security deposits based upon their respective fair values aggregating a liability balance of approximately $48.8 million with the offsetting adjustment reflected as unrealized losses in accumulated other comprehensive loss in total equity. Balances in accumulated other comprehensive loss are recognized in earnings in the period that the forecasted hedge transactions affect earnings. We have not posted any collateral related to our interest rate hedge agreements. For the three months ended March 31, 2010, approximately $8.1 million was reclassified from accumulated other comprehensive income to interest expense as an increase to interest expense. During the next twelve months, we expect to reclassify approximately $26.5 million from accumulated other comprehensive loss to interest expense as an increase to interest expense.

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Secured notes payable

As of March 31, 2010, we had aggregate secured notes payable of approximately $884.8 million. If we are unable to refinance, extend principal payments due at maturity, or pay principal maturities with proceeds from other capital sources, then our cash flows may be insufficient to pay dividends to our stockholders and to repay debt upon maturity. Furthermore, even if we are able to refinance debt prior to maturity, the interest rate, loan to value, and other key loan terms may be less favorable than existing loan terms. Less favorable loan terms, assuming we are able to refinance our secured notes payable, may result in higher interest costs, additional required capital as a result of less proceeds or lower loan to value upon refinancing and new or more restrictive covenants or loan terms.

Dividends

We are required to distribute 90% of our REIT taxable income on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to preferred and common stockholders from cash flow from operating activities. All such distributions are at the discretion of our board of directors. We may be required to use borrowings under our unsecured line of credit, if necessary, to meet REIT distribution requirements and maintain our REIT status. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. During the three months ended March 31, 2010, we paid dividends on our common stock aggregating approximately $15.5 million. Also, during the three months ended March 31, 2010, we paid dividends on our 8.375% series C cumulative redeemable preferred stock and our 7.00% series D cumulative convertible preferred stock (“Series D Convertible Preferred Stock”) aggregating approximately $2.7 million and $4.4 million, respectively.

Sources of capital

Cash and cash equivalents

As of March 31, 2010**, we had approximately $71.0 million of cash andcash equivalents.**

Restricted cash

Restricted cash consisted of the following (in thousands):

****	March 31,<br><br> 2010		December 31,<br><br> 2009
Funds<br> held in trust under the terms of certain secured notes payable	$	19,108	$	19,340
Funds held in escrow related to construction projects	15,006		24,054
Other restricted funds	1,718		3,897
Total	$	35,832	$	47,291

Thefunds held in escrow related to construction projects will be used to pay forcertain construction costs.

Cash flows

Net cash provided by operating activities for the three months ended March 31, 2010 decreased by $3.6 million to $51.1 million compared to $54.8 million for the three months ended March 31, 2009. The decrease resulted primarily from a decrease in cash flows from operations and partially offset by cash flows from overall changes in operating assets and liabilities.Cash flowsfrom operations are primarily dependent upon the occupancy level of our assetbase, the net effective rental rates achieved on our leases, the collectabilityof rent, operating escalations, recoveries from our tenants, and the level ofoperating and other costs. We believeour cash flows from operating activities provide a stable source of cash tofund operating expenses. In addition, asof March 31, 2010**,** approximately 88% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area and other operating expenses, including increases thereto, and approximately 8% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses.

We are largely dependent on the life science industry for revenues due under lease agreements. Our business could be adversely affected if the life science industry is impacted by the current economic downturn and financial and banking crisis

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or if the life science industry migrates from the United States to other countries. Our tenants may not be able to pay amounts due under their lease agreements if they are unsuccessful in discovering, developing, making or selling their products or technologies.

The bankruptcy or insolvency of a major tenant may also adversely affect the income produced by a property. If any of our tenants becomes a debtor in a case under the United States Bankruptcy Code, the bankruptcy court must approve any eviction. The bankruptcy court may authorize the tenant to reject and terminate its lease with us. Our claim against such a tenant for unpaid future rent would be subject to a statutory limitation that might be substantially less than the remaining rent actually owed to us under the tenant’s lease. Any shortfall in rent payments could adversely affect our cash flow and our ability to make distributions to our stockholders.

Net cash used in investing activities for the three months ended March 31, 2010 was $80.8 million compared to $108.7 million the three months ended March 31, 2009. The decrease in net cash used in investing activities primarily reflects lower additions to properties due to our strategy to manage capital expenditures.

Net cash provided by financing activities for the three months ended March 31, 2010 decreased by $78.1 million to $30.0 million compared to $108.1 million for the three months ended March 31, 2009. For the three months ended March 31, 2010, proceeds from the borrowings on our unsecured line of credit of approximately $80.0 million was partially offset by principal reductions of secured notes payable and our unsecured line of credit of approximately $28.7 million. Additionally, for the three months ended March 31, 2010, we paid dividends on our common and preferred stock of approximately $22.6 million. For the three months ended March 31, 2009, proceeds from the issuance of common stock, secured notes payable and borrowings from our unsecured line of credit of approximately $461.7 million were partially offset by principal reductions of secured notes payable and our unsecured line of credit of approximately $317.2 million. Additionally, for the three months ended March 31, 2009, we paid dividends on our common and preferred stock of approximately $33.0 million.

Unsecured line of credit and unsecured term loan

Property dispositions

During the three months ended March 31, 2010, we sold one property at an aggregate contract price of approximately $11.8 million. During the year ended December 31, 2009, we sold four properties at an aggregate contract price of approximately $20.9 million. The net sales proceeds were initially used to repay outstanding debt. As of March 31, 2010, we had one land parcel classified as “held for sale.”

Other resources and liquidityrequirements

Under our current shelf registration statement filed with the SEC, we may offer common stock, preferred stock, debt, and other securities. These securities may be issued from time to time at our discretion based on our needs and market conditions.

In April 2009, we completed a private offering of the 8.00% Unsecured Convertible Notes. The net proceeds from this offering, after initial purchasers’ fees and other offering costs, were approximately $233.0 million. Prior to April 20, 2014, we will not have the right to redeem the 8.00% Unsecured Convertible Notes, except to preserve our qualification as a REIT. On and after that date, we have the right to redeem the 8.00% Unsecured Convertible Notes, in whole or in part, at any time and from time to time, for cash equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the 8.00% Unsecured Convertible Notes may require us to

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repurchase their notes, in whole or in part, on April 15, 2014, 2019, and 2024 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Holders of the 8.00% Unsecured Convertible Notes may require us to repurchase all or a portion of their notes upon the occurrence of specified corporate transactions (each, a “Fundamental Change”), at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.**** At issuance, the 8.00% Unsecured Convertible Notes had an initial conversion rate of approximately 24.1546 shares of common stock per $1,000 principal amount of the 8.00% Unsecured Convertible Notes, representing a conversion price of approximately $41.40 per share of our common stock. This initial conversion price represented a premium of 15% based on the last reported sale price of $36.00 per share of our common stock on April 21, 2009. The conversion rate of the 8.00% Unsecured Convertible Notes is subject to adjustments for certain events, including, but not limited to, certain cash dividends on our common stock in excess of $0.35 per share per quarter and dividends on our common stock payable in shares of our common stock. As of March 31, 2010, there was no change from the initial conversion rate of our 8.00% Unsecured Convertible Notes. Holders of the 8.00% Unsecured Convertible Notes may convert their notes prior to the stated maturity date of April 15, 2029 only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending June 30, 2009, if the closing sale price of our common stock for each of 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds or is equal to 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (the “8.00% Unsecured Convertible Note Measurement Period”) in which the average trading price per $1,000 principal amount of the 8.00% Unsecured Convertible Notes was equal to or less than 98% of the average conversion value of the 8.00% Unsecured Convertible Notes during the 8.00% Unsecured Convertible Note Measurement Period; (3) upon the occurrence of a Fundamental Change; (4) if we call the 8.00% Unsecured Convertible Notes for redemption; and (5) at any time from, and including, March 15, 2029 until the close of business on the business day immediately preceding April 15, 2029 or earlier redemption or repurchase. Upon conversion, holders of the 8.00% Unsecured Convertible Notes will receive cash, shares of our common stock, or a combination thereof, as the case may be, at our election. Pursuant to the accounting literature related to convertible debt, at issuance of the 8.00% Unsecured Convertible Notes, we determined the effective interest rate of the notes to be 11.0%.

In March and April 2008, we completed a public offering of 10,000,000 shares of Series D Convertible Preferred Stock. The shares were issued at a price of $25.00 per share, resulting in aggregate proceeds of approximately $242 million (after deducting underwriters’ discounts and other offering costs). The dividends on our Series D Convertible Preferred Stock are cumulative and accrue from the date of original issuance. We pay dividends quarterly in arrears at an annual rate of $1.75 per share. Our Series D Convertible Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption provisions, and we are not allowed to redeem our Series D Convertible Preferred Stock, except to preserve our status as a REIT. Investors in our Series D Convertible Preferred Stock generally have no voting rights. On or after April 20, 2013, we may, at our option, be able to cause some or all of our Series D Convertible Preferred Stock to be automatically converted if the closing sale price per share of our common stock equals or exceeds 150% of the then-applicable conversion price of the Series D Convertible Preferred Stock for at least 20 trading days in a period of 30 consecutive trading days ending on the trading day immediately prior to our issuance of a press release announcing the exercise of our conversion option. Holders of our Series D Convertible Preferred Stock, at their option, may, at any time and from time to time, convert some or all of their outstanding shares initially at a conversion rate of 0.2477 shares of common stock per $25.00 liquidation preference, which was equivalent to an initial conversion price of approximately $100.93 per share of common stock. The conversion rate for the Series D Convertible Preferred Stock is subject to adjustments for certain events, including, but not limited to, certain dividends on our common stock in excess of $0.78 per share per quarter and dividends on our common stock payable in shares of our common stock. As of March 31, 2010, the Series D Convertible Preferred Stock had a conversion rate of approximately 0.2480 shares of common stock per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $100.81 per share of common stock.

In January 2007, we completed a private offering of $460 million principal amount of 3.70% Unsecured Convertible Notes. The net proceeds from this offering, after initial purchasers’ fees and other offering costs, were approximately $450.8 million. Prior to January 15, 2012, we will not have the right to redeem the 3.70% Unsecured Convertible Notes, except to preserve our qualification as a REIT. On and after that date, we have the right to redeem the 3.70% Unsecured Convertible Notes, in whole or in part, at any time and from time to time, for cash equal to 100% of the principal amount of the 3.70%

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Unsecured Convertible Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the 3.70% Unsecured Convertible Notes may require us to repurchase their notes, in whole or in part, on January 15, 2012, 2017 and 2022 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Holders of the 3.70% Unsecured Convertible Notes may require us to repurchase all or a portion of their notes upon the occurrence of a Fundamental Change, including a change in control, certain merger or consolidation transactions or the liquidation of the Company, at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. At issuance, the 3.70% Unsecured Convertible Notes had an initial conversion rate of approximately 8.4774 shares of common stock per $1,000 principal amount of the 3.70% Unsecured Convertible Notes, representing a conversion price of approximately $117.96 per share of our common stock. This initial conversion price represented a premium of 20% based on the last reported sale price of $98.30 per share of our common stock on January 10, 2007. The conversion rate of the 3.70% Unsecured Convertible Notes is subject to adjustments for certain events, including, but not limited to, certain cash dividends on our common stock in excess of $0.74 per share per quarter and dividends on our common stock payable in shares of our common stock. As of March 31, 2010, the 3.70% Unsecured Convertible Notes had a conversion rate of approximately 8.5207 shares of common stock per $1,000 principal amount of the 3.70% Unsecured Convertible Notes, which is equivalent to a conversion price of approximately $117.36 per share of our common stock. Holders of the 3.70% Unsecured Convertible Notes may convert their notes into cash and, if applicable, shares of our common stock prior to the stated maturity of January 15, 2027 only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending March 31, 2007, if the closing sale price of our common stock for each of 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (the “3.70% Unsecured Convertible Note Measurement Period”) in which the average trading price per $1,000 principal amount of 3.70% Unsecured Convertible Notes was equal to or less than 98% of the average conversion value of the 3.70% Unsecured Convertible Notes during the 3.70% Unsecured Convertible Note Measurement **** Period; (3) upon the occurrence of a Fundamental Change; (4) if we call the 3.70% Unsecured Convertible Notes for redemption; and (5) at any time from, and including, December 15, 2026 until the close of business on the business day immediately preceding January 15, 2027 or earlier redemption or repurchase. Pursuant to the accounting literature related to convertible debt, at issuance of the 3.70% Unsecured Convertible Notes, we determined the effective interest rate of the notes to be 5.96%.

We hold interests, together with certain third parties, in a limited partnership and in limited liability companies, which we consolidate in our financial statements. These third parties may contribute equity into these entities primarily related to their share of funds for construction and financing related activities.

Inflation

As of March 31, 2010, approximately 88% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, 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. Approximately 94% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed (generally ranging from 3.0% to 3.5%) or indexed based on the consumer price index or another index. Accordingly, we do not believe that our earnings or cash flow from real estate operations are subject to any significant risk from inflation. An increase in inflation, however, could result in an increase in the cost of our variable rate borrowings, including borrowings related to our unsecured line of credit and unsecured term loan.

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Funds from Operations

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 the National Association of Real Estate Investment Trusts (“NAREIT”) established the measurement tool of funds from operations (“FFO”). Since its introduction, FFO has become a widely used non-GAAP financial measure among 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. While FFO is a relevant and widely used measure of operating performance for REITs, it 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 (see “Liquidity and Capital Resources — Cash Flows” above for information regarding these measures of cash flow).

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 (in thousands):

****	Three Months Ended March 31,					****
****	2010		****	2009		****
Net income<br> attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders	$	20,542		$	32,768
Add:
Depreciation and<br> amortization (1)	29,738			31,446
Net income<br> attributable to noncontrolling interests	935			875
Net income<br> attributable to unvested restricted stock awards	219			517
Subtract:
Gain<br> on sales of property (2)	(24		)	(2,234		)
FFO attributable<br> to noncontrolling interests	(1,098		)	(1,077		)
FFO attributable<br> to unvested restricted stock awards	(530		)	(966		)
Subtotal	$	49,782		$	61,329
Add:
Assumed<br> conversion of 8.00% Unsecured Convertible Notes	4,194			–
Effect of<br> dilutive securities and assumed conversion attributable to unvested<br> restricted stock	4			–
FFO attributable<br> to Alexandria Real Estate Equities, Inc.’s **** common<br> stockholders assuming effect of dilutive securities and assumed conversion	$	53,980		$	61,329

(1) Includes depreciation and amortization on assets sold or “held for sale” reflected as discontinued operations for the periods prior to when such assets were sold or classified as “held for sale.”

(2) Gain on sales of property for the three months ended March 31, 2010 relates to the disposition of one property. Gain on sales of property for the three months ended March 31, 2009 relates to the dispositions of three properties. Gain on sales of property is included in the condensed consolidated statementsof income in income from discontinued operations, net.

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Item3. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates, equity prices, and foreign currency exchange rates.

Interest rate risk

The primary market risk to which we believe we are exposed is interest rate risk, which may result from many factors, including government monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control.

In order to modify and manage the interest rate characteristics of our outstanding debt and to limit the effects of interest rate risks on our operations, we may utilize a variety of financial instruments, including interest rate swap agreements, caps, floors, and other interest rate exchange contracts. The use of these types of instruments to hedge a portion of our exposure to changes in interest rates carries additional risks, such as counterparty credit risk and the legal enforceability of hedging contracts.

Our future earnings and fair values relating to financial instruments are primarily dependent upon prevalent market rates of interest, such as LIBOR. However, our interest rate hedge agreements are intended to reduce the effects of interest rate changes. Based on interest rates at, and our interest rate hedge agreements in effect on March 31, 2010, we estimate that a 1% increase in interest rates on our variable rate debt, including our unsecured line of credit and unsecured term loan, after considering the effect of our interest rate hedge agreements, would decrease annual future earnings by approximately $3.0 million. We further estimate that a 1% decrease in interest rates on our variable rate debt, including our unsecured line of credit and unsecured term loan, after considering the effect of our interest rate hedge agreements in effect on March 31, 2010, would increase annual future earnings by approximately $3.0 million, respectively. A 1% increase in interest rates on our secured debt, unsecured convertible notes and interest rate hedge agreements would decrease their aggregate fair values by approximately $68.5 million at March 31, 2010. A 1% decrease in interest rates on our secured debt, unsecured convertible notes, and interest rate hedge agreements would increase their aggregate fair values by approximately $59.6 million at March 31, 2010.

These amounts are determined by considering the impact of the hypothetical interest rates on our borrowing cost and our interest rate swap agreements in effect on March 31, 2010. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.

Equity price risk

We have exposure to equity price market risk because of our equity investments in certain publicly traded companies and privately held entities. We classify investments in publicly traded companies as “available for sale” and, consequently, record them on our consolidated balance sheets at fair value with unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. Investments in privately held entities are generally accounted for under the cost method because we do not influence any of the operating or financial policies of the entities in which we invest. For all investments, we recognize other-than-temporary declines in value against earnings in the same period the decline in value was deemed to have occurred. There is no assurance that future declines in value will not have a material adverse impact on our future results of operations. By way of example, a 10% decrease in the fair value of our equity investments as of March 31, 2010 would decrease their fair value by approximately $7.7 million.

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Foreign currency risk

We have exposure to foreign currency exchange rate risk related to our subsidiaries operating in Canada and China. The functional currencies of our foreign subsidiaries operating in Canada and China are the respective local currencies. Gains or losses resulting from the translation of our foreign subsidiaries’ balance sheets and income statements are included in accumulated other comprehensive income as a separate component of total equity. Gains or losses will be reflected in our income statement when there is a sale or partial sale of our investment in these operations or upon a complete or substantially complete liquidation of the investment. Based on our current operating assets outside the United States as of March 31, 2010, we estimate that a 10% increase in foreign currency rates relative to the United States dollar would increase annual future earnings by approximately $1.2 million. We further estimate that a 10% decrease in foreign currency rates relative to the United States dollar would decrease annual future earnings by approximately $1.2 million. This sensitivity analysis assumes a parallel shift of all foreign currency exchange rates with respect to the United States dollar; however, all foreign currency exchange rates do not always move in such a manner and actual results may differ materially

Item4. CONTROLS AND PROCEDURES

Evaluationof Disclosure Controls and Procedures

As of March 31, 2010, we performed an evaluation, under the supervision of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and procedures have been designed to ensure that information required for disclosure is recorded, processed, summarized and reported within the requisite time periods. Based on our evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2010.

Changesin Internal Control Over Financial Reporting

There has not been any change in our internal control over financial reporting during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II– OTHER INFORMATION

Item 1A. RISKFACTORS

In addition to the information set forth in this quarterly report on Form 10-Q, one should also carefully review and consider the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2009. Those risk factors could materially affect our business, financial condition and results of operations. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition, and results of operations.

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Item 6. EXHIBITS

3.1*	Articles of Amendment and Restatement of the<br> Company, filed as an exhibit to the Company’s quarterly report on<br> Form 10-Q filed with the SEC on August 14, 1997.
3.2*	Certificate of Correction of the Company, filed as<br> an exhibit to the Company’s quarterly report on Form 10-Q filed with the<br> SEC on August 14, 1997.
3.3*	Bylaws of the Company (as amended February 17,<br> 2009), filed as an exhibit to the Company’s current report on Form 8-K<br> filed with the SEC on February 20, 2009.
3.4*	Articles Supplementary, dated June 9, 1999,<br> relating to the 9.50% Series A Cumulative Redeemable Preferred Stock,<br> filed as an exhibit to the Company’s quarterly report on Form 10-Q filed<br> with the SEC on August 13, 1999.
3.5*	Articles Supplementary, dated February 10,<br> 2000, relating to the election to be subject to Subtitle 8 of Title 3 of the<br> Maryland General Corporation Law, filed as an exhibit to the Company’s<br> current report on Form 8-K filed with the SEC on February 10, 2000.
3.6*	Articles Supplementary, dated February 10,<br> 2000, relating to the Series A Junior Participating Preferred Stock ,<br> filed as an exhibit to the Company’s current report on Form 8-K filed<br> with the SEC on February 10, 2000.
3.7*	Articles Supplementary, dated January 18, 2002,<br> relating to the 9.10% Series B Cumulative Redeemable Preferred Stock,<br> filed as an exhibit to the Company’s Form 8-A for registration of<br> certain classes of securities filed with the SEC on January 18, 2002.
3.8*	Articles Supplementary, dated June 22, 2004,<br> relating to the 8.375% Series C Cumulative Redeemable Preferred Stock,<br> filed as an exhibit to the Company’s Form 8-A for registration of<br> certain classes of securities filed with the SEC on June 28, 2004.
3.9*	Articles Supplementary, dated March 25, 2008,<br> relating to the 7.00% Series D Cumulative Convertible Preferred Stock,<br> filed as an exhibit to the Company’s current report on Form 8-K filed<br> with the SEC on March 25, 2008.
4.1*	Rights Agreement, dated as of February 10,<br> 2000, between the Company and American Stock Transfer & Trust<br> Company, as Rights Agent, including the forms of Articles Supplementary<br> setting forth the terms of the Series A Junior Participating Preferred<br> Stock, par value $.01 per share, Rights Certificate and the Summary of Rights<br> to Purchase Preferred Stock attached as exhibits to the Rights Agreement.<br> Pursuant to the Rights Agreement, printed Rights Certificates will not be<br> mailed until after the Distribution Date (as defined in the Rights<br> Agreement), filed as an exhibit to the Company’s current report on<br> Form 8-K filed with the SEC on February 10, 2000.
4.2*	Specimen certificate representing shares of Common<br> Stock, filed as an exhibit to the Company’s Registration Statement on<br> Form S-11 (No. 333-23545) filed with the SEC on May 19, 1997.
4.3*	Specimen certificate representing shares of 9.50%<br> Series A Cumulative Redeemable Preferred Stock, filed as an exhibit to<br> Alexandria’s quarterly report on Form 10-Q filed with the SEC on<br> August 13, 1999.
4.4*	Specimen certificate representing shares of 9.10%<br> Series B Cumulative Redeemable Preferred Stock, filed as an exhibit to<br> the Company’s Form 8-A for registration of certain classes of securities<br> filed with the SEC on January 18, 2002.
4.5*	Specimen certificate representing shares of 8.375%<br> Series C Cumulative Redeemable Preferred Stock, filed as an exhibit to<br> the Company’s Form 8-A for registration of certain classes of securities<br> filed with the SEC on June 28, 2004.
4.6*	Specimen certificate representing shares of 7.00%<br> Series D Cumulative Convertible Preferred Stock, filed as an exhibit to<br> the Company’s current report on Form 8-K filed with the SEC on<br> March 25, 2008.
4.7*	Indenture, dated January 17, 2007, among the<br> Company, Alexandria Real Estate Equities, L.P., as Guarantor, and Wilmington<br> Trust company, as Trustee filed as an exhibit to the Company’s current report<br> on Form 8-K filed with the SEC on January 19, 2007.
4.8*	Registration Rights Agreement, dated as of<br> January 17, 2007, among the Company, Alexandria Real Estate Equities,<br> L.P., UBS Securities LLC., Citigroup Global Markets, Inc. and Merrill<br> Lynch, Pierce, Fenner & Smith Incorporated filed as an exhibit to<br> the Company’s current report on Form 8-K filed with the SEC on<br> January 18, 2007.
4.9*	Indenture, dated as of April 27, 2009, among<br> the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor,<br> and Wilmington Trust Company, as Trustee filed as an exhibit to the Company’s<br> quarterly report on Form 10-Q filed with the SEC on August 10,<br> 2009.
10.1	Amended and Restated Executive Employment Agreement<br> between the Company and Dean A. Shigenaga, effective as of January 1,<br> 2010.
11.1	Computation of Per Share Earnings (included in Note<br> 2 to the Condensed Consolidated Financial Statements).
12.1	Computation of Consolidated Ratio of Earnings to<br> Combined Fixed Charges and Preferred Stock Dividends.

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31.1	Certification of Chief Executive Officer Pursuant to<br> Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to<br> Section 302 of the Sarbanes-Oxley Act of 2002.
32.0	Certification of Chief Executive Officer and Chief<br> Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted<br> Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(*) Incorporated by reference.

Table of Contents

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, thereunto duly authorized, on April 30, 2010.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
/s/ Joel S. Marcus
Joel S. Marcus<br><br> <br>Chairman/Chief Executive Officer<br><br> <br>(Principal Executive Officer)
/s/ Dean A. Shigenaga
Dean A. Shigenaga<br><br> <br>Chief Financial Officer<br><br> <br>(Principal Financial and Chief Accounting Officer)

Exhibit10.1

AMENDED ANDRESTATED

EXECUTIVEEMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”), made between Alexandria Real Estate Equities, Inc. (the “Company”) and Dean Shigenaga (“Employee”), amends and restates in its entirety the original Executive Employment Agreement between the Company and Employee that was effective as of January 1, 2007, as amended (the “2007Agreement”). This Agreement is effective as of January 1, 2010 (the “EffectiveDate”).

RECITALS

WHEREAS, Employee is employed by the Company as its Chief Financial Officer (“CFO”), having initially been party to an offer letter agreement dated December 5, 2000 (the “Offer Letter”); and

WHEREAS, the Offer Letter was replaced by the 2007 Agreement effective January 1, 2007, pursuant to which Employee was employed as a Senior Vice President and the CFO; and

WHEREAS, the Company desires to continue to employ Employee as a Senior Vice President and the CFO, and Employee is willing to continue such employment by the Company, on the amended and restated terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises and subject to the terms and conditions set forth herein, the parties hereto agree as follows:

SECTION 1. POSITION; DUTIES;LOCATION.

Employee agrees to continue to be employed by and to continue to serve the Company as a Senior Vice President and the CFO, and the Company agrees to employ and retain Employee in such capacity. In addition, Employee agrees to serve in such capacities for the Company’s subsidiaries, and in such additional or different capacities consistent with Employee’s current position as CFO and a senior executive of the Company, as may be determined by the Board of Directors of the Company (the “Board”). Employee shall devote such of his business time, energy, and skill to the affairs of the Company and its subsidiaries as shall be necessary to perform the duties of such positions. Notwithstanding the foregoing, and subject to any written policies of the Company, nothing in this Agreement shall preclude Employee from: (i) engaging in charitable and community affairs and not-for-profit activities, so long as they are consistent with his duties and responsibilities under this Agreement; (ii) managing his personal investments; (iii) serving on the boards of directors of non-profit companies; and (iv) serving on the boards of directors of other for-profit companies; provided, however, that, prior to accepting a position on any such for-profit board of directors, Employee shall obtain the approval of the Board (or, if applicable, the appropriate committee thereof), which shall be provided or withheld

within the Board’s sole discretion; and provided, further, however, that Employee shall submit to the Board (or the appropriate committee thereof) a list of any for-profit boards of directors on which Employee is serving as of the Effective Date of this Agreement or thereafter. Employee shall continue to report to the Company’s Chief Executive Officer. Employee shall be based in the Los Angeles metropolitan area, except for required travel on the Company’s business.

SECTION 2. COMPENSATION ANDOTHER BENEFITS.

In consideration of Employee’s employment, and except as otherwise provided herein, Employee shall receive from the Company the compensation and benefits described in this Section 2. Employee authorizes the Company to deduct and withhold from all compensation to be paid to Employee any and all sums required to be deducted or withheld by the Company pursuant to the provisions of any federal, state, or local law, regulation, ruling, or ordinance, including, but not limited to, income tax withholding and payroll taxes.

2.1 Base Salary. Subject to the terms and conditions set forth herein, the Company agrees to pay Employee a base salary at the rate of $305,000 per year, less standard payroll deductions and withholdings, payable on the Company’s regular payroll schedule (the “Base Salary”). Employee’s Base Salary shall be reviewed no less frequently than on each anniversary of the Effective Date by the Board (or such committee as may be appointed by the Board for such purpose). The Base Salary payable to Employee shall be increased on each such anniversary date (and such other times as the Board or a committee of the Board may deem appropriate) to an amount determined by the Board (or a committee of the Board). Each such new Base Salary shall become the base for each successive annual increase; provided, however, that such increase, at a minimum (and, including without limitation, for 2010), shall be equal to the cumulative cost-of-living increment as reported in the “Consumer Price Index, Los Angeles, California, All Items,” published by the U.S. Department of Labor (using January 1, 2007 as the base date for comparison). Any increase in Base Salary or other compensation shall in no way limit or reduce any other obligations of the Company hereunder and, once established at an increased specified rate, Employee’s Base Salary shall not be reduced unless Employee otherwise agrees in writing.

2.2 Bonus. Employee shall be eligible to receive a bonus for each calendar year of the Company (each a “Bonus Year”) in an amount to be determined in the sole discretion of the Board (or a committee of the Board) based upon its evaluation of Employee’s performance and the performance of the Company during such year and such other factors and conditions as the Board (or a committee of the Board) deems relevant. Bonuses are not guaranteed, and the Board may determine that Employee has not earned a bonus for any Bonus Year. Any earned bonus shall be payable within 185 days after the end of the relevant Bonus Year or as soon thereafter as reasonably practicable, but in no event after the end of the year following the relevant Bonus Year; provided that, in the event that Employee terminates employment with the Company for any reason other than a termination by the Company for Cause, after the end of the Bonus Year and prior to the date when such bonuses are paid by the Company to senior executives, then Employee shall receive the same bonus that would have been awarded to Employee in the absence of such termination and it shall be paid to Employee at the same time that bonuses are paid by the Company to other senior executives.

2.3 Restricted Stock; Options. Employee shall be eligible for equity awards from time to time as shall be determined by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion, and subject to such vesting, exercisability, and other provisions as the Compensation Committee may determine in its discretion, after reviewing the performance of both Employee and the Company. All equity awards shall be governed in all respects by the terms of the applicable stock option or restricted stock agreements, grant notice and plan documents, except as specifically provided in Sections 3.4(b), 3.5 and 3.7(b) hereof. Notwithstanding the foregoing or anything in this Agreement to the contrary, upon a Change in Control (as defined herein), (i) any outstanding equity awards held by Employee (whether in the form of stock options or shares of restricted stock) shall become fully vested, and (ii) any outstanding stock options held by Employee shall become exercisable for their full terms without regard to the termination of Employee’s employment.

2.4 Vacation. Employee shall be entitled to accrue and use paid vacation in accordance with the terms of the Company’s vacation policy and practices.

2.5 Other Benefits. Employee shall be eligible to participate in such of the Company’s benefit and deferred compensation plans as may be made available to executive officers of the Company, including, without limitation, the Company’s stock incentive plans, annual incentive compensation plans, profit sharing/pension plans, deferred compensation plans, annual physical examinations, dental plans, vision plans, sick pay, medical plans, personal catastrophe and accidental death insurance plans, financial planning, automobile arrangements, retirement plans and supplementary executive retirement plans, if any. For purposes of establishing the length of service under any benefit plans or programs of the Company, such service shall be deemed to have commenced on December 27, 2000, which was Employee’s first date of employment with the Company.

2.6 Reimbursement For Expenses. The Company shall reimburse Employee for all reasonable out-of-pocket business expenses (including, but not limited to, business entertainment expenses) incurred by Employee for the purpose of and in connection with the performance of his services pursuant to this Agreement. Employee shall be entitled to such reimbursement upon the presentation by Employee to the Company of vouchers or other statements itemizing such expenses in reasonable detail consistent with the Company’s policies. In addition, Employee shall be entitled to reimbursement for: (i) dues and membership fees in professional organizations and industry associations in which Employee is currently a member or becomes a member; and (ii) appropriate industry seminars and mandatory continuing education. The amount of expenses eligible for reimbursement pursuant to this Section 2.6 during a calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year. Without extending the time of payment that would apply in the absence of this sentence, the Company shall reimburse Employee for any expense eligible for reimbursement pursuant to this Section 2.6 on or before the end of the calendar year following the calendar year in which the expense was incurred. The Company shall pay Employee for all reasonable attorney’s fees, disbursements and costs incurred by Employee in connection with the negotiation, preparation and execution of this Agreement, within 15 days following presentation of invoices which have been paid.

SECTION 3. TERM ANDTERMINATION; SEVERANCE.

3.1 Term And Termination. The term of this Agreement (the “Term”) shall be for a period commencing on January 1, 2010 and ending on December 31, 2012, unless terminated earlier pursuant to this Agreement; provided however, that commencing on January 1, 2013, and on each subsequent anniversary thereof, the Term shall be automatically extended for one (1) additional year unless, no later than six (6) months before such date, either party shall have given written notice to the other that it does not wish to extend the Term of this Agreement (which notice may be given for any reason). References herein to the Term shall refer to both the initial Term and any such extended Term. In the event that the Agreement terminates at the end of the Term due to timely notice of non-renewal by either party for any reason, Employee shall be entitled to compensation pursuant to Section 3.2. In addition, if the Company is the party providing for non-renewal of the Agreement, then Employee shall receive the following: (a) if such termination due to non-renewal of the Agreement is effective on or following a Change in Control (as defined herein), then Employee shall be entitled to severance benefits pursuant to Section 3.4; and (b) if such termination due to non-renewal of the Agreement is effective prior to a Change in Control, then the Company shall accelerate the vesting of any equity awards previously granted to Employee by the Company (whether in the form of stock options or shares of restricted stock) such that the shares that would have vested in the one (1) year period following the Separation Date, had Employee’s employment not been terminated, shall be deemed vested as of the Separation Date (provided that, Employee satisfies the Release requirement provided under Section 3.8).

3.2 Compensation UponTermination. Upon the termination of Employee’s employment for any reason, including termination due to expiration of the Term, the Company shall pay Employee all of Employee’s accrued and unused vacation and unpaid Base Salary earned through Employee’s last day of employment (the “Separation Date”).

3.3 Termination For Cause. At any time, the Company shall be entitled to terminate this Agreement for Cause (as defined herein) immediately upon written notice to Employee, which notice shall specify the reason for and the effective date of such termination. In that event, the Company shall pay Employee the compensation set forth in Section 3.2, and Employee shall not be entitled to any further compensation from the Company, including severance benefits.

3.4 Termination WithoutCause During The Term And Not In Connection With A Change In Control;Termination Due To Non-Renewal Of The Agreement By Company On Or Following AChange In Control. The Company shall be entitled to terminate Employee’s employment without Cause during the Term immediately upon written notice to Employee. In that event, and provided that Employee is not eligible for severance benefits under Section 3.7 (Termination Without Cause or Resignation For Good Reason During The Term And Following A Change In Control), or in the event that Employee’s employment terminates due to non-renewal of the Agreement by the Company on or following a Change in Control, Employee shall receive the following severance benefits:

**(a) Salary Continuation.**The Company shall pay Employee

severance in an amount equal to one (1) year of Base Salary, less standard payroll deductions and withholdings, and paid in accordance with Section 3.9. The Company’s obligation to provide, or continue to provide, such severance payments will cease immediately and in full in the event that Employee materially breaches any of his continuing obligations to the Company (including, but not limited to, any continuing obligations under this Agreement or the Proprietary Information Agreement (as defined herein)).

(b) Accelerated Vesting. The Company shall accelerate the vesting of any equity awards previously granted to Employee by the Company (whether in the form of stock options or shares of restricted stock) such that all of the unvested shares shall be deemed vested as of the Separation Date.

(c) Bonus. The Company shall pay Employee a bonus for the year in which the Separation Date occurs in the amount of the bonus that Employee earned for the previous year, if any, or, if such amount has not been determined at the time of termination, for the previous year (provided that, if termination is on or after a Change in Control, and Section 3.7 does not apply, the amount shall in no event be lower than the highest actual bonus amount received by Employee for the two (2) calendar years preceding the calendar year in which the Change in Control occurs).

(d) Restricted Stock Grants. The Company shall grant to Employee, fully vested, the pro rata amount of: (1) any annual performance-based grants of restricted stock that may have already then been determined by the Compensation Committee for the Company’s fiscal year prior to the fiscal year in which the Separation Date occurs but which have not yet been made to Employee as of the Separation Date; or (2) in the event that such annual performance-based grants have not yet been determined for the Company’s fiscal year prior to the fiscal year in which the Separation Date occurs, the average of the amounts of any such grants that Employee received during the preceding two fiscal years (or, if termination is on or after a Change in Control and Section 3.7 does not apply, the average shall be no lower than the average of the two (2) annual grants received by Employee for the two (2) calendar years preceding the calendar year in which Change in Control occurs). In either event, the proration shall be based on the number of months of completed service during the fiscal year of termination divided by twelve (12).

(e) Continued Health Benefits. If Employee timely elects to continue his coverage under the Company’s health insurance plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and any analogous provisions of state law, the Company shall pay the applicable premiums for such continued coverage throughout the twelve (12)-month period following the Separation Date; provided, however, that (i) the Company shall not be required to make any such payments after such time as Employee becomes entitled to receive similar health insurance coverage from another employer or recipient of Employee’s services, and (ii) any applicable premiums that are paid by the Company shall not include any amounts payable by Employee under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are the sole responsibility of Employee.

3.5 Termination During TheTerm Upon Death Or Disability. The Agreement shall terminate immediately during the Term upon Employee’s death or Disability (as defined herein). In that event, the Company shall provide Employee with the compensation set forth in Section 3.2, as well as the severance benefits set forth in Sections 3.4(a) and (b).

3.6 Resignation During TheTerm. Employee shall be entitled to resign at any time during the Term upon written notice to the Company thirty (30) days prior to the effective date of such resignation, which shall be specified in Employee’s notice of resignation. Unless Employee’s resignation is for Good Reason following a Change in Control (as defined herein), upon Employee’s resignation, the Company shall pay Employee the compensation set forth in Section 3.2, and Employee shall not be entitled to any further compensation from the Company, including severance benefits.

3.7 Termination Without CauseOr Resignation For Good Reason During The Term And Following A Change InControl. Upon or within two (2) years following a Change in Control, the Company, during the Term, shall be entitled to terminate Employee’s employment without Cause immediately upon written notice to Employee, and Employee, during the Term, shall be entitled to terminate this Agreement for Good Reason in accordance with Section 3.10(c). In either event, Employee shall receive the following severance benefits:

(a) Salary Continuation. The Company shall pay Employee severance in an amount equal to two (2) years of Base Salary, less standard payroll deductions and withholdings, and paid in accordance with Section 3.9. The Company’s obligation to provide, or continue to provide, such severance payments will cease immediately and in full in the event that Employee materially breaches any of his continuing obligations to the Company (including, but not limited to, any continuing obligations under this Agreement or the Proprietary Information Agreement (as defined herein)).

(b) Accelerated Vesting. To the extent not previously accelerated pursuant to Section 2.3, the Company shall accelerate the vesting of any equity awards previously granted to Employee by the Company (whether in the form of stock options or shares of restricted stock) such that all of the unvested shares shall be deemed vested as of the Separation Date.

(c) Bonus. The Company shall pay Employee a bonus for the year in which the Separation Date occurs in an amount equal to two (2) times the amount of the bonus that Employee earned for the previous year, if any, or, if such amount has not been determined at the time of termination, two (2) times the amount for the previous year (provided that, the amount shall in no event be lower than two (2) times the highest actual bonus amount received by Employee for the two (2) calendar years preceding the calendar year in which the Change in Control occurs).

been made to Employee as of the Separation Date; or (2) in the event that such annual performance-based grants have not yet been determined for the Company’s fiscal year prior to the fiscal year in which the Separation Date occurs, the average of the amounts of any such grants that Employee received during the preceding two fiscal years (provided that, the average shall be no lower than the average of the two (2) annual grants received by Employee for the two (2) calendar years preceding the calendar year in which Change in Control occurs). In either event, the proration shall be based on the number of months of completed service during the fiscal year of termination divided by twelve (12).

(e) Continued Health Benefits. If Employee timely elects to continue his coverage under the Company’s health insurance plans in accordance with COBRA and any analogous provisions of state law, the Company shall pay the applicable premiums for such continued coverage throughout the twelve (12)-month period following the Separation Date; provided, however, that (i) the Company shall not be required to make any such payments after such time as Employee becomes entitled to receive similar health insurance coverage from another employer or recipient of Employee’s services, and (ii) any applicable premiums that are paid by the Company shall not include any amounts payable by Employee under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are the sole responsibility of Employee.

3.8 Release. As a condition to receipt of any accelerated vesting or severance benefits under this Agreement, Employee (or his estate, in the event of Employee’s death) shall be required to provide the Company with an effective general release of any and all known and unknown claims against the Company and other specifically identified released parties, substantially in the form attached hereto as Exhibit A (the “Release”) **** within the applicable time period set forth in the specific form of Release provided to Employee by the Company, but in no event more than sixty (60) days following the Separation Date.

3.9 Payment Of SeveranceBenefits; Section 409A. In the event that Employee is entitled to any severance benefits pursuant to Section 3.4, 3.5 or 3.7 of this Agreement (other than any accelerated vesting under Section 3.4(b), 3.5 or 3.7(b)), such severance benefits shall be payable as follows: (1) any payment of Base Salary pursuant to Section 3.4(a), 3.5, or 3.7(a) shall be made in the form of substantially equal installments for a period of one (1) year following the Separation Date (with respect to any termination of employment pursuant to Section 3.4(a) or 3.5) or two (2) years following the Separation Date (with respect to any termination of employment pursuant to Section 3.7(a)), provided that any payments delayed pending the effectiveness of the Release shall be paid in arrears no later than ten (10) days after such effective date; (2) any payment of bonus pursuant to Section 3.4(c) or 3.7(c) shall be made in the form of a lump sum within ten (10) days following the effective date of the Release; and (3) any restricted stock grants pursuant to Section 3.4(d) or 3.7(d) shall be made in full within thirty (30) days following the effective date of the Release; the parties being in agreement that none of the foregoing is “deferred compensation” under Section 409A (as defined below), except for amounts under the foregoing clause (1) that are payable and paid more than two and one-half (2 ½) months following the end of the calendar year in which Employee’s Separation from Service (as defined below) occurs; provided,however, that:

(a) payment of such amounts and any other amounts or benefits provided under this Agreement in connection with Employee’s termination of employment that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Employee’s termination of employment unless and until Employee has also incurred a “separation from service” (as such term is defined in Treasury Regulations Section 1.409A-1(h) (“SeparationFrom Service”)), unless the Company reasonably determines that such amounts and benefits may be provided to Employee without causing Employee to incur the adverse personal tax consequences under Section 409A; and

(b) it is intended that (i) each installment of any amounts or benefits payable under this Agreement be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i) (and each such installment is hereby designated as separate for such purpose), (ii) all payments of any such amounts or benefits satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (iii) any such amounts or benefits consisting of premiums payable under COBRA also satisfy, to the greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v). However, if any such amounts or benefits constitute “deferred compensation” under Section 409A and Employee is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the imposition of the adverse personal tax consequences under Section 409A, the timing of such benefit payments shall be delayed as follows, provided that the Release has become effective in accordance with its terms: on the earlier to occur of (a) the date that is six (6) months and one (1) day after Employee’s Separation From Service and (b) the date of Employee’s death (such applicable date, the “Delayed Initial Payment Date”), the Company shall (1) pay Employee a lump sum amount equal to the sum of the benefit payments that Employee would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the benefits had not been delayed pursuant to this Section 3.9(b) and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.

3.10 Definitions. For purposes of this Agreement, the following definitions shall apply:

(a) Disability. The term “Disability” shall mean a physical or mental disability that renders Employee unable to perform one or more of the essential functions of his job, as determined by the Board, for a period of 180 days during any 365 day period.

(b) Cause. For purposes of this Agreement, “Cause” shall mean: (1) Employee’s conviction of any felony involving moral turpitude, fraud or dishonesty; (2) Employee’s persistent unsatisfactory performance of job duties (but only as to a termination before a Change in Control); or (3) Employee’s material violation or breach of any Company policy (as in effect prior to a Change in Control) or statutory, fiduciary, or contractual duty to the Company, provided that the Company shall provide notice to Employee describing the nature of

such Cause and Employee shall thereafter have thirty (30) days to cure. In order to terminate this Agreement for Cause, the Company must provide written notice to Employee of the occurrence of one or more of the foregoing circumstances within ninety (90) days following the initial occurrence of the circumstance; provided, however, that if the circumstance is part of an ongoing or series of actions or behavior that the Company considers to be Cause, the Company shall be entitled to provide such written notice to Employee within ninety (90) days following any occurrence of such action or behavior.

(c) Good Reason. Following a Change in Control, “Good Reason” shall mean, without Employee’s express written consent, the occurrence of any of the following circumstances: (1) the assignment to Employee of any duties materially inconsistent with the position in the Company that Employee held immediately prior to the Change in Control, or a materially adverse alteration in the nature or status of Employee’s responsibilities from those in effect immediately prior to the Change in Control; (2) a material reduction by the Company in Employee’s Base Salary as in effect on the date hereof or as the same may be increased from time to time; (3) the relocation of Employee’s offices to a location outside the greater Los Angeles metropolitan area (or, if different, the metropolitan area in which such offices are located immediately prior to the Change in Control), or requiring Employee to travel on Company business to an extent materially greater than Employee’s business travel obligations immediately prior to the Change in Control; (4) the failure by the Company to pay Employee any material portion of his current compensation except pursuant to an across-the-board compensation deferral similarly affecting all the employees of the Company and all the employees of any entity whose actions resulted in a Change in Control, or to pay Employee any material portion of an installment of deferred compensation under any deferred compensation program of the Company, in each case within seven (7) days of the date such compensation is due; (5) the failure by the Company to continue in effect any compensation plan in which Employee participates immediately prior to the Change in Control which is material to Employee’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue Employee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of participation relative to other participants, as existed at the time of the Change in Control; (6) a material reduction in the benefits provided to Employee under any of the Company’s directors and officers liability insurance, life insurance, medical, health and accident, or disability plans in which Employee was participating at the time of the Change in Control, or the failure by the Company to provide Employee with substantially the same number of paid vacation days to which he is entitled in accordance with the Company’s normal vacation policy in effect at the time of the Change in Control; or (7) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement. In order to terminate this Agreement for Good Reason, Employee must provide written notice to the Company of the occurrence of one or more of the foregoing circumstances within ninety (90) days following the initial occurrence of the circumstance; provided, however, that the Company shall not be required to provide any benefits under Section 3.7 if it is able to remedy and does remedy such circumstance within a period of thirty (30) days following such notice.

(d) Change in Control. A “Change in Control” shall be deemed to

have occurred if:

(i) any Person (as such term is used in section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”), as modified and used in sections 13(d) and 14(d) thereof, except that such term shall not include (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a Company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the Beneficial Owner, as such term is defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

(iii) there is consummated a merger or consolidation of the Company with any other Company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least seventy-five percent (75%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an

entity, at least seventy-five (75%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

3.11 No Offset. Employee shall not be required to mitigate damages under this Agreement by seeking other comparable employment or otherwise, nor shall Employee’s entitlement to any severance benefit hereunder be offset by any earned income Employee may receive from employment or consulting with a third party after his employment with the Company.

SECTION 4. PROPRIETARYINFORMATION AND INVENTIONS AGREEMENT.

Employee shall be required to continue compliance with his obligations under the Employee Proprietary Information and Inventions Agreement with the Company that Employee executed on December 10, 2000 (the “Proprietary Information Agreement”), a copy of which is attached as Exhibit B.

SECTION 5. COMPANYPOLICIES.

Employee shall be required to continue compliance with the Company’s employee policies and procedures established by the Company from time to time.

SECTION 6. ASSIGNABILITY.

****

This Agreement is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, personal representatives, successors and assigns. The Company may assign its rights or delegate its duties under this Agreement at any time and from time to time. However, the parties acknowledge that the availability of Employee to perform services and the covenants provided by Employee hereunder are personal to Employee and have been a material consideration for the Company to enter into this Agreement. Accordingly, Employee may not assign any of Employee’s rights or delegate any of Employee’s duties under this Agreement, either voluntarily or by operation of law, without the prior written consent of the Company, which may be given or withheld by the Company in its sole and absolute discretion.

SECTION 7. NOTICES.

****

All notices and other communications under this Agreement shall be in writing and shall be given by facsimile, first class mail (certified or registered with return receipt requested), or Federal Express overnight delivery, and shall be deemed to have been duly given three days after mailing or twenty-four (24) hours after transmission of a facsimile or Federal Express overnight delivery (if the receipt of the facsimile or Federal Express overnight delivery is confirmed) to the respective persons named below:

If to the Company: Alexandria Real Estate Equities, Inc.

385 E. Colorado Boulevard

Suite 299

Pasadena, CA 91101

Phone: (626) 578 0777

If to Employee: Dean Shigenaga

c/o Alexandria Real Estate Equities, Inc.

385 East Colorado Boulevard, Suite 299

Pasadena, CA 91101

With a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attention: Andrew L. Oringer, Esq.

Phone: (212) 596-9702

Any Party may change such Party’s address for notices by notice duly given pursuant hereto.

SECTION 8. ARBITRATION.

****

To ensure the timely and economical resolution of disputes that may arise in connection with Employee’s employment with the Company, Employee and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, Employee’s employment, or the termination of Employee’s employment, including but not limited to statutory claims, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in Los Angeles, California, conducted by JAMS under the then applicable JAMS rules. By agreeing to thisarbitration procedure, both Employee and the Company waive the right to resolveany such dispute through a trial by jury or judge or administrative proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that Employee or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required if the dispute were decided in a court of law. Nothing in this Agreement is intended to prevent either Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.

SECTION 9. MISCELLANEOUS.

****

9.1 Entire Agreement. This Agreement, including its exhibits, contains the

full, complete, and exclusive embodiment of the entire agreement of the parties with regard to the subject matter hereof and supersedes all prior communications, representations, or agreements, oral or written, including but not limited to the Offer Letter and the 2007 Agreement, and all negotiations and communications between the parties relating to this Agreement. Employee has not entered into this Agreement in reliance on any representations, written or oral, other than those contained herein. Any ambiguity in this document shall not be construed against either party as the drafter.

9.2 Amendment. This Agreement may not be amended or modified except by an instrument in writing duly executed by Employee and the Company’s Chief Executive Officer.

9.3 Applicable Law; ChoiceOf Forum. This Agreement has been made and executed under, and will be construed and interpreted in accordance with, the laws of the State of California, without regard to conflict of laws principles.

9.4 Provisions Severable. Every provision of this Agreement is intended to be severable from every other provision of this Agreement. If any provision of this Agreement is held to be invalid, illegal or unenforceable, in whole or in part, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement; and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein except to the extent that such provision may be construed and modified so as to render it valid, lawful, and enforceable in a manner consistent with the intent of the parties to the extent compatible with the applicable law as it shall then appear.

9.5 Non-Waiver Of Rights AndBreaches. Any waiver by a party of any breach of any provision of this Agreement will not be deemed to be a waiver of any subsequent breach of that provision, or of any breach of any other provision of this Agreement. No failure or delay in exercising any right, power, or privilege granted to a party under any provision of this Agreement will be deemed a waiver of that or any other right, power or privilege. No single or partial exercise of any right, power or privilege granted to a party under any provision of this Agreement will preclude any other or further exercise of that or any other right, power or privilege.

9.6 Headings. The headings of the Sections and Paragraphs of this Agreement are inserted for ease of reference only, and will have no effect in the construction or interpretation of this Agreement.

9.7 Counterparts. This Agreement and any amendment or supplement to this Agreement may be executed in two or more counterparts, each of which will constitute an original but all of which will together constitute a single instrument. Transmission by facsimile or .pdf of an executed counterpart signature page hereof by a party hereto shall constitute due execution and delivery of this Agreement by such party.

9.8 Indemnification. In addition to any rights to indemnification to which Employee may be entitled under the Company’s Charter and By-Laws, the Company shall indemnify Employee at all times during and after Employee’s employment to the maximum

extent permitted under Section 2-418 of the General Corporation Law of the State of Maryland or any successor provision thereof and any other applicable state law, and shall pay Employee’s expenses in defending any civil or criminal action, suit, or proceeding in advance of the final disposition of such action, suit, or proceeding, to the maximum extent permitted under such applicable state laws.

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated **** Executive **** Employment Agreement to be duly executed on March 1, 2010, effective as of the Effective Date.

ALEXANDRIA REAL ESTATE EQUITIES, INC.		DEAN SHIGENAGA
By	:<br> /s/ Joel S. Marcus	/s/ Dean Shigenaga
Joel S. Marcus		****
Chief Executive Officer		****

EXHIBIT12.1

ALEXANDRIAREAL ESTATE EQUITIES, INC.

COMPUTATIONOF CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED

CHARGES,AND PREFERRED STOCK DIVIDENDS

(in thousands, except ratios)

****	Three Months		****	****		****	****		****	****		****	****		****	****		****
****	Ended		****	Year Ended December 31, (a)														****
****	March 31, 2010		****	2009		****	2008		****	2007		****	2006		****	2005		****
Income<br> from continuing operations before noncontrolling interests	$	28,058		$	136,065		$	101,427		$	76,476		$	65,844		$	51,910
Add:<br> Interest expense	17,562			82,249			85,366			93,539			69,087			46,792
Subtract:<br> Noncontrolling interests in income of subsidiaries which have not incurred<br> fixed charges	(302		)	(1,217		)	(1,304		)	(1,407		)	(1,404		)	(571		)
Earnings<br> available for fixed charges	$	45,318		$	217,097		$	185,489		$	168,608		$	133,527		$	98,131
Combined<br> fixed charges and preferred stock dividends:
Interest<br> incurred	$	36,076		$	148,345		$	151,587		$	142,641		$	105,359		$	75,371
Preferred<br> stock dividends	7,089			28,357			24,225			12,020			16,090			16,090
Preferred<br> stock redemption charge	–			–			–			2,799			–			–
Total<br> combined fixed charges and preferred stock dividends	$	43,165		$	176,702		$	175,812		$	157,460		$	121,449		$	91,461
Ratio<br> of earnings to combined fixed charges and preferred stock dividends (b)	1.05			1.23			1.06		(c)	1.07		(d)	1.10			1.07

(a) Amounts disclosed for prior periods have been reclassified to conform to the current year presentation related to discontinued operations.

(b) For purposes of calculating the consolidated ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of earnings from continuing operations before income taxes and fixed charges less noncontrolling interests’ in income of subsidiaries which have not incurred fixed charges. Fixed charges consist of interest incurred (including amortization of deferred financing costs and capitalized interest) and preferred stock dividends.

(c) Ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2008 includes the effect of non-cash impairment charges aggregating $13,251,000 for other-than-temporary declines in the fair value of certain investments. Excluding the impact of the non-cash impairment charges, the ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2008 was 1.13.

(d) Ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2007 includes the effect of the preferred stock redemption charge. Excluding the impact of this charge, the ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2007 was 1.09.

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANTTOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joel S. Marcus, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alexandria Real Estate Equities, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2010

/s/ Joel S. Marcus
Joel S. Marcus
Chief Executive Officer

EXHIBIT31.2

CERTIFICATIONOF CHIEF FINANCIAL OFFICER PURSUANTTOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dean A. Shigenaga, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alexandria Real Estate Equities, Inc.;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2010

/s/ Dean A. Shigenaga
Dean A. Shigenaga
Chief Financial Officer

EXHIBIT32.0

CERTIFICATIONOF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICERPURSUANT TO18 U.S.C. SECTION 1350.AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Joel S. Marcus, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alexandria Real Estate Equities, Inc. for the quarter ended March 31, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition, and results of operations of Alexandria Real Estate Equities, Inc.

Date: April 30, 2010

/s/ Joel S. Marcus
Joel S. Marcus
Chief Executive Officer

I, Dean A. Shigenaga, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alexandria Real Estate Equities, Inc. for the quarter ended March 31, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition, and results of operations of Alexandria Real Estate Equities, Inc.

Date: April 30, 2010

/s/ Dean A. Shigenaga
Dean A. Shigenaga
Chief Financial Officer