Skip to main content
Equibles

8-K

Alexandria Real Estate Equities, Inc. (ARE)

8-K 2013-02-07 For: 2013-02-07
View Original
Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): February 7, 2013

ALEXANDRIA REAL ESTATE EQUITIES, INC.

(Exact name of registrant as specified in its charter)

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

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

N/A

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

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

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

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

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

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

1

Item 2.02.  Results of Operations and Financial Condition.

On February 7, 2013, Alexandria Real Estate Equities, Inc. (the “Company”) issued a press release entitled “Alexandria Real Estate Equities, Inc. Reports Fourth Quarter and Year Ended December 31, 2012 Financial and Operating Results” which sets forth the Company’s results of operations and financial condition for the fourth quarter and year ended December 31, 2012.  The press release referred to certain supplemental information that is available on the Company’s website at www.are.com.  Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

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

Item 9.01.  Financial Statements and Exhibits.

(d)   Exhibits.

99.1            Press Release dated February 7, 2013.

99.2            Alexandria Real Estate Equities, Inc.’s Earnings Press Release and Supplemental Information for the Fourth Quarter and Year Ended December 31, 2012.

2

SIGNATURES

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.
February 7, 2013 By: /s/ Joel S. Marcus
Joel S. Marcus
Chairman/Chief Executive Officer
(Principal Executive Officer)
By: /s/ Dean A. Shigenaga
Dean A. Shigenaga
Chief Financial Officer
(Principal Financial Officer)

3

EXHIBIT INDEX

Exhibit Number Exhibit Title
99.1 Press Release dated February 7, 2013.
99.2 Alexandria Real Estate Equities, Inc.’s Earnings Press Release and Supplemental Information for the Fourth Quarter and Year Ended December 31, 2012.

4

Exhibit 99.1

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

Alexandria Real Estate Equities, Inc.

Reports

Fourth Quarter and Year Ended December 31, 2012

Financial and Operating Results

FFO Per Share – Diluted, as Adjusted, of $1.16 and $4.38 for Three Months and Year Ended 4Q12

EPS - Diluted of $0.33 and $1.09 for Three Months and Year Ended 4Q12

Total Revenues for the Three Months and Year Ended 4Q12 Up 11% and 7% Over Same Period in Prior Year

NOI from Continuing Operations for the Three Months Ended 4Q12 Up 10% Over 4Q11

Achieved Significant NOI Growth From Delivery of Development and Redevelopment Projects

PASADENA, CA. – February 7, 2013 – Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced financial and operating results for the fourth quarter and year ended December 31, 2012.

Fourth Quarter and Year Ended December 31, 2012, Highlights

Results

·                   Funds From Operations (“FFO”) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, as Adjusted, for the Three Months Ended December 31, 2012, was $72.9 Million, or $1.16 Per Share;  FFO Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, as Adjusted, for the Year Ended December 31, 2012, was $272.1 Million, or $4.38 Per Share

·                   Adjusted Funds From Operations (“AFFO”) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $66.3 Million, or $1.05 Per Share;  AFFO Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $257.7 Million, or $4.15 Per Share

·                   Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $21.0 Million, or $0.33 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $24.7 Million, or $0.39 Per Share, Excluding Impairment of Land Parcel/Real Estate Aggregating $3.7 Million, or $0.06 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $67.6 Million, or $1.09 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $85.8 Million, or $1.38 Per Share, Excluding Impairment of Land Parcel/Real Estate, Loss on Early Extinguishment of Debt, Gain on Sale of Land Parcel/Real Estate, and Preferred Stock Redemption Charge Aggregating $18.2 Million, or $0.29 Per Share

Core Operating Metrics

·                   Total Revenues for the Three Months Ended December 31, 2012, were $154.2 Million, Up 11%, Compared to Total Revenues for the Three Months Ended December 31, 2011, of $139.2 Million; Total Revenues for the Year Ended December 31, 2012, were $586.1 Million, Up 7%, Compared to Total Revenues for the Year Ended December 31, 2011, of $548.2 Million

·                   Net Operating Income (“NOI”) from Continuing and Discontinued Operations for the Three Months Ended December 31, 2012, was $111.1 Million, or $444.5 Million on an Annualized Basis, Up 9%, Compared to NOI from Continuing and Discontinued Operations for the Three Months Ended December 31, 2011, of $101.8 Million, or $407.2 Million on an Annualized Basis; NOI for the Three Months Ended December 31, 2012, was $107.5 Million, Up 10%, Compared to NOI for the Three Months Ended December 31, 2011, of $97.7 Million; NOI for the Year Ended December 31, 2012, was $411.6 Million, Up 6%, Compared to NOI for the Year Ended December 31, 2011, of $388.7 Million

·                   47% of Total Annualized Base Rent (“ABR”) from Investment-Grade Client Tenants

·                   Investment-Grade Client Tenants Represented 72% of Top 10 Client Tenants’ ABR

·                   Operating Margins at 70% for the Three Months Ended December 31, 2012

·                   Cash and GAAP Same Property Net Operating Income Increases of 6.3% and 0.7%, Respectively, for the Three Months Ended December 31, 2012

·                   Cash and GAAP Same Property Net Operating Income Increase of 3.5% and Decrease of 0.5%, Respectively, for the Year Ended December 31, 2012

·                   Second Highest Year of Leasing Activity in Company History

·                   During the Three Months Ended December 31, 2012, Executed 47 Leases for 678,000 Rentable Square Feet, Including 265,000 Rentable Square Feet of Development and Redevelopment Space; Rental Rate Decrease of 2.9% and Increase of 2.6% on a Cash and GAAP Basis, Respectively, on Renewed/Re-Leased Space; Excluding One Lease for 70,000 Rentable Square Feet in the Suburban Washington, D.C., Market, Rental Rates for Renewed/Re-Leased Space were, on Average, 1.3% Higher and 6.1% Higher than Rental Rates for Expiring Leases on a Cash and GAAP Basis, Respectively

·                   During the Year Ended December 31, 2012, Executed 187 Leases for 3,281,000 Rentable Square Feet, Including 1,135,000 Rentable Square Feet of Development and Redevelopment Space; Rental Rate Decrease of 2.0% and Increase of 5.2% on a Cash and GAAP Basis, Respectively, on Renewed/Re-Leased Space; Excluding One Lease for 48,000 Rentable Square Feet in the Research Triangle Park Market and Two Leases for 141,000 Rentable Square Feet in the Suburban Washington, D.C., Market, Rental Rates for Renewed/Re-Leased Space were, on Average, 0.4% Higher and 7.1% Higher than Rental Rates for Expiring Leases on a Cash and GAAP Basis, Respectively

·                   Occupancy Percentage for North America Operating Properties of 94.6%, Up from 94.2%, and Occupancy Percentage for North America Operating and Redevelopment Properties of 91.6% Up from 90.0%; Occupancy Percentage for All Operating Properties of 93.4%, Up from 93.0%, Including Asia Properties, and Occupancy Percentage for All Operating and Redevelopment Properties of 89.8%, Up from 88.3%, Including Asia Properties

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 1

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Value-Added Opportunities and External Growth

Key Commencements - Development

·                   In November 2012, Commenced Development of 430 East 29th Street, the West Tower of the Alexandria Center™ for Life Science – New York City, Located in the Greater NYC Market, a Building with 419,806 Rentable Square Feet; 14% Pre-Leased Plus an Additional 40% Subject to Letters of Intent

·                   In April 2012, Commenced Development of 360 Longwood Avenue, Located in the Greater Boston Market, a 37% Pre-Leased Unconsolidated Joint Venture Project with 414,000 Rentable Square Feet

Key Commencements - Redevelopment

·                   In October 2012, Commenced Conversion of Manufacturing Space into Laboratory Space Through Redevelopment of 4757 Nexus Center Drive, Located in the San Diego Market, a 100% Pre-Leased Project with 68,423 Rentable Square Feet

·                   In October 2012, Commenced Conversion of Office Space into Laboratory Space Through Redevelopment of 1616 Eastlake Avenue, Located in the Seattle Market, a 61% Pre-Leased Project with 66,776 Rentable Square Feet

Key Deliveries - Development

·                   In November 2012, Completed Development of 259 East Grand Avenue, Located in the San Francisco Bay Area Market, a 100% Leased Building with 170,618 Rentable Square Feet

·                   In October 2012, Completed Development of 400/450 East Jamie Court, Located in the San Francisco Bay Area Market, an 80% Leased Project with 163,036 Total Rentable Square Feet

·                   In October 2012, Completed Development of 5200 Illumina Way, Located in the San Diego Market, a 100% Leased Project with 127,373 Rentable Square Feet

·                   In September 2012, Completed Development of 4755 Nexus Center Drive, Located in the San Diego Market, a 100% Leased Project with 45,255 Rentable Square Feet

·                   In April 2012, Completed Development Located in the Canadian Market, a 100% Leased Project with 26,426 Rentable Square Feet

Key Deliveries - Redevelopment

·                   In November/December 2012, Partially Completed Redevelopment of 100% Leased 140,532 Rentable Square Feet at 400 Technology Square, Located in the Greater Boston Market, a Building with 212,124 Total Rentable Square Feet

·                   From November 2011 to September 2012, Completed Redevelopment of 10300 Campus Point Drive, Located in the San Diego Market, a 96% Leased Project with 279,138 Rentable Square Feet, including 189,562 Rentable Square Feet Completed in September 2012

·                   In June 2012, Completed Redevelopment of 3530/3550 John Hopkins Court, Located in the San Diego Market, a 100% Leased Project with 98,320 Rentable Square Feet

Balance Sheet Strategy and Significant Milestones

·                   Our Balance Sheet Strategy Continues to Focus on Our Leverage Target of 6.5x Net Debt to Adjusted EBITDA by December 31, 2013, by Funding our Significant Development and Redevelopment Projects in 2013 with Leverage-Neutral Sources of Capital and by Continuing to Execute Our Asset Recycling Program

·                   In 2012, Executed Capital Strategy and Proved Access to Diverse Sources of Capital Strategically Important to Our Long-Term Capital Structure; Successfully Accessed Every Long-Term Component of Our Targeted Sources of Capital, Including Proceeds from Our Asset Recycling Program, Unsecured Senior Line of Credit, 4.60% Unsecured Senior Notes Payable Offering, Secured Construction Loan, 6.45% Series E Preferred Stock Offering, and Selective “At The Market” Common Stock Offerings

·                   Completed $75.1 Million of Asset Sales in 2012; Completed Additional $84.0 Million of Asset Sales in 2013

·                   In June 2012, Established an “At The Market” Common Stock Offering Program and Raised $97.9 Million in Net Proceeds from Sales Under This Program in 2012

·                   In June 2012, Closed a Secured Construction Loan with Aggregate Commitments of $55.0 Million for a Development Project at 259 East Grand Avenue Located in the San Francisco Bay Area Market

·                   In April 2012, Amended Our $1.5 Billion Unsecured Senior Line of Credit to Reduce Its Interest Rate and Extend Its Maturity Date to April 2017, Assuming We Exercise Our Sole Right to Extend the Maturity Date Twice

·                   In April 2012, Redeemed All $129.6 Million of Our Outstanding 8.375% Series C Preferred Stock

·                   In March 2012, Completed a 6.45% Series E Preferred Stock Offering with Net Proceeds of $124.9 Million

·                   In February 2012, Completed Our 4.60% Unsecured Senior Notes Payable Offering with Net Proceeds of $544.6 Million; Net Proceeds from the Offering Were Used to Repay Certain Outstanding Variable Rate Bank Debt, Including All $250 Million of Our 2012 Unsecured Senior Bank Term Loan

·                   In January and April 2012, Retired All $84.8 Million of Our 3.70% Unsecured Senior Convertible Notes

Events Subsequent to Year End

·                   In January 2013, Executed a Lease for 244,123 Rentable Square Feet at 75/125 Binney Street, Located in the Greater Boston Market and in the First Quarter of 2013 Expect to Commence Development of this 386,275 Rentable Square Feet, 63% Pre-Leased Project

·                   In January 2013, Completed Sale of 1124 Columbia Street and Two Land Parcels, Located in the Seattle Market, a Building with 203,817 Rentable Square Feet, for a Sales Price of Approximately $42.6 Million, to a Buyer Expected to Renovate and Reposition the Property for Medical Office Use

·                   In February 2013, Completed Sale of 25/35/45 West Watkins Mill Road, 1201 Clopper Road, and a Land  Parcel, Located in the Suburban Washington D.C., Market, Two Buildings with an Aggregate of 282,523 Rentable Square Feet, for a Sales Price of Approximately $41.4 Million, to a Buyer Expected to Renovate and Reposition these Properties; Recognized a Gain on Sale of Approximately $0.1 Million

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 2

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

VALUE-ADDED OPPORTUNITIES AND EXTERNAL GROWTH

As of December 31, 2012, 96% of our leases contained annual rent escalations that were either fixed or based on a consumer price index or another index.  Our initial stabilized yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date.  We expect, on average, our contractual cash rents related to our value-added projects to increase over time.  Initial stabilized yield is calculated as the quotient of the estimated amounts of net operating income and our investment in the property at stabilization (“Initial Stabilized Yield”).

During the three months and year ended December 31, 2012, we executed leases aggregating 265,000 and 1,135,000 rentable square feet, respectively, related to our development and redevelopment projects.

Development and redevelopment

The following table summarizes the commencement of key development and redevelopment projects (dollars in thousands, except per square foot amounts):

Investment Initial
Commencement Rentable Pre-Leased at Per Stabilized Yield Key
Address/Market Date Square Feet % Completion RSF Cash GAAP Client Tenant
Development
75/125 Binney Street, Greater Boston 1Q13 386,275 (1) 63 % (1) $ 351,439 $ 910 8.0% 8.2% ARIAD Pharmaceuticals, Inc.
430 East 29th Street, Greater NYC November 2012 419,806 14 % (2) $ 463,245 $ 1,103 6.6% 6.5% Roche
360 Longwood Avenue, Greater Boston April 2012 414,000 37 % (3) $ 350,000 (4) $ 845 8.3% 8.9% Dana-Farber Cancer Institute, Inc.
Redevelopment
4757 Nexus Center Drive, San Diego October 2012 68,423 100 % $ 34,829 $ 509 7.6% 7.8% Genomatica, Inc.
1616 Eastlake Avenue, Seattle October 2012 66,776 61 % $ 37,816 $ 566 8.4% 8.6% Infectious Disease Research Institute

(1)    Represents a one-building project with two towers totaling 386,275 rentable square feet.  ARIAD Pharmaceuticals, Inc. leased 100% of the 216,926 rentable square feet at 125 Binney Street and 27,197 rentable square feet at 75 Binney Street, with additional potential expansion opportunities through June 30, 2014.  See page 10 for additional details on current assumptions included in our guidance for funding the cost to complete the development of 75/125 Binney Street.

(2)    We have an additional 40% of the 419,806 rentable square feet that are at the letter of intent stage.

(3)    Dana-Farber Cancer Institute, Inc. also has an option to lease an additional two floors of approximately 99,000 rentable square feet, or an additional 24% of the total rentable square feet of our unconsolidated joint venture development project through June 2014.

(4)    Represents the total venture cost at completion.  As of December 31, 2012, our equity investment was approximately $28.7 million related to our 27.5% ownership interest in the unconsolidated real estate entity.  Our expected remaining cash commitment to the venture of approximately $16.9 million is less than the $22.3 million received in March 2012 from an in-substance partial sale of our interest in the underlying real estate.

The following table summarizes the delivery of key development and redevelopment projects during the year ended December 31, 2012 (dollars in thousands, except per square foot amounts):

Portion Delivered Total Project
Occupancy Investment Total Project Initial
Completion Rentable as of at Per Stabilized Yield Key
Address/Market Date Square Feet 12/31/2012 Completion RSF Cash GAAP Client Tenant(s)
Development
259 East Grand Avenue, San Francisco Bay Area November 2012 170,618 100% $ 74,090 $ 434 8.7% (1) 8.6 % (1) Onyx Pharmaceuticals, Inc.
400/450 East Jamie Court, San Francisco Bay Area October 2012 163,036 80% $ 112,106 $ 688 4.9% (2) 4.9 % (2) Stem CentRx, Inc.
5200 Illumina Way, San Diego October 2012 127,373 100% $ 46,978 $ 369 7.0% 11.2 % Illumina, Inc.
4755 Nexus Center Drive, San Diego September 2012 45,255 100% $ 23,084 $ 510 6.8% 7.5 % Optimer Pharmaceuticals, Inc.
Canada April 2012 26,426 100% $ 8,883 $ 336 7.7% 8.3 % GlaxoSmithKline plc
Redevelopment
400 Technology Square, Greater Boston November – December 2012 140,532 (3) 100% $ 144,688 $ 1,030 8.1% 8.9 % Ragon Institute of MGH, MIT and Harvard; Epizyme, Inc.; Aramco Services Company, Inc.
10300 Campus Point Drive, San Diego November 2011 – September 2012 279,138 (4) 96% $ 131,649 $ 472 7.9% 7.7 % The Regents of the University of California; Celgene Corporation
3530/3550 John Hopkins Court, San Diego June 2012 98,320 100% $ 50,898 $ 518 8.9% 9.1 % Genomics Institute of the Novartis Research Foundation; Verenium Corporation

(1)    The Initial Stabilized Yield on a cash and GAAP basis for this project was approximately 8.7% and 8.6%, respectively, or approximately 0.7% and 0.6% higher than the mid-point of our previous Initial Stabilized Yield estimates of 8.0%, on a cash and GAAP basis, respectively.

(2)    The Initial Stabilized Yield on a cash and GAAP basis for this project was approximately 4.9% and 4.9%, respectively, or approximately 0.7% and 0.6% higher than our previous Initial Stabilized Yield estimate of 4.2% and 4.3%, on a cash and GAAP basis, respectively.

(3)    In November and December 2012, we partially completed the redevelopment of 140,532 rentable square feet at 400 Technology Square, a building with 212,124 total rentable square feet.

(4)    Includes 189,562 rentable square feet delivered in September 2012, and 89,576 rentable square feet delivered in November 2011.

Acquisitions

In April 2012, we acquired 3013/3033 Science Park Road located in the San Diego market, which consists of two buildings aggregating 176,500 rentable square feet of non-laboratory space, for approximately $13.7 million.  The property was 100% leased on a short-term basis to a non-life science tenant and thereafter, we expect to redevelop the property.  We expect to provide an estimate of our Initial Stabilized Yields in the future upon commencement of development/redevelopment activity.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 3

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Tabular dollar amounts in thousands, except per square foot amounts)

(Unaudited)

BALANCE SHEET STRATEGY AND SIGNIFICANT MILESTONES

Our balance sheet strategy continues to focus on our leverage target of achieving net debt to adjusted EBITDA of 6.5x by December 31, 2013, by funding our significant development and redevelopment projects in 2013 with leverage-neutral sources of capital and by continuing to execute our asset recycling program.  During 2012, we executed our capital strategy and proved that we have access to diverse sources of capital that we believe is strategically important to our long-term capital structure.  These sources of capital included 1) real estate asset dispositions, 2) secured construction project financing, 3) unsecured line of credit, 4) unsecured note payable, 5) joint venture capital, 6) preferred stock, and 7) common stock through our “at the market” common stock offering program.

Real estate asset sales

We continue the disciplined execution of our asset recycling program to monetize non-strategic operating and non-income-producing assets as a source of capital while minimizing the issuance of common equity.  We target the following asset types for sale and redeploy the capital to fund active development and redevelopment projects with significant pre-leasing:

·                   Older buildings: elimination of potential capital expenditures and leasing risk;

·                   Non-strategic assets: disposition of properties not proximate to academic medical research centers in core life science cluster locations;

·                   Assets with alternative uses for buyer: transformation into non-laboratory space, such as medical office buildings, hospitals, and residential spaces;

·                   Suburban locations: reinvestment in higher value, Class-A assets in urban “brain trust” life science cluster locations; or

·                   Excess land: reduction of non-income-producing land holdings in certain clusters, while maintaining specific land parcels for future growth.

A portion of our projected 2013 asset sales is under negotiation and we expect to identify the remainder of the assets for disposition in the first half of 2013 in order to seek to achieve our target dispositions.

The following table presents our completed real estate asset sales:

Rentable/ Sales Occupancy Annualized
Date Developable Price at Date GAAP Sales Gain
Description Location of Sale Square Feet per SF of Sale NOI (1) Price on Sale
Sales completed in 2012
1201/1209 Mercer Street (2) Seattle September 2012 76,029 $ 73 0% $ 45 $ 5,570 $ 54
801 Dexter Avenue North (2) Seattle August 2012 120,000 $ 72 0% $ (96) 8,600 $ 55
200 Lawrence Drive/210 Welsh Pool Road Pennsylvania July 2012 210,866 $ 94 100% $ 2,193 19,750 (3) $ 103
155 Fortune Boulevard (4) Route 495/Worcester July 2012 36,000 $ 222 100% $ 804 8,000 $ 1,350
5110 Campus Drive (4) Pennsylvania May 2012 21,000 $ 86 71% $ 77 1,800 $ 2
Land parcel Greater Boston March 2012 (5) $ 275 N/A N/A 31,360 $ 1,864
Sales completed in 2012 75,080
Sales completed in 1Q13
1124 Columbia Street Seattle January 2013 203,817 $ 209 81% (6) $ 6,802 42,600 $ -
25/35/45 West Watkins Mill Road/1201 Clopper Road (7) Suburban Washington D.C. February 2013 282,523 $ 147 (8) 100% $ 7,795 41,400 $ 53
Sales completed in 2013 84,000
Total $ 159,080

(1)    Annualized using actual year-to-date results as of the quarter end prior to date of sale or December 31, 2012.

(2)    Properties sold to residential developers.

(3)    Sales price reflects the near-term lease expiration of a client tenant occupying 38,513 rentable square feet, or 18% of the total rentable square feet, on the date of sale.  In connection with the sale, we received a secured note receivable for $6.1 million with a maturity date in 2018.

(4)    Properties were sold to client tenants.

(5)    In March 2012, we completed an in-substance partial sale of our interest in underlying real estate supporting a project with 414,000 rentable square feet for approximately $31.4 million, or approximately $275 per rentable square foot.

(6)    The property is expected to become 74% vacant in 2013 and the current buyer is expected to significantly renovate the property into medical office use.  The sales price of 1124 Columbia Street includes a $29.8 million secured note receivable due in 2015 with an option to extend the maturity date by one year.  As of December 31, 2012, this property is classified in discontinued operations.

(7)    These properties met the classification for discontinued operations in January 2013 and were classified as operating properties as of December 31, 2012.  We completed the sale on February 1, 2013, and recognized a $0.1 million gain upon the closing of the transaction.

(8)    These properties are expected to become 17% vacant in 2013, with significant additional vacancy in subsequent years, and the buyer is expected to significantly renovate the property at 1201 Clopper Road.

Impairment of real estate assets

During the three months ended September 30, 2012, we committed to sell four operating properties comprised of 1124 Columbia Street in the Seattle market and One Innovation Drive, 377 Plantation Street, and 381 Plantation Street in the suburban Greater Boston market, aggregating 504,130 rentable square feet, rather than to hold them on a long-term basis.  At the time of our commitment to dispose of these assets, these four properties were on average 94% occupied and generated approximately $12.8 million in annual operating income.  Upon our commitment to sell, we wrote down the value of these assets to our estimate of fair value, based on the anticipated sales price, less cost to sell.  As a result, we recognized an impairment charge of approximately $9.8 million.  In December 2012, we entered into an agreement with a third party to sell 1124 Columbia Street, at a price of $42.6 million which was below our reduced carrying value as of September 30, 2012.  As a result we recognized an additional impairment charge of $1.6 million to write down the carrying value to our revised estimated fair value less cost to sell.  In January 2013, we completed the sale of this property and no gain or loss on sale was recognized.

During the three months ended December 31, 2012, we committed to sell a land parcel with 50,000 developable square feet rather than hold it on a long-term basis for future development.  Upon our decision to sell, we wrote down the value of the land parcel to our estimate of fair value, based on the anticipated sales price, less cost to sell.  As a result, we recognized an impairment charge of approximately $2.1 million.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 4

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Sale of land parcel

In March 2012, we completed an in-substance partial sale of our interest in a joint venture that owned a land parcel supporting a future building with 414,000 rentable square feet in the Longwood Medical Area of the Greater Boston market to a newly formed joint venture (the “Restated JV”) with National Development and Charles River Realty Investors, and admitted as a 50% member Clarion Partners, LLC, resulting in a reduction of our ownership interest from 55% to 27.5%.  The transfer of one-half of our 55% ownership interest in this real estate venture to Clarion Partners, LLC, was accounted for as an in-substance partial sale of an interest in the underlying real estate.  In connection with the sale of one-half of our 55% ownership interest in the land parcel, we received a special distribution of approximately $22.3 million, which included the recognition of a $1.9 million gain on sale of land and approximately $5.4 million from our share of loan refinancing proceeds.  The land parcel we sold in March 2012 did not meet the criteria for classification as discontinued operations since the parcel did not have any significant operations prior to disposition.  Pursuant to the presentation and disclosure literature on gains/losses on sales or disposals by REITs required by the Securities and Exchange Commission (“SEC”), gains or losses on sales or disposals by a REIT that do not qualify as discontinued operations are classified below income (loss)  from discontinued operations in the income statement.  Accordingly, we classified the $1.9 million gain on sale of land below income (loss) from discontinued operations, net, in the condensed consolidated statements of income, and included the gain in income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders in the “control number,” or numerator for computation of earnings per share.  Our 27.5% share of the land was sold at approximately $31 million (including closing costs), or approximately $275 per rentable square foot.  Upon formation of the Restated JV, the existing $38.4 million secured loan was refinanced with a seven-year (including two one-year extension options) non-recourse $213 million secured construction loan with initial loan proceeds of $50 million.  As of December 31, 2012, the outstanding balance on the construction loan was $61.0 million.  We do not expect our share of capital contributions through the completion of the project to exceed the approximate $22.3 million in net proceeds received in this transaction.  Construction of this $350 million project commenced in April 2012.  The initial occupancy date for this project is expected to be in the fourth quarter of 2014.  The project is 37% pre-leased to Dana-Farber Cancer Institute, Inc.  In addition, Dana-Farber Cancer Institute, Inc. has an option to lease an additional two floors approximating 99,000 rentable square feet, or 24% of the total rentable square feet of the project.  In addition to our economic share of the joint venture, we also expect to earn development and other fees of approximately $3.5 million through 2015, and recurring annual property management fees thereafter, from this project.

“At the market” common stock offering program

In June 2012, we established an “at the market” common stock offering program under which we may sell, from time to time, up to an aggregate of $250.0 million of our common stock through our sales agents, BNY Mellon Capital Markets, LLC and Credit Suisse Securities (USA) LLC, during a three-year period.  During the year ended December 31, 2012, we sold an aggregate of 1,366,977 shares of common stock for gross proceeds of approximately $100.0 million at an average stock price of $73.15 and net proceeds of approximately $97.9 million, including commissions and other expenses of approximately $2.1 million.  Net proceeds from the sales were used to pay down the outstanding balance on our senior unsecured line of credit or other borrowings, and for general corporate purposes.  As of December 31, 2012, approximately $150.0 million of our common stock remained available for issuance under the “at the market” common stock offering program.

Secured construction loan for development project in San Francisco Bay Area market

In June 2012, we closed a secured construction loan with aggregate commitments of $55.0 million.  We have an option to extend the stated maturity date of July 1, 2015, by one year, twice, to July 1, 2017.  The construction loan bears interest at the London Interbank Offered Rate (“LIBOR”) or the base rate specified in the construction loan agreement, defined as the higher of either the prime rate being offered by our lender or the federal funds rate in effect on the day of borrowing (“Base Rate”), plus in either case a specified margin of 1.50% for LIBOR borrowings or 0.25% for Base Rate borrowings.  As of December 31, 2012, commitments of $38.1 million were available under this loan.

Amendment of $1.5 billion unsecured senior line of credit

In April 2012, we amended our $1.5 billion unsecured senior line of credit with Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. as joint lead arrangers, and certain lenders, to extend the maturity date of our unsecured senior line of credit, provide an accordion option for up to an additional $500 million, and reduce the interest rate for outstanding borrowings.  The maturity date of the unsecured senior line of credit was extended to April 2017, assuming we exercise our sole right to extend the stated maturity date twice by an additional six months after each exercise.  Borrowings under the unsecured senior line of credit bear interest at LIBOR or the base rate specified in the amended unsecured senior line of credit agreement, plus in either case a specified margin (the “Applicable Margin”).  The Applicable Margin for LIBOR borrowings under the unsecured senior line of credit was set at 1.20%, down from the 2.40% in effect immediately prior to the modification.  In addition to the Applicable Margin, our unsecured senior line of credit is subject to an annual facility fee of 0.25% based on the aggregate commitments outstanding.  In connection with the modification of our unsecured senior line of credit in April 2012, we recognized a loss on early extinguishment of debt of approximately $1.6 million related to the write-off of a portion of unamortized loan fees for the three months ended June 30, 2012.

8.375% series C preferred stock redemption

In April 2012, we redeemed all 5,185,500 outstanding shares of our Series C Preferred Stock at a price equal to $25.00 per share, or approximately $129.6 million in aggregate, and paid $0.5234375 per share, representing accumulated and unpaid dividends to the redemption date on such shares.  We announced the redemption and recognized a preferred stock redemption charge of approximately $6.0 million to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders in March 2012, related to the write-off of original issuance costs of the Series C Preferred Stock.

6.45% series E preferred stock offering

In March 2012, we completed a public offering of 5,200,000 shares of our 6.45% series E cumulative redeemable preferred stock (“Series E Preferred Stock”).  The shares were issued at a price of $25.00 per share, resulting in net proceeds of approximately $124.9 million (after deducting underwriters’ discounts and other offering costs).  The proceeds were initially used to reduce the outstanding borrowings under our unsecured senior line of credit.  We then borrowed funds under our unsecured senior line of credit to redeem our 8.375% series C cumulative redeemable preferred stock (“Series C Preferred Stock”) in April 2012.  The dividends on our Series E Preferred Stock are cumulative and accrue from the date of original issuance.  We pay dividends quarterly in arrears at an annual rate of 6.45%, or $1.6125 per share.  Our Series E Preferred Stock has no stated maturity date, is not subject to any sinking fund or mandatory redemption provisions, and is not redeemable before March 15, 2017, except to preserve our status as a REIT.  On and after March 15, 2017, we may, at our option, redeem the Series E Preferred Stock, in whole or in part, at any time for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends on the Series E Preferred Stock up to, but excluding, the redemption date.  In addition, upon the occurrence of a change of control, we may, at our option, redeem the Series E Preferred Stock, in whole or in part within 120 days after the first date on which such change of control occurred, by paying $25.00 per share, plus any accrued and unpaid dividends up to, but excluding, the date of redemption.  Investors in our Series E Preferred Stock generally have no voting rights.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 5

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

4.60% unsecured senior notes payable offering

In February 2012, we completed the issuance of our 4.60% unsecured senior notes payable due in February 2022.  Net proceeds of approximately $544.6 million were used to repay certain outstanding variable rate bank debt, including the entire $250 million of our 2012 unsecured senior bank term loan (“2012 Unsecured Senior Bank Term Loan”), and approximately $294.6 million of outstanding borrowings under our unsecured senior line of credit.  In connection with the retirement of our 2012 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt of approximately $0.6 million related to the write-off of unamortized loan fees for the three months ended March 31, 2012.

Retirement of 3.70% unsecured senior convertible notes

In January 2012, we repurchased approximately $83.8 million in principal amount of our 3.70% unsecured senior convertible notes (“3.70% Unsecured Senior Convertible Notes”) at par, pursuant to options exercised by holders thereof under the indenture governing the notes.  In April 2012, we repurchased the remaining outstanding $1.0 million in principal amount of the notes.  In aggregate, we repurchased approximately $84.8 million in principal amount of the notes and we did not recognize a gain or loss as a result during the year ended December 31, 2012.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 6

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

GUIDANCE

Earnings outlook

Based on our current view of existing market conditions and certain current assumptions, we expect that our earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted and FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted for the year ended December 31, 2013, will be as set forth in the table below.  The table below provides a reconciliation of FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, a non-GAAP measure, to earnings per share, the most directly comparable GAAP measure and other key assumptions included in our guidance for the year ended December 31, 2013.

Guidance for the Year Ended December 31, 2013 Reported on February 7, 2013 Reported on December 5, 2012
Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted $1.41 to $1.61 $1.39 to $1.59
Depreciation and amortization $2.93 to $3.13 $2.91 to $3.11
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted $4.44 to $4.64 $4.40 to $4.60
Key projection assumptions:
Same property net operating income growth – cash basis 4% to 7% 4% to 7%
Same property net operating income growth – GAAP basis 0% to 3% 0% to 3%
Rental rate steps on lease renewals and re-leasing of space – cash basis Flat to slightly positive Flat to slightly positive
Rental rate steps on lease renewals and re-leasing of space – GAAP basis Up 5% to 10% Up 5% to 10%
Occupancy at the end of 2013 93.9% to 94.3% 93.6% to 94.0%
Straight-line rents $24 to $26 million $24 to $26 million
Amortization of above and below market leases $3 to $4 million $3 to $4 million
G&A expenses $48 to $51 million $48 to $51 million
Capitalization of interest $47 to $53 million $47 to $53 million
Interest expense, net $74 to $84 million $74 to $84 million
Net debt to adjusted EBITDA for the annualized three months ended December 31, 2013 6.5x 6.5x
Fixed charge coverage ratio for the annualized three months ended December 31, 2013 2.9x to 3.0x 2.9x to 3.0x

As of December 31, 2012, we had approximately $431.6 million and $199.7 million of construction in progress related to our three North American development and eight North American redevelopment projects, respectively.  The completion of these projects, along with recently delivered projects, certain future projects, and contributions from same properties, is expected to contribute significant increases in rental income, net operating income, and cash flows.  Operating performance assumptions related to the completion of our North American development and redevelopment projects, including the timing of initial occupancy, stabilization dates, and Initial Stabilized Yields, are included on page 9 and 10.  Certain key assumptions regarding our projections, including the impact of various development and redevelopment projects, are included in the tables above and on the following page.

The completion of our development and redevelopment projects will result in increased interest expense and other direct project costs, because these project costs will no longer qualify for capitalization and these costs will be expensed as incurred.  Our projection assumptions for depreciation and amortization, general and administrative expenses, capitalization of interest, interest expense, net, and net operating income growth are included in the tables on this page and are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking Statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011, and the “Risk Factors” section of Item 1A of our quarterly report on Form 10-Q for the period ended September 30, 2012.  To the extent our full year earnings guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance.  Further, we believe net operating income is a key performance indicator and is useful to investors as a performance measure because, when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 7

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Sources and uses of capital

We expect that our principal liquidity needs for the year ended December 31, 2013, will be satisfied by the following multiple sources of capital as shown in the table below.  There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations.  Our liquidity available under our unsecured senior line of credit and from cash equivalents was approximately $1.1 billion as of December 31, 2012.

Reported on<br> February 7, 2013 Reported on<br> December 5, 2012
Sources and Uses of Capital for the Year Ended December 31, 2013 (in millions) Completed Projected Total Total
Sources of capital:
Net cash provided by operating activities less dividends $ - $ 130 - 150 $ 130 - 150 (1) $ 130 - 150
2013 asset sales initially targeted for 4Q12 closing 43 34 77 -
2013 asset sales initially projected on December 5, 2012 (2)
Non-income-producing - 175 - 225 (3) 175 - 225 (3) 175 - 225
Income-producing 41 34 - 84 75 - 125 75 - 125
Secured construction loan borrowing - 20 - 30 20 - 30 20 - 30
Unsecured senior notes - 350 - 450 350 - 450 350 - 450
Issuances under “at the market” common stock offering program - 125 - 175 125 - 175 125 - 175
Total sources of capital $ 84 $ 868 - 1,148 $ 952 - 1,232 $ 875 - 1,155
Uses of capital:
Development, redevelopment, and construction $ - $ 545 - 595 $ 545 - 595 (4) $ 545 - 595
Seller financing of asset sales 39 - 39 -
Acquisitions - - - - (5)
Secured notes payable repayments (6) - 37 37 52
Unsecured senior bank term loan repayment - 125 - 175 125 - 175 125 - 175
Paydown of unsecured senior line of credit 45 161 - 341 206 - 386 153 - 333
Total uses of capital $ 84 $ 868 - 1,148 $ 952 - 1,232 $ 875 - 1,155
(1) See “Projection Results – Key Projection Assumptions” on the previous page.
--- ---
(2) A portion of our projected 2013 asset sales is under negotiation and we expect to identify the remainder of the assets for disposition in the first half of 2013 in order to achieve our targeted dispositions.
(3) Our guidance has assumed transfer of 50% of our ownership interest in the 75/125 Binney Street project to be accounted for as an in-substance partial sale of an interest in a land parcel, with the resulting entity presented as an unconsolidated joint venture (the “Binney JV”) in our financial statements. This sale of a land parcel is included in our total projected asset sales for 2013.
(4) See “Investment to Complete” columns in the “Development and Redevelopment Projects in North America” table on the following page for additional details underlying this estimate. Our guidance for 2013 development, redevelopment, and construction spending of $545 to $595 million includes our estimated share of incremental capital required to complete the 75/125 Binney Street Project. See page 10 for additional details on the 75/125 Binney Street Project.
(5) Our guidance has assumed no acquisitions, but we review opportunistic acquisitions that we expect to fund on a leverage-neutral basis.
(6) The reduction in projected secured notes payable of $15 million is related to two loans that were repaid in 2012 prior to their contractual maturity dates in 2013.

The key assumptions behind the sources and uses of capital in the table above are a favorable capital market environment and performance of our core operations in areas such as delivery of current and future development and redevelopment projects, leasing activity, and renewals.  Our expected sources and uses of capital are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011, and the “Risk Factors” section of Item 1A of our quarterly report on Form 10-Q for the period ended September 30, 2012.  We expect to update our forecast of sources and uses of capital on a quarterly basis.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 8

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Project RSF (1) Leased Status RSF (1)
Market – Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Development projects in North America
Greater Boston – Cambridge ****
225 Binney Street – 305,212 305,212 305,212 – – 305,212 100% Biogen Idec Inc.
San Francisco Bay Area – Mission Bay
499 Illinois Street – 222,780 222,780 – – 222,780 222,780 – N/A
Greater NYC – Manhattan
430 East 29th Street – 419,806 419,806 60,816 167,244 (2) 191,746 419,806 54% Roche
Development projects in North America – 947,798 947,798 366,028 167,244 414,526 947,798 56%
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square 140,532 71,592 212,124 169,939 – 42,185 212,124 80% Ragon Institute of MGH, MIT and Harvard; Epizyme, Inc.; Warp Drive Bio, LLC; Aramco Services Company, Inc.
San Diego – University Town Center
4757 Nexus Center Drive – 68,423 68,423 68,423 – – 68,423 100% Genomatica, Inc.
Seattle – Lake Union –
1551 Eastlake Avenue 74,914 42,569 117,483 74,914 – 42,569 117,483 64% Puget Sound Blood Center and Program
1616 Eastlake Avenue – 66,776 66,776 40,706 – 26,070 66,776 61% Infectious Disease Research Institute
Suburban and other redevelopment projects 45,287 182,264 227,551 146,613 59,532 21,406 227,551 91%
Redevelopment projects in North America 260,733 431,624 692,357 500,595 59,532 132,230 692,357 81%
Total development and redevelopment projects in North America 260,733 1,379,422 1,640,155 866,623 226,776 546,756 1,640,155 67%
Investment (1) Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market – Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP 2013 Thereafter Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Development projects in North America
Greater Boston – Cambridge
225 Binney Street $ – $ 104,422 $ 75,851 $ – $ 180,273 $ 591 7.5% 8.1% 4Q11 4Q13 4Q13
San Francisco Bay Area – Mission Bay
499 Illinois Street $ – $ 113,196 $ 17,119 $ 22,894 $ 153,209 $ 688 6.4% 7.2% 2Q11 2Q14 1Q15
Greater NYC – Manhattan
430 East 29th Street $ – $ 213,960 $ 134,057 $ 115,228 $ 463,245 $ 1,103 6.6% 6.5% 4Q12 4Q13 2016
Development projects in North America $ – $ 431,578 $ 227,027 $ 138,122 $ 796,727 $ 841
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square $ 85,732 $ 43,966 $ 14,990 $ – $ 144,688 $ 682 8.1% 8.9% 4Q11 4Q12 4Q13
San Diego – University Town Center
4757 Nexus Center Drive $ – $ 3,966 $ 24,167 $ 6,696 $ 34,829 $ 509 7.6% 7.8% 4Q12 4Q13 4Q13 (5)
Seattle – Lake Union
1551 Eastlake Avenue $ 41,787 $ 17,520 $ 4,703 $ – $ 64,010 $ 545 6.7% 6.7% 4Q11 4Q11 4Q13
1616 Eastlake Avenue $ – $ 29,033 $ 4,115 $ 4,668 $ 37,816 $ 566 8.4% 8.6% 4Q12 2Q13 2014
Suburban and other redevelopment projects $ 42,320 $ 105,259 $ 37,391 $ – $ 184,970 $ 813
Redevelopment projects in North America $ 169,839 $ 199,744 $ 85,366 $ 11,364 $ 466,313 $ 674
Total development and redevelopment projects in North America $ 169,839 $ 631,322 $ 312,393 $ 149,486 $ 1,263,040 $ 770

Refer to the following page for all footnotes to the table above

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 9

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Development project commencements in the first quarter of 2013 in North America

Project RSF (1) Leased Status RSF (1)
Market – Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Greater Boston – Cambridge
75/125 Binney Street – 386,275 (5) 386,275 244,123 – 142,152 (6) 386,275 63% (6) ARIAD Pharmaceuticals, Inc.
Investment Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market – Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP (4) 2013 Thereafter Subtotal Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Greater Boston – Cambridge
75/125 Binney Street $ – 87,452 $ 101,087 (7) $ 162,900 $ 263,987 $ 351,439 $ 910 8.0% 8.2% 1Q13 1Q15 2016

The following table presents the current assumptions included in our guidance for funding of the cost to complete the 75/125 Binney Street project:

Cost to Complete (7)
2013 Thereafter Total
ARE investment $ 40,000 - 50,000 $ – $ 40,000 - 50,000
Binney JV partner capital contribution 20,000 - 25,000 – 20,000 - 25,000
Secured construction loan 30,000 - 40,000 160,000 - 165,000 190,000 - 205,000
$ 90,000 - 115,000 $ 160,000 - 165,000 $ 250,000 - 280,000
(1) All project information, including rentable square feet; investment; Initial Stabilized Yields; and project start, occupancy and stabilization dates, relates to the discrete portion of each property undergoing active development or redevelopment. A redevelopment project does not necessarily represent the entire property or the entire vacant portion of a property. For example, the redevelopment project at 1616 Eastlake Avenue represents the conversion of two floors from office to laboratory/office aggregating 66,776 rentable square feet. The remaining rentable square feet of 101,714 at this property not undergoing active redevelopment was 74.8% occupied at December 31, 2012, and is included in our operating statistics.
--- ---
(2) Represents rentable square feet subject to letters of intent.
(3) As of December 31, 2012, 96% of our leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our Initial Stabilized Yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date. We expect, on average, our contractual cash rents related to our value-added projects to increase over time. Our estimates for initial cash and GAAP yields, and total costs at completion, represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.
(4) We expect to deliver 54,102 rentable square feet, or 79% of the total project, to Genomatica, Inc. in the fourth quarter of 2013. Genomatica, Inc. is contractually required to lease the remaining 14,411 rentable square feet no later than 18 to 24 months following the delivery of the initial 54,102 rentable square foot space.
(5) As of December 31, 2012, this project was classified in land undergoing preconstruction activities (additional CIP) in North America. This project will be transferred into active development upon commencement of vertical construction during the three months ended March 31, 2013.
(6) ARIAD Pharmaceuticals, Inc. has potential additional expansion opportunities through June 2014.
(7) Our guidance has assumed transfer of 50% of our ownership interest in the 75/125 Binney Street project to be accounted for as an in-substance partial sale of an interest in a land parcel, with the resulting entity presented as an unconsolidated joint venture (the “Binney JV”) in our financial statements. This sale of a land parcel is included in our total projected asset sales for 2013. The total remaining cost to complete for the 75/125 Binney Street project is expected to aggregate approximately $264 million through 2016, of which $101 million is expected to be invested in 2013. The projected sources of funding for the $264 million cost to complete for this project include a secured construction loan of approximately $190 million to $205 million, Binney JV partner capital contribution of approximately $75 million to $80 million, (approximately $20 million to $25 million to be used towards construction) and our investment in the project of approximately $40 million to $50 million. Our guidance for 2013 development, redevelopment, and construction spending of $545 to $595 million, shown on page 8, includes our estimated investment in the project of approximately $40 million to $50 million into the Binney JV.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 10
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

EARNINGS CALL INFORMATION

We will host a conference call on Thursday, February 7, 2013, at 3:00 p.m. Eastern Time (“ET”)/12:00 p.m. noon Pacific Time (“PT”) that is open to the general public to discuss our financial and operating results for the three months and year ended December 31, 2012.  To participate in this conference call, dial (866) 638-3013 or (630) 691-2761 and confirmation code 34214742, shortly before 3:00 p.m. ET/12:00 p.m. noon PT.  The audio web cast can be accessed at: www.are.com, in the “For Investors” section.  A replay of the call will be available for a limited time from 5:30 p.m. ET/2:30 p.m. PT on Thursday, February 7, 2013.  The replay number is (888) 843-7419 or (630) 652-3042 and the confirmation code is 34214742.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2012, are available in the “For Investors” section of our website at www.are.com.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed REIT, is the largest and leading investment-grade REIT focused principally on owning, operating, developing, redeveloping, and acquiring high-quality, sustainable real estate for the broad and diverse life science industry.  Founded in 1994, Alexandria was the first REIT to identify and pursue the laboratory niche and has since had the first-mover advantage in every core life science cluster location including Greater Boston, San Francisco Bay Area, San Diego, New York City, Seattle, Suburban Washington, D.C., and Research Triangle Park.  Alexandria’s high-credit client tenants span the life science industry, including renowned academic and medical institutions, multinational pharmaceutical companies, public and private biotechnology entities, United States government research agencies, medical device companies, industrial biotech companies, venture capital firms, and life science product and service companies.  As the recognized real estate partner of the life science industry, Alexandria has a superior track record in driving client tenant productivity and innovation through its best-in-class laboratory and office space, collaborative locations adjacent to leading academic and medical institutions, unparalleled life science real estate expertise and services, and longstanding and expansive network in the life science community, which we believe result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria Real Estate Equities, Inc., please visit www.are.com.

***********

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such forward-looking statements include, without limitation, statements regarding our 2013 earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, 2013 FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, and net operating income for the year ended December 31, 2013, and our projected sources and uses of capital in 2013.  These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events.  These statements are subject to risks, uncertainties, assumptions and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, our failure to successfully operate or lease acquired properties, decreased rental rates or increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by client tenants, general and local economic conditions, and other risks and uncertainties detailed in our filings with the SEC.  Accordingly, you are cautioned not to place undue reliance on such forward-looking statements.  All forward-looking statements are made as of the date of this press release, and we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.  For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 11

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Condensed Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Revenues:
Rental $ 114,205 $ 108,367 $ 106,463 $ 103,417 $ 104,634 $ 432,452 $ 414,164
Tenant recoveries 36,180 34,448 32,172 32,386 33,031 135,186 128,299
Other income 3,785 2,640 9,381 2,629 1,584 18,435 5,762
Total revenues 154,170 145,455 148,016 138,432 139,249 586,073 548,225
Expenses:
Rental operations 46,639 44,614 42,359 40,911 41,553 174,523 159,567
General and administrative 12,643 12,485 12,309 10,358 10,601 47,795 41,127
Interest 17,941 17,094 17,922 16,227 14,757 69,184 63,378
Depreciation and amortization 48,072 47,176 51,276 42,326 39,762 188,850 153,087
Impairment of land parcel 2,050 – – – – 2,050 –
Loss on early extinguishment of debt – – 1,602 623 – 2,225 6,485
Total expenses 127,345 121,369 125,468 110,445 106,673 484,627 423,644
Income from continuing operations 26,825 24,086 22,548 27,987 32,576 101,446 124,581
Income (loss) from discontinued operations
Income from discontinued operations before impairment of real estate 3,583 4,018 3,093 2,924 2,886 13,618 11,760
Impairment of real estate (1,601 ) (9,799 ) – – – (11,400 ) (994 )
Income (loss) from discontinued operations, net 1,982 (5,781 ) 3,093 2,924 2,886 2,218 10,766
Gain on sale of land parcel – – – 1,864 – 1,864 46
Net income 28,807 18,305 25,641 32,775 35,462 105,528 135,393
Net income attributable to noncontrolling interests 1,012 828 851 711 1,142 3,402 3,975
Dividends on preferred stock 6,471 6,471 6,903 7,483 7,090 27,328 28,357
Preferred stock redemption charge – – – 5,978 – 5,978 –
Net income attributable to unvested restricted stock awards 324 360 271 235 270 1,190 1,088
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders $ 21,000 $ 10,646 $ 17,616 $ 18,368 $ 26,960 $ 67,630 $ 101,973
Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted:
Continuing operations $ 0.30 $ 0.26 $ 0.24 $ 0.25 $ 0.39 $ 1.05 $ 1.55
Discontinued operations, net 0.03 (0.09 ) 0.05 0.05 0.05 0.04 0.18
Earnings per share – basic and diluted $ 0.33 $ 0.17 $ 0.29 $ 0.30 $ 0.44 $ 1.09 $ 1.73
Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic 63,091,781 62,364,210 61,663,367 61,507,807 61,427,495 62,159,913 59,066,812
Dilutive effect of stock options – – 173 1,160 3,939 331 10,798
Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted 63,091,781 62,364,210 61,663,540 61,508,967 61,431,434 62,160,244 59,077,610
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 12
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

**** December 31, September 30, June 30, March 31, December 31,
**** 2012 2012 2012 2012 2011
Assets
Investments in real estate, net $ 6,424,578 $ 6,300,027 $ 6,208,354 $ 6,113,252 $ 6,008,440
Cash and cash equivalents 140,971 94,904 80,937 77,361 78,539
Restricted cash 39,947 44,863 41,897 39,803 23,332
Tenant receivables 8,449 10,124 6,143 8,836 7,480
Deferred rent 170,396 160,914 155,295 150,515 142,097
Deferred leasing and financing costs, net 160,048 152,021 151,355 143,754 135,550
Investments 115,048 107,808 104,454 98,152 95,777
Other assets 90,679 94,356 93,304 86,418 82,914
Total assets $ 7,150,116 $ 6,965,017 $ 6,841,739 $ 6,718,091 $ 6,574,129
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable $ 716,144 $ 719,350 $ 719,977 $ 721,715 $ 724,305
Unsecured senior notes payable 549,805 549,794 549,783 550,772 84,959
Unsecured senior line of credit 566,000 413,000 379,000 167,000 370,000
Unsecured senior bank term loans 1,350,000 1,350,000 1,350,000 1,350,000 1,600,000
Accounts payable, accrued expenses, and tenant security deposits 423,708 376,785 348,037 323,002 325,393
Dividends payable 41,401 39,468 38,357 36,962 36,579
Preferred stock redemption liability – – – 129,638 –
Total liabilities 3,647,058 3,448,397 3,385,154 3,279,089 3,141,236
Commitments and contingencies
Redeemable **** noncontrolling interests 14,564 15,610 15,817 15,819 16,034
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Series C Preferred Stock – – – – 129,638
Series D Convertible Preferred Stock 250,000 250,000 250,000 250,000 250,000
Series E Preferred Stock 130,000 130,000 130,000 130,000 –
Common stock 632 632 622 616 616
Additional paid-in capital 3,086,052 3,094,987 3,053,269 3,022,242 3,028,558
Accumulated other comprehensive loss (24,833 ) (19,729 ) (37,370 ) (23,088 ) (34,511 )
Alexandria Real Estate Equities, Inc.’s stockholders’ equity 3,441,851 3,455,890 3,396,521 3,379,770 3,374,301
Noncontrolling interests 46,643 45,120 44,247 43,413 42,558
Total equity 3,488,494 3,501,010 3,440,768 3,423,183 3,416,859
Total **** liabilities, noncontrolling interests, and equity $ 7,150,116 $ 6,965,017 $ 6,841,739 $ 6,718,091 $ 6,574,129
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 13
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Funds From Operations and Adjusted Funds From Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

The following table presents a reconciliation of net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, for the periods below:

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Net income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic $ 21,000 $ 10,646 $ 17,616 $ 18,368 $ 26,960 $ 67,630 $ 101,973
Depreciation and amortization 48,072 48,173 52,355 43,405 40,966 192,005 158,026
Gain on sale of real estate – (1,562 ) (2 ) – – (1,564 ) –
Impairment of real estate 1,601 9,799 – – – 11,400 994
Gain on sale of land parcel – – – (1,864 ) – (1,864 ) (46 )
Amount attributable to noncontrolling interests/unvested stock awards:
Net income 1,336 1,188 1,122 946 1,412 4,592 5,063
FFO (1,109 ) (1,148 ) (1,133 ) (1,156 ) (1,539 ) (4,561 ) (6,402 )
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic 70,900 67,096 69,958 59,699 67,799 267,638 259,608
Assumed conversion of 8.00% Unsecured Senior Convertible Notes 5 5 6 5 5 21 21
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted 70,905 67,101 69,964 59,704 67,804 267,659 259,629
Realized gain on equity investment primarily related to one non-tenant lifescience entity – – (5,811 ) – – (5,811 ) –
Impairment of land parcel 2,050 – – – – 2,050 –
Loss on early extinguishment of debt – – 1,602 623 – 2,225 6,485
Preferred stock redemption charge – – – 5,978 – 5,978 –
Allocation to unvested restricted stock awards (19 ) – 35 (53 ) – (39 ) (69 )
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted, as adjusted $ 72,936 $ 67,101 $ 65,790 $ 66,252 $ 67,804 $ 272,062 $ 266,045
Non-revenue-enhancing capital expenditures:
Building improvements (329 ) (935 ) (594 ) (210 ) (675 ) (2,068 ) (2,531 )
Tenant improvements and leasing commissions (3,170 ) (1,844 ) (2,148 ) (2,019 ) (6,083 ) (9,181 ) (10,600 )
Straight-line rent (9,240 ) (5,225 ) (5,195 ) (8,796 ) (9,558 ) (28,456 ) (26,797 )
Straight-line rent on ground leases 471 201 1,207 1,406 1,221 3,285 4,704
Capitalized income from development projects 45 50 72 478 537 645 3,973
Amortization of acquired above and below market leases (844 ) (778 ) (778 ) (800 ) (812 ) (3,200 ) (9,332 )
Amortization of loan fees 2,505 2,470 2,214 2,643 2,551 9,832 9,300
Amortization of debt premiums/discounts 110 112 110 179 565 511 3,819
Stock compensation 3,748 3,845 3,274 3,293 3,306 14,160 11,755
Allocation to unvested restricted stock awards 63 19 15 31 80 127 122
AFFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted $ 66,295 $ 65,016 $ 63,967 $ 62,457 $ 58,936 $ 257,717 $ 250,458

The following table presents a reconciliation of net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, to FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, for the periods below.  For the computation of the weighted average shares used to compute the per share information, refer to the “Definitions and Other Information” section in our supplemental information:

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Net income per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic $ 0.33 $ 0.17 $ 0.29 $ 0.30 $ 0.44 $ 1.09 $ 1.73
Depreciation and amortization 0.76 0.78 0.84 0.70 0.67 3.10 2.66
Gain on sale of real estate – (0.03 ) – – – (0.03 ) –
Impairment of real estate 0.03 0.16 – – – 0.18 0.02
Gain on sale of land parcel – – – (0.03 ) – (0.03 ) –
Amount attributable to noncontrolling interests/unvested stock awards:
Net income 0.02 0.02 0.02 0.02 0.02 0.07 0.09
FFO (0.02 ) (0.02 ) (0.02 ) (0.02 ) (0.03 ) (0.07 ) (0.11 )
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic 1.12 1.08 1.13 0.97 1.10 4.31 4.39
Assumed conversion of 8.00% Unsecured Senior Convertible Notes – – – – – – –
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted 1.12 1.08 1.13 0.97 1.10 4.31 4.39
Realized gain on equity investment primarily related to one non-tenant life science entity – – (0.09 ) – – (0.09 ) –
Impairment of land parcel 0.04 – – – – 0.04 –
Loss on early extinguishment of debt – – 0.03 0.01 – 0.02 0.11
Preferred stock redemption charge – – – 0.10 – 0.10 –
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted, as adjusted $ 1.16 $ 1.08 $ 1.07 $ 1.08 $ 1.10 $ 4.38 $ 4.50
Non-revenue-enhancing capital expenditures:
Building improvements (0.01 ) (0.01 ) (0.01 ) – (0.01 ) (0.03 ) (0.04 )
Tenant improvements and leasing commissions (0.05 ) (0.03 ) (0.03 ) (0.03 ) (0.10 ) (0.15 ) (0.18 )
Straight-line rent (0.15 ) (0.08 ) (0.08 ) (0.14 ) (0.16 ) (0.46 ) (0.45 )
Straight-line rent on ground leases 0.01 – 0.02 0.02 0.02 0.05 0.08
Capitalized income from development projects – – – 0.01 0.01 0.01 0.07
Amortization of acquired above and below market leases (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.05 ) (0.16 )
Amortization of loan fees 0.04 0.03 0.03 0.04 0.05 0.16 0.16
Amortization of debt premiums/discounts – – – – 0.01 0.01 0.06
Stock compensation 0.06 0.06 0.05 0.05 0.05 0.23 0.20
AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted $ 1.05 $ 1.04 $ 1.04 $ 1.02 $ 0.96 $ 4.15 $ 4.24
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 14
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Non-GAAP Measures

Funds from operations and funds from operations, as adjusted

GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes that 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 FFO.  Since its introduction, FFO has become a widely used non-GAAP financial measure among equity REITs.  We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT.  Moreover, we believe that FFO, as adjusted, is also helpful because it allows investors to compare our performance to the performance of other real estate companies between periods, and on a consistent basis, without having to account for differences caused by investment and disposition decisions, financing decisions, terms of securities, capital structures, and capital market transactions.  We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper and related implementation guidance (“NAREIT White Paper”).  The NAREIT White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of real estate and land parcels and impairments of real estate (excluding land parcels), plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.  Impairments of real estate relate to decreases in the estimated fair value of real estate due to changes in general market conditions and do not necessarily reflect the operating performance of the properties during the corresponding period.  Impairments of real estate represent the non-cash write-down of assets when fair value over the recoverability period is less than the carrying value.  We compute FFO, as adjusted, as FFO calculated in accordance with the NAREIT White Paper, plus losses on early extinguishment of debt, preferred stock redemption charges, and impairments of land parcels, less realized gain on equity investment primarily related to one non-tenant life science entity, and the amount of such items which are allocable to our unvested restricted stock awards.  Our calculations of both FFO and FFO, as adjusted, may differ from those methodologies utilized by other equity REITs for similar performance measurements, and, accordingly, may not be comparable to other equity REITs.  Neither FFO nor FFO, as adjusted, should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity, nor are they indicative of the availability of funds for our cash needs, including funds available to make distributions.

Adjusted funds from operations

AFFO is a non-GAAP financial measure that we use as a supplemental measure of our performance.  We compute AFFO by adding to or deducting from FFO, as adjusted: (1) non-revenue-enhancing capital expenditures, tenant improvements, and leasing commissions (excludes development and redevelopment expenditures); (2) effects of straight-line rent and straight-line rent on ground leases; (3) capitalized income from development projects; (4) amortization of acquired above and below market leases, loan fees, and debt premiums/discounts; (5) non-cash compensation expense; and (6) allocation of AFFO attributable to unvested restricted stock awards.

We believe that AFFO is a useful supplemental performance measure because it further adjusts to: (1) deduct certain expenditures that, although capitalized and classified in depreciation expense, do not enhance the revenue or cash flows of our properties; (2) eliminate the effect of straight-lining our rental income and capitalizing income from development projects in order to reflect the actual amount of contractual rents due in the period presented; and (3) eliminate the effect of non-cash items that are not indicative of our core operations and do not actually reduce the amount of cash generated by our operations.  We believe that eliminating the effect of non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use.  We believe that AFFO provides useful information by excluding certain items that are not representative of our core operating results because such items are dependent upon historical costs or subject to judgmental valuation inputs and the timing of our decisions.

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 15

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Non-GAAP Measures

(Dollar amounts in thousands)

(Unaudited)

Net operating income

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

Further, we believe net operating income is useful to investors as a performance measure, because when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.  Net operating income excludes certain components from income from continuing operations in order to provide results that are more closely related to the results of operations of our properties.  For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level.  In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level.  Real estate impairments have been excluded in deriving net operating income because we do not consider impairment losses to be property level operating expenses.  Real estate impairment losses relate to changes in the values of our assets and do not reflect the current operating performance with respect to related revenues or expenses.  Our real estate impairments represent the write down in the value of the assets to the estimated fair value less cost to sell.  These impairments result from investing decisions and the deterioration in market conditions that adversely impact underlying real estate values.  Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as losses on early extinguishment of debt, as these charges often relate to the timing of corporate strategy.  Property operating expenses that are included in determining net operating income consist of costs that are related to our operating properties, such as utilities, repairs and maintenance, rental expense related to ground leases, contracted services, such as janitorial, engineering, and landscaping, property taxes and insurance, and property level salaries.  General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional fees, office rent, and office supplies that are incurred as part of corporate office management.  Net operating income presented by us may not be comparable to net operating income reported by other equity REITs that define net operating income differently.  We believe that in order to facilitate a clear understanding of our operating results, net operating income should be examined in conjunction with income from continuing operations as presented in our condensed consolidated statements of income.  Net operating income should not be considered as an alternative to income from continuing operations as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions.  The following table presents a reconciliation of net operating income from continuing operations to income from continuing operations, and a reconciliation of net operating income from discontinued operations to income from discontinued operations, net:

**** Three Months Ended Year Ended
Continuing operations December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Total revenues $ 154,170 $ 139,249 $ 586,073 $ 548,225
Rental operating expenses 46,639 41,553 174,523 159,567
Net operating income 107,531 97,696 411,550 388,658
Operating margins 70% 70% 70% 71%
General and administrative 12,643 10,601 47,795 41,127
Interest 17,941 14,757 69,184 63,378
Depreciation and amortization 48,072 39,762 188,850 153,087
Impairment of land parcel 2,050 – 2,050 –
Loss on early extinguishment of debt – – 2,225 6,485
Income from continuing operations $ 26,825 $ 32,576 $ 101,446 $ 124,581
Discontinued operations
Total revenues $ 5,898 $ 6,640 $ 24,706 $ 26,298
Rental operating expenses 2,315 2,548 9,496 9,534
Net operating income 3,583 4,092 15,210 16,764
Operating margins 61% 62% 62% 64%
Interest – – – 65
Depreciation and amortization – 1,206 3,156 4,939
Gain on sale of real estate – – (1,564 ) –
Impairment of real estate 1,601 – 11,400 994
Income from discontinued operations, net $ 1,982 $ 2,886 $ 2,218 $ 10,766
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 16
--- ---

Exhibit 99.2

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Table of Contents

December 31, 2012

Page
Company Profile ii
Investor Information iii
EARNINGS PRESS RELEASE
Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results 1
Guidance 7
Condensed Consolidated Statements of Income 12
Condensed Consolidated Balance Sheets 13
Funds From Operations and Adjusted Funds From Operations 14
Non-GAAP Measures 15
SUPPLEMENTAL INFORMATION
Financial and Asset Base Highlights 17
Core Operating Metrics
Core Operating Metrics 18
Summary of Same Property Comparisons 19
Summary of Leasing Activity 20
Summary of Lease Expirations 21
Summary of Properties and Occupancy 22
Property Listing 23
Top 20 Client Tenants and Client Tenant Mix 26
Value-Added Opportunities and External Growth
Summary of Investments in Real Estate 27
Development and Redevelopment Projects in North America 28
Investment in Unconsolidated Real Estate Entity and Future Value-Added Projects in North America 30
Summary of Capital Expenditures 31
Summary of Real Estate Investment in Asia 32
Balance Sheet
Credit Metrics 33
Summary of Debt 34
Definitions and Other Information
Definitions and Other Information 36

This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  You can identify the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or similar words.  These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events.  These statements are subject to risks, uncertainties, assumptions and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, our failure to successfully operate or lease acquired properties, decreased rental rates or increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by client tenants, general and local economic conditions, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission (“SEC”).  Accordingly, you are cautioned not to place undue reliance on such forward-looking statements.  All forward-looking statements are made as of February 7, 2013, the date this document was first made available on our website, and we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.  For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.  Note that certain figures are rounded throughout this document, which may impact footing and/or crossfooting of totals and subtotals.

This document is not an offer to sell or solicitation to buy securities of Alexandria Real Estate Equities, Inc.  Any offers to sell or solicitations to buy securities of Alexandria Real Estate Equities, Inc. shall be made only by means of a prospectus approved for that purpose.  Unless otherwise indicated, the “Company,” “Alexandria,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 i

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Company Profile

December 31, 2012

The Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed real estate investment trust (“REIT”), is the largest and leading investment-grade REIT focused principally on owning, operating, developing, redeveloping, and acquiring high-quality, sustainable real estate for the broad and diverse life science industry.  Founded in 1994, Alexandria was the first REIT to identify and pursue the laboratory niche and has since had the first-mover advantage in the core life science cluster locations including Greater Boston, San Francisco Bay Area, San Diego, New York City, Seattle, Suburban Washington, D.C., and Research Triangle Park.  Alexandria’s high-credit client tenants span the life science industry, including renowned academic and medical institutions, multinational pharmaceutical companies, public and private biotechnology entities, United States government research agencies, medical device companies, industrial biotech companies, venture capital firms, and life science product and service companies.  As the recognized real estate partner of the life science industry, Alexandria has a superior track record in driving client tenant productivity and innovation through its best-in-class laboratory and office space, collaborative locations adjacent to leading academic and medical institutions, unparalleled life science real estate expertise and services, and longstanding and expansive network in the life science community, which we believe result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria Real Estate Equities, Inc., please visit www.are.com.

Unique Niche Strategy

Alexandria’s primary business objective is to maximize stakeholder value by providing its stakeholders with the greatest possible total return and long-term asset value based on a multifaceted platform of internal and external growth.  The key elements to our strategy include our consistent focus on high-quality assets and operations in the top life science cluster locations with our properties located adjacent to life science entities driving growth and technological advances within each cluster.  These adjacency locations are characterized by high barriers to entry and exit, limited supply of available space, and represent highly desirable locations for tenancy by life science entities.  Alexandria’s strategy also includes drawing on its deep and broad life science and real estate relationships in order to attract new and leading life science client tenants and value-added real estate opportunities.  Alexandria was founded in 1994 by Jerry M. Sudarsky and Joel S. Marcus.  Alexandria executed its initial public offering in 1997 and received its investment-grade ratings in 2011.

Management

Alexandria’s executive and senior management team is highly experienced in the REIT industry (uniquely with life science and real estate development, construction, operations, ownership, and expertise) and is the most accomplished team focused on providing high-quality, environmentally sustainable real estate, technical infrastructure, and unique expertise to the broad and diverse life science industry.  Our deep and talented team has decades of life science industry experience.  Our management team also includes highly experienced regional market directors averaging over 20 years of real estate experience, including approximately 10 years with Alexandria.  We believe that our expertise, experience, reputation, and key life science relationships provide Alexandria significant competitive advantages in attracting new business opportunities.

Client Tenant Base

The quality, diversity, breadth, and depth of our significant relationships with our life science client tenants provide Alexandria with solid and stable cash flows.  Investment-grade client tenants represented 47% of Alexandria’s total annualized base rent as of December 31, 2012.  Investment-grade client tenants represented 72% of Alexandria’s top 10 client tenants by annualized base rent as of December 31, 2012.  As of December 31, 2012, our multinational pharmaceutical client tenants represented approximately 26.5% of our annualized base rent, led by Bristol-Myers Squibb Company, Eli Lilly and Company, GlaxoSmithKline plc, Novartis AG, Pfizer Inc., and Roche; revenue-producing life science product and service, medical device, and industrial biotech companies represented approximately 22.6%, led by Illumina, Inc., Laboratory Corporation of America Holdings, Monsanto Company, Qiagen N.V., and Quest Diagnostics Incorporated; non-profit, renowned medical and research institutions, and government agencies represented approximately 16.7% and included Fred Hutchinson Cancer Research Center, Massachusetts Institute of Technology, The Regents of the University of California, Sanford-Burnham Medical Research Institute, The Scripps Research Institute, the United States Government, and University of Washington; public biotechnology companies represented approximately 16.2% and included Amgen Inc., Biogen Idec Inc., Celgene Corporation, Gilead Sciences, Inc., and Onyx Pharmaceuticals, Inc.; private biotechnology companies represented approximately 13.7% and included high-quality, leading-edge companies with blue-chip venture and institutional investors, including Constellation Pharmaceuticals, Inc., Epizyme, Inc., FibroGen, Inc., and FORMA Therapeutics, Inc.; and the remaining approximately 4.3% consisted of traditional office client tenants.  Alexandria’s strong life science underwriting skills, long-term life science industry relationships, and sophisticated management with both real estate and life science operating expertise positively distinguish Alexandria from all other publicly traded real estate investment trusts and real estate companies.

Company Information

Corporate Headquarters Trading Symbols Information Requests
385 East Colorado Boulevard, Suite 299 New York Stock Exchange Phone:   (626) 396-4828
Pasadena, California  91101 Common stock:  ARE E-mail:   [email protected]
Series E preferred stock:  ARE–E Web:      www.are.com

Summary Data

Cluster markets Greater Boston, San Francisco Bay Area, San Diego, Greater NYC, Suburban Washington, D.C., Seattle, Research Triangle Park, Canada, India, and China
Fiscal year-end December 31
Total properties 178
Total rentable square feet 17.1 million

Common Stock Data

**** 4Q12 3Q12 2Q12 1Q12 4Q11
High trading price $ 74.59 $ 77.10 $ 76.50 $ 74.45 $ 71.07
Low trading price $ 64.09 $ 70.97 $ 67.40 $ 66.90 $ 56.10
Closing stock price, average for period $ 69.88 $ 73.65 $ 71.67 $ 71.70 $ 65.83
Closing stock price, at the end of the quarter $ 69.32 $ 73.52 $ 72.72 $ 73.13 $ 68.97
Dividend per share – quarter/annualized $ 0.56/2.24 $ 0.53/2.12 $ 0.51/2.04 $ 0.49/1.96 $ 0.49/1.96
Closing dividend yield – annualized 3.2% 2.9% 2.8% 2.7% 2.8%
Common shares outstanding at the end of the quarter 63,244,645 63,161,177 62,249,973 61,634,645 61,560,472
Closing market value of outstanding common shares (in thousands) $ 4,384,119 $ 4,643,610 $ 4,526,818 $ 4,507,342 $ 4,245,826
Total market capitalization (in thousands) $ 7,953,348 $ 8,064,386 $ 7,912,286 $ 7,673,553 $ 7,412,402
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 ii
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Investor Information

December 31, 2012

Executive/Senior Management
Joel S. Marcus Chairman, Chief Executive Officer, & Founder Thomas J. Andrews EVP – Regional Market Director-Greater Boston
Dean A. Shigenaga Chief Financial Officer, EVP, & Treasurer Daniel J. Ryan EVP – Regional Market Director-San Diego & Strategic Operations
Stephen A. Richardson Chief Operating Officer & Regional Market Director-San Francisco Bay Area John J. Cox SVP – Regional Market Director-Seattle
Peter M. Moglia Chief Investment Officer John H. Cunningham SVP – Regional Market Director-NY & Strategic Operations
Jennifer J. Pappas SVP, General Counsel, & Corporate Secretary Larry J. Diamond SVP – Regional Market Director-Mid Atlantic
Marc E. Binda SVP – Finance Vincent R. Ciruzzi SVP – Construction & Development
Andres R. Gavinet Chief Accounting Officer

Equity Research Coverage

Alexandria Real Estate Equities, Inc. is currently covered by the following research analysts.  This list may not be complete and is subject to change as firms initiate or discontinue coverage of our company.  Please note that any opinions, estimates, or forecasts regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, forecasts, or predictions of Alexandria Real Estate Equities, Inc. or its management.  Alexandria Real Estate Equities, Inc. does not by its reference below or distribution imply its endorsement of or concurrence with such information, conclusions, or recommendations.  Interested persons may obtain copies of analysts’ reports on their own as we do not distribute these reports.  Several of these firms may from time-to-time own our stock and/or hold other long or short positions in our stock, and may provide compensated services to us.

Argus Research Group, Inc. Evercore Partners J.P. Morgan Securities LLC
William Eddleman, Jr. (212) 425-7500 Sheila McGrath (212) 497-0882 Anthony Paolone (212) 622-6682
Nathan Crossett (212) 497-0870 Joseph Dazio (212) 622-6416
Banc of America Securities-Merrill Lynch The Goldman Sachs Group, Inc. RBC Capital Markets
James Feldman (646) 855-5808 Matthew Rand (212) 902-4227 Michael Carroll (440) 715-2649
Jeffrey Spector (646) 855-1363 Andrew Rosivach (212) 902-2796 Rich Moore (440) 715-2646
Stephen Sihelnik (646) 855-1829 Caitlin Burrows (212) 902-4736
Barclays Capital Inc. Green Street Advisors, Inc. Robert W. Baird & Company
Ross L. Smotrich (212) 526-2306 Jeff Theiler (949) 640-8780 David Rodgers (216) 737-7341
Michael R. Lewis (212) 526-3098 John Hornbeak (949) 640-8780 Mathew R. Spencer (414) 298-5053
Citigroup Global Markets Inc. International Strategy & Investment Group Inc. Standard & Poor’s
Michael Bilerman (212) 816-1383 George Auerbach (212) 446-9459 Roy Shepard (212) 438-1947
Quentin Velleley (212) 816-6981 Steve Sakwa (212) 446-9462
Emmanuel Korchman (212) 816-1382 Gwen Clark (212) 446-5611
Cowen and Company, LLC JMP Securities – JMP Group, Inc. UBS Financial Services Inc.
James Sullivan (646) 562-1380 William C. Marks (415) 835-8944 Ross Nussbaum (212) 713-2484
Michael Gorman (646) 562-1381 Whitney Stevenson (415) 835-8948 Gabriel Hilmoe (212) 713-3876
Weina Hou (212) 713-4057

Rating Agencies

Moody’s Investors Service Standard & Poor’s
Philip Kibel (212) 553-4569 Lisa Sarajian (212) 438-2597
Maria Maslovsky (212) 553-4831 George Skoufis (212) 438-2608

Rating

Moody’s Investors Service Standard & Poor’s
Issuer Rating Baa2<br> Stable Outlook Corporate Credit Rating BBB-<br> Stable Outlook
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 iii
--- ---

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

Alexandria Real Estate Equities, Inc.

Reports

Fourth Quarter and Year Ended December 31, 2012

Financial and Operating Results

FFO Per Share – Diluted, as Adjusted, of $1.16 and $4.38 for Three Months and Year Ended 4Q12

EPS - Diluted of $0.33 and $1.09 for Three Months and Year Ended 4Q12

Total Revenues for the Three Months and Year Ended 4Q12 Up 11% and 7% Over Same Period in Prior Year

NOI from Continuing Operations for the Three Months Ended 4Q12 Up 10% Over 4Q11

Achieved Significant NOI Growth From Delivery of Development and Redevelopment Projects

PASADENA, CA. – February 7, 2013 – Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced financial and operating results for the fourth quarter and year ended December 31, 2012.

Fourth Quarter and Year Ended December 31, 2012, Highlights

Results

·                   Funds From Operations (“FFO”) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, as Adjusted, for the Three Months Ended December 31, 2012, was $72.9 Million, or $1.16 Per Share;  FFO Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, as Adjusted, for the Year Ended December 31, 2012, was $272.1 Million, or $4.38 Per Share

·                   Adjusted Funds From Operations (“AFFO”) Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $66.3 Million, or $1.05 Per Share;  AFFO Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $257.7 Million, or $4.15 Per Share

·                   Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $21.0 Million, or $0.33 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Three Months Ended December 31, 2012, was $24.7 Million, or $0.39 Per Share, Excluding Impairment of Land Parcel/Real Estate Aggregating $3.7 Million, or $0.06 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $67.6 Million, or $1.09 Per Share; Net Income Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders – Diluted, for the Year Ended December 31, 2012, was $85.8 Million, or $1.38 Per Share, Excluding Impairment of Land Parcel/Real Estate, Loss on Early Extinguishment of Debt, Gain on Sale of Land Parcel/Real Estate, and Preferred Stock Redemption Charge Aggregating $18.2 Million, or $0.29 Per Share

Core Operating Metrics

·                   Total Revenues for the Three Months Ended December 31, 2012, were $154.2 Million, Up 11%, Compared to Total Revenues for the Three Months Ended December 31, 2011, of $139.2 Million; Total Revenues for the Year Ended December 31, 2012, were $586.1 Million, Up 7%, Compared to Total Revenues for the Year Ended December 31, 2011, of $548.2 Million

·                   Net Operating Income (“NOI”) from Continuing and Discontinued Operations for the Three Months Ended December 31, 2012, was $111.1 Million, or $444.5 Million on an Annualized Basis, Up 9%, Compared to NOI from Continuing and Discontinued Operations for the Three Months Ended December 31, 2011, of $101.8 Million, or $407.2 Million on an Annualized Basis; NOI for the Three Months Ended December 31, 2012, was $107.5 Million, Up 10%, Compared to NOI for the Three Months Ended December 31, 2011, of $97.7 Million; NOI for the Year Ended December 31, 2012, was $411.6 Million, Up 6%, Compared to NOI for the Year Ended December 31, 2011, of $388.7 Million

·                   47% of Total Annualized Base Rent (“ABR”) from Investment-Grade Client Tenants

·                   Investment-Grade Client Tenants Represented 72% of Top 10 Client Tenants’ ABR

·                   Operating Margins at 70% for the Three Months Ended December 31, 2012

·                   Cash and GAAP Same Property Net Operating Income Increases of 6.3% and 0.7%, Respectively, for the Three Months Ended December 31, 2012

·                   Cash and GAAP Same Property Net Operating Income Increase of 3.5% and Decrease of 0.5%, Respectively, for the Year Ended December 31, 2012

·                   Second Highest Year of Leasing Activity in Company History

·                   During the Three Months Ended December 31, 2012, Executed 47 Leases for 678,000 Rentable Square Feet, Including 265,000 Rentable Square Feet of Development and Redevelopment Space; Rental Rate Decrease of 2.9% and Increase of 2.6% on a Cash and GAAP Basis, Respectively, on Renewed/Re-Leased Space; Excluding One Lease for 70,000 Rentable Square Feet in the Suburban Washington, D.C., Market, Rental Rates for Renewed/Re-Leased Space were, on Average, 1.3% Higher and 6.1% Higher than Rental Rates for Expiring Leases on a Cash and GAAP Basis, Respectively

·                   During the Year Ended December 31, 2012, Executed 187 Leases for 3,281,000 Rentable Square Feet, Including 1,135,000 Rentable Square Feet of Development and Redevelopment Space; Rental Rate Decrease of 2.0% and Increase of 5.2% on a Cash and GAAP Basis, Respectively, on Renewed/Re-Leased Space; Excluding One Lease for 48,000 Rentable Square Feet in the Research Triangle Park Market and Two Leases for 141,000 Rentable Square Feet in the Suburban Washington, D.C., Market, Rental Rates for Renewed/Re-Leased Space were, on Average, 0.4% Higher and 7.1% Higher than Rental Rates for Expiring Leases on a Cash and GAAP Basis, Respectively

·                   Occupancy Percentage for North America Operating Properties of 94.6%, Up from 94.2%, and Occupancy Percentage for North America Operating and Redevelopment Properties of 91.6% Up from 90.0%; Occupancy Percentage for All Operating Properties of 93.4%, Up from 93.0%, Including Asia Properties, and Occupancy Percentage for All Operating and Redevelopment Properties of 89.8%, Up from 88.3%, Including Asia Properties

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 1

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Value-Added Opportunities and External Growth

Key Commencements - Development

·                   In November 2012, Commenced Development of 430 East 29th Street, the West Tower of the Alexandria Center™ for Life Science – New York City, Located in the Greater NYC Market, a Building with 419,806 Rentable Square Feet; 14% Pre-Leased Plus an Additional 40% Subject to Letters of Intent

·                   In April 2012, Commenced Development of 360 Longwood Avenue, Located in the Greater Boston Market, a 37% Pre-Leased Unconsolidated Joint Venture Project with 414,000 Rentable Square Feet

Key Commencements - Redevelopment

·                   In October 2012, Commenced Conversion of Manufacturing Space into Laboratory Space Through Redevelopment of 4757 Nexus Center Drive, Located in the San Diego Market, a 100% Pre-Leased Project with 68,423 Rentable Square Feet

·                   In October 2012, Commenced Conversion of Office Space into Laboratory Space Through Redevelopment of 1616 Eastlake Avenue, Located in the Seattle Market, a 61% Pre-Leased Project with 66,776 Rentable Square Feet

Key Deliveries - Development

·                   In November 2012, Completed Development of 259 East Grand Avenue, Located in the San Francisco Bay Area Market, a 100% Leased Building with 170,618 Rentable Square Feet

·                   In October 2012, Completed Development of 400/450 East Jamie Court, Located in the San Francisco Bay Area Market, an 80% Leased Project with 163,036 Total Rentable Square Feet

·                   In October 2012, Completed Development of 5200 Illumina Way, Located in the San Diego Market, a 100% Leased Project with 127,373 Rentable Square Feet

·                   In September 2012, Completed Development of 4755 Nexus Center Drive, Located in the San Diego Market, a 100% Leased Project with 45,255 Rentable Square Feet

·                   In April 2012, Completed Development Located in the Canadian Market, a 100% Leased Project with 26,426 Rentable Square Feet

Key Deliveries - Redevelopment

·                   In November/December 2012, Partially Completed Redevelopment of 100% Leased 140,532 Rentable Square Feet at 400 Technology Square, Located in the Greater Boston Market, a Building with 212,124 Total Rentable Square Feet

·                   From November 2011 to September 2012, Completed Redevelopment of 10300 Campus Point Drive, Located in the San Diego Market, a 96% Leased Project with 279,138 Rentable Square Feet, including 189,562 Rentable Square Feet Completed in September 2012

·                   In June 2012, Completed Redevelopment of 3530/3550 John Hopkins Court, Located in the San Diego Market, a 100% Leased Project with 98,320 Rentable Square Feet

Balance Sheet Strategy and Significant Milestones

·                   Our Balance Sheet Strategy Continues to Focus on Our Leverage Target of 6.5x Net Debt to Adjusted EBITDA by December 31, 2013, by Funding our Significant Development and Redevelopment Projects in 2013 with Leverage-Neutral Sources of Capital and by Continuing to Execute Our Asset Recycling Program

·                   In 2012, Executed Capital Strategy and Proved Access to Diverse Sources of Capital Strategically Important to Our Long-Term Capital Structure; Successfully Accessed Every Long-Term Component of Our Targeted Sources of Capital, Including Proceeds from Our Asset Recycling Program, Unsecured Senior Line of Credit, 4.60% Unsecured Senior Notes Payable Offering, Secured Construction Loan, 6.45% Series E Preferred Stock Offering, and Selective “At The Market” Common Stock Offerings

·                   Completed $75.1 Million of Asset Sales in 2012; Completed Additional $84.0 Million of Asset Sales in 2013

·                   In June 2012, Established an “At The Market” Common Stock Offering Program and Raised $97.9 Million in Net Proceeds from Sales Under This Program in 2012

·                   In June 2012, Closed a Secured Construction Loan with Aggregate Commitments of $55.0 Million for a Development Project at 259 East Grand Avenue Located in the San Francisco Bay Area Market

·                   In April 2012, Amended Our $1.5 Billion Unsecured Senior Line of Credit to Reduce Its Interest Rate and Extend Its Maturity Date to April 2017, Assuming We Exercise Our Sole Right to Extend the Maturity Date Twice

·                   In April 2012, Redeemed All $129.6 Million of Our Outstanding 8.375% Series C Preferred Stock

·                   In March 2012, Completed a 6.45% Series E Preferred Stock Offering with Net Proceeds of $124.9 Million

·                   In February 2012, Completed Our 4.60% Unsecured Senior Notes Payable Offering with Net Proceeds of $544.6 Million; Net Proceeds from the Offering Were Used to Repay Certain Outstanding Variable Rate Bank Debt, Including All $250 Million of Our 2012 Unsecured Senior Bank Term Loan

·                   In January and April 2012, Retired All $84.8 Million of Our 3.70% Unsecured Senior Convertible Notes

Events Subsequent to Year End

·                   In January 2013, Executed a Lease for 244,123 Rentable Square Feet at 75/125 Binney Street, Located in the Greater Boston Market and in the First Quarter of 2013 Expect to Commence Development of this 386,275 Rentable Square Feet, 63% Pre-Leased Project

·                   In January 2013, Completed Sale of 1124 Columbia Street and Two Land Parcels, Located in the Seattle Market, a Building with 203,817 Rentable Square Feet, for a Sales Price of Approximately $42.6 Million, to a Buyer Expected to Renovate and Reposition the Property for Medical Office Use

·                   In February 2013, Completed Sale of 25/35/45 West Watkins Mill Road, 1201 Clopper Road, and a Land Parcel, Located in the Suburban Washington D.C., Market, Two Buildings with an Aggregate of 282,523 Rentable Square Feet, for a Sales Price of Approximately $41.4 Million, to a Buyer Expected to Renovate and Reposition these Properties; Recognized a Gain on Sale of Approximately $0.1 Million

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 2

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

VALUE-ADDED OPPORTUNITIES AND EXTERNAL GROWTH

As of December 31, 2012, 96% of our leases contained annual rent escalations that were either fixed or based on a consumer price index or another index.  Our initial stabilized yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date.  We expect, on average, our contractual cash rents related to our value-added projects to increase over time.  Initial stabilized yield is calculated as the quotient of the estimated amounts of net operating income and our investment in the property at stabilization (“Initial Stabilized Yield”).

During the three months and year ended December 31, 2012, we executed leases aggregating 265,000 and 1,135,000 rentable square feet, respectively, related to our development and redevelopment projects.

Development and redevelopment

The following table summarizes the commencement of key development and redevelopment projects (dollars in thousands, except per square foot amounts):

Investment Initial
Commencement Rentable Pre-Leased at Per Stabilized Yield Key
Address/Market Date Square Feet % Completion RSF Cash GAAP Client Tenant
Development
75/125 Binney Street, Greater Boston 1Q13 386,275 (1) 63% (1) $ 351,439 $ 910 8.0% 8.2% ARIAD Pharmaceuticals, Inc.
430 East 29th Street, Greater NYC November 2012 419,806 14% (2) $ 463,245 $ 1,103 6.6% 6.5% Roche
360 Longwood Avenue, Greater Boston April 2012 414,000 37% (3) $ 350,000 (4) $ 845 8.3% 8.9% Dana-Farber Cancer Institute, Inc.
Redevelopment
4757 Nexus Center Drive, San Diego October 2012 68,423 100% $ 34,829 $ 509 7.6% 7.8% Genomatica, Inc.
1616 Eastlake Avenue, Seattle October 2012 66,776 61% $ 37,816 $ 566 8.4% 8.6% Infectious Disease Research Institute

(1)             Represents a one-building project with two towers totaling 386,275 rentable square feet.  ARIAD Pharmaceuticals, Inc. leased 100% of the 216,926 rentable square feet at 125 Binney Street and 27,197 rentable square feet at 75 Binney Street, with additional potential expansion opportunities through June 30, 2014.  See page 10 for additional details on current assumptions included in our guidance for funding the cost to complete the development of 75/125 Binney Street.

(2)             We have an additional 40% of the 419,806 rentable square feet that are at the letter of intent stage.

(3)             Dana-Farber Cancer Institute, Inc. also has an option to lease an additional two floors of approximately 99,000 rentable square feet, or an additional 24% of the total rentable square feet of our unconsolidated joint venture development project through June 2014.

(4)             Represents the total venture cost at completion.  As of December 31, 2012, our equity investment was approximately $28.7 million related to our 27.5% ownership interest in the unconsolidated real estate entity.  Our expected remaining cash commitment to the venture of approximately $16.9 million is less than the $22.3 million received in March 2012 from an in-substance partial sale of our interest in the underlying real estate.

The following table summarizes the delivery of key development and redevelopment projects during the year ended December 31, 2012 (dollars in thousands, except per square foot amounts):

Portion Delivered Total Project
Occupancy Investment Total Project Initial
Completion Rentable as of at Per Stabilized Yield Key
Address/Market Date Square Feet 12/31/2012 Completion RSF Cash GAAP Client Tenant(s)
Development
259 East Grand Avenue, San Francisco Bay Area November 2012 170,618 100% $ 74,090 $ 434 8.7% (1) 8.6% (1) Onyx Pharmaceuticals, Inc.
400/450 East Jamie Court, San Francisco Bay Area October 2012 163,036 80% $ 112,106 $ 688 4.9% (2) 4.9% (2) Stem CentRx, Inc.
5200 Illumina Way, San Diego October 2012 127,373 100% $ 46,978 $ 369 7.0% 11.2% Illumina, Inc.
4755 Nexus Center Drive, San Diego September 2012 45,255 100% $ 23,084 $ 510 6.8% 7.5% Optimer Pharmaceuticals, Inc.
Canada April 2012 26,426 100% $ 8,883 $ 336 7.7% 8.3% GlaxoSmithKline plc
Redevelopment
400 Technology Square, Greater Boston November – December 2012 140,532 (3) 100% $ 144,688 $ 1,030 8.1% 8.9% Ragon Institute of MGH, MIT and Harvard; Epizyme, Inc.; Aramco Services Company, Inc.
10300 Campus Point Drive, San Diego November 2011 – September 2012 279,138 (4) 96% $ 131,649 $ 472 7.9% 7.7% The Regents of the University of California; Celgene Corporation
3530/3550 John Hopkins Court, San Diego June 2012 98,320 100% $ 50,898 $ 518 8.9% 9.1% Genomics Institute of the Novartis Research Foundation; Verenium Corporation

(1)             The Initial Stabilized Yield on a cash and GAAP basis for this project was approximately 8.7% and 8.6%, respectively, or approximately 0.7% and 0.6% higher than the mid-point of our previous Initial Stabilized Yield estimates of 8.0%, on a cash and GAAP basis, respectively.

(2)             The Initial Stabilized Yield on a cash and GAAP basis for this project was approximately 4.9% and 4.9%, respectively, or approximately 0.7% and 0.6% higher than our previous Initial Stabilized Yield estimate of 4.2% and 4.3%, on a cash and GAAP basis, respectively.

(3)             In November and December 2012, we partially completed the redevelopment of 140,532 rentable square feet at 400 Technology Square, a building with 212,124 total rentable square feet.

(4)             Includes 189,562 rentable square feet delivered in September 2012, and 89,576 rentable square feet delivered in November 2011.

Acquisitions

In April 2012, we acquired 3013/3033 Science Park Road located in the San Diego market, which consists of two buildings aggregating 176,500 rentable square feet of non-laboratory space, for approximately $13.7 million.  The property was 100% leased on a short-term basis to a non-life science tenant and thereafter, we expect to redevelop the property.  We expect to provide an estimate of our Initial Stabilized Yields in the future upon commencement of development/redevelopment activity.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 3

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Tabular dollar amounts in thousands, except per square foot amounts)

(Unaudited)

BALANCE SHEET STRATEGY AND SIGNIFICANT MILESTONES

Our balance sheet strategy continues to focus on our leverage target of achieving net debt to adjusted EBITDA of 6.5x by December 31, 2013, by funding our significant development and redevelopment projects in 2013 with leverage-neutral sources of capital and by continuing to execute our asset recycling program.  During 2012, we executed our capital strategy and proved that we have access to diverse sources of capital that we believe is strategically important to our long-term capital structure.  These sources of capital included 1) real estate asset dispositions, 2) secured construction project financing, 3) unsecured line of credit, 4) unsecured note payable, 5) joint venture capital, 6) preferred stock, and 7) common stock through our “at the market” common stock offering program.

Real estate asset sales

We continue the disciplined execution of our asset recycling program to monetize non-strategic operating and non-income-producing assets as a source of capital while minimizing the issuance of common equity.  We target the following asset types for sale and redeploy the capital to fund active development and redevelopment projects with significant pre-leasing:

·                   Older buildings: elimination of potential capital expenditures and leasing risk;

·                   Non-strategic assets: disposition of properties not proximate to academic medical research centers in core life science cluster locations;

·                   Assets with alternative uses for buyer: transformation into non-laboratory space, such as medical office buildings, hospitals, and residential spaces;

·                   Suburban locations: reinvestment in higher value, Class-A assets in urban “brain trust” life science cluster locations; or

·                   Excess land: reduction of non-income-producing land holdings in certain clusters, while maintaining specific land parcels for future growth.

A portion of our projected 2013 asset sales is under negotiation and we expect to identify the remainder of the assets for disposition in the first half of 2013 in order to seek to achieve our target dispositions.

The following table presents our completed real estate asset sales:

Rentable/ Sales Occupancy Annualized
Date Developable Price at Date GAAP Sales Gain
Description Location of Sale Square Feet per SF of Sale NOI (1) Price on Sale
Sales completed in 2012
1201/1209 Mercer Street (2) Seattle September 2012 76,029 $ 73 0% $ 45 $ 5,570 $ 54
801 Dexter Avenue North (2) Seattle August 2012 120,000 $ 72 0% $ (96 ) 8,600 $ 55
200 Lawrence Drive/210 Welsh Pool Road Pennsylvania July 2012 210,866 $ 94 100% $ 2,193 19,750 (3) $ 103
155 Fortune Boulevard (4) Route 495/Worcester July 2012 36,000 $ 222 100% $ 804 8,000 $ 1,350
5110 Campus Drive (4) Pennsylvania May 2012 21,000 $ 86 71% $ 77 1,800 $ 2
Land parcel Greater Boston March 2012 (5) $ 275 N/A N/A 31,360 $ 1,864
Sales completed in 2012 75,080
Sales completed in 1Q13
1124 Columbia Street Seattle January 2013 203,817 $ 209 81% (6) $ 6,802 42,600 $ –
25/35/45 West Watkins Mill Road/1201 Clopper Road (7) Suburban Washington D.C. February 2013 282,523 $ 147 (8) 100% $ 7,795 41,400 $ 53
Sales completed in 2013 84,000
Total $ 159,080

(1)             Annualized using actual year-to-date results as of the quarter end prior to date of sale or December 31, 2012.

(2)             Properties sold to residential developers.

(3)             Sales price reflects the near-term lease expiration of a client tenant occupying 38,513 rentable square feet, or 18% of the total rentable square feet, on the date of sale.  In connection with the sale, we received a secured note receivable for $6.1 million with a maturity date in 2018.

(4)             Properties were sold to client tenants.

(5)             In March 2012, we completed an in-substance partial sale of our interest in underlying real estate supporting a project with 414,000 rentable square feet for approximately $31.4 million, or approximately $275 per rentable square foot.

(6)             The property is expected to become 74% vacant in 2013 and the current buyer is expected to significantly renovate the property into medical office use.  The sales price of 1124 Columbia Street includes a $29.8 million secured note receivable due in 2015 with an option to extend the maturity date by one year.  As of December 31, 2012, this property is classified in discontinued operations.

(7)             These properties met the classification for discontinued operations in January 2013 and were classified as operating properties as of December 31, 2012.  We completed the sale on February 1, 2013, and recognized a $0.1 million gain upon the closing of the transaction.

(8)             These properties are expected to become 17% vacant in 2013, with significant additional vacancy in subsequent years, and the buyer is expected to significantly renovate the property at 1201 Clopper Road.

Impairment of real estate assets

During the three months ended September 30, 2012, we committed to sell four operating properties comprised of 1124 Columbia Street in the Seattle market and One Innovation Drive, 377 Plantation Street, and 381 Plantation Street in the suburban Greater Boston market, aggregating 504,130 rentable square feet, rather than to hold them on a long-term basis.  At the time of our commitment to dispose of these assets, these four properties were on average 94% occupied and generated approximately $12.8 million in annual operating income.  Upon our commitment to sell, we wrote down the value of these assets to our estimate of fair value, based on the anticipated sales price, less cost to sell.  As a result, we recognized an impairment charge of approximately $9.8 million.  In December 2012, we entered into an agreement with a third party to sell 1124 Columbia Street, at a price of $42.6 million which was below our reduced carrying value as of September 30, 2012.  As a result we recognized an additional impairment charge of $1.6 million to write down the carrying value to our revised estimated fair value less cost to sell.  In January 2013, we completed the sale of this property and no gain or loss on sale was recognized.

During the three months ended December 31, 2012, we committed to sell a land parcel with 50,000 developable square feet rather than hold it on a long-term basis for future development.  Upon our decision to sell, we wrote down the value of the land parcel to our estimate of fair value, based on the anticipated sales price, less cost to sell.  As a result, we recognized an impairment charge of approximately $2.1 million.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 4

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Sale of land parcel

In March 2012, we completed an in-substance partial sale of our interest in a joint venture that owned a land parcel supporting a future building with 414,000 rentable square feet in the Longwood Medical Area of the Greater Boston market to a newly formed joint venture (the “Restated JV”) with National Development and Charles River Realty Investors, and admitted as a 50% member Clarion Partners, LLC, resulting in a reduction of our ownership interest from 55% to 27.5%.  The transfer of one-half of our 55% ownership interest in this real estate venture to Clarion Partners, LLC, was accounted for as an in-substance partial sale of an interest in the underlying real estate.  In connection with the sale of one-half of our 55% ownership interest in the land parcel, we received a special distribution of approximately $22.3 million, which included the recognition of a $1.9 million gain on sale of land and approximately $5.4 million from our share of loan refinancing proceeds.  The land parcel we sold in March 2012 did not meet the criteria for classification as discontinued operations since the parcel did not have any significant operations prior to disposition.  Pursuant to the presentation and disclosure literature on gains/losses on sales or disposals by REITs required by the Securities and Exchange Commission (“SEC”), gains or losses on sales or disposals by a REIT that do not qualify as discontinued operations are classified below income (loss)  from discontinued operations in the income statement.  Accordingly, we classified the $1.9 million gain on sale of land below income (loss) from discontinued operations, net, in the condensed consolidated statements of income, and included the gain in income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders in the “control number,” or numerator for computation of earnings per share.  Our 27.5% share of the land was sold at approximately $31 million (including closing costs), or approximately $275 per rentable square foot.  Upon formation of the Restated JV, the existing $38.4 million secured loan was refinanced with a seven-year (including two one-year extension options) non-recourse $213 million secured construction loan with initial loan proceeds of $50 million.  As of December 31, 2012, the outstanding balance on the construction loan was $61.0 million.  We do not expect our share of capital contributions through the completion of the project to exceed the approximate $22.3 million in net proceeds received in this transaction.  Construction of this $350 million project commenced in April 2012.  The initial occupancy date for this project is expected to be in the fourth quarter of 2014.  The project is 37% pre-leased to Dana-Farber Cancer Institute, Inc.  In addition, Dana-Farber Cancer Institute, Inc. has an option to lease an additional two floors approximating 99,000 rentable square feet, or 24% of the total rentable square feet of the project.  In addition to our economic share of the joint venture, we also expect to earn development and other fees of approximately $3.5 million through 2015, and recurring annual property management fees thereafter, from this project.

“At the market” common stock offering program

In June 2012, we established an “at the market” common stock offering program under which we may sell, from time to time, up to an aggregate of $250.0 million of our common stock through our sales agents, BNY Mellon Capital Markets, LLC and Credit Suisse Securities (USA) LLC, during a three-year period.  During the year ended December 31, 2012, we sold an aggregate of 1,366,977 shares of common stock for gross proceeds of approximately $100.0 million at an average stock price of $73.15 and net proceeds of approximately $97.9 million, including commissions and other expenses of approximately $2.1 million.  Net proceeds from the sales were used to pay down the outstanding balance on our senior unsecured line of credit or other borrowings, and for general corporate purposes.  As of December 31, 2012, approximately $150.0 million of our common stock remained available for issuance under the “at the market” common stock offering program.

Secured construction loan for development project in San Francisco Bay Area market

In June 2012, we closed a secured construction loan with aggregate commitments of $55.0 million.  We have an option to extend the stated maturity date of July 1, 2015, by one year, twice, to July 1, 2017.  The construction loan bears interest at the London Interbank Offered Rate (“LIBOR”) or the base rate specified in the construction loan agreement, defined as the higher of either the prime rate being offered by our lender or the federal funds rate in effect on the day of borrowing (“Base Rate”), plus in either case a specified margin of 1.50% for LIBOR borrowings or 0.25% for Base Rate borrowings.  As of December 31, 2012, commitments of $38.1 million were available under this loan.

Amendment of $1.5 billion unsecured senior line of credit

In April 2012, we amended our $1.5 billion unsecured senior line of credit with Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. as joint lead arrangers, and certain lenders, to extend the maturity date of our unsecured senior line of credit, provide an accordion option for up to an additional $500 million, and reduce the interest rate for outstanding borrowings.  The maturity date of the unsecured senior line of credit was extended to April 2017, assuming we exercise our sole right to extend the stated maturity date twice by an additional six months after each exercise.  Borrowings under the unsecured senior line of credit bear interest at LIBOR or the base rate specified in the amended unsecured senior line of credit agreement, plus in either case a specified margin (the “Applicable Margin”).  The Applicable Margin for LIBOR borrowings under the unsecured senior line of credit was set at 1.20%, down from the 2.40% in effect immediately prior to the modification.  In addition to the Applicable Margin, our unsecured senior line of credit is subject to an annual facility fee of 0.25% based on the aggregate commitments outstanding.  In connection with the modification of our unsecured senior line of credit in April 2012, we recognized a loss on early extinguishment of debt of approximately $1.6 million related to the write-off of a portion of unamortized loan fees for the three months ended June 30, 2012.

8.375% series C preferred stock redemption

In April 2012, we redeemed all 5,185,500 outstanding shares of our Series C Preferred Stock at a price equal to $25.00 per share, or approximately $129.6 million in aggregate, and paid $0.5234375 per share, representing accumulated and unpaid dividends to the redemption date on such shares.  We announced the redemption and recognized a preferred stock redemption charge of approximately $6.0 million to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders in March 2012, related to the write-off of original issuance costs of the Series C Preferred Stock.

6.45% series E preferred stock offering

In March 2012, we completed a public offering of 5,200,000 shares of our 6.45% series E cumulative redeemable preferred stock (“Series E Preferred Stock”).  The shares were issued at a price of $25.00 per share, resulting in net proceeds of approximately $124.9 million (after deducting underwriters’ discounts and other offering costs).  The proceeds were initially used to reduce the outstanding borrowings under our unsecured senior line of credit.  We then borrowed funds under our unsecured senior line of credit to redeem our 8.375% series C cumulative redeemable preferred stock (“Series C Preferred Stock”) in April 2012.  The dividends on our Series E Preferred Stock are cumulative and accrue from the date of original issuance.  We pay dividends quarterly in arrears at an annual rate of 6.45%, or $1.6125 per share.  Our Series E Preferred Stock has no stated maturity date, is not subject to any sinking fund or mandatory redemption provisions, and is not redeemable before March 15, 2017, except to preserve our status as a REIT.  On and after March 15, 2017, we may, at our option, redeem the Series E Preferred Stock, in whole or in part, at any time for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends on the Series E Preferred Stock up to, but excluding, the redemption date.  In addition, upon the occurrence of a change of control, we may, at our option, redeem the Series E Preferred Stock, in whole or in part within 120 days after the first date on which such change of control occurred, by paying $25.00 per share, plus any accrued and unpaid dividends up to, but excluding, the date of redemption.  Investors in our Series E Preferred Stock generally have no voting rights.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 5

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

4.60% unsecured senior notes payable offering

In February 2012, we completed the issuance of our 4.60% unsecured senior notes payable due in February 2022.  Net proceeds of approximately $544.6 million were used to repay certain outstanding variable rate bank debt, including the entire $250 million of our 2012 unsecured senior bank term loan (“2012 Unsecured Senior Bank Term Loan”), and approximately $294.6 million of outstanding borrowings under our unsecured senior line of credit.  In connection with the retirement of our 2012 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt of approximately $0.6 million related to the write-off of unamortized loan fees for the three months ended March 31, 2012.

Retirement of 3.70% unsecured senior convertible notes

In January 2012, we repurchased approximately $83.8 million in principal amount of our 3.70% unsecured senior convertible notes (“3.70% Unsecured Senior Convertible Notes”) at par, pursuant to options exercised by holders thereof under the indenture governing the notes.  In April 2012, we repurchased the remaining outstanding $1.0 million in principal amount of the notes.  In aggregate, we repurchased approximately $84.8 million in principal amount of the notes and we did not recognize a gain or loss as a result during the year ended December 31, 2012.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 6

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

GUIDANCE

Earnings outlook

Based on our current view of existing market conditions and certain current assumptions, we expect that our earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted and FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted for the year ended December 31, 2013, will be as set forth in the table below.  The table below provides a reconciliation of FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, a non-GAAP measure, to earnings per share, the most directly comparable GAAP measure and other key assumptions included in our guidance for the year ended December 31, 2013.

Guidance for the Year Ended December 31, 2013 Reported on February 7, 2013 Reported on December 5, 2012
Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted $1.41 to $1.61 $1.39 to $1.59
Depreciation and amortization $2.93 to $3.13 $2.91 to $3.11
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted $4.44 to $4.64 $4.40 to $4.60
Key projection assumptions:
Same property net operating income growth – cash basis 4% to 7% 4% to 7%
Same property net operating income growth – GAAP basis 0% to 3% 0% to 3%
Rental rate steps on lease renewals and re-leasing of space – cash basis Flat to slightly positive Flat to slightly positive
Rental rate steps on lease renewals and re-leasing of space – GAAP basis Up 5% to 10% Up 5% to 10%
Occupancy at the end of 2013 93.9% to 94.3% 93.6% to 94.0%
Straight-line rents $24 to $26 million $24 to $26 million
Amortization of above and below market leases $3 to $4 million $3 to $4 million
G&A expenses $48 to $51 million $48 to $51 million
Capitalization of interest $47 to $53 million $47 to $53 million
Interest expense, net $74 to $84 million $74 to $84 million
Net debt to adjusted EBITDA for the annualized three months ended December 31, 2013 6.5x 6.5x
Fixed charge coverage ratio for the annualized three months ended December 31, 2013 2.9x to 3.0x 2.9x to 3.0x

As of December 31, 2012, we had approximately $431.6 million and $199.7 million of construction in progress related to our three North American development and eight North American redevelopment projects, respectively.  The completion of these projects, along with recently delivered projects, certain future projects, and contributions from same properties, is expected to contribute significant increases in rental income, net operating income, and cash flows.  Operating performance assumptions related to the completion of our North American development and redevelopment projects, including the timing of initial occupancy, stabilization dates, and Initial Stabilized Yields, are included on page 9 and 10.  Certain key assumptions regarding our projections, including the impact of various development and redevelopment projects, are included in the tables above and on the following page.

The completion of our development and redevelopment projects will result in increased interest expense and other direct project costs, because these project costs will no longer qualify for capitalization and these costs will be expensed as incurred.  Our projection assumptions for depreciation and amortization, general and administrative expenses, capitalization of interest, interest expense, net, and net operating income growth are included in the tables on this page and are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking Statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011, and the “Risk Factors” section of Item 1A of our quarterly report on Form 10-Q for the period ended September 30, 2012.  To the extent our full year earnings guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance.  Further, we believe net operating income is a key performance indicator and is useful to investors as a performance measure because, when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 7

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

(Unaudited)

Sources and uses of capital

We expect that our principal liquidity needs for the year ended December 31, 2013, will be satisfied by the following multiple sources of capital as shown in the table below.  There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations.  Our liquidity available under our unsecured senior line of credit and from cash equivalents was approximately $1.1 billion as of December 31, 2012.

Reported on<br> February 7, 2013 Reported on<br> December 5, 2012
Sources and Uses of Capital for the Year Ended December 31, 2013 (in millions) Completed Projected Total Total
Sources of capital:
Net cash provided by operating activities less dividends $ – $ 130 - 150 $ 130 - 150 (1) $ 130 - 150
2013 asset sales initially targeted for 4Q12 closing 43 34 77 –
2013 asset sales initially projected on December 5, 2012 (2)
Non-income-producing – 175 - 225 (3) 175 - 225 (3) 175 - 225
Income-producing 41 34 - 84 75 - 125 75 - 125
Secured construction loan borrowing – 20 - 30 20 - 30 20 - 30
Unsecured senior notes – 350 - 450 350 - 450 350 - 450
Issuances under “at the market” common stock offering program – 125 - 175 125 - 175 125 - 175
Total sources of capital $ 84 $ 868 - 1,148 $ 952 - 1,232 $ 875 - 1,155
Uses of capital:
Development, redevelopment, and construction $ – $ 545 - 595 $ 545 - 595 (4) $ 545 - 595
Seller financing of asset sales 39 – 39 –
Acquisitions – – – – (5)
Secured notes payable repayments (6) – 37 37 52
Unsecured senior bank term loan repayment – 125 - 175 125 - 175 125 - 175
Paydown of unsecured senior line of credit 45 161 - 341 206 - 386 153 - 333
Total uses of capital $ 84 $ 868 - 1,148 $ 952 - 1,232 $ 875 - 1,155
(1) See “Projection Results – Key Projection Assumptions” on the previous page.
--- ---
(2) A portion of our projected 2013 asset sales is under negotiation and we expect to identify the remainder of the assets for disposition in the first half of 2013 in order to achieve our targeted dispositions.
(3) Our guidance has assumed transfer of 50% of our ownership interest in the 75/125 Binney Street project to be accounted for as an in-substance partial sale of an interest in a land parcel, with the resulting entity presented as an unconsolidated joint venture (the “Binney JV”) in our financial statements. This sale of a land parcel is included in our total projected asset sales for 2013.
(4) See “Investment to Complete” columns in the “Development and Redevelopment Projects in North America” table on the following page for additional details underlying this estimate. Our guidance for 2013 development, redevelopment, and construction spending of $545 to $595 million includes our estimated share of incremental capital required to complete the 75/125 Binney Street Project. See page 10 for additional details on the 75/125 Binney Street Project.
(5) Our guidance has assumed no acquisitions, but we review opportunistic acquisitions that we expect to fund on a leverage-neutral basis.
(6) The reduction in projected secured notes payable of $15 million is related to two loans that were repaid in 2012 prior to their contractual maturity dates in 2013.

The key assumptions behind the sources and uses of capital in the table above are a favorable capital market environment and performance of our core operations in areas such as delivery of current and future development and redevelopment projects, leasing activity, and renewals.  Our expected sources and uses of capital are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011, and the “Risk Factors” section of Item 1A of our quarterly report on Form 10-Q for the period ended September 30, 2012.  We expect to update our forecast of sources and uses of capital on a quarterly basis.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 8

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Project RSF (1) Leased Status RSF (1)
Market – Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Development projects in North America
Greater Boston – Cambridge ****
225 Binney Street – 305,212 305,212 305,212 – – 305,212 100% Biogen Idec Inc.
San Francisco Bay Area – Mission Bay
499 Illinois Street – 222,780 222,780 – – 222,780 222,780 – N/A
Greater NYC – Manhattan
430 East 29th Street – 419,806 419,806 60,816 167,244 (2) 191,746 419,806 54% Roche
Development projects in North America – 947,798 947,798 366,028 167,244 414,526 947,798 56%
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square 140,532 71,592 212,124 169,939 – 42,185 212,124 80% Ragon Institute of MGH, MIT and Harvard; Epizyme, Inc.; Warp Drive Bio, LLC; Aramco Services Company, Inc.
San Diego – University Town Center
4757 Nexus Center Drive – 68,423 68,423 68,423 – – 68,423 100% Genomatica, Inc.
Seattle – Lake Union –
1551 Eastlake Avenue 74,914 42,569 117,483 74,914 – 42,569 117,483 64% Puget Sound Blood Center and Program
1616 Eastlake Avenue – 66,776 66,776 40,706 – 26,070 66,776 61% Infectious Disease Research Institute
Suburban and other redevelopment projects 45,287 182,264 227,551 146,613 59,532 21,406 227,551 91%
Redevelopment projects in North America 260,733 431,624 692,357 500,595 59,532 132,230 692,357 81%
Total development and redevelopment projects in North America 260,733 1,379,422 1,640,155 866,623 226,776 546,756 1,640,155 67%
Investment (1) Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market – Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP 2013 Thereafter Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Development projects in North America
Greater Boston – Cambridge
225 Binney Street $ – $ 104,422 $ 75,851 $ – $ 180,273 $ 591 7.5% 8.1% 4Q11 4Q13 4Q13
San Francisco Bay Area – Mission Bay
499 Illinois Street $ – $ 113,196 $ 17,119 $ 22,894 $ 153,209 $ 688 6.4% 7.2% 2Q11 2Q14 1Q15
Greater NYC – Manhattan
430 East 29th Street $ – $ 213,960 $ 134,057 $ 115,228 $ 463,245 $ 1,103 6.6% 6.5% 4Q12 4Q13 2016
Development projects in North America $ – $ 431,578 $ 227,027 $ 138,122 $ 796,727 $ 841
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square $ 85,732 $ 43,966 $ 14,990 $ – $ 144,688 $ 682 8.1% 8.9% 4Q11 4Q12 4Q13
San Diego – University Town Center
4757 Nexus Center Drive $ – $ 3,966 $ 24,167 $ 6,696 $ 34,829 $ 509 7.6% 7.8% 4Q12 4Q13 4Q13 (5)
Seattle – Lake Union
1551 Eastlake Avenue $ 41,787 $ 17,520 $ 4,703 $ – $ 64,010 $ 545 6.7% 6.7% 4Q11 4Q11 4Q13
1616 Eastlake Avenue $ – $ 29,033 $ 4,115 $ 4,668 $ 37,816 $ 566 8.4% 8.6% 4Q12 2Q13 2014
Suburban and other redevelopment projects $ 42,320 $ 105,259 $ 37,391 $ – $ 184,970 $ 813
Redevelopment projects in North America $ 169,839 $ 199,744 $ 85,366 $ 11,364 $ 466,313 $ 674
Total development and redevelopment projects in North America $ 169,839 $ 631,322 $ 312,393 $ 149,486 $ 1,263,040 $ 770

Refer to the following page for all footnotes to the table above

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 9

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Development project commencements in the first quarter of 2013 in North America

Project RSF (1) Leased Status RSF (1)
Market – Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Greater Boston – Cambridge
75/125 Binney Street – 386,275 (5) 386,275 244,123 – 142,152 (6) 386,275 63% (6) ARIAD Pharmaceuticals, Inc.
Investment Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market – Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP (4) 2013 Thereafter Subtotal Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Greater Boston – Cambridge
75/125 Binney Street $ – 87,452 $ 101,087 (7) $ 162,900 $ 263,987 $ 351,439 $ 910 8.0% 8.2% 1Q13 1Q15 2016

The following table presents the current assumptions included in our guidance for funding of the cost to complete the 75/125 Binney Street project:

Cost to Complete (7)
2013 Thereafter Total
ARE investment $ 40,000 - 50,000 $ – $ 40,000 - 50,000
Binney JV partner capital contribution 20,000 - 25,000 – 20,000 - 25,000
Secured construction loan 30,000 - 40,000 160,000 - 165,000 190,000 - 205,000
$ 90,000 - 115,000 $ 160,000 - 165,000 $ 250,000 - 280,000
(1) All project information, including rentable square feet; investment; Initial Stabilized Yields; and project start, occupancy and stabilization dates, relates to the discrete portion of each property undergoing active development or redevelopment. A redevelopment project does not necessarily represent the entire property or the entire vacant portion of a property. For example, the redevelopment project at 1616 Eastlake Avenue represents the conversion of two floors from office to laboratory/office aggregating 66,776 rentable square feet. The remaining rentable square feet of 101,714 at this property not undergoing active redevelopment was 74.8% occupied at December 31, 2012, and is included in our operating statistics.
--- ---
(2) Represents rentable square feet subject to letters of intent.
(3) As of December 31, 2012, 96% of our leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our Initial Stabilized Yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date. We expect, on average, our contractual cash rents related to our value-added projects to increase over time. Our estimates for initial cash and GAAP yields, and total costs at completion, represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.
(4) We expect to deliver 54,102 rentable square feet, or 79% of the total project, to Genomatica, Inc. in the fourth quarter of 2013. Genomatica, Inc. is contractually required to lease the remaining 14,411 rentable square feet no later than 18 to 24 months following the delivery of the initial 54,102 rentable square foot space.
(5) As of December 31, 2012, this project was classified in land undergoing preconstruction activities (additional CIP) in North America. This project will be transferred into active development upon commencement of vertical construction during the three months ended March 31, 2013.
(6) ARIAD Pharmaceuticals, Inc. has potential additional expansion opportunities through June 2014.
(7) Our guidance has assumed transfer of 50% of our ownership interest in the 75/125 Binney Street project to be accounted for as an in-substance partial sale of an interest in a land parcel, with the resulting entity presented as an unconsolidated joint venture (the “Binney JV”) in our financial statements. This sale of a land parcel is included in our total projected asset sales for 2013. The total remaining cost to complete for the 75/125 Binney Street project is expected to aggregate approximately $264 million through 2016, of which $101 million is expected to be invested in 2013. The projected sources of funding for the $264 million cost to complete for this project include a secured construction loan of approximately $190 million to $205 million, Binney JV partner capital contribution of approximately $75 million to $80 million, (approximately $20 million to $25 million to be used towards construction) and our investment in the project of approximately $40 million to $50 million. Our guidance for 2013 development, redevelopment, and construction spending of $545 to $595 million, shown on page 8, includes our estimated investment in the project of approximately $40 million to $50 million into the Binney JV.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 10
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Fourth Quarter and Year Ended December 31, 2012, Financial and Operating Results

EARNINGS CALL INFORMATION

We will host a conference call on Thursday, February 7, 2013, at 3:00 p.m. Eastern Time (“ET”)/12:00 p.m. noon Pacific Time (“PT”) that is open to the general public to discuss our financial and operating results for the three months and year ended December 31, 2012.  To participate in this conference call, dial (866) 638-3013 or (630) 691-2761 and confirmation code 34214742, shortly before 3:00 p.m. ET/12:00 p.m. noon PT.  The audio web cast can be accessed at: www.are.com, in the “For Investors” section.  A replay of the call will be available for a limited time from 5:30 p.m. ET/2:30 p.m. PT on Thursday, February 7, 2013.  The replay number is (888) 843-7419 or (630) 652-3042 and the confirmation code is 34214742.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2012, are available in the “For Investors” section of our website at www.are.com.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed REIT, is the largest and leading investment-grade REIT focused principally on owning, operating, developing, redeveloping, and acquiring high-quality, sustainable real estate for the broad and diverse life science industry.  Founded in 1994, Alexandria was the first REIT to identify and pursue the laboratory niche and has since had the first-mover advantage in every core life science cluster location including Greater Boston, San Francisco Bay Area, San Diego, New York City, Seattle, Suburban Washington, D.C., and Research Triangle Park.  Alexandria’s high-credit client tenants span the life science industry, including renowned academic and medical institutions, multinational pharmaceutical companies, public and private biotechnology entities, United States government research agencies, medical device companies, industrial biotech companies, venture capital firms, and life science product and service companies.  As the recognized real estate partner of the life science industry, Alexandria has a superior track record in driving client tenant productivity and innovation through its best-in-class laboratory and office space, collaborative locations adjacent to leading academic and medical institutions, unparalleled life science real estate expertise and services, and longstanding and expansive network in the life science community, which we believe result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria Real Estate Equities, Inc., please visit www.are.com.

***********

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such forward-looking statements include, without limitation, statements regarding our 2013 earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - diluted, 2013 FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - diluted, and net operating income for the year ended December 31, 2013, and our projected sources and uses of capital in 2013.  These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events.  These statements are subject to risks, uncertainties, assumptions and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, our failure to successfully operate or lease acquired properties, decreased rental rates or increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by client tenants, general and local economic conditions, and other risks and uncertainties detailed in our filings with the SEC.  Accordingly, you are cautioned not to place undue reliance on such forward-looking statements.  All forward-looking statements are made as of the date of this press release, and we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.  For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 11

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Condensed Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Revenues:
Rental $ 114,205 $ 108,367 $ 106,463 $ 103,417 $ 104,634 $ 432,452 $ 414,164
Tenant recoveries 36,180 34,448 32,172 32,386 33,031 135,186 128,299
Other income 3,785 2,640 9,381 2,629 1,584 18,435 5,762
Total revenues 154,170 145,455 148,016 138,432 139,249 586,073 548,225
Expenses:
Rental operations 46,639 44,614 42,359 40,911 41,553 174,523 159,567
General and administrative 12,643 12,485 12,309 10,358 10,601 47,795 41,127
Interest 17,941 17,094 17,922 16,227 14,757 69,184 63,378
Depreciation and amortization 48,072 47,176 51,276 42,326 39,762 188,850 153,087
Impairment of land parcel 2,050 - - - - 2,050 -
Loss on early extinguishment of debt - - 1,602 623 - 2,225 6,485
Total expenses 127,345 121,369 125,468 110,445 106,673 484,627 423,644
Income from continuing operations 26,825 24,086 22,548 27,987 32,576 101,446 124,581
Income (loss) from discontinued operations
Income from discontinued operations before impairment of real estate 3,583 4,018 3,093 2,924 2,886 13,618 11,760
Impairment of real estate (1,601 ) (9,799 ) - - - (11,400 ) (994 )
Income (loss) from discontinued operations, net 1,982 (5,781 ) 3,093 2,924 2,886 2,218 10,766
Gain on sale of land parcel - - - 1,864 - 1,864 46
Net income 28,807 18,305 25,641 32,775 35,462 105,528 135,393
Net income attributable to noncontrolling interests 1,012 828 851 711 1,142 3,402 3,975
Dividends on preferred stock 6,471 6,471 6,903 7,483 7,090 27,328 28,357
Preferred stock redemption charge - - - 5,978 - 5,978 -
Net income attributable to unvested restricted stock awards 324 360 271 235 270 1,190 1,088
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders $ 21,000 $ 10,646 $ 17,616 $ 18,368 $ 26,960 $ 67,630 $ 101,973
Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted:
Continuing operations $ 0.30 $ 0.26 $ 0.24 $ 0.25 $ 0.39 $ 1.05 $ 1.55
Discontinued operations, net 0.03 (0.09 ) 0.05 0.05 0.05 0.04 0.18
Earnings per share – basic and diluted $ 0.33 $ 0.17 $ 0.29 $ 0.30 $ 0.44 $ 1.09 $ 1.73
Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic 63,091,781 62,364,210 61,663,367 61,507,807 61,427,495 62,159,913 59,066,812
Dilutive effect of stock options - - 173 1,160 3,939 331 10,798
Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted 63,091,781 62,364,210 61,663,540 61,508,967 61,431,434 62,160,244 59,077,610
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 12
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

December 31, September 30, June 30, March 31, December 31,
2012 2012 2012 2012 2011
Assets
Investments in real estate, net $ 6,424,578 $ 6,300,027 $ 6,208,354 $ 6,113,252 $ 6,008,440
Cash and cash equivalents 140,971 94,904 80,937 77,361 78,539
Restricted cash 39,947 44,863 41,897 39,803 23,332
Tenant receivables 8,449 10,124 6,143 8,836 7,480
Deferred rent 170,396 160,914 155,295 150,515 142,097
Deferred leasing and financing costs, net 160,048 152,021 151,355 143,754 135,550
Investments 115,048 107,808 104,454 98,152 95,777
Other assets 90,679 94,356 93,304 86,418 82,914
Total assets $ 7,150,116 $ 6,965,017 $ 6,841,739 $ 6,718,091 $ 6,574,129
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable $ 716,144 $ 719,350 $ 719,977 $ 721,715 $ 724,305
Unsecured senior notes payable 549,805 549,794 549,783 550,772 84,959
Unsecured senior line of credit 566,000 413,000 379,000 167,000 370,000
Unsecured senior bank term loans 1,350,000 1,350,000 1,350,000 1,350,000 1,600,000
Accounts payable, accrued expenses, and tenant security deposits 423,708 376,785 348,037 323,002 325,393
Dividends payable 41,401 39,468 38,357 36,962 36,579
Preferred stock redemption liability - - - 129,638 -
Total liabilities 3,647,058 3,448,397 3,385,154 3,279,089 3,141,236
Commitments and contingencies
Redeemable **** noncontrolling interests 14,564 15,610 15,817 15,819 16,034
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Series C Preferred Stock - - - - 129,638
Series D Convertible Preferred Stock 250,000 250,000 250,000 250,000 250,000
Series E Preferred Stock 130,000 130,000 130,000 130,000 -
Common stock 632 632 622 616 616
Additional paid-in capital 3,086,052 3,094,987 3,053,269 3,022,242 3,028,558
Accumulated other comprehensive loss (24,833 ) (19,729 ) (37,370 ) (23,088 ) (34,511 )
Alexandria Real Estate Equities, Inc.’s stockholders’ equity 3,441,851 3,455,890 3,396,521 3,379,770 3,374,301
Noncontrolling interests 46,643 45,120 44,247 43,413 42,558
Total equity 3,488,494 3,501,010 3,440,768 3,423,183 3,416,859
Total **** liabilities, noncontrolling interests, and equity $ 7,150,116 $ 6,965,017 $ 6,841,739 $ 6,718,091 $ 6,574,129
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 13
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Funds From Operations and Adjusted Funds From Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

The following table presents a reconciliation of net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - diluted, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, for the periods below:

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Net income attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic $ 21,000 $ 10,646 $ 17,616 $ 18,368 $ 26,960 $ 67,630 $ 101,973
Depreciation and amortization 48,072 48,173 52,355 43,405 40,966 192,005 158,026
Gain on sale of real estate - (1,562 ) (2 ) - - (1,564 ) -
Impairment of real estate 1,601 9,799 - - - 11,400 994
Gain on sale of land parcel - - - (1,864 ) - (1,864 ) (46 )
Amount attributable to noncontrolling interests/unvested stock awards:
Net income 1,336 1,188 1,122 946 1,412 4,592 5,063
FFO (1,109 ) (1,148 ) (1,133 ) (1,156 ) (1,539 ) (4,561 ) (6,402 )
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic 70,900 67,096 69,958 59,699 67,799 267,638 259,608
Assumed conversion of 8.00% Unsecured Senior Convertible Notes 5 5 6 5 5 21 21
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted 70,905 67,101 69,964 59,704 67,804 267,659 259,629
Realized gain on equity investment primarily related to one non-tenant life science entity - - (5,811 ) - - (5,811 ) -
Impairment of land parcel 2,050 - - - - 2,050 -
Loss on early extinguishment of debt - - 1,602 623 - 2,225 6,485
Preferred stock redemption charge - - - 5,978 - 5,978 -
Allocation to unvested restricted stock awards (19 ) - 35 (53 ) - (39 ) (69 )
FFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted, as adjusted $ 72,936 $ 67,101 $ 65,790 $ 66,252 $ 67,804 $ 272,062 $ 266,045
Non-revenue-enhancing capital expenditures:
Building improvements (329 ) (935 ) (594 ) (210 ) (675 ) (2,068 ) (2,531 )
Tenant improvements and leasing commissions (3,170 ) (1,844 ) (2,148 ) (2,019 ) (6,083 ) (9,181 ) (10,600 )
Straight-line rent (9,240 ) (5,225 ) (5,195 ) (8,796 ) (9,558 ) (28,456 ) (26,797 )
Straight-line rent on ground leases 471 201 1,207 1,406 1,221 3,285 4,704
Capitalized income from development projects 45 50 72 478 537 645 3,973
Amortization of acquired above and below market leases (844 ) (778 ) (778 ) (800 ) (812 ) (3,200 ) (9,332 )
Amortization of loan fees 2,505 2,470 2,214 2,643 2,551 9,832 9,300
Amortization of debt premiums/discounts 110 112 110 179 565 511 3,819
Stock compensation 3,748 3,845 3,274 3,293 3,306 14,160 11,755
Allocation to unvested restricted stock awards 63 19 15 31 80 127 122
AFFO attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted $ 66,295 $ 65,016 $ 63,967 $ 62,457 $ 58,936 $ 257,717 $ 250,458

The following table presents a reconciliation of net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - basic, to FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders - diluted, FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, for the periods below.  For the computation of the weighted average shares used to compute the per share information, refer to the “Definitions and Other Information” section in our supplemental information:

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Net income per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic $ 0.33 $ 0.17 $ 0.29 $ 0.30 $ 0.44 $ 1.09 $ 1.73
Depreciation and amortization 0.76 0.78 0.84 0.70 0.67 3.10 2.66
Gain on sale of real estate - (0.03 ) - - - (0.03 ) -
Impairment of real estate 0.03 0.16 - - - 0.18 0.02
Gain on sale of land parcel - - - (0.03 ) - (0.03 ) -
Amount attributable to noncontrolling interests/unvested stock awards:
Net income 0.02 0.02 0.02 0.02 0.02 0.07 0.09
FFO (0.02 ) (0.02 ) (0.02 ) (0.02 ) (0.03 ) (0.07 ) (0.11 )
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – basic 1.12 1.08 1.13 0.97 1.10 4.31 4.39
Assumed conversion of 8.00% Unsecured Senior Convertible Notes - - - - - - -
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted 1.12 1.08 1.13 0.97 1.10 4.31 4.39
Realized gain on equity investment primarily related to one non-tenant life science entity - - (0.09 ) - - (0.09 ) -
Impairment of land parcel 0.04 - - - - 0.04 -
Loss on early extinguishment of debt - - 0.03 0.01 - 0.02 0.11
Preferred stock redemption charge - - - 0.10 - 0.10 -
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted, as adjusted $ 1.16 $ 1.08 $ 1.07 $ 1.08 $ 1.10 $ 4.38 $ 4.50
Non-revenue-enhancing capital expenditures:
Building improvements (0.01 ) (0.01 ) (0.01 ) - (0.01 ) (0.03 ) (0.04 )
Tenant improvements and leasing commissions (0.05 ) (0.03 ) (0.03 ) (0.03 ) (0.10 ) (0.15 ) (0.18 )
Straight-line rent (0.15 ) (0.08 ) (0.08 ) (0.14 ) (0.16 ) (0.46 ) (0.45 )
Straight-line rent on ground leases 0.01 - 0.02 0.02 0.02 0.05 0.08
Capitalized income from development projects - - - 0.01 0.01 0.01 0.07
Amortization of acquired above and below market leases (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.01 ) (0.05 ) (0.16 )
Amortization of loan fees 0.04 0.03 0.03 0.04 0.05 0.16 0.16
Amortization of debt premiums/discounts - - - - 0.01 0.01 0.06
Stock compensation 0.06 0.06 0.05 0.05 0.05 0.23 0.20
AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders – diluted $ 1.05 $ 1.04 $ 1.04 $ 1.02 $ 0.96 $ 4.15 $ 4.24
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 14
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Non-GAAP Measures

Funds from operations and funds from operations, as adjusted

GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes that 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 FFO.  Since its introduction, FFO has become a widely used non-GAAP financial measure among equity REITs.  We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT.  Moreover, we believe that FFO, as adjusted, is also helpful because it allows investors to compare our performance to the performance of other real estate companies between periods, and on a consistent basis, without having to account for differences caused by investment and disposition decisions, financing decisions, terms of securities, capital structures, and capital market transactions.  We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper and related implementation guidance (“NAREIT White Paper”).  The NAREIT White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of real estate and land parcels and impairments of real estate (excluding land parcels), plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.  Impairments of real estate relate to decreases in the estimated fair value of real estate due to changes in general market conditions and do not necessarily reflect the operating performance of the properties during the corresponding period.  Impairments of real estate represent the non-cash write-down of assets when fair value over the recoverability period is less than the carrying value.  We compute FFO, as adjusted, as FFO calculated in accordance with the NAREIT White Paper, plus losses on early extinguishment of debt, preferred stock redemption charges, and impairments of land parcels, less realized gain on equity investment primarily related to one non-tenant life science entity, and the amount of such items which are allocable to our unvested restricted stock awards.  Our calculations of both FFO and FFO, as adjusted, may differ from those methodologies utilized by other equity REITs for similar performance measurements, and, accordingly, may not be comparable to other equity REITs.  Neither FFO nor FFO, as adjusted, should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity, nor are they indicative of the availability of funds for our cash needs, including funds available to make distributions.

Adjusted funds from operations

AFFO is a non-GAAP financial measure that we use as a supplemental measure of our performance.  We compute AFFO by adding to or deducting from FFO, as adjusted: (1) non-revenue-enhancing capital expenditures, tenant improvements, and leasing commissions (excludes development and redevelopment expenditures); (2) effects of straight-line rent and straight-line rent on ground leases; (3) capitalized income from development projects; (4) amortization of acquired above and below market leases, loan fees, and debt premiums/discounts; (5) non-cash compensation expense; and (6) allocation of AFFO attributable to unvested restricted stock awards.

We believe that AFFO is a useful supplemental performance measure because it further adjusts to: (1) deduct certain expenditures that, although capitalized and classified in depreciation expense, do not enhance the revenue or cash flows of our properties; (2) eliminate the effect of straight-lining our rental income and capitalizing income from development projects in order to reflect the actual amount of contractual rents due in the period presented; and (3) eliminate the effect of non-cash items that are not indicative of our core operations and do not actually reduce the amount of cash generated by our operations.  We believe that eliminating the effect of non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use.  We believe that AFFO provides useful information by excluding certain items that are not representative of our core operating results because such items are dependent upon historical costs or subject to judgmental valuation inputs and the timing of our decisions.

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 15

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Non-GAAP Measures

(Dollars in thousands,)

(Unaudited)

Net operating income

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

Further, we believe net operating income is useful to investors as a performance measure, because when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.  Net operating income excludes certain components from income from continuing operations in order to provide results that are more closely related to the results of operations of our properties.  For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level.  In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level.  Real estate impairments have been excluded in deriving net operating income because we do not consider impairment losses to be property level operating expenses.  Real estate impairment losses relate to changes in the values of our assets and do not reflect the current operating performance with respect to related revenues or expenses.  Our real estate impairments represent the write down in the value of the assets to the estimated fair value less cost to sell.  These impairments result from investing decisions and the deterioration in market conditions that adversely impact underlying real estate values.  Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as losses on early extinguishment of debt, as these charges often relate to the timing of corporate strategy.  Property operating expenses that are included in determining net operating income consist of costs that are related to our operating properties, such as utilities, repairs and maintenance, rental expense related to ground leases, contracted services, such as janitorial, engineering, and landscaping, property taxes and insurance, and property level salaries.  General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional fees, office rent, and office supplies that are incurred as part of corporate office management.  Net operating income presented by us may not be comparable to net operating income reported by other equity REITs that define net operating income differently.  We believe that in order to facilitate a clear understanding of our operating results, net operating income should be examined in conjunction with income from continuing operations as presented in our condensed consolidated statements of income.  Net operating income should not be considered as an alternative to income from continuing operations as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions.  The following table presents a reconciliation of net operating income from continuing operations to income from continuing operations, and a reconciliation of net operating income from discontinued operations to income from discontinued operations, net:

**** Three Months Ended Year Ended
Continuing operations December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Total revenues $ 154,170 $ 139,249 $ 586,073 $ 548,225
Rental operating expenses 46,639 41,553 174,523 159,567
Net operating income 107,531 97,696 411,550 388,658
Operating margins 70% 70% 70% 71%
General and administrative 12,643 10,601 47,795 41,127
Interest 17,941 14,757 69,184 63,378
Depreciation and amortization 48,072 39,762 188,850 153,087
Impairment of land parcel 2,050 - 2,050 -
Loss on early extinguishment of debt - - 2,225 6,485
Income from continuing operations $ 26,825 $ 32,576 $ 101,446 $ 124,581
Discontinued operations
Total revenues $ 5,898 $ 6,640 $ 24,706 $ 26,298
Rental operating expenses 2,315 2,548 9,496 9,534
Net operating income 3,583 4,092 15,210 16,764
Operating margins 61% 62% 62% 64%
Interest - - - 65
Depreciation and amortization - 1,206 3,156 4,939
Gain on sale of real estate - - (1,564 ) -
Impairment of real estate 1,601 - 11,400 994
Income from discontinued operations, net $ 1,982 $ 2,886 $ 2,218 $ 10,766
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 16
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Financial and Asset Base Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

**** Three Months Ended ****
Key Credit Metrics 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 ****
Unencumbered net operating income as a percentage of total net operating income 71% 73% 73% 70% 69%
Percentage outstanding on unsecured senior line of credit at end of period 38% 28% 25% 11% 25%
Net debt to gross assets (excluding cash and restricted cash) at end of period 38% 38% 38% 36% 37%
Net debt to Adjusted EBITDA (1) 7.3x 7.6x 7.1x (2) 7.1x 7.1x
Fixed charge coverage ratio (1) 2.8x 2.5x 2.6x 2.6x 2.7x
Interest coverage ratio (1) 3.4x 3.1x 3.2x 3.3x 3.4x
Dividend payout ratio (common stock) 49% 50% 49% 46% 45%
Selected Balance Sheet Information **** **** **** **** **** **** **** **** **** ****
Investments in real estate (gross) $ 7,299,613 $ 7,154,359 $ 7,030,723 $ 6,892,429 $ 6,750,975
Total assets $ 7,150,116 $ 6,965,017 $ 6,841,739 $ 6,718,091 $ 6,574,129
Total unsecured debt $ 2,465,805 $ 2,312,794 $ 2,278,783 $ 2,067,772 $ 2,054,959
Total debt $ 3,181,949 $ 3,032,114 $ 2,998,760 $ 2,789,487 $ 2,779,264
Net debt $ 3,001,031 $ 2,892,377 $ 2,875,926 $ 2,672,323 $ 2,677,393
Total liabilities $ 3,647,058 $ 3,448,397 $ 3,385,154 $ 3,279,089 $ 3,141,236
Common shares outstanding 63,244,645 63,161,177 62,249,973 61,634,645 61,560,472
Total market capitalization $ 7,953,348 $ 8,064,386 $ 7,912,286 $ 7,673,553 $ 7,412,402
Operating Data
Total revenues $ 154,170 $ 145,455 $ 148,016 $ 138,432 $ 139,249
Rental operations $ 46,639 $ 44,614 $ 42,359 $ 40,911 $ 41,553
Operating margins 70% 69% 71% 70% 70%
General and administrative expense as a percentage of total revenues 8.2% 8.6% 8.3% 7.5% 7.6%
Capitalized interest $ 14,897 $ 16,763 $ 15,825 $ 15,266 $ 16,151
Weighted average interest rate used for capitalization during period 4.10% 4.35% 4.41% 4.29% 4.35%
Adjusted EBITDA – quarter annualized $ 408,876 $ 382,616 $ 403,168 (2) $ 377,836 $ 377,964
Adjusted EBITDA – trailing 12 months $ 393,124 $ 385,396 $ 384,034 (2) $ 378,484 $ 376,050
Adjusted EBITDA margins – quarter annualized 66% 66% 68% 68% 68%
Net Income, FFO, and AFFO
Net income attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – diluted $ 21,000 $ 10,646 (3) $ 17,616 $ 18,368 $ 26,960
FFO attributable to Alexandria Real Estate, Inc.’s **** common stockholders – diluted $ 70,905 $ 67,101 $ 69,964 $ 59,704 $ 67,804
FFO attributable to Alexandria Real Estate, Inc.’s **** common stockholders – diluted,<br> as adjusted $ 72,936 $ 67,101 $ 65,790 $ 66,252 $ 67,804
AFFO attributable to Alexandria Real Estate Equities, Inc.’s common<br> stockholders – diluted $ 66,295 $ 65,016 $ 63,967 $ 62,457 58,936
Per Share Data **** **** **** **** **** **** **** **** **** ****
Earnings per share – diluted $ 0.33 $ 0.17 (3) $ 0.29 $ 0.30 $ 0.44
FFO per share – diluted $ 1.12 $ 1.08 $ 1.13 $ 0.97 $ 1.10
FFO per share – diluted, as adjusted $ 1.16 $ 1.08 $ 1.07 $ 1.08 $ 1.10
AFFO per share – diluted $ 1.05 $ 1.04 $ 1.04 $ 1.02 $ 0.96
Asset Base Statistics **** **** **** **** **** **** **** **** **** ****
Number of properties at end of period 178 177 182 174 173
Rentable square feet at end of period 17,067,834 16,648,028 16,931,634 15,557,333 15,321,870
Occupancy of operating properties at end of period 93.4% 93.0% 92.9% 94.2% 94.9%
Occupancy of operating and redevelopment properties at end of period 89.8% 88.3% 86.9% 87.9% 88.5%
Leasing Activity and Same Property Performance
Leasing activity – Qtr rentable square feet 677,781 732,094 959,295 911,926 1,142,055
Leasing activity – Qtr percentage change in rental rates – cash basis (2.9% ) (2.9% ) (0.8% ) (2.8% ) (4.1% )
Leasing activity – Qtr percentage change in rental rates – GAAP basis 2.6% 7.6% 5.8% 3.3% 7.6%
Same property – Qtr percentage change in net operating income – cash basis 6.3% 4.3% 1.6% 1.7% 3.1%
Same property – Qtr percentage change in net operating income – GAAP basis 0.7% (0.9% ) (0.2% ) (0.7% ) (0.5% )
(1) Quarter annualized.
--- ---
(2) Excluding $5.8 million recognized in the second quarter of 2012 related to a realized gain on an equity investment primarily related to one non-tenant life science entity, net debt to Adjusted EBITDA was 7.6x, Adjusted EBITDA – quarter annualized was approximately $379.9 million, and Adjusted EBITDA – trailing 12 months was approximately $378.2 million.
(3) Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted excluding $9.8 million, or $0.16 per share, impairment of real estate, was $20.4 million, or $0.33 per share.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 17
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Core Operating Metrics

December 31, 2012

(Unaudited)

Quarterly percentage change in same property net operating income

Percentage change in rental rates on renewed/re-leased space

Occupancy percentage

Solid leasing capabilities – rentable square feet leased

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 18

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Same Property Comparisons

December 31, 2012

(Dollars in thousands)

(Unaudited)

Three Months Ended Year Ended
Same property data December 31, 2012 December 31, 2012
Percentage change in net operating income – cash basis 6.3% 3.5%
Percentage change in net operating income – GAAP basis 0.7% (0.5% )
Number of properties 139 131
Rentable square feet 10,768,514 9,581,079
Occupancy - current period 92.9% 93.9%
Occupancy - same period prior year 92.6% 93.7%

The following table presents a comparison of the components of same property and non-same property net operating income for the three months and year ended December 31, 2012, compared to the three months and year ended December 31, 2011, and a reconciliation of net operating income to income from continuing operations, the most directly comparable GAAP financial measure:

Three Months Ended December 31, Year Ended December 31,
Revenues: 2012 2011 % Change 2012 2011 % Change
Total revenues – same properties $ 119,253 $ 115,984 2.8 % $ 423,816 $ 420,689 0.7 %
Total revenues – non-same properties 34,917 23,265 50.1 162,257 127,536 27.2
Total revenues – GAAP basis 154,170 139,249 10.7 586,073 548,225 6.9
Expenses:
Rental operations – same properties 36,316 33,630 8.0 126,283 121,599 3.9
Rental operations – non-same properties 10,323 7,923 30.3 48,240 37,968 27.1
Total rental operations 46,639 41,553 12.2 174,523 159,567 9.4
Net operating income:
Net operating income – same properties 82,937 82,354 0.7 297,533 299,090 (0.5 )
Net operating income – non-same properties 24,594 15,342 60.3 114,017 89,568 27.3
Total net operating income – GAAP basis 107,531 97,696 10.1 411,550 388,658 5.9
Other expenses:
General and administrative 12,643 10,601 19.3 47,795 41,127 16.2
Interest 17,941 14,757 21.6 69,184 63,378 9.2
Depreciation and amortization 48,072 39,762 20.9 188,850 153,087 23.4
Impairment of land parcel 2,050 – 100.0 2,050 – 100.0
Loss on early extinguishment of debt – – 0.0 2,225 6,485 (65.7 )
Total other expenses 80,706 65,120 23.9 310,104 264,077 17.4
Income from continuing operations $ 26,825 $ 32,576 (17.7 %) $ 101,446 $ 124,581 (18.6 %)
Net operating income – same properties – GAAP basis $ 82,937 **** $ 82,354 **** 0.7 % **** $ 297,533 **** $ 299,090 **** (0.5 %) ****
Less: straight-line rent adjustments (973 ) (5,271 ) (81.5 ) (1) (5,434 ) (16,966 ) (68.0 ) (1)
Net operating income – same properties – cash basis $ 81,964 **** $ 77,083 **** 6.3 % **** $ 292,099 **** $ 282,124 **** 3.5 % ****

(1)        The decrease in straight-line rent was primarily related to the commencement of approximately $6.5 million of annual cash rent at 450 East 29th Street in the Greater NYC market in early February 2012.

The following table reconciles same properties to total properties for the year ended December 31, 2012:

Number of<br> Properties Number of<br> Properties Number of<br> Properties
Development – active Development – deliveries since January 1, 2011 Development/Redevelopment – Asia 9 (1)
225 Binney Street 1 259 East Grand Avenue 1
409/499 Illinois Street 2 400/450 East Jamie Court 2 Properties acquired since January 1, 2011
430 East 29th Street 1 455 Mission Bay Boulevard South 1
4 4755 Nexus Center Drive 1 3013/3033 Science Park Road 1
5200 Illumina Way 1 6 Davis Drive 1
7 Triangle Drive 1 2
Canada - (2)
7
Redevelopment – active Redevelopment – deliveries since January 1, 2011 Properties held for sale 4
11119 North Torrey Pines Road 1 10300 Campus Point Drive 1 Total properties excluded from same properties 47
1551 Eastlake Avenue 1 15010 Broschart Road 1 Same properties 131
1616 Eastlake Avenue 1 20 Walkup Drive 1 Total properties as of December 31, 2012 178
285 Bear Hill Road 1 215 First Street 1
343 Oyster Point Boulevard 1 3530/3550 John Hopkins Court 2
400 Technology Square 1 3565 General Atomics Court 1
4757 Nexus Center Drive 1 500 Arsenal Street 1
9800 Medical Center Drive 3 6101 Quadrangle Drive 1
10 620 Professional Drive 1
6275 Nancy Ridge Drive 1
11

(1)       Property count includes two development deliveries, one redevelopment delivery, one property acquired since January 1, 2011, and five active development and redevelopment properties.

(2)       Represents two buildings included in our property listing as one property.  One of the two buildings represents the ground-up development completed during the year ended December 31, 2012.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 19

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Leasing Activity

December 31, 2012

(Unaudited)

Three Months Ended Year Ended
December 31, 2012 December 31, 2012 December 31, 2011 December 31, 2010 December 31, 2009
Leasing activity: Cash GAAP Cash GAAP Cash GAAP Cash GAAP Cash GAAP
Lease expirations
Number of leases 48 48 162 162 158 158 129 129 131 131
Rentable square footage 559,168 559,168 2,350,348 2,350,348 2,689,257 2,689,257 2,416,291 2,416,291 1,842,597 1,842,597
Expiring rates 32.16 27.44 30.03 27.65 29.98 28.42 27.18 28.54 30.61 30.70
Renewed/re-leased space
Number of leases 26 26 102 102 109 109 89 89 95 95
Leased rentable square footage 314,354 314,354 1,475,403 1,475,403 1,821,866 1,821,866 1,777,966 1,777,966 1,188,184 1,188,184
Expiring rates 32.39 30.75 30.47 28.87 30.73 28.79 28.84 30.54 28.07 26.78
New rates 31.44 31.55 29.86 30.36 30.16 30.00 29.41 32.04 28.11 27.72
Rental rate changes (2.9% 2.6% (2.0% 5.2% (1.9% 4.2 2.0 4.9 0.1 3.5
TI’s/lease commissions per square foot 10.09 10.09 6.22 6.22 5.82 5.82 4.40 4.40 3.99 3.99
Average lease terms 5.0 years 5.0 years 4.7 years 4.7 years 4.2 years 4.2 years 8.1 years 8.1 years 3.3 years 3.3 years
Developed/redeveloped/previously vacant space leased
Number of leases 21 21 85 85 81 81 53 53 47 47
Rentable square footage 363,427 363,427 1,805,693 1,805,693 1,585,610 1,585,610 966,273 966,273 676,163 676,163
New rates 22.54 24.23 30.66 32.56 33.45 36.00 36.33 39.89 33.57 36.00
TI’s/lease commissions per square foot 7.14 7.14 11.02 11.02 12.78 12.78 8.10 8.10 8.12 8.12
Average lease terms 8.6 years 8.6 years 9.0 years 9.0 years 8.9 years 8.9 years 9.7 years 9.7 years 6.6 years 6.6 years
Leasing activity summary:
Totals (4)
Number of leases 47 47 187 187 190 190 142 142 142 142
Rentable square footage 677,781 677,781 3,281,096 3,281,096 3,407,476 3,407,476 2,744,239 2,744,239 1,864,347 1,864,347
New rates 26.67 27.62 30.30 31.57 31.69 32.79 31.84 34.80 30.09 30.73
TI’s/lease commissions per square foot 8.51 8.51 8.87 8.87 9.06 9.06 5.70 5.70 5.49 5.49
Average lease terms 6.9 years 6.9 years 7.1 years 7.1 years 6.4 years 6.4 years 8.7 years 8.7 years 4.5 years 4.5 years

All values are in US Dollars.

(1)                   Excluding one lease for 70,000 rentable square feet in the Suburban Washington, D.C., market, rental rates for renewed/re-leased space were, on average, 1.3% higher and 6.1% higher than rental rates for expiring leases on a cash and GAAP basis, respectively.

(2)                   Excluding one lease for 48,000 rentable square feet in the Research Triangle Park market, and two leases for 141,000 rentable square feet in the Suburban Washington, D.C., market, rental rates for renewed/re-leased space were, on average, 0.4% higher and 7.1% higher than rental rates for expiring leases on a cash and GAAP basis, respectively.

(3)                   Excluding three leases aggregating 200,000 rentable square feet related to the Asia market, new rates for developed/redeveloped/previously vacant space were, on average, $30.31 and $31.37 on a cash and GAAP basis, respectively; TI’s/lease commissions per square foot were, on average, $13.26 on both cash and GAAP basis; average lease terms were 7.8 years on both cash and GAAP basis.

(4)                   Excludes 11 month-to-month leases for approximately 33,638 rentable square feet.

During the three months ended December 31, 2012, we granted tenant concessions/free rent averaging approximately 1.0 month with respect to the 677,781 rentable square feet leased.  During the year ended December 31, 2012, we granted tenant concessions/free rent averaging approximately 1.6 months with respect to the 3,281,096 rentable square feet leased.

Lease Structure December 31, 2012
Percentage of triple net leases 94%
Percentage of leases containing annual rent escalations 96%
Percentage of leases providing for the recapture of capital expenditures 92%

The following chart presents our total rentable square feet leased by development/redevelopment space leased and renewed/re-leased/previously vacant space leased:

GRAPHIC

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 20

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Lease Expirations

December 31, 2012

(Unaudited)

Year of Lease Expiration Number of Leases Expiring RSF of Expiring Leases Percentage of<br> Aggregate Total RSF Annualized Base Rent of<br> Expiring Leases (per RSF)
2013 92 (1) 1,122,071 (1) 7.9% $27.52
2014 88 1,188,795 8.4% $31.30
2015 72 1,376,412 9.7% $32.80
2016 55 1,450,110 10.2% $30.10
2017 60 1,542,680 10.9% $30.76
2018 24 1,141,470 8.0% $39.50
2019 20 663,463 4.7% $33.50
2020 16 772,974 5.4% $41.08
2021 21 829,431 5.8% $36.77
2022 15 545,344 3.8% $31.43
Thereafter 21 2,095,674 14.7% $39.78
Annualized
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2013 RSF of Expiring Leases Base Rent of
Negotiating/ Targeted for Remaining Expiring Leases Market Rent
Market Leased Anticipating Redevelopment Expiring Leases Total (per RSF) per RSF (1)
Greater Boston 4,679 35,077 – 105,746 145,502 $ 36.78 $25.00 - $59.00
San Francisco Bay Area 56,862 61,058 – 205,104 323,024 32.39 $20.00 - $47.00
San Diego 2,835 – 176,500 (2) 135,069 314,404 19.46 $16.00 - $36.00
Greater NYC – – – – – – N/A
Suburban Washington, D.C. – 121,068 (3) – 101,256 222,324 30.58 $15.00 - $32.00
Seattle – – – 7,192 7,192 17.35 $17.00 - $44.00
Research Triangle Park 9,464 12,261 – 52,213 73,938 19.52 $10.00 - $32.00
Canada – – – – – – N/A
Non-cluster markets 15,463 4,006 – 5,873 25,342 17.68 $14.00 - $24.00
Asia – 2,314 – 8,031 10,345 12.94 (4) $11.00 - $26.00
Total 89,303 235,784 176,500 620,484 1,122,071 (5) $ 27.52
Percentage of expiring leases 8 % 21 % 16 % 55 % 100 %
Annualized
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2014 RSF of Expiring Leases Base Rent of
Negotiating/ Targeted for Remaining Expiring Leases Market Rent
Market Leased Anticipating Redevelopment Expiring Leases Total (per RSF) per RSF (1)
Greater Boston – 63,360 – 265,788 329,148 $ 38.42 $25.00 - $59.00
San Francisco Bay Area 91,644 – – 278,808 370,452 31.56 $20.00 - $47.00
San Diego – – – 43,894 43,894 27.63 $16.00 - $36.00
Greater NYC – 5,271 – 89,954 95,225 40.78 $20.00 - $70.00
Suburban Washington, D.C. – 10,778 85,297 (6) 76,136 172,211 19.42 $15.00 - $32.00
Seattle – 6,849 – 13,213 20,062 47.75 $17.00 - $44.00
Research Triangle Park – 10,527 – 34,496 45,023 22.71 $10.00 - $32.00
Canada – 13,031 – 80,127 93,158 23.37 $13.00 - $28.00
Non-cluster markets – – – – – – N/A
Asia – 12,720 – 6,902 19,622 13.74 (4) $11.00 - $26.00
Total 91,644 122,536 85,297 889,318 1,188,795 $ 31.30
Percentage of expiring leases 8 % 10 % 7 % 75 % 100 %
(1) Based upon rental rates achieved in recently executed leases over the trailing 12 months and our estimate of market rents.
--- ---
(2) Represents a project containing 176,500 rentable square feet of non-laboratory space at 3013/3033 Science Park Road, which consists of two buildings acquired in April 2012. The property was 100% leased on a short-term basis to a non-life science tenant and thereafter, we expect to redevelop the property.
(3) Includes 54,906 rentable square feet at 5 Research Court. We expect the tenant to extend their lease beyond their 2013 lease end date. This property consists of non-laboratory space and upon rollover will undergo conversion into laboratory space through redevelopment.
(4) Our current investment in this property is approximately $86 per rentable square foot.
(5) Excludes 11 month-to-month leases for approximately 33,638 rentable square feet.
(6) Represents projects containing 60,000 rentable square feet and 25,000 rentable square feet at 930 Clopper Road and 1500 East Gude Drive, respectively, which we expect to convert from non-laboratory space to laboratory space through redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 21
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Properties and Occupancy

December 31, 2012

(Dollars in thousands)

(Unaudited)

Summary of properties

Rentable Square Feet Number of
Market Operating Development Redevelopment Total % Total Properties Annualized Base Rent
Greater Boston 3,021,427 305,212 97,862 3,424,501 20 % 35 $ 115,752 26 %
San Francisco Bay Area 2,486,752 222,780 53,980 2,763,512 16 25 96,952 22
San Diego 2,722,456 – 95,381 2,817,837 17 36 86,942 20
Greater NYC 534,827 419,806 – 954,633 6 7 32,115 7
Suburban Washington, D.C. 2,360,990 – 75,056 2,436,046 14 31 50,157 11
Seattle 636,838 – 109,345 746,183 4 10 26,001 6
Research Triangle Park 941,807 – – 941,807 6 14 19,386 5
Canada 1,096,077 – – 1,096,077 6 5 9,368 2
Non-cluster markets 61,002 – – 61,002 – 2 590 –
North America 13,862,176 947,798 431,624 15,241,598 89 **** 165 437,263 99 ****
Asia 587,662 618,976 115,468 1,322,106 8 9 4,188 1
Continuing operations 14,449,838 1,566,774 547,092 16,563,704 97 174 $ 441,451 100 %
Discontinued operations 504,130 – – 504,130 3 4
Total 14,953,968 1,566,774 547,092 17,067,834 100 % 178

Summary of occupancy percentages

Operating Properties Operating and Redevelopment Properties
Market December 31, 2012 September 30, 2012 June 30, 2012 December 31, 2012 September 30, 2012 June 30, 2012
Greater Boston 94.6 % 94.3 % 93.1 % 91.6 % 84.3 % 84.1 %
San Francisco Bay Area 97.8 98.0 97.0 95.7 95.7 94.7
San Diego 95.1 95.2 95.5 91.9 93.3 85.5
Greater NYC 95.7 95.0 94.2 95.7 95.0 94.2
Suburban Washington, D.C. 90.9 89.4 90.1 88.1 85.7 86.3
Seattle 93.9 96.3 96.1 80.1 89.6 90.8
Research Triangle Park 95.5 95.5 95.5 95.5 95.5 95.5
Canada 98.1 92.7 92.7 98.1 92.7 92.7
Non-cluster markets 51.4 51.4 51.4 51.4 51.4 51.4
North America 94.6 **** 94.2 **** 93.9 **** 91.6 **** 90.0 **** 88.4 ****
Asia 66.2 68.1 67.4 55.3 57.2 55.0
Continuing operations 93.4 % 93.0 % 92.9 % 89.8 % 88.3 % 86.9 %
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 22
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Property Listing December 31, 2012 (Dollars in thousands)

(Unaudited)

**** **** **** Occupancy Percentage
**** **** Rentable Square Feet Number of Annualized Operating and
Address Submarket Operating Development Redevelopment Total Properties Base Rent Operating Redevelopment
Greater Boston **** **** **** **** **** **** ****
100 Technology Square Cambridge/Inner Suburbs 255,441 – – 255,441 1 $ 17,180 100.0 % 100.0 %
200 Technology Square Cambridge/Inner Suburbs 177,101 – – 177,101 1 10,411 100.0 100.0
300 Technology Square Cambridge/Inner Suburbs 175,609 – – 175,609 1 7,701 88.9 88.9
400 Technology Square Cambridge/Inner Suburbs 140,532 – 71,592 212,124 1 7,439 100.0 66.2
500 Technology Square Cambridge/Inner Suburbs 184,207 – – 184,207 1 10,041 98.4 98.4
600 Technology Square Cambridge/Inner Suburbs 128,224 – – 128,224 1 4,383 99.6 99.6
700 Technology Square Cambridge/Inner Suburbs 48,930 – – 48,930 1 1,548 82.4 82.4
161 First Street Cambridge/Inner Suburbs 46,356 – – 46,356 1 1,955 99.5 99.5
167 Sidney Street Cambridge/Inner Suburbs 26,589 – – 26,589 1 1,392 100.0 100.0
215 First Street Cambridge/Inner Suburbs 366,719 – – 366,719 1 10,633 86.2 86.2
225 Binney Street Cambridge/Inner Suburbs – 305,212 – 305,212 1 – N/A N/A
300 Third Street Cambridge/Inner Suburbs 131,963 – – 131,963 1 6,520 100.0 100.0
480 Arsenal Cambridge/Inner Suburbs 140,744 – – 140,744 1 4,644 100.0 100.0
500 Arsenal Street Cambridge/Inner Suburbs 93,516 – – 93,516 1 3,402 100.0 100.0
780/790 Memorial Drive Cambridge/Inner Suburbs 99,350 – – 99,350 2 6,634 100.0 100.0
79/96 Charlestown Navy Yard Cambridge/Inner Suburbs 25,309 – – 25,309 1 171 34.8 34.8
99 Erie Street Cambridge/Inner Suburbs 27,960 – – 27,960 1 1,143 100.0 100.0
100 Beaver Street Route 128 82,330 – – 82,330 1 2,286 100.0 100.0
285 Bear Hill Road Route 128 – – 26,270 26,270 1 – N/A –
19 Presidential Way Route 128 128,325 – – 128,325 1 3,398 100.0 100.0
29 Hartwell Avenue Route 128 59,000 – – 59,000 1 2,049 100.0 100.0
3 Preston Court Route 128 30,123 – – 30,123 1 395 44.4 44.4
35 Hartwell Avenue Route 128 46,700 – – 46,700 1 1,650 100.0 100.0
35 Wiggins Avenue Route 128 48,640 – – 48,640 1 878 100.0 100.0
44 Hartwell Avenue Route 128 26,828 – – 26,828 1 1,105 100.0 100.0
45/47 Wiggins Avenue Route 128 38,000 – – 38,000 1 1,114 100.0 100.0
60 Westview Street Route 128 40,200 – – 40,200 1 1,147 100.0 100.0
6/8 Preston Court Route 128 54,391 – – 54,391 1 752 100.0 100.0
111 Forbes Boulevard Route 495/Worcester 58,280 – – 58,280 1 261 28.6 28.6
130 Forbes Boulevard Route 495/Worcester 97,566 – – 97,566 1 871 100.0 100.0
20 Walkup Drive Route 495/Worcester 91,045 – – 91,045 1 653 100.0 100.0
30 Bearfoot Road Route 495/Worcester 60,759 – – 60,759 1 2,765 100.0 100.0
306 Belmont Street Route 495/Worcester 78,916 – – 78,916 1 1,139 100.0 100.0
350 Plantation Street Route 495/Worcester 11,774 – – 11,774 1 92 42.5 42.5
Greater Boston 3,021,427 305,212 97,862 3,424,501 35 $ 115,752 94.6 % 91.6 %
San Francisco Bay Area **** **** **** **** **** **** ****
1500 Owens Street Mission Bay 158,267 – – 158,267 1 $ 7,029 97.8 % 97.8 %
1700 Owens Street Mission Bay 157,340 – – 157,340 1 10,099 99.6 99.6
455 Mission Bay Boulevard South Mission Bay 210,398 – – 210,398 1 8,805 97.8 97.8
409/499 Illinois Street Mission Bay 234,249 222,780 – 457,029 2 14,197 100.0 100.0
249 East Grand Avenue South San Francisco 129,501 – – 129,501 1 5,086 100.0 100.0
259 East Grand Avenue South San Francisco 170,618 – – 170,618 1 6,378 100.0 100.0
341/343 Oyster Point Boulevard South San Francisco 53,980 – 53,980 107,960 2 1,189 100.0 50.0
400/450 East Jamie Court South San Francisco 163,036 – – 163,036 2 4,075 79.6 79.6
500 Forbes Boulevard South San Francisco 155,685 – – 155,685 1 5,540 100.0 100.0
600/630/650 Gateway Boulevard South San Francisco 150,960 – – 150,960 3 4,400 96.9 96.9
681 Gateway Boulevard South San Francisco 126,971 – – 126,971 1 6,161 100.0 100.0
7000 Shoreline Court South San Francisco 136,395 – – 136,395 1 4,167 99.7 99.7
901/951 Gateway Boulevard South San Francisco 170,244 – – 170,244 2 5,573 100.0 100.0
2425 Garcia Avenue & 2400/2450 Bayshore Parkway Peninsula 98,964 – – 98,964 1 3,232 96.6 96.6
2625/2627/2631 Hanover Street Peninsula 32,074 – – 32,074 1 1,328 100.0 100.0
3165 Porter Drive Peninsula 91,644 – – 91,644 1 3,929 100.0 100.0
3350 West Bayshore Road Peninsula 60,000 – – 60,000 1 1,530 100.0 100.0
75/125 Shoreway Road Peninsula 82,815 – – 82,815 1 2,044 100.0 100.0
849/863 Mitten Road & 866 Malcolm Road Peninsula 103,611 – – 103,611 1 2,190 95.5 95.5
San Francisco Bay Area 2,486,752 222,780 53,980 2,763,512 25 $ 96,952 97.8 % 95.7 %
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 23

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Property Listing December 31, 2012 (Dollars in thousands)

(Unaudited)

**** **** **** Occupancy Percentage
**** **** Rentable Square Feet Number of Annualized Operating and
Address Submarket Operating Development Redevelopment Total Properties Base Rent Operating Redevelopment
San Diego **** **** **** **** **** **** ****
10931/10933 North Torrey Pines Road Torrey Pines 96,641 – – 96,641 1 $ 3,081 95.7 % 95.7 %
10975 North Torrey Pines Road Torrey Pines 44,733 – – 44,733 1 1,595 100.0 100.0
11119 North Torrey Pines Road Torrey Pines 45,287 – 26,958 72,245 1 1,495 100.0 62.7
3010 Science Park Road Torrey Pines 74,557 – – 74,557 1 3,215 100.0 100.0
3013/3033 Science Park Road (1) Torrey Pines 176,500 – – 176,500 1 3,055 100.0 100.0
3115/3215 Merryfield Row Torrey Pines 158,645 – – 158,645 2 7,125 100.0 100.0
3530/3550 John Hopkins Court & 3535/3565 General Atomics Court Torrey Pines 220,569 – – 220,569 4 7,815 93.4 93.4
10300 Campus Point Drive University Town Center 449,759 – – 449,759 1 15,783 96.1 96.1
4755/4757/4767 Nexus Center Drive University Town Center 110,535 – 68,423 178,958 3 4,252 100.0 61.8
5200 Illumina Way University Town Center 473,954 – – 473,954 1 18,574 100.0 100.0
9363/9373/9393 Towne Center Drive University Town Center 128,844 – – 128,844 3 3,627 100.0 100.0
9880 Campus Point Drive University Town Center 71,510 – – 71,510 1 2,774 100.0 100.0
5810/5820 Nancy Ridge Drive Sorrento Mesa 87,298 – – 87,298 1 1,641 88.7 88.7
5871 Oberlin Drive Sorrento Mesa 33,817 – – 33,817 1 478 48.0 48.0
6138/6150 Nancy Ridge Drive Sorrento Mesa 56,698 – – 56,698 1 1,586 100.0 100.0
6146/6166 Nancy Ridge Drive Sorrento Mesa 51,273 – – 51,273 2 639 57.2 57.2
6175/6225/6275 Nancy Ridge Drive Sorrento Mesa 105,812 – – 105,812 3 1,215 55.5 55.5
7330 Carroll Road Sorrento Mesa 66,244 – – 66,244 1 2,341 100.0 100.0
10505 Roselle Street & 3770 Tansy Street Sorrento Valley 33,013 – – 33,013 2 1,001 100.0 100.0
11025/11035/11045 Roselle Street Sorrento Valley 66,442 – – 66,442 3 1,621 100.0 100.0
3985 Sorrento Valley Boulevard Sorrento Valley 60,545 – – 60,545 1 1,534 100.0 100.0
13112 Evening Creek Drive I-15 Corridor 109,780 – – 109,780 1 2,495 100.0 100.0
San Diego 2,722,456 – 95,381 2,817,837 36 $ 86,942 95.1 % 91.9 %
Greater NYC
430 East 29th Street Manhattan – 419,806 – 419,806 1 $ – N/A N/A
450 East 29th Street Manhattan 309,141 – – 309,141 1 25,195 99.8 % 99.8 %
100 Phillips Parkway Bergen County 78,501 – – 78,501 1 2,213 90.8 90.8
102 Witmer Road Pennsylvania 50,000 – – 50,000 1 3,345 100.0 100.0
5100 Campus Drive Pennsylvania 21,859 – – 21,859 1 274 100.0 100.0
701 Veterans Circle Pennsylvania 35,155 – – 35,155 1 735 100.0 100.0
702 Electronic Drive Pennsylvania 40,171 – – 40,171 1 353 62.3 62.3
Greater NYC 534,827 419,806 – 954,633 7 $ 32,115 95.7 % 95.7 %
Suburban Washington, D.C. **** **** **** **** **** **** ****
12301 Parklawn Drive Rockville 49,185 – – 49,185 1 $ 1,169 100.0 % 100.0 %
1330 Piccard Drive Rockville 131,511 – – 131,511 1 2,876 94.0 94.0
1405 Research Boulevard Rockville 71,669 – – 71,669 1 2,119 100.0 100.0
1500/1550 East Gude Drive (2) Rockville 90,489 – – 90,489 2 1,386 77.3 77.3
14920 Broschart Road Rockville 48,500 – – 48,500 1 1,073 100.0 100.0
15010 Broschart Road Rockville 38,203 – – 38,203 1 741 85.8 85.8
5 Research Court (3) Rockville 54,906 – – 54,906 1 1,425 100.0 100.0
5 Research Place Rockville 63,852 – – 63,852 1 2,364 100.0 100.0
9800 Medical Center Drive Rockville 206,530 – 75,056 281,586 4 7,028 89.6 65.7
9920 Medical Center Drive Rockville 58,733 – – 58,733 1 455 100.0 100.0
1201 Clopper Road Gaithersburg 143,585 – – 143,585 1 3,984 100.0 100.0
1300 Quince Orchard Road Gaithersburg 54,874 – – 54,874 1 997 100.0 100.0
16020 Industrial Drive Gaithersburg 71,000 – – 71,000 1 1,052 100.0 100.0
19/20/22 Firstfield Road Gaithersburg 132,639 – – 132,639 3 3,229 95.9 95.9
25/35/45 West Watkins Mill Road Gaithersburg 138,938 – – 138,938 1 3,616 100.0 100.0
401 Professional Drive Gaithersburg 63,154 – – 63,154 1 959 78.9 78.9
620 Professional Drive Gaithersburg 26,127 – – 26,127 1 – – –
708 Quince Orchard Road Gaithersburg 49,624 – – 49,624 1 1,145 99.3 99.3
9 West Watkins Mill Road Gaithersburg 92,449 – – 92,449 1 2,766 100.0 100.0
910 Clopper Road Gaithersburg 180,650 – – 180,650 1 3,237 87.1 87.1
930/940 Clopper Road (4) Gaithersburg 104,302 – – 104,302 2 1,654 93.4 93.4
950 Wind River Lane Gaithersburg 50,000 – – 50,000 1 1,082 100.0 100.0
8000/9000/10000 Virginia Manor Road Beltsville 191,884 – – 191,884 1 1,459 56.3 56.3
14225 Newbrook Drive Northern Virginia 248,186 – – 248,186 1 4,341 100.0 100.0
Suburban Washington, D.C. 2,360,990 – 75,056 2,436,046 31 $ 50,157 90.9 % 88.1 %
(1) Represents a project containing 176,500 rentable square feet of non-laboratory space at 3013/3033 Science Park Road, which consists of two buildings acquired in April 2012.  The property was 100% leased on a short-term basis to a non-life science tenant and thereafter, we expect to redevelop the property.
(2) Represents a project containing 25,000 rentable square feet of non-laboratory space, which we intend to convert into laboratory space through redevelopment.
(3) Represents a project containing 54,906 rentable square feet at 5 Research Court.  We expect the tenant to extend their lease beyond their 2013 lease end date.  This property consists of non-laboratory space and upon rollover will undergo conversion into laboratory space through redevelopment.
(4) Represents a project containing 60,000 rentable square feet of non-laboratory space, which we intend to convert into laboratory space through redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 24
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Property Listing December 31, 2012 (Dollars in thousands)

(Unaudited)

**** **** **** Occupancy Percentage
**** **** Rentable Square Feet Number of Annualized Operating and
Address Submarket Operating Development Redevelopment Total Properties Base Rent Operating Redevelopment
Seattle **** **** **** **** **** ****
1201/1208 Eastlake Avenue Lake Union 203,369 – – 203,369 2 8,748 100.0 % 100.0 %
1551 Eastlake Avenue Lake Union 74,914 – 42,569 117,483 1 2,309 100.0 63.8
1600 Fairview Avenue Lake Union 27,991 – – 27,991 1 1,519 100.0 100.0
1616 Eastlake Avenue Lake Union 101,714 – 66,776 168,490 1 3,218 74.8 45.1
199 East Blaine Street Lake Union 115,084 – – 115,084 1 6,169 100.0 100.0
219 Terry Avenue Lake Union 30,845 – – 30,845 1 1,422 93.4 93.4
3000/3018 Western Avenue Elliott Bay 47,746 – – 47,746 1 1,795 100.0 100.0
410 West Harrison Street & 410 Elliott Avenue West Elliott Bay 35,175 – – 35,175 2 821 67.4 67.4
Seattle 636,838 – 109,345 746,183 10 26,001 93.9 % 80.1 %
Research Triangle Park
100 Capitola Drive Research Triangle Park 65,965 – – 65,965 1 1,062 100.0 % 100.0 %
108/110/112/114 Alexander Road Research Triangle Park 158,417 – – 158,417 1 4,996 100.0 100.0
2525 East NC Highway 54 Research Triangle Park 81,580 – – 81,580 1 1,673 100.0 100.0
5 Triangle Drive Research Triangle Park 32,120 – – 32,120 1 824 100.0 100.0
601 Keystone Park Drive Research Triangle Park 77,395 – – 77,395 1 1,306 100.0 100.0
6101 Quadrangle Drive Research Triangle Park 30,122 – – 30,122 1 445 79.1 79.1
7 Triangle Drive Research Triangle Park 96,626 – – 96,626 1 3,157 100.0 100.0
7010/7020/7030 Kit Creek Road Research Triangle Park 133,654 – – 133,654 3 1,932 77.0 77.0
800/801 Capitola Drive Research Triangle Park 120,905 – – 120,905 2 2,121 95.9 95.9
6 Davis Drive Research Triangle Park 100,000 – – 100,000 1 1,062 100.0 100.0
555 Heritage Drive Palm Beach 45,023 – – 45,023 1 808 100.0 100.0
Research Triangle Park 941,807 – – 941,807 14 19,386 95.5 % 95.5 %
Canada
Canada 46,032 – – 46,032 1 1,879 100.0 % 100.0 %
Canada 66,000 – – 66,000 1 1,213 100.0 100.0
Canada 132,790 – – 132,790 1 3,102 95.6 95.6
Canada 68,000 – – 68,000 1 3,174 100.0 100.0
Canada (1) 783,255 – – 783,255 1 N/A N/A N/A
Total Canada 1,096,077 – – 1,096,077 5 9,368 98.1 % 98.1 %
Other market properties 61,002 – – 61,002 2 590 51.4 % 51.4 %
North America 13,862,176 947,798 431,624 15,241,598 165 94.6 % 91.6 %
Asia 587,662 618,976 115,468 1,322,106 9 4,188 66.2 % 55.3 %
Continuing operations 14,449,838 1,566,774 547,092 16,563,704 174 441,451 93.4 % 89.8 %
Properties “held for sale” 504,130 – – 504,130 4
Total 14,953,968 1,566,774 547,092 17,067,834 178

All values are in US Dollars.

(1) Represents land and improvements subject to a ground lease with a client tenant.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 25

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Top 20 Client Tenants and Client Tenant Mix

December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Top 20 client tenants

Percentage Percentage
Approximate of of Investment-Grade
Remaining Lease Aggregate Aggregate Aggregate Client Tenants (3)
Number Term in Years Rentable Total Annualized Annualized Fitch Moody’s S&P Education/
Client Tenant of Leases (1) (2) Square Feet Square Feet Base Rent Base Rent Rating Rating Rating Research
1 Novartis AG 11 4.0 4.2 608,876 3.6 % $ 30,508 6.9 % AA Aa2 AA- –
2 Illumina, Inc. 1 18.8 18.8 473,954 2.8 18,574 4.2 – – – –
3 Bristol-Myers Squibb Company 6 4.9 5.1 419,624 2.5 15,840 3.6 A A2 A+ –
4 Eli Lilly and Company 5 8.6 10.2 262,182 1.5 15,068 3.4 A A2 AA- –
5 FibroGen, Inc. 1 10.9 10.9 234,249 1.4 14,197 3.2 – – – –
6 Roche 3 5.2 5.3 348,918 2.0 13,867 3.1 AA- A1 AA –
7 United States Government 8 4.0 5.0 324,577 1.9 12,735 2.9 AAA Aaa AA+ –
8 GlaxoSmithKline plc 5 6.9 6.6 208,394 1.2 10,266 2.3 A+ A1 A+ –
9 Celgene Corporation 4 8.5 8.4 255,779 1.5 9,540 2.2 – Baa2 BBB+ –
10 Onyx Pharmaceuticals, Inc. 4 9.2 9.8 257,287 1.5 9,030 2.1 – – – –
11 Massachusetts Institute of Technology 3 4.4 4.7 178,952 1.0 8,230 1.9 – Aaa AAA ü
12 The Regents of the University of California 3 8.6 8.7 188,654 1.1 7,787 1.8 AA Aa1 AA ü
13 NYU-Neuroscience Translational Research Institute 2 12.5 11.4 82,170 0.5 7,642 1.7 A- A3 AA- ü
14 Alnylam Pharmaceuticals, Inc. 1 3.8 3.8 129,424 0.8 6,066 1.4 – – – –
15 Gilead Sciences, Inc. 1 7.5 7.5 109,969 0.6 5,824 1.3 – Baa1 A- –
16 Pfizer Inc. 2 6.4 6.2 116,518 0.7 5,502 1.2 A+ A1 AA –
17 The Scripps Research Institute 2 3.9 3.9 99,377 0.6 5,200 1.2 AA- Aa3 – ü
18 Theravance, Inc. (4) 2 7.4 7.4 130,342 0.8 4,895 1.1 – – – –
19 Infinity Pharmaceuticals, Inc. 2 2.1 2.1 68,020 0.4 4,423 1.0 – – – –
20 Qiagen N.V. 2 3.5 3.5 158,879 0.9 4,380 1.0 – – – –
Total/Weighted Average Top 20: 68 7.5 7.7 4,656,145 27.3 % $ 209,574 47.5 %
(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 December 31, 2012.
(3) Ratings obtained from Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s.
(4) As of October 24, 2012, GlaxoSmithKline plc owned approximately 27% of the outstanding stock of Theravance, Inc.

Client tenant mix by annualized base rent

GRAPHIC

Multinational Pharmaceutical Institutional: University,<br><br><br>Non-Profit, and Government Life Science Product and Service,<br><br><br>Medical Device, and Industrial Biotech Biotechnology: Public & Private
·  AbbVie Inc.<br><br><br>·  Astellas Pharma Inc.<br><br><br>·  AstraZeneca PLC<br><br><br>·  Bayer AG<br><br><br>·  Bristol-Myers Squibb Company<br><br><br>·  Eisai Co., Ltd.<br><br><br>·  Eli Lilly and Company<br><br><br>·  Genomics Institute of the Novartis Research Foundation<br><br><br>·  GlaxoSmithKline plc<br><br><br>·  Novartis AG<br><br><br>·  Pfizer Inc.<br><br><br>·  Roche<br><br><br>·  Sanofi<br><br><br>·  Shire plc<br><br><br>·  UCB S.A. ·  California Institute of Technology<br><br><br>·  Dana-Farber Cancer Institute, Inc.<br><br><br>·  Duke University<br><br><br>·  Environmental Protection Agency<br><br><br>·  Fred Hutchinson Cancer Research  Center<br><br><br>·  Massachusetts Institute of Technology<br><br><br>·  National Institutes of Health<br><br><br>·  NYU-Neuroscience Translational  Research Institute<br><br><br>·  Sanford-Burnham Medical Research  Institute<br><br><br>·  Stanford University<br><br><br>·  The Regents of the University of  California<br><br><br>·  The Scripps Research Institute<br><br><br>·  UMass Memorial Health Care, Inc.<br><br><br>·  UNC Health Care System<br><br><br>·  United States Government<br><br><br>·  University of Washington ·  Canon U.S. Life Sciences, Inc.<br><br><br>·  Covance Inc.<br><br><br>·  DSM N.V.<br><br><br>·  Fluidigm Corporation<br><br><br>·  Illumina, Inc.<br><br><br>·  Laboratory Corporation of America  Holdings<br><br><br>·  Life Technologies Corporation<br><br><br>·  Monsanto Company<br><br><br>·  Qiagen N.V.<br><br><br>·  Quest Diagnostics Incorporated<br><br><br>·  Sapphire Energy, Inc.<br><br><br>·  Thermo Fisher Scientific, Inc. ·  Alnylam Pharmaceuticals, Inc.<br><br><br>·  Amgen Inc.<br><br><br>·  Biogen Idec Inc.<br><br><br>·  Celgene Corporation<br><br><br>·  Constellation Pharmaceuticals, Inc.<br><br><br>·  Epizyme, Inc.<br><br><br>·  Fate Therapeutics, Inc.<br><br><br>·  FibroGen, Inc.<br><br><br>·  FORMA Therapeutics, Inc.<br><br><br>·  Gilead Sciences, Inc.<br><br><br>·  Infinity Pharmaceuticals, Inc.<br><br><br>·  Kadmon Corporation, LLC<br><br><br>·  Medicago Inc.<br><br><br>·  Nektar Therapeutics<br><br><br>·  Onyx Pharmaceuticals, Inc.<br><br><br>·  Proteostasis Therapeutics, Inc.<br><br><br>·  Quanticel Pharmaceuticals, Inc.<br><br><br>·  Theravance, Inc.<br><br><br>·  Warp Drive Bio, LLC
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 26
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Investments in Real Estate

December 31, 2012

(Tabular dollar amounts in thousands, except per square foot amounts)

(Unaudited)

Summary of investments in real estate

December 31, 2012 September 30, 2012
Book Value Square Feet Cost per<br> Square Foot Book Value Square Feet Cost per<br> Square Foot
Land (related to rental properties) $ 522,664 $ 506,823
Buildings and building improvements 4,933,314 4,682,998
Other improvements 189,793 184,301
Rental properties 5,645,771 14,953,968 $ 378 5,374,122 14,429,902 $ 372
Less: accumulated depreciation (875,035 ) (854,332 )
Rental properties, net 4,770,736 4,519,790
Construction in progress (“CIP”)/current value-added projects:
Active development in North America 431,578 947,798 455 304,619 887,256 343
Active redevelopment in North America 199,744 431,624 463 277,506 590,526 470
Generic infrastructure/building improvement projects in North America 80,599 72,739
Active development and redevelopment in Asia 101,602 734,444 138 95,301 731,037 130
813,523 2,113,866 385 750,165 2,208,819 340
Subtotal 5,584,259 17,067,834 327 5,269,955 16,638,721 317
Land/future value-added projects:
Land held for future development in North America 296,039 4,659,000 64 326,932 5,451,000 60
Land undergoing preconstruction activities (additional CIP) in North America 433,310 2,934,000 148 597,631 2,370,000 252
Land held for future development/land undergoing preconstruction activities (additional CIP) in Asia 82,314 6,829,000 12 78,511 6,789,000 12
811,663 14,422,000 56 1,003,074 14,610,000 69
Investment in unconsolidated real estate entity 28,656 413,536 69 26,998 414,000 65
Investments in real estate, net 6,424,578 31,903,370 $ 201 6,300,027 31,662,721 $ 199
Add: accumulated depreciation 875,035 854,332
Gross investments in real estate $ 7,299,613 31,903,370 $ 7,154,359 31,662,721

Non-income-producing real estate assets as a percentage of gross investments in real estate

GRAPHIC

As of December 31, 2012, our active development and redevelopment projects represent 12% of gross investments in real estate, a significant amount of which is pre-leased and expected to be delivered over the next one to eight quarters.  Land undergoing preconstruction activities represents 7% of gross investment in real estate.  The largest project included in land undergoing preconstruction consists of our 1.6 million developable square feet at Alexandria Center™ at Kendall Square in East Cambridge, Massachusetts.  Land held for future development represent 4% of our non-income-producing assets.  Over the next few years, we may also identify certain land parcels for potential sale.  Our goal is to reduce non-income-producing assets as a percentage of our gross investments in real estate to 15-17% by December 31, 2013, and 15% or less for the subsequent periods.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 27

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Project RSF (1) Leased Status RSF (1)
Market - Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Development projects in North America
Greater Boston – Cambridge
225 Binney Street - 305,212 305,212 305,212 - - 305,212 100% Biogen Idec Inc.
San Francisco Bay Area – Mission Bay
499 Illinois Street - 222,780 222,780 - - 222,780 222,780 - N/A
Greater NYC – Manhattan
430 East 29th Street - 419,806 419,806 60,816 167,244 (2) 191,746 419,806 54% Roche
Development projects in North America - 947,798 947,798 366,028 167,244 414,526 947,798 56%
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square 140,532 71,592 212,124 169,939 - 42,185 212,124 80% Ragon Institute of MGH, MIT and Harvard; Epizyme, Inc.; Warp Drive Bio, LLC; Aramco Services Company, Inc.
San Diego – University Town Center
4757 Nexus Center Drive - 68,423 68,423 68,423 - - 68,423 100% Genomatica, Inc.
Seattle – Lake Union -
1551 Eastlake Avenue 74,914 42,569 117,483 74,914 - 42,569 117,483 64% Puget Sound Blood Center and Program
1616 Eastlake Avenue - 66,776 66,776 40,706 - 26,070 66,776 61% Infectious Disease Research Institute
Suburban and other redevelopment projects 45,287 182,264 227,551 146,613 59,532 21,406 227,551 91%
Redevelopment projects in North America 260,733 431,624 692,357 500,595 59,532 132,230 692,357 81%
Total development and redevelopment projects in North America 260,733 1,379,422 1,640,155 866,623 226,776 546,756 1,640,155 67%
Investment (1) Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market - Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP 2013 Thereafter Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Development projects in North America
Greater Boston – Cambridge
225 Binney Street $ - $ 104,422 $ 75,851 $ - $ 180,273 $ 591 7.5% 8.1% 4Q11 4Q13 4Q13
San Francisco Bay Area – Mission Bay
499 Illinois Street $ - $ 113,196 $ 17,119 $ 22,894 $ 153,209 $ 688 6.4% 7.2% 2Q11 2Q14 1Q15
Greater NYC – Manhattan
430 East 29th Street $ - $ 213,960 $ 134,057 $ 115,228 $ 463,245 $ 1,103 6.6% 6.5% 4Q12 4Q13 2016
Development projects in North America $ - $ 431,578 $ 227,027 $ 138,122 $ 796,727 $ 841
Redevelopment projects in North America
Greater Boston – Cambridge
400 Technology Square $ 85,732 $ 43,966 $ 14,990 $ - $ 144,688 $ 682 8.1% 8.9% 4Q11 4Q12 4Q13
San Diego – University Town Center
4757 Nexus Center Drive $ - $ 3,966 $ 24,167 $ 6,696 $ 34,829 $ 509 7.6% 7.8% 4Q12 4Q13 4Q13 (5)
Seattle – Lake Union
1551 Eastlake Avenue $ 41,787 $ 17,520 $ 4,703 $ - $ 64,010 $ 545 6.7% 6.7% 4Q11 4Q11 4Q13
1616 Eastlake Avenue $ - $ 29,033 $ 4,115 $ 4,668 $ 37,816 $ 566 8.4% 8.6% 4Q12 2Q13 2014
Suburban and other redevelopment projects $ 42,320 $ 105,259 $ 37,391 $ - $ 184,970 $ 813
Redevelopment projects in North America $ 169,839 $ 199,744 $ 85,366 $ 11,364 $ 466,313 $ 674
Total development and redevelopment projects in North America $ 169,839 $ 631,322 $ 312,393 $ 149,486 $ 1,263,040 $ 770

Refer to the following page for all footnotes to the table above

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 28

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Development and Redevelopment Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Development project commencements in the first quarter of 2013 in North America

Project RSF (1) Leased Status RSF (1)
Market – Submarket/ In % Leased/
Property Service CIP Total Leased Negotiating Marketing Total Negotiating Client Tenants
Greater Boston – Cambridge
75/125 Binney Street – 386,275 (5) 386,275 244,123 – 142,152 (6) 386,275 63% (6) ARIAD Pharmaceuticals, Inc.
Investment Initial Stabilized Initial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Market – Submarket/ December 31, 2012 To Complete Total at Per Yield (1) (3) Project Start Occupancy Stabilization
Property In Service CIP (4) 2013 Thereafter Subtotal Completion (3) RSF Cash GAAP Date (1) Date (1) Date (1)
Greater Boston – Cambridge
75/125 Binney Street $ – 87,452 $ 101,087 (7) $ 162,900 $ 263,987 $ 351,439 $ 910 8.0% 8.2% 1Q13 1Q15 2016

The following table presents the current assumptions included in our guidance for funding of the cost to complete the 75/125 Binney Street project:

Cost to Complete (7)
2013 Thereafter Total
ARE investment $ 40,000 - 50,000 $ – $ 40,000 - 50,000
Binney JV partner capital contribution 20,000 - 25,000 – 20,000 - 25,000
Secured construction loan 30,000 - 40,000 160,000 - 165,000 190,000 - 205,000
$ 90,000 - 115,000 $ 160,000 - 165,000 $ 250,000 - 280,000
(1) All project information, including rentable square feet; investment; Initial Stabilized Yields; and project start, occupancy and stabilization dates, relates to the discrete portion of each property undergoing active development or redevelopment. A redevelopment project does not necessarily represent the entire property or the entire vacant portion of a property. For example, the redevelopment project at 1616 Eastlake Avenue represents the conversion of two floors from office to laboratory/office aggregating 66,776 rentable square feet. The remaining rentable square feet of 101,714 at this property not undergoing active redevelopment was 74.8% occupied at December 31, 2012, and is included in our operating statistics.
--- ---
(2) Represents rentable square feet subject to letters of intent.
(3) As of December 31, 2012, 96% of our leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our Initial Stabilized Yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date. We expect, on average, our contractual cash rents related to our value-added projects to increase over time. Our estimates for initial cash and GAAP yields, and total costs at completion, represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.
(4) We expect to deliver 54,102 rentable square feet, or 79% of the total project, to Genomatica, Inc. in the fourth quarter of 2013. Genomatica, Inc. is contractually required to lease the remaining 14,411 rentable square feet no later than 18 to 24 months following the delivery of the initial 54,102 rentable square foot space.
(5) As of December 31, 2012, this project was classified in land undergoing preconstruction activities (additional CIP) in North America. This project will be transferred into active development upon commencement of vertical construction during the three months ended March 31, 2013.
(6) ARIAD Pharmaceuticals, Inc. has potential additional expansion opportunities through June 2014.
(7) Our guidance has assumed transfer of 50% of our ownership interest in the 75/125 Binney Street project to be accounted for as an in-substance partial sale of an interest in a land parcel, with the resulting entity presented as an unconsolidated joint venture (the “Binney JV”) in our financial statements. This sale of a land parcel is included in our total projected asset sales for 2013. The total remaining cost to complete for the 75/125 Binney Street project is expected to aggregate approximately $264 million through 2016, of which $101 million is expected to be invested in 2013. The projected sources of funding for the $264 million cost to complete for this project include a secured construction loan of approximately $190 million to $205 million, Binney JV partner capital contribution of approximately $75 million to $80 million, (approximately $20 million to $25 million to be used towards construction) and our investment in the project of approximately $40 million to $50 million. Our guidance for 2013 development, redevelopment, and construction spending of $545 to $595 million, shown on page 8, includes our estimated investment in the project of approximately $40 million to $50 million into the Binney JV.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 29
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Investment in Unconsolidated Real Estate Entity and Future Value-Added Projects in North America December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Investment in unconsolidated real estate entity

In March 2012, we completed an in-substance partial sale of our interest in a joint venture that owned a land parcel supporting a future building with 414,000 rentable square feet in the Longwood Medical Area of the Greater Boston market to a newly formed joint venture (the “Restated JV”) with National Development and Charles River Realty Investors, and admitted as a 50% member Clarion Partners, LLC, resulting in a reduction of our ownership interest from 55% to 27.5%.  The transfer of one-half of our 55% ownership interest in this real estate venture to Clarion Partners, LLC, was accounted for as an in-substance partial sale of an interest in the underlying real estate.  Upon formation of the Restated JV, the existing $38.4 million secured loan was refinanced with a seven-year (including two one-year extension options) non-recourse $213 million secured construction loan with initial loan proceeds of $50 million.  As of December 31, 2012, the outstanding balance on the construction loan was $61.0 million.  We do not expect our share of capital contributions through the completion of the project to exceed the approximate $22.3 million in net proceeds received in this transaction.  Construction of this $350 million project commenced in April 2012.  The initial occupancy date for this project is expected in the fourth quarter of 2014, the project is 37% pre-leased to Dana-Farber Cancer Institute, Inc.  In addition, Dana-Farber Cancer Institute, Inc. has an option to lease an additional two floors approximating 99,000 rentable square feet, or 24% of the total rentable square feet of the project.  We expect to earn development and other fees of approximately $3.5 million through 2015, and recurring annual property management fees thereafter, from this project.  As of December 31, 2012, key information regarding the unconsolidated real estate entity in the Greater Boston market was as follows:

360 Longwood Avenue, Greater Boston
Our Total Venture Current Unlevered Initial Total Venture Venture Debt Debt Our Equity
Ownership Costs at Venture Project Percentage Stabilization Stabilized Yield (1) Debt Outstanding Available Investment
Percentage Completion (1) CIP RSF Leased Date Cash GAAP Commitment (2) as of 12/31/12 as of 12/31/12 as of 12/31/12 (3)
27.5% $ 350,000 $ 136,207 414,000 37% (4) 2016 8.3% 8.9% $ 213,200 $ 60,988 $ 152,212 $ 28,656
(1) Our estimates for initial cash and GAAP yields, and total costs at completion, represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.
--- ---
(2) Total joint venture loan commitment is comprised of borrowings up to $175.2 million which bear interest at fixed interest rate of 5.25%, and additional borrowings up to $38 million that bear interest at LIBOR plus 3.75% with a floor of 5.25%, which will be used to fund tenant improvements, leasing commissions, and other related expenses. The joint venture has entered into an interest rate hedge agreement to cap LIBOR at a maximum of 3.50%. The notes carry a maturity date of April 1, 2019, assuming the joint venture exercises its option to extend the stated maturity date of April 1, 2017, by one year, twice.
(3) Our expected remaining cash commitment to the venture of approximately $16.9 million is less than the $22.3 million received in March 2012 from the sale of one-half of our 55% interest in a land parcel.
(4) Dana-Farber Cancer Institute, Inc. has an option to lease an additional two floors approximating 99,000 rentable square feet, or 24% of the total rentable square feet of the project.

Future value-added projects in North America

The following table summarizes the components of our future value-added developable square footage in North America:

December 31, 2012 September 30, 2012
Market Land Undergoing<br> Preconstruction<br> Activities<br> (additional CIP) Land Held for<br> Future<br> Development Total<br> Land (1) Future<br> Redevelop-<br> ment (2) Land Undergoing<br> Preconstruction<br> Activities<br> (additional CIP) Land Held for<br> Future<br> Development Total<br> Land (1) Future<br> Redevelop-<br> ment (2)
Greater Boston 1,689,000 (3) 155,000 1,844,000 119,000 1,589,000 155,000 1,744,000 119,000
San Francisco Bay Area - Mission Bay – 290,000 290,000 – – 290,000 290,000 –
San Francisco Bay Area - South San Francisco 107,000 (4) 911,000 1,018,000 40,000 – 1,024,000 1,024,000 40,000
San Diego 801,000 (5) 74,000 875,000 264,000 255,000 522,000 777,000 264,000
Greater NYC – (6) – – – 420,000 – 420,000 –
Suburban Washington, D.C. 231,000 (7) 1,043,000 1,274,000 501,000 – 1,274,000 1,274,000 416,000
Seattle 106,000 (8) 959,000 1,065,000 15,000 106,000 959,000 1,065,000 82,000
Other markets – 1,085,000 1,085,000 105,000 – 1,085,000 1,085,000 105,000
Canada – 142,000 142,000 – – 142,000 142,000 –
Total future value-added projects in North America 2,934,000 4,659,000 7,593,000 1,044,000 2,370,000 5,451,000 7,821,000 1,026,000
(1) In addition to assets included in our gross investment in real estate, we hold options/rights for parcels supporting the future ground-up development of approximately 420,000 rentable square feet in Alexandria Center™ for Life Science – New York City related to an option under our ground lease. Additionally, amounts are updated as necessary to reflect refinement of design of each building.
--- ---
(2) Our asset base also includes non-laboratory space (office, warehouse, and industrial space) identified for future conversion into life science laboratory space through redevelopment. These spaces are classified in investments in real estate, net, in the condensed consolidated balance sheets.
(3) Represents preconstruction related to four future ground-up development projects aggregating 1.6 million rentable square feet related to The Alexandria Center™ at Kendall Square and one future ground-up development project aggregating 100,000 rentable square feet related to the Alexandria Technology Square® – Cambridge.
(4) Represents preconstruction related to a future development site aggregating 107,000 rentable square feet in the South San Francisco submarket.  We expect to commence development of this 100% pre-leased project during the three months ended March 31, 2013.
(5) Represents preconstruction related to a future development site for 205,000 rentable square feet in Torrey Pines. This site also contains a parking structure and other improvements. Additionally, this also includes three future development sites aggregating 596,000 rentable square feet in the University Town Center submarket.
(6) In November 2012, we commenced the ground-up development of a building with 419,806 rentable square feet at 430 East 29th Street, the West Tower of the Alexandria Center™ for Life Science – New York City. The cost previously classified as land undergoing preconstruction activities included costs related to steel, curtain wall, foundation, and underground parking garage.
(7) Represents a future development project containing 231,000 rentable square feet at 9800 Medical Center Drive in the Rockville submarket.
(8) Represents preconstruction related to a future ground-up development project for 106,000 rentable square feet in the Lake Union submarket.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 30
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Capital Expenditures December 31, 2012

(Unaudited)

Construction spending - actual Year Ended<br> December 31, 2012<br> (in thousands)
Development projects in North America $ 221,826
Redevelopment projects in North America 184,053
Preconstruction 73,087
Generic infrastructure/building improvement projects in North America (1) 72,752
Development and redevelopment projects in Asia 25,669
Total construction spending (2) $ 577,387
Construction spending - projection Year Ended<br> December 31, 2013<br> (in thousands) Thereafter<br> (in thousands)
Active development projects in North America $ 227,027 $ 138,122
Active redevelopment projects in North America 85,366 11,364
Preconstruction 40,889 TBD (3)
Generic infrastructure/building improvement projects in North America 53,629 TBD (3)
Future projected construction projects (4) 111,447 - 161,447 TBD (3)
Development and redevelopment projects in Asia 26,642 25,877
Total construction spending (2) $ 545,000 - 595,000 $ 175,363
(1) Includes revenue-enhancing projects and amounts shown in the table below related to non-revenue-enhancing capital expenditures.
--- ---
(2) Amounts include indirect project costs, including interest, property taxes, insurance, and payroll costs.
(3) Estimated spending beyond 2013 will be determined at a future date and is contingent upon many factors.
(4) Includes future projected construction projects in North America, including a future ground-up development at 75/125 Binney Street, and future redevelopment projects at 3013/3033 Science Park Road.

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

Year Ended
Non-revenue-enhancing capital expenditures (1): December 31, 2012
Major capital expenditures $ 223,737
Other building improvements $ 1,844,708
Square feet in asset base 14,115,129
Per square foot:
Major capital expenditures $ 0.02
Other building improvements $ 0.13
Tenant improvements and leasing costs:
Re-tenanted space (2)
Tenant improvements and leasing costs $ 2,672,823
Re-tenanted square feet 284,263
Per square foot $ 9.40
Renewal space
Tenant improvements and leasing costs $ 6,508,352
Renewal square feet 1,191,140
Per square foot $ 5.46
(1) Major capital expenditures typically consist of significant improvements such as roof and HVAC systems replacements. Other building improvements exclude major capital expenditures.
--- ---
(2) Excludes space that has undergone redevelopment before re-tenanting.
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 31
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Real Estate Investment in Asia December 31, 2012

(Tabular dollar amounts in thousands, except per square foot amounts)

(Unaudited)

Property listing

Occupancy Percentage
Rentable Square Feet Number of Annualized Operating and
Country Operating Development Redevelopment Total Properties Base Rent Operating Redevelopment
China **** **** **** **** **** **** **** **** ****
China 299,484 – – 299,484 1 $ 443 (1) 46.7 % 46.7 %
China – 309,476 – 309,476 1 – N/A N/A
Total China 299,484 309,476 – 608,960 2 $ 443 46.7 % 46.7 %
India
India 33,698 – – 33,698 1 $ 219 41.7 % 41.7 %
India 143,260 – – 143,260 1 2,295 86.5 86.5
India – 134,500 – 134,500 1 – N/A N/A
India – 175,000 – 175,000 1 – N/A N/A
India 25,020 – 70,808 95,828 1 305 100.0 26.1
India – – 44,660 44,660 1 – N/A –
India 86,200 – – 86,200 1 926 100.0 100.0
Total India 288,178 309,500 115,468 713,146 7 $ 3,745 86.5 % 61.7 %
Total Asia 587,662 618,976 115,468 1,322,106 9 $ 4,188 66.2 % 55.3 %
(1) Represents annualized base rent for non-laboratory use.

Summary of investments in real estate

December 31, 2012 September 30, 2012
Book Value Square Feet Cost per<br> Square Foot Book Value Square Feet Cost per<br> Square Foot
Rental properties, net, in China $ 21,456 299,484 $ 72 $ 21,435 299,484 $ 72
Rental properties, net, in India 32,391 288,178 112 31,191 292,704 107
CIP/current value-added projects:
Active development in China 57,305 309,476 185 56,098 309,476 181
Active development in India 30,008 309,500 97 26,337 309,500 85
Active redevelopment projects in India 14,289 115,468 124 12,866 112,061 115
101,602 734,444 138 95,301 731,037 130
Land held for future development/land undergoing preconstruction activities (additional CIP) - India 82,314 6,829,000 12 78,511 6,789,000 12
Total investments in real estate, net, in Asia $ 237,763 8,151,106 $ 29 $ 226,438 8,112,225 $ 28

Active development and redevelopment

Project RSF Leased Status RSF Investment
In Leased/ December 31, 2012 To Complete Total at
Description Service CIP Total Leased Negotiating Marketing Total Negotiating % In Service CIP 2013 Thereafter Completion (1)
China development project – 309,476 309,476 – – 309,476 309,476 –% $ – $ 57,305 $ 4,530 $ 20,465 $ 82,300
India development projects – 309,500 309,500 175,000 – 134,500 309,500 57% – 30,008 17,498 4,279 51,785
India redevelopment projects 25,020 115,468 140,488 38,635 6,400 95,453 140,488 32% 2,673 14,289 4,614 1,133 22,709
Total active development and redevelopment in Asia 25,020 734,444 759,464 $ 2,673 $ 101,602 $ 26,642 $ 25,877 $ 156,794
(1) Our estimates for total costs at completion represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project costs.
--- ---
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br><br><br>ALL RIGHTS RESERVED © 2013 32
--- ---

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Credit Metrics

December 31, 2012

(Unaudited)

Net Debt/Adjusted EBITDA Fixed Charge Coverage Ratio
Net Debt to Gross Assets (Excluding Cash and Restricted Cash) Interest Coverage Ratio
Unencumbered NOI as a % of Total NOI Unencumbered Assets Gross Book Value as a % of Gross Assets
Liquidity Unhedged Variable Rate Debt as a % of Total Debt

(1)    Periods represent quarter annualized metrics.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 33

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Debt December 31, 2012 (Tabular dollar amounts in thousands)

(Unaudited)

Fixed rate/hedged and unhedged variable rate debt

Fixed Rate/Hedged<br> Variable Rate Unhedged<br> Variable Rate Total<br> Consolidated Percentage of<br> Total Weighted Average<br> Interest Rate at<br> End of Period (1) Weighted Average<br> Remaining Term<br> (Years)
Secured notes payable (2) $ 622,733 $ 93,411 $ 716,144 22.5 % 5.65 % 3.1
Unsecured senior notes payable (2) 549,805 – 549,805 17.3 4.61 9.2
Unsecured senior line of credit (3) – 566,000 566,000 17.8 1.41 4.3
2016 Unsecured Senior Bank Term Loan (4) 750,000 – 750,000 23.5 2.39 3.5
2017 Unsecured Senior Bank Term Loan (5) 300,000 300,000 600,000 18.9 4.05 4.1
Total debt $ 2,222,538 $ 959,411 $ 3,181,949 100.0 % 3.65 % 4.7
Percentage of total debt 70% 30% 100%

(1)             Represents the contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate hedge agreements.  The weighted average interest rate excludes bank fees and amortization of loan fees.

(2)             Represents amounts net of unamortized premiums/discounts.

(3)             Total commitments available for borrowing aggregate $1.5 billion under our unsecured senior line of credit.  As of December 31, 2012, we had approximately $0.9 billion available for borrowings under our unsecured senior line of credit.  Weighted average remaining term assumes we exercise our sole option to extend the stated maturity date of April 30, 2016, by six months, twice, to April 30, 2017.

(4)             Assumes we exercise our sole option to extend the stated maturity date of June 30, 2015, by one year, to June 30, 2016.

(5)             Assumes we exercise our sole option to extend the stated maturity date of January 31, 2016, by one year, to January 31, 2017.

Debt maturities

Debt Stated Rate Effective<br> Interest<br> Rate (1) Maturity<br> Date 2013 2014 2015 2016 2017 Thereafter Total
Secured notes payable
Suburban Washington, D.C. 6.36 % 6.36 % 9/1/13 $ 26,093 $ – $ – $ – $ – $ – $ 26,093
Greater Boston 5.26 5.59 4/1/14 3,839 208,683 – – – – 212,522
Suburban Washington, D.C. 2.20 2.20 4/20/14 – 76,000 – – – – 76,000
San Diego 6.05 4.88 7/1/14 131 6,458 – – – – 6,589
San Diego 5.39 4.00 11/1/14 164 7,495 – – – – 7,659
Seattle 6.00 (2) 6.00 11/18/14 240 240 – – – – 480
Suburban Washington, D.C. 5.64 4.50 6/1/15 120 138 5,788 – – – 6,046
San Francisco Bay Area LIBOR+1.50 1.74 7/1/15 (3) – – 16,931 – – – 16,931
Greater Boston, San Francisco Bay Area, and San Diego 5.73 5.73 1/1/16 1,617 1,713 1,816 75,501 – – 80,647
Greater Boston, San Diego, and Greater NYC 5.82 5.82 4/1/16 878 931 988 29,389 – – 32,186
San Francisco Bay Area 6.35 6.35 8/1/16 2,332 2,487 2,652 126,715 – – 134,186
San Diego, Suburban Washington, D.C., and Seattle 7.75 7.75 4/1/20 1,345 1,453 1,570 1,696 1,832 108,469 116,365
San Francisco Bay Area 6.50 6.50 6/1/37 16 17 18 19 20 773 863
Average/Total 5.59 % 5.65 36,775 305,615 29,763 233,320 1,852 109,242 716,567
$1.5 billion unsecured senior line of credit LIBOR+1.20% (4) 1.41 4/30/17 (5) – – – – 566,000 – 566,000
2016 Unsecured Senior Bank Term Loan LIBOR+1.75% 2.39 6/30/16 (6) – – – 750,000 – – 750,000
2017 Unsecured Senior Bank Term Loan LIBOR+1.50% 4.05 1/31/17 (7) – – – – 600,000 – 600,000
Unsecured senior notes payable (8) 4.60 % 4.61 4/1/22 – 250 – – – 550,000 550,250
Average/Subtotal 3.65 36,775 305,865 29,763 983,320 1,167,852 659,242 3,182,817
Unamortized discounts – (464 ) (78 ) (12 ) (44 ) (47 ) (223 ) (868 )
Average/Total 3.65 % $ 36,311 $ 305,787 $ 29,751 $ 983,276 $ 1,167,805 $ 659,019 $ 3,181,949
Balloon payments $ 25,757 $ 297,330 $ 22,659 $ 980,029 $ 1,166,000 $ 653,791 $ 3,145,566
Principal amortization 10,554 8,457 7,092 3,247 1,805 5,228 36,383
Total consolidated debt $ 36,311 $ 305,787 $ 29,751 $ 983,276 $ 1,167,805 $ 659,019 $ 3,181,949
Fixed rate/hedged variable rate debt $ 36,071 $ 229,547 $ 12,820 $ 983,276 $ 301,805 $ 659,019 $ 2,222,538
Unhedged variable rate debt 240 76,240 16,931 – 866,000 – 959,411
Total consolidated debt $ 36,311 $ 305,787 $ 29,751 $ 983,276 $ 1,167,805 $ 659,019 $ 3,181,949

(1)             Represents the contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate hedge agreements.  The weighted average interest rate excludes bank fees and amortization of loan fees.

(2)             Represents a loan assumed with the acquisition of a property.  The interest rate is based upon 10-year U.S. treasury bills plus 3%, with a floor of 6% and a ceiling of 8.5%.

(3)             We have an option to extend the stated maturity date of July 1, 2015, by one year, twice, to July 1, 2017.

(4)             In addition to the stated rate, we are subject to an annual facility fee of 0.25%.

(5)             Assumes we exercise our sole option to extend the stated maturity date of April 30, 2016, by six months, twice, to April 30, 2017.

(6)             Assumes we exercise our sole option to extend the stated maturity date of June 30, 2015, by one year, to June 30, 2016.

(7)             Assumes we exercise our sole option to extend the stated maturity date of January 31, 2016, by one year, to January 31, 2017.

(8)             Includes $550 million of our 4.60% unsecured senior notes payable due in April 2022, and $250,000 of our 8.00% unsecured senior convertible notes payable with a maturity date of April 15, 2014.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 34

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Summary of Debt December 31, 2012 (Tabular dollar amounts in thousands)

(Unaudited)

Debt covenants

Unsecured Senior Notes Payable Unsecured Senior Line of Credit and<br><br><br>Unsecured Senior Bank Term Loans
Debt Covenant Ratios Requirement Actual (1) Requirement Actual (1)
Total Debt to Total Assets (2) < 60% 40% < 60.0% (3) 37%
Consolidated EBITDA to Interest Expense (4) > 1.5x 5.7x > 1.50x 2.5x
Unencumbered Total Asset Value to Unsecured Debt > 150% 250% N/A N/A
Secured Debt to Total Assets (5) < 40% 9% < 40.0% (3) 8%
Unsecured Leverage Ratio N/A N/A < 60.0% (3) 43%
Unsecured Interest Coverage Ratio N/A N/A > 1.75x 7.4x

(1)             Actual covenants are calculated pursuant to the specific terms of each agreement.

(2)             Under the unsecured senior line of credit and unsecured senior bank term loans, this ratio is referred to as the Leverage Ratio.

(3)             These ratios may increase by an additional 5% in connection with a Material Acquisition, as defined, for up to four quarters.

(4)             Under the unsecured senior line of credit and unsecured senior bank term loans, this ratio is referred to as the Fixed Charge Coverage Ratio.

(5)             Under the unsecured senior line of credit and unsecured senior bank term loans, this ratio is referred to as the Secured Debt Ratio.

Summary of interest rate hedge agreements

Interest Pay Fair Value as of Notional Amount in Effect as of
Transaction Date Effective Date Termination Date Rate (1) December 31, 2012 (2) December 31, 2012 December 31, 2013
December 2006 December 29, 2006 March 31, 2014 4.990 % $ (2,991 ) $ 50,000 $ 50,000
October 2007 October 31, 2007 September 30, 2013 4.642 % (1,672 ) 50,000 –
October 2007 July 1, 2008 March 31, 2013 4.622 % (264 ) 25,000 –
October 2007 July 1, 2008 March 31, 2013 4.625 % (264 ) 25,000 –
December 2006 November 30, 2009 March 31, 2014 5.015 % (4,510 ) 75,000 75,000
December 2006 November 30, 2009 March 31, 2014 5.023 % (4,518 ) 75,000 75,000
December 2011 December 31, 2012 December 31, 2013 0.640 % (1,057 ) 250,000 –
December 2011 December 31, 2012 December 31, 2013 0.640 % (1,057 ) 250,000 –
December 2011 December 31, 2012 December 31, 2013 0.644 % (533 ) 125,000 –
December 2011 December 31, 2012 December 31, 2013 0.644 % (533 ) 125,000 –
December 2011 December 31, 2013 December 31, 2014 0.977 % (1,632 ) – 250,000
December 2011 December 31, 2013 December 31, 2014 0.976 % (1,630 ) – 250,000
Total $ (20,661 ) $ 1,050,000 $ 700,000

(1)             In addition to the interest pay rate, borrowings outstanding under our unsecured senior line of credit and unsecured senior bank term loans include an applicable margin currently ranging from 1.20% to 1.75%.

(2)             Including accrued interest and credit valuation adjustment.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 35

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Definitions and Other Information

December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

This section contains additional information for sections throughout this supplemental information package as well as explanations of certain non-GAAP financial measures and the reasons why we use these supplemental measures of performance.  Additional detail can be found in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Adjusted EBITDA and Adjusted EBITDA margins

EBITDA represents earnings before interest, taxes, depreciation, and amortization (“EBITDA”), a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance.  We use adjusted EBITDA (“Adjusted EBITDA”) and Adjusted EBITDA margins to assess the performance of our core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis.  Adjusted EBITDA also serves as a proxy for a component of a financial covenant under certain of our debt obligations.  Adjusted EBITDA is calculated as EBITDA excluding net stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, gains or losses on sales of land parcels, impairments of real estate, and impairments of land parcels.  We believe Adjusted EBITDA and Adjusted EBITDA margins provide investors relevant and useful information because they permit investors to view income from our operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, net stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, gains or losses on sales of land parcels, impairments of real estate, and impairments of land parcels.  By excluding interest expense, EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins allow investors to measure our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries.  We believe that excluding non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use.  We believe that adjusting for the effects of gains or losses on early extinguishment of debt, gains or losses on sales of real estate, gains or losses on sales of land parcels, impairments of real estate, and impairments of land parcels provides useful information by excluding certain items that are not representative of our core operating results.  These items are not related to core operations, not dependent upon historical costs, and not subject to judgmental valuation inputs and the timing of our decisions.  EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins have limitations as measures of our performance.  EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins do not reflect our historical cash expenditures or future cash requirements for capital expenditures or contractual commitments.  While EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins are relevant and widely used measures of performance, they do not represent net income or cash flows from operations as defined by GAAP, and they should not be considered as alternatives to those indicators in evaluating performance or liquidity.  Further, our computation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins may not be comparable to similar measures reported by other companies.

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

Three Months Ended Year Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Net income $ 28,807 $ 18,305 $ 25,641 $ 32,775 $ 35,462 $ 105,528 $ 135,393
Interest expense – continuing operations 17,941 17,094 17,922 16,227 14,757 69,184 63,378
Interest expense – discontinued operations – – – – – – 65
Depreciation and amortization – continuing operations 48,072 47,176 51,276 42,326 39,762 188,850 153,087
Depreciation and amortization – discontinued operations – 997 1,079 1,079 1,204 3,155 4,939
EBITDA 94,820 83,572 95,918 92,407 91,185 366,717 356,862
Stock compensation expense 3,748 3,845 3,274 3,293 3,306 14,160 11,755
Loss on early extinguishment of debt – – 1,602 623 – 2,225 6,485
Gain on sale of real estate – (1,562 ) (2 ) – – (1,564 ) –
Gain on sale of land parcel – – – (1,864 ) – (1,864 ) (46 )
Impairment of real estate 1,601 9,799 – – – 11,400 994
Impairment of land parcel 2,050 – – – – 2,050 –
Adjusted EBITDA $ 102,219 $ 95,654 $ 100,792 $ 94,459 $ 94,491 $ 393,124 $ 376,050
Total revenues $ 154,170 $ 145,455 $ 148,016 $ 138,432 $ 139,249 $ 586,073 $ 548,225
Adjusted EBITDA margins 66% 66% 68% 68% 68% 67% 69%

Adjusted funds from operations

AFFO is a non-GAAP financial measure that we use as a supplemental measure of our performance.  We compute AFFO by adding to or deducting from FFO, as adjusted: (1) non-revenue-enhancing capital expenditures, tenant improvements, and leasing commissions (excludes development and redevelopment expenditures); (2) effects of straight-line rent and straight-line rent on ground leases; (3) capitalized income from development projects; (4) amortization of acquired above and below market leases, loan fees, and debt premiums/discounts; (5) non-cash compensation expense; and (6) allocation of AFFO attributable to unvested restricted stock awards.

We believe that AFFO is a useful supplemental performance measure because it further adjusts to: (1) deduct certain expenditures that, although capitalized and classified in depreciation expense, do not enhance the revenue or cash flows of our properties; (2) eliminate the effect of straight-lining our rental income and capitalizing income from development projects in order to reflect the actual amount of contractual rents due in the period presented; and (3) eliminate the effect of non-cash items that are not indicative of our core operations and do not actually reduce the amount of cash generated by our operations.  We believe that eliminating the effect of non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use.  We believe that AFFO provides useful information by excluding certain items that are not representative of our core operating results because such items are dependent upon historical costs or subject to judgmental valuation inputs and the timing of our decisions.

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 36

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Definitions and Other Information

December 31, 2012

(Unaudited)

Annualized base rent

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

Capitalized interest

A key component of our business model is our value-added development and redevelopment programs.  These programs are focused on providing high-quality generic life science laboratory space to meet the real estate requirements of and are reusable by various life science industry client tenants.  Upon completion, each value-added project is expected to generate significant revenues and cash flows.  Our development and redevelopment projects are generally in locations that are highly desirable to life science entities which we believe results in higher occupancy levels, longer lease terms, and higher rental income and returns.  Development projects consist of the ground-up development of generic life science laboratory facilities.  Redevelopment projects consist of the permanent change in use of office, warehouse, and shell space into generic life science laboratory space, including the conversion of single-tenancy space to multi-tenancy space or vice versa.  We also have certain significant value-added projects undergoing important and substantial preconstruction activities to bring these assets to their intended use.  These critical activities add significant value and are required for the construction of buildings.  The projects will provide high-quality facilities for the life science industry and are expected to generate significant revenue and cash flows for the Company.  In accordance with GAAP, we capitalize project costs clearly related to the construction, development, and redevelopment as a cost of the project.  Indirect project costs such as construction administration, legal fees, and office costs that clearly relate to projects under construction, development, and redevelopment are also capitalized as a cost of the project.  We capitalize project costs only during periods in which activities necessary to prepare an asset for its intended use are in progress.  We also capitalize interest cost as a cost of the project only during the period for which activities necessary to prepare an asset for its intended use are ongoing, provided that expenditures for the asset have been made and interest cost is incurred.  Additionally, should activities necessary to prepare an asset for its intended use cease, interest, taxes, insurance, and certain other direct project costs related to these assets would be expensed as incurred.

Cash interest

Cash interest is equal to interest expense calculated in accordance with GAAP, plus capitalized interest, less amortization of loan fees, and amortization of debt premiums/discounts.

Construction in progress/current value-added projects

Active development/active redevelopment projects

A key component of our business model is our value-added development and redevelopment programs.  These programs are focused on providing high-quality, generic, and reusable life science laboratory space to meet the real estate requirements of a wide range of clients in the life science industry.  Upon completion, each value-added project is expected to generate significant revenues and cash flows.  Our development and redevelopment projects are generally in locations that are highly desirable to life science entities, which we believe results in higher occupancy levels, longer lease terms, and higher rental income and returns.  Development projects consist of the ground-up development of generic and reusable life science laboratory facilities.  We generally will not commence new development projects for aboveground vertical construction of new life science laboratory space without first securing pre-leasing for such space except when there is significant market demand for high-quality laboratory facilities.  Redevelopment projects consist of the permanent change in use of office, warehouse, and shell space into generic life science laboratory space, including the conversion of single-tenancy space to multi-tenancy space or vice versa.

Generic infrastructure/building improvement projects

Generic infrastructure/building improvement projects include revenue-enhancing capital spending, non-revenue-enhancing capital expenditures, and tenant improvements.

Dividend payout ratio

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

Dividend yield

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 37

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Definitions and Other Information

December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

EBITDA

See Adjusted EBITDA and Adjusted EBITDA margins

Fixed charge coverage ratio

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

**** Three Months Ended ****
**** 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 ****
Adjusted EBITDA $ 102,219 $ 95,654 $ 100,792 $ 94,459 $ 94,491
Interest expense – continuing operations $ 17,941 $ 17,094 $ 17,922 $ 16,227 $ 14,757
Interest expense – discontinued operations – – – – –
Add: capitalized interest 14,897 16,763 15,825 15,266 16,151
Less: amortized loan fees (2,505 ) (2,470 ) (2,214 ) (2,643 ) (2,551 )
Less: amortization of debt premium/discounts (110 ) (112 ) (110 ) (179 ) (565 )
Cash interest 30,223 31,275 31,423 28,671 27,792
Dividends on preferred stock 6,471 6,471 6,903 7,483 7,090
Fixed charges $ 36,694 $ 37,746 $ 38,326 $ 36,154 $ 34,882
Fixed charge coverage ratio – quarter annualized 2.8x 2.5x 2.6x 2.6x 2.7x
Fixed charge coverage ratio – trailing 12 months 2.6x 2.6x 2.7x 2.7x 2.7x

Funds from operations and funds from operations, as adjusted

GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes that 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 FFO.  Since its introduction, FFO has become a widely used non-GAAP financial measure among equity REITs.  We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT.  Moreover, we believe that FFO, as adjusted, is also helpful because it allows investors to compare our performance to the performance of other real estate companies between periods, and on a consistent basis, without having to account for differences caused by investment and disposition decisions, financing decisions, terms of securities, capital structures, and capital market transactions.  We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper and related implementation guidance (“NAREIT White Paper”).  The NAREIT White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of real estate and land parcels and impairments of real estate (excluding land parcels), plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.  Impairments of real estate relate to decreases in the estimated fair value of real estate due to changes in general market conditions and do not necessarily reflect the operating performance of the properties during the corresponding period.  Impairments of real estate represent the non-cash write-down of assets when fair value over the recoverability period is less than the carrying value.  We compute FFO, as adjusted, as FFO calculated in accordance with the NAREIT White Paper, plus losses on early extinguishment of debt, preferred stock redemption charges, and impairments of land parcels, less realized gain on equity investment primarily related to one non-tenant life science entity, and the amount of such items which are allocable to our unvested restricted stock awards.  Our calculations of both FFO and FFO, as adjusted, may differ from those methodologies utilized by other equity REITs for similar performance measurements, and, accordingly, may not be comparable to other equity REITs.  Neither FFO nor FFO, as adjusted, should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity, nor are they indicative of the availability of funds for our cash needs, including funds available to make distributions.

Future value-added projects

Land held for future development

All preconstruction efforts have been advanced to appropriate stages and no further preconstruction activities are ongoing and therefore, interest, property taxes, and other costs related to these assets are expensed as incurred.  We generally will not commence new development projects for aboveground vertical construction of new life science laboratory space without first securing pre-leasing for such space.

Land undergoing preconstruction activities (additional CIP)

Preconstruction activities include Building Information Modeling (3-D virtual modeling), design development and construction drawings, sustainability and energy optimization review, budgeting, planning for future site and infrastructure work, and other activities prior to commencement of vertical construction of aboveground shell and core improvements.  Our objective with preconstruction is to reduce the time it takes to deliver projects to prospective client tenants.  Project costs are capitalized as a cost of the project during periods when activities necessary to prepare an asset for its intended use are in progress.  We generally will not commence ground-up development of any parcels undergoing preconstruction activities without first securing pre-leasing for such space.  If vertical aboveground construction is not initiated at completion of preconstruction activities, the land parcel will be classified as land held for future development.  The largest project included in land undergoing preconstruction consists of our 1.6 million developable square feet at Alexandria Center™ at Kendall Square in East Cambridge, Massachusetts.

Future redevelopment

Our asset base also includes non-laboratory space (office, warehouse, and industrial space), classified as rental properties, representing square feet for future conversion into life science laboratory space through redevelopment.  These spaces are currently classified in investments in real estate, net, in the condensed consolidated balance sheets.

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 38

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Definitions and Other Information

December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Gross assets (excluding cash and restricted cash)

Gross assets (excluding cash and restricted cash) are equal to total assets plus accumulated depreciation, less cash, cash equivalents, and restricted cash.

Initial stabilized yield - cash

Initial Stabilized Yield is calculated as the quotient of net operating income and our investment in the property at stabilization.  Our Initial Stabilized Yield on a cash basis reflects cash rents at date of stabilization and does not reflect contractual rent escalations beyond the stabilization date.  We expect, on average, our contractual cash rents related to our value-added projects to increase over time.  Our Initial Stabilized Yield excludes the impact of leverage.

Interest coverage ratio

Interest coverage ratio is the ratio of Adjusted EBITDA to cash interest.  This ratio is useful to investors as an indicator of our ability to service our cash interest obligations.  See fixed charge coverage ratio for calculation of cash interest.  The following table summarizes the calculation of the interest coverage ratio:

**** Three Months Ended
**** 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11
Adjusted EBITDA $ 102,219 $ 95,654 $ 100,792 $ 94,459 $ 94,491
Cash interest $ 30,223 $ 31,275 $ 31,423 $ 28,671 $ 27,792
Interest coverage ratio – quarter annualized 3.4x 3.1x 3.2x 3.3x 3.4x
Interest coverage ratio – trailing 12 months 3.2x 3.2x 3.3x 3.4x 3.4x

Net debt

Net debt is equal to the sum of total debt less cash, cash equivalents, and restricted cash.

Net operating income

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

Further, we believe net operating income is useful to investors as a performance measure, because when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.  Net operating income excludes certain components from income from continuing operations in order to provide results that are more closely related to the results of operations of our properties.  For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level.  In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level.  Real estate impairments have been excluded in deriving net operating income because we do not consider impairment losses to be property level operating expenses.  Real estate impairment losses relate to changes in the values of our assets and do not reflect the current operating performance with respect to related revenues or expenses.  Our real estate impairments represent the write down in the value of the assets to the estimated fair value less cost to sell.  These impairments result from investing decisions and the deterioration in market conditions that adversely impact underlying real estate values.  Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as losses on early extinguishment of debt, as these charges often relate to the timing of corporate strategy.  Property operating expenses that are included in determining net operating income consist of costs that are related to our operating properties, such as utilities, repairs and maintenance, rental expense related to ground leases, contracted services, such as janitorial, engineering, and landscaping, property taxes and insurance, and property level salaries.  General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional fees, office rent, and office supplies that are incurred as part of corporate office management.  Net operating income presented by us may not be comparable to net operating income reported by other equity REITs that define net operating income differently.  We believe that in order to facilitate a clear understanding of our operating results, net operating income should be examined in conjunction with income from continuing operations as presented in our condensed consolidated statements of income.  Net operating income should not be considered as an alternative to income from continuing operations as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions.

Same property comparisons

As a result of changes within our total property portfolio, the financial data presented in the Summary of Same Property Comparisons shows significant changes in revenue and expenses from period to period.  In order to supplement an evaluation of our results of operations over a given period, we analyze the operating performance for all properties that were fully operating for the entire periods presented for the quarter periods (herein referred to as “Same Properties”) separate from properties acquired subsequent to the first day in the first period presented, properties undergoing active development and active redevelopment, and corporate entities (legal entities performing general and administrative functions), which are excluded from same property results (herein referred to as “Non-Same Properties”).  Additionally, rental revenues from lease termination fees, if any, are excluded from the results of the Same Properties.

Total market capitalization

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 39

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Definitions and Other Information

December 31, 2012

(Tabular dollar amounts in thousands)

(Unaudited)

Unencumbered net operating income as a percentage of total net operating income

Unencumbered net operating income as a percentage of total net operating income is a non-GAAP financial measure that we believe is useful to investors as a performance measure of our results of operations of our unencumbered real estate assets, as it reflects primarily those income and expense items that are incurred at the unencumbered property level.  We use unencumbered net operating income as a percentage of total net operating income in order to assess our compliance with our financial covenants under our debt obligations because the measure serves as a proxy for a financial measure under certain of our debt obligations.  Unencumbered net operating income is derived from assets classified in continuing operations which are not subject to any mortgage, deed of trust, lien, or other security interest as of the period for which income is presented.  Unencumbered net operating income for periods through September 30, 2012, has been reclassified to conform to current period presentation related to discontinued operations.

**** Three Months Ended Year Ended
**** 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Unencumbered net operating income $ 76,833 $ 73,543 $ 76,989 $ 68,462 $ 66,968 $ 296,033 $ 252,376
Encumbered net operating income 30,698 27,298 28,668 29,059 30,728 115,517 136,282
Total net operating income $ 107,531 $ 100,841 $ 105,657 $ 97,521 $ 97,696 $ 411,550 $ 388,658
Unencumbered net operating income as a percentage of total net operating income 71% 73% 73% 70% 69% 72% 65%

Weighted average interest rate for capitalization

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

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

Weighted average shares represent the weighted average of common shares outstanding during the period.  The following calculation of weighted average shares was applied to arrive at FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders, FFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s **** common stockholders:

**** Three Months Ended Year Ended
**** 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 12/31/12 12/31/11
Weighted average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic 63,091,781 62,364,210 61,663,367 61,507,807 61,427,495 62,159,913 59,066,812
Effect of assumed conversion and dilutive securities:
Assumed conversion of 8.00% Unsecured Senior Convertible Notes 6,146 6,087 6,087 6,087 6,087 6,146 6,087
Dilutive effect of stock options – – 173 1,160 3,939 331 10,798
Weighted average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted 63,097,927 62,370,297 61,669,627 61,515,054 61,437,521 62,166,390 59,083,697
ALEXANDRIA REAL ESTATE EQUITIES, INC.<br> ALL RIGHTS RESERVED © 2013 40
--- ---

Report a Problem

Category
Description
Email (optional, for follow-up)