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Alexandria Real Estate Equities, Inc. News

Alexandria Real Estate Equities, Inc. Reports Fourth Quarter and Year Ended December 31, 2007 Results

PASADENA, Calif., Feb. 11 PRNewswire — Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the fourth quarter and year ended December 31, 2007.

For the fourth quarter of 2007, we reported total revenues of $109,616,000 and FFO available to common stockholders of $46,324,000, or $1.46 per share (diluted), compared to total revenues of $91,907,000 and FFO available to common stockholders of $39,054,000, or $1.34 per share (diluted), for the fourth quarter of 2006. Comparing the fourth quarter of 2007 to the fourth quarter of 2006, total revenues increased 19%, FFO available to common stockholders increased 19% and FFO per share (diluted) increased 9%. For the year ended December 31, 2007, we reported total revenues of $405,360,000 and FFO available to common stockholders of $168,200,000, or $5.61 per share (diluted), net of a preferred stock redemption charge, compared to total revenues of $310,779,000 and FFO available to common stockholders of $131,665,000, or $5.16 per share (diluted), for the year ended December 31, 2006. Comparing the year ended December 31, 2007 to the year ended December 31, 2006, total revenues increased 30%, FFO available to common stockholders increased 28% and FFO per share (diluted) increased 9%, net of a preferred stock redemption charge recognized in the first quarter of 2007. The preferred stock redemption charge related to the redemption of our Series B Preferred Stock was approximately $2,799,000. Excluding the preferred stock redemption charge, FFO available to common stockholders for the year ended December 31, 2007 increased by 30% and FFO per share (diluted) increased by 10% as compared to the year ended December 31, 2006.

FFO is a non-GAAP measure widely used by publicly-traded real estate investment trusts. A reconciliation of GAAP net income available to common stockholders to FFO available to common stockholders, on both an aggregate and per share diluted basis, is included in the financial information accompanying this press release. The primary reconciling item between GAAP net income available to common stockholders and FFO available to common stockholders is depreciation and amortization expense. Depreciation and amortization expense for the three months ended December 31, 2007 and 2006 was $26,969,000 and $22,454,000, respectively. Depreciation and amortization expense for the years ended December 31, 2007 and 2006 was $97,335,000 and $74,039,000, respectively. Net income available to common stockholders for the fourth quarter of 2007 was $22,277,000, or $0.70 per share (diluted), compared to net income available to common stockholders of $16,512,000, or $0.57 per share (diluted), for the fourth quarter of 2006. Net income available to common stockholders for the year ended December 31, 2007 was $78,905,000, or $2.63 per share (diluted), compared to net income available to common stockholders of $57,326,000, or $2.25 per share (diluted), for the year ended December 31, 2006. In the first quarter of 2007, we recognized a preferred stock redemption charge of approximately $2,799,000 related to the redemption of our Series B Preferred Stock. Excluding the preferred stock redemption charge, net income available to common stockholders for the year ended December 31, 2007 increased by 43% and net income per share (diluted) increased by 21% as compared to the year ended December 31, 2006.

For the fourth quarter of 2007, we executed a total of 43 leases for approximately 432,000 rentable square feet of space at 29 different properties (excluding month-to-month leases). Of this total, approximately 201,000 rentable square feet related to new or renewal leases of previously leased space and approximately 231,000 rentable square feet related to redeveloped, developed or previously vacant space. Of the 231,000 rentable square feet, approximately 187,000 rentable square feet were delivered from our redevelopment or development programs, with the remaining approximately 44,000 rentable square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 12.4% higher (on a GAAP basis) than rental rates for expiring leases. For the year ended December 31, 2007, we executed a total of 136 leases for approximately 1,583,000 rentable square feet of space at 50 different properties (excluding month-to-month leases). Of this total, approximately 896,000 rentable square feet were for new or renewal leases related to previously leased space and approximately 687,000 rentable square feet were for redeveloped, developed or previously vacant space. Of the 687,000 rentable square feet, approximately 399,000 rentable square feet were delivered from our redevelopment or development programs, with the remaining approximately 288,000 rentable square feet for previously vacant space. Rental rates for new or renewal leases were on average approximately 9.8% higher (on a GAAP basis) than rental rates for expiring leases.

During the fourth quarter of 2007, we acquired one property in the Eastern Massachusetts market and one property in the New Jersey/Suburban Philadelphia market with approximately 404,986 aggregate rentable square feet. We paid approximately $101.2 million cash for the properties and closed two secured notes payable of $34.0 million and $23.9 million for total consideration of $159.1 million. The largest property aggregating approximately 369,831 rentable square feet in the Eastern Massachusetts market is currently occupied by multiple office tenants. This property also has an additional approximately 390,786 developable square feet. Additionally, during the fourth quarter of 2007, we acquired one development parcel in the Longwood Medical submarket, Boston, MA., with approximately 350,000 developable square feet through a joint venture. The purchase price of this land development parcel was approximately $70.0 million. In connection with this purchase, we closed a $62.0 million pre-construction secured loan of which approximately $38.2 million was drawn and outstanding as of December 31, 2007.

During the fourth quarter of 2007, we sold one office/industrial property in the San Francisco Bay market, located south of the city of San Francisco, with approximately 49,874 rentable square feet. The sale price of this property was approximately $10.6 million. As of December 31, 2007, two properties approximating 136,399 rentable square feet were classified as "held for sale." In January 2008, we sold one of these properties located in the San Diego market approximating 86,962 rentable square feet. In addition, in February 2008, we sold four properties in the San Francisco Bay market aggregating approximately 211,715 rentable square feet. The sales price for the properties sold in 2008 was approximately $63.5 million. The net proceeds from these sales were used to repay secured notes payable totaling approximately $25.2 million with the balance used to reduce outstanding borrowings on our unsecured line of credit.

As of December 31, 2007, approximately 88% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, as of December 31, 2007, approximately 9% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses. Additionally, as of December 31, 2007, approximately 91% of our leases (on a rentable square footage basis) provided for the recapture of certain capital expenditures and approximately 94% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed or indexed based on the consumer price index or another index.

Based on our current view of existing market conditions and certain current assumptions, our guidance for FFO per share (diluted) and earnings per share (diluted) as follows: 2008 ———- FFO per share (diluted) $6.10 Earnings per share (diluted) $3.27

Alexandria Real Estate Equities, Inc., Landlord and Developer of Choice to the Life Science Industry(R), is a publicly-traded real estate investment trust focused principally on the ownership, operation, management, selective development, redevelopment and acquisition of life science properties. Our properties are designed and improved for lease primarily to institutional (universities and independent not-for-profit institutions), pharmaceutical, biotechnology, medical device, life science product, service, and translational medicine entities, as well as governmental agencies. We are the largest and leading provider of real estate to the broad and diverse life science industry with an asset base, as of December 31, 2007, that will enable us to grow to approximately 22.4 million square feet consisting of 166 properties approximating 12.1 million rentable square feet, properties undergoing ground-up development approximating 1.6 million rentable square feet, plus an imbedded pipeline for ground-up development approximating 8.7 million developable square feet.

This press release contains forward-looking statements, including earnings guidance, within the meaning of the federal securities laws. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our Annual Report on Form 10-K and our other periodic reports filed with the Securities and Exchange Commission.

ALEXANDRIA REAL ESTATE EQUITIES, INC. Financial Information (Dollars in thousands, except per share data) (Unaudited) Three Months Ended Year Ended December 31, December 31, ———————————- ———————————- 2007 2006 2007 2006 ————— ————— ————— ————— Income statement data Total revenues $109,616 $91,907 $405,360 $310,779 Expenses Rental operations 27,446 21,625 99,210 69,775 General and administrative 8,131 6,693 32,456 26,051 Interest 24,013 21,148 88,387 71,371 Depreciation and amortization 26,838 22,095 96,476 72,432 ————— ————— ————— ————— 86,428 71,561 316,529 239,629 Minority interest 951 838 3,669 2,287 ————— ————— ————— ————— Income from continuing operations 22,237 19,508 85,162 68,863 Income from discontinued operations, net 2,755 1,027 8,562 4,553 ————— ————— ————— ————— Net income 24,992 20,535 93,724 73,416 Dividends on preferred stock 2,715 4,023 12,020 16,090 Preferred stock redemption charge - - 2,799 - ————— ————— ————— ————— Net income available to common stockholders $22,277 $16,512 $78,905 $57,326 ========== ========== ========== ========== Weighted average shares of common stock outstanding Basic 31,446,999 28,821,942 29,668,231 25,102,200 ========== ========== ========== ========== Diluted 31,729,054 29,222,144 30,004,462 25,524,478 ========== ========== ========== ========== Earnings per share - basic Continuing operations (net of preferred stock dividends and preferred stock redemption charge) $0.62 $0.53 $2.37 $2.10 Discontinued operations, net 0.09 0.04 0.29 0.18 ————— ————— ————— ————— Earnings per share - basic $0.71 $0.57 $2.66 $2.28 ========== ========== ========== ========== Earnings per share - diluted Continuing operations (net of preferred stock dividends and preferred stock redemption charge) $0.62 $0.53 $2.34 $2.07 Discontinued operations, net 0.08 0.04 0.29 0.18 ————— ————— ————— ————— Earnings per share - diluted $0.70 $0.57 $2.63 $2.25 ========== ========== ========== ========== ALEXANDRIA REAL ESTATE EQUITIES, INC. Financial Information (Unaudited)

Funds from Operations

Generally accepted accounting principles ("GAAP") basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") established the measurement tool of Funds From Operations ("FFO"). Since its introduction, FFO has become a widely used non-GAAP financial measure by REITs. We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper (the "White Paper") and related implementation guidance, which may differ from the methodology for calculating FFO utilized by other equity REITs, and, accordingly, may not be comparable to such other REITs. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. While FFO is a relevant and widely used measure of operating performance for REITs, it should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.

The following table presents a reconciliation of net income available to common stockholders, the most directly comparable GAAP financial measure to FFO, to funds from operations available to common stockholders for the three months and year ended December 31, 2007 and 2006 (in thousands, except per share data):

Reconciliation of net income available to common stockholders to funds from Three Months Three Months Year Year operations available Ended Ended Ended Ended to common December 31, December 31, December 31, December 31, stockholders 2007 2006 2007 2006 —————- —————- —————- —————- Net income available to common stockholders (1) $22,277 $16,512 $78,905 $57,326 Add: Depreciation and amortization (2) 26,969 22,454 97,335 74,039 Add: Minority interest 951 838 3,669 2,287 Subtract: Gain on sales of property (3) (2,901) - (7,976) (59) Subtract: FFO allocable to minority interest (972) (750) (3,733) (1,928) —————- —————- —————- —————- Funds from operations available to common stockholders (1) $46,324 $39,054 $168,200 $131,665 =========== =========== =========== =========== FFO per share Basic $1.47 $1.36 $5.67 $5.25 =========== =========== =========== =========== Diluted $1.46 $1.34 $5.61 $5.16 =========== =========== =========== =========== Reconciliation of earnings per share (diluted) to FFO per share (diluted) Earnings per share (diluted) $0.70 $0.57 $2.63 $2.25 Depreciation and amortization(2) 0.85 0.77 3.25 2.90 Minority interest 0.03 0.03 0.12 0.09 Gain on sales of property (3) (0.09) - (0.27) - FFO allocable to minority interest (0.03) (0.03) (0.12) (0.08) —————- —————- —————- —————- FFO per share (diluted) $1.46 $1.34 $5.61 $5.16 =========== =========== =========== =========== (1) During the first quarter of 2007, we redeemed our 9.10% Series B cumulative redeemable preferred stock. Accordingly, in compliance with EITF Topic D-42, we recorded a charge of $2,799,000 in the first quarter of 2007 for costs related to the redemption of our Series B Preferred Stock. (2) Includes depreciation and amortization for assets \"held for sale\" reflected as discontinued operations (for the periods prior to when such assets were designated as \"held for sale.\") (3) Gain on sales of property relates to the disposition of one property sold during fourth quarter 2007, four land parcels and one property sold during the third quarter of 2007, one property sold during the second quarter of 2007, one property sold during the first quarter of 2007, and three properties sold during the second quarter of 2006. Gain on sales of property is included in the income statement in income from discontinued operations, net. ALEXANDRIA REAL ESTATE EQUITIES, INC. Quarterly Supplemental Financial Information (Dollars in thousands, except per share data) (Unaudited) For the Three Months Ended Operational data 12/31/2007 9/30/2007 6/30/2007 3/31/2007 12/31/2006 ————— ————— ————— ————— ————— Breakdown of revenues from continuing operations (a) Rental income $83,086 $78,309 $72,923 $72,392 $69,329 Tenant recoveries 22,553 21,733 19,055 20,441 18,642 Other income 3,977 3,731 3,410 3,750 3,936 ————— ————— ————— ————— ————— Total revenues $109,616 $103,773 $95,388 $96,583 $91,907 ========== ========== ========== ========== ========== Funds from operations per share-diluted (b) $1.46 $1.45 $1.42 $1.28(c) $1.34 Dividends per share on common stock $0.78 $0.76 $0.76 $0.74 $0.74 Dividend payout ratio (common stock) (d) 53.9% 56.3% 53.8% 58.1% 55.6% Straight-line rent $4,601 $4,508 $2,720(e) $5,082 $5,671 Capitalized interest $16,609(f) $15,035 $13,548 $10,844 $9,010 Number of properties (g) Acquired/added/completed during period 2 13 2 - 8 Sold/transferred to development (h) (3) (1) (4) (1) - Owned at end of period 166 167 155 157 158 Rentable square feet (g) Acquired/added/ completed during period 404,986 994,024 104,312 - 573,027 Sold/transferred to development (h) (92,927) (37,000) (375,112) (75,500) - Owned at end of period 12,125,992 11,813,933 10,856,909 11,127,709 11,203,209 As of 12/31/2007 9/30/2007 6/30/2007 3/31/2007 12/31/2006 ————— ————— ————— ————— ————— Other data Number of shares of common stock outstanding 31,603,344 31,243,448 29,180,700 29,129,238 29,012,135 Closing price of common stock $101.67 $96.26 $96.82 $100.37 $100.40 Debt to total market capitalization (i) Total debt $2,787,904 $2,502,832 $2,274,269 $2,176,594 $2,024,866 Less minority interest share of debt (39,320) (22,102) (22,089) (22,076) (22,064) ————— ————— ————— ————— ————— Our share of debt 2,748,584 2,480,730 2,252,180 2,154,518 2,002,802 Preferred stock market capitalization 136,845 130,156 132,593 140,579 193,360 Common stock market capitalization 3,213,112 3,007,494 2,825,275 2,923,702 2,912,818 ————— ————— ————— ————— ————— Total market capitalization $6,098,541 $5,618,380 $5,210,048 $5,218,799 $5,108,980 ————— ————— ————— ————— ————— Debt to total market capitalization 45.1% 44.2% 43.2% 41.3% 39.2% (a) The historical results above exclude the results of assets \"held for sale\" which have been reflected as discontinued operations. (b) See page 5 for a reconciliation of earnings per share (diluted) to FFO per share (diluted). (c) During the first quarter of 2007, we redeemed our 9.10% Series B cumulative redeemable preferred stock. Accordingly, in compliance with EITF Topic D-42, we recorded a charge of $2,799,000, or $0.10 per share (diluted), in the first quarter of 2007 for costs related to the redemption of our Series B Preferred Stock. (d) Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (common stock shares outstanding on the respective record date multiplied by the related dividend per share) to funds from operations for the respective quarter. (e) Includes a rental payment of approximately $1.4 million from one tenant, the U.S. Government, in the second quarter of 2007. Pursuant to Statement of Financial Accounting Standards No. 13, \"Accounting for Leases\" rental payments due under this lease are recognized on a straight-line basis over the lease term. (f) As of December 31, 2007, assets for which capitalization of interest is required pursuant to Statement of Financial Accounting Standards No. 34, \"Capitalization of Interest Cost\" (\"SFAS 34\"), approximated $1.1 billion. This amount is classified as properties undergoing development and redevelopment and land held for development on our balance sheet. As of December 31, 2007, the weighted average interest rate used in the calculation of capitalized interest required pursuant to SFAS 34 was approximately 6.27%. SFAS 34 requires the interest rate for capitalization to be based on applicable interest costs related to borrowings outstanding during the period, including the impact of interest rate swap agreements, debt premiums/discounts and amortization of loan fees. (g) Includes properties \"held for sale\" during the applicable periods such assets were \"held for sale.\" As of December 31, 2007, two properties aggregating approximately 136,399 square feet were classified as \"held for sale.\" (h) During the fourth quarter of 2007, we sold one asset and transferred two properties from operating assets to imbedded future development opportunities. During the third quarter of 2007, we sold one asset located in the New Jersey/Suburban Philadelphia market and four land parcels to the Massachusetts Institute of Technology. During the second quarter of 2007, we sold one asset and transferred three properties from operating assets to imbedded future development opportunities. During the first quarter of 2007, we sold one asset located in the Suburban Washington D.C. market. (i) Debt to total market capitalization is the ratio of our share of total debt (secured notes payable, unsecured line of credit and unsecured term loan and unsecured convertible notes) to total market capitalization. Total market capitalization is equal to outstanding shares of preferred stock and common stock multiplied by the related closing price at the end of each period presented, plus our share of total debt. ALEXANDRIA REAL ESTATE EQUITIES, INC. Annual Supplemental Financial Information (Dollars in thousands, except per share data) (Unaudited) For the Year Ended Operational data 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 ————— ————— ————— ————— ————— Breakdown of revenues from continuing operations (a) Rental income $306,710 $236,848 $180,100 $135,900 $117,329 Tenant recoveries 83,782 62,104 46,739 33,077 29,076 Other income 14,868 11,827 4,767 3,489 1,964 ————— ————— ————— ————— ————— Total revenues $405,360 $310,779 $231,606 $172,466 $148,369 ========== ========== ========== ========== ========== Funds from operations per share-diluted (b) $5.61(c) $5.16 $4.82 $4.41(d) $4.23 Dividends per share on common stock $3.04 $2.86 $2.72 $2.52 $2.20 Dividend payout ratio (common stock) (e) 55.4% 58.8% 57.9% 56.7% 51.8% Number of properties (f) Acquired/added/completed during period 17 29 22 23 4 Sold/transferred to development (9) (3) (1) (1) (4) Owned at end of period 166 158 132 111 89 Rentable square feet (f) Acquired/added/ completed during period 1,503,322 2,683,211 1,392,299 1,717,209 267,164 Sold/transferred to development (580,539) (268,099) (16,500) 2,891 (338,256) Owned at end of period 12,125,992 11,203,209 8,788,097 7,412,298 5,692,198 As of 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 ————— ————— ————— ————— ————— Other data Number of shares of common stock outstanding 31,603,344 29,012,135 22,441,294 19,594,418 19,264,023 Closing price of common stock $101.67 $100.40 $80.50 $74.42 $57.90 Debt to total market capitalization (g) Total debt $2,787,904 $2,024,866 $1,406,666 $1,186,946 $709,007 Less minority interest share of debt (39,320) (22,064) - - - ————— ————— ————— ————— ————— Our share of debt 2,748,584 2,002,802 1,406,666 1,186,946 709,007 Preferred stock market capitalization 136,845 193,360 192,419 199,360 104,421 Common stock market capitalization 3,213,112 2,912,818 1,806,524 1,458,217 1,115,387 ————— ————— ————— ————— ————— Total market capitalization $6,098,541 $5,108,980 $3,405,609 $2,844,523 $1,928,815 ————— ————— ————— ————— ————— Debt to total market capitalization 45.1% 39.2% 41.3% 41.7% 36.8% (a) The historical results above exclude the results of assets \"held for sale\" which have been reflected as discontinued operations. (b) See page 5 for a reconciliation of earnings per share (diluted) to FFO per share (diluted). (c) During the first quarter of 2007, we redeemed our 9.10% Series B cumulative redeemable preferred stock. Accordingly, in compliance with EITF Topic D-42, we recorded a charge of $2,799,000 in the first quarter of 2007 for costs related to the redemption of our Series B Preferred Stock. (d) Includes the effect of the preferred stock redemption charge of $1,876,000 recorded in the second quarter of 2004 for cost related to the redemption of our Series A Preferred Stock. (e) Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (common stock shares outstanding on the respective record date multiplied by the related dividend per share) to funds from operations for the respective year. (f) Includes assets \"held for sale\" during the applicable periods such assets were \"held for sale.\" (g) Debt to total market capitalization is the ratio of our share of total debt (secured notes payable, unsecured line of credit and unsecured term loan and unsecured convertible notes) to total market capitalization. Total market capitalization is equal to outstanding shares of preferred stock and common stock multiplied by the related closing price at the end of each period presented, plus our share of total debt. ALEXANDRIA REAL ESTATE EQUITIES, INC. Condensed Consolidated Balance Sheets (In thousands) December 31, ————————————- 2007 2006 ————— ————— (Unaudited) Assets Rental properties, net $3,146,915 $2,726,251 Properties undergoing development and redevelopment and land held for development 1,143,302 596,331 Cash and cash equivalents 8,030 2,948 Tenant security deposits and other restricted cash 51,911 34,360 Tenant receivables 6,759 6,330 Deferred rent 81,496 68,412 Investments 84,322 74,824 Other assets 119,359 108,021 ————— ————— Total assets $4,642,094 $3,617,477 ========== ========== Liabilities and Stockholders' Equity Secured notes payable $1,212,904 $1,174,866 Unsecured line of credit and unsecured term loan 1,115,000 850,000 Unsecured convertible notes 460,000 - Accounts payable, accrued expenses and tenant security deposits 247,289 158,119 Dividends payable 27,575 25,363 ————— ————— Total liabilities 3,062,768 2,208,348 Minority interest 75,506 57,477 Stockholders' equity: Series B preferred stock - 57,500 Series C preferred stock 129,638 129,638 Common stock 316 290 Additional paid-in capital 1,365,773 1,139,629 Accumulated other comprehensive income 8,093 24,595 ————— ————— Total stockholders' equity 1,503,820 1,351,652 ————— ————— Total liabilities and stockholders' equity $4,642,094 $3,617,477 ========== ========== ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Debt December 31, 2007 (Dollars in thousands) (Unaudited) Principal Maturities / Rates Secured Debt Unsecured Debt ————————————————- ———————- Weighted Average Year Amount Interest Rate (1) Amount ——————— ——————— ——————— ———————- 2008 $160,074 (2) 6.08% $- 2009 284,220 6.20 - 2010 93,259 6.18 365,000 (3) 2011 108,191 6.04 750,000 (3) 2012 39,348 6.00 460,000 (4) Thereafter 527,812 5.93 - ——————— ———————- Total $1,212,904 (5) $1,575,000 ============== =============== Secured and Unsecured Debt Analysis Percentage Weighted Weighted of Average Average Balance Balance Interest Rate (6) Maturity ——————- ——————- ——————- ——————— Secured Debt $1,212,904 43.5% 6.08% 4.4 Years Unsecured Debt 1,575,000 56.5 5.27 3.7 Years ——————- ——————- ——————- ——————— Total Debt $2,787,904 100.0% 5.62% 4.0 Years ============= ============= ============= ============== Fixed and Floating Rate Debt Analysis Percentage Weighted Weighted of Average Average Balance Balance Interest Rate (6) Maturity ——————- ——————- ——————- ——————— Fixed Rate Debt $1,362,949 48.9% 5.27% 4.8 Years Floating Rate Debt - Hedged 778,500 27.9 5.85 3.8 Years Floating Rate Debt - Unhedged 646,455 23.2 6.09 2.4 Years ——————- ——————- ——————- ——————— Total Debt $2,787,904 100.0% 5.62% 4.0 Years ============= ============= ============= ============== (1) The weighted average interest rate is calculated based on outstanding debt as of December 31st of the year immediately preceding the year presented. (2) A secured note payable totaling $34.0 million was repaid in early January 2008. Approximately $76.4 million matures in the fourth quarter of 2008. We are in discussions with our lender to extend/refinance this secured loan. (3) The unsecured line of credit matures in October 2010 and may be extended at our sole option for an additional one year period. The unsecured term loan matures in October 2011 and may be extended at our sole option for an additional one year period. (4) On or after January 15, 2012, we have the right to redeem our 3.70% unsecured convertible notes, in whole or in part, at any time from time to time, for cash equal to 100% of the principal amounts of the notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the notes may require us to repurchase their notes, in whole or in part, on January 15, 2012, 2017 and 2022 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Additional information regarding our unsecured convertible notes is contained in our Form 10-K filed with the Securities and Exchange Commission. (5) Includes minority interests' share of scheduled principal maturities including lump sum principal payments of $38.2 million and $211.3 million in 2009 and thereafter, respectively, of which our share is approximately $21.0 million and $190.2 million, respectively. (6) Represents the weighted average contractual interest rate plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted average interest rate excludes bank fees and amortization of loan fees. See page 10 for further details of our interest rate swap agreements. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Interest Rate Swap Agreements December 31, 2007 (Dollars in thousands) (Unaudited) Interest Effective Pay at Transaction Effective Termination Rates Notional December Dates Dates Dates (1) Amounts 31, 2007 ——————- ————————- ———————- ———- ———- ———- December 2004 December 31, 2004 January 2, 2008 3.590% $50,000 $50,000 December 2004 January 3, 2006 July 1, 2008 3.927 50,000 50,000 June 2006 June 30, 2006 September 30, 2009 5.299 125,000 125,000 December 2003 December 29, 2006 October 31, 2008 5.090 50,000 50,000 December 2005 December 29, 2006 November 30, 2009 4.730 50,000 50,000 December 2005 December 29, 2006 November 30, 2009 4.740 50,000 50,000 December 2006 December 29, 2006 March 31, 2014 4.990 50,000 50,000 December 2006 January 2, 2007 January 3, 2011 5.003 28,500 28,500 April 2004 April 30, 2007 April 30, 2008 4.850 50,000 50,000 May 2005 June 29, 2007 June 30, 2008 4.400 50,000 50,000 December 2006 June 29, 2007 October 31, 2008 4.920 50,000 50,000 October 2007 October 31, 2007 June 30, 2008 4.458 50,000 50,000 October 2007 October 31, 2007 September 30, 2012 4.546 50,000 50,000 October 2007 October 31, 2007 September 30, 2013 4.642 50,000 50,000 May 2005 November 30, 2007 November 28, 2008 4.460 25,000 25,000 December 2005 January 2, 2008 December 31, 2010 4.768 50,000 - May 2005 June 30, 2008 June 30, 2009 4.509 50,000 - June 2006 June 30, 2008 June 30, 2010 5.325 50,000 - June 2006 June 30, 2008 June 30, 2010 5.325 50,000 - October 2007 July 1, 2008 March 31, 2013 4.622 25,000 - October 2007 July 1, 2008 March 31, 2013 4.625 25,000 - June 2006 October 31, 2008 December 31, 2010 5.340 50,000 - June 2006 October 31, 2008 December 31, 2010 5.347 50,000 - May 2005 November 28, 2008 November 30, 2009 4.615 25,000 - December 2006 November 30, 2009 March 31, 2014 5.015 75,000 - December 2006 November 30, 2009 March 31, 2014 5.023 75,000 - December 2006 December 31, 2010 October 31, 2012 5.015 100,000 - ———— Total $778,500 ======== (1) The interest pay rates represent the interest rate we will pay for one month LIBOR under the respective interest rate swap agreement. These rates do not include any spread in addition to one month LIBOR that is due monthly as interest expense. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Same Property Comparisons (Dollars in thousands) (Unaudited) GAAP Basis (1) Cash Basis (1) Quarter Ended Quarter Ended ———————————————— ———————————————— 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change ————— ————— ————— ————— ————— ————— Revenue(2) $80,750 $77,026 4.8% $78,730 $71,907 9.5% Operating expenses 20,617 18,937 8.9 20,617 18,937 8.9 ————— ————— ————— ————— ————— ————— Revenue less operating expenses $60,133 $58,089 3.5% $58,113 $52,970 9.7% ========== ========== ========== ========== ========== ========== GAAP Basis (1) Cash Basis (1) Year Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change ————— ————— ————— ————— ————— ————— Revenue(2) $213,425 $202,115 5.6% $207,883 $192,781 7.8% Operating expenses 49,060 43,647 12.4 49,060 43,647 12.4 ————— ————— ————— ————— ————— ————— Revenue less operating expenses $164,365 $158,468 3.7% $158,823 $149,134 6.5% ========== ========== ========== ========== ========== ==========

NOTE: This summary represents operating data for all properties that were owned and fully operating for the entire periods presented for the quarter periods (the "Fourth Quarter Same Properties") and for the full year periods (the "2007 Same Properties.") Same property occupancy for the quarters ended December 31, 2007 and 2006 was 94.9% and 94.0%, respectively. Same property occupancy for the year ended December 31, 2007 and 2006 was 95.8% and 95.1%, respectively. Properties undergoing redevelopment are excluded from same property results.

(1) Revenue less operating expenses computed in accordance with GAAP is total revenue associated with the Fourth Quarter Same Properties and 2007 Same Properties, as applicable, (excluding lease termination fees, if any) less property operating expenses. Under GAAP, rental revenue is recognized on a straight-line basis over the respective lease terms. Revenue less operating expenses on a cash basis is total revenue associated with the Fourth Quarter Same Properties and 2007 Same Properties, as applicable (excluding lease termination fees, if any) less property operating expenses, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. Straight-line rent adjustments for the quarters ended December 31, 2007 and 2006 for the Fourth Quarter Same Properties were $2,020,000 and $5,119,000, respectively. Straight-line rent adjustments for the years ended December 31, 2007 and 2006 for the 2007 Same Properties were $5,542,000 and $9,334,000, respectively. We believe that revenue less operating expenses on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent adjustments to rental revenue. (2) Fees received from tenants in connection with termination of their leases, if any, are excluded from revenue in the Summary of Same Property Comparisons. As of December 31, 2007, approximately 88% of our leases (on a square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, as of December 31, 2007, approximately 9% of our leases (on a square footage basis) required the tenants to pay a majority of operating expenses. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Properties (Dollars in thousands) (Unaudited) December 31, 2007 ——————————————————————————— Rentable Square Feet Number of —————————— Annualized Properties Operating Redevelopment Total Base Rent(1) ————— ————— ——————- ——- —————— Markets California - Los Angeles Metro 2 31,343 29,660 61,003 $697 California - San Diego 33 1,465,032 215,370 1,680,402 43,264 California - San Francisco Bay 23 1,837,457 30,217 1,867,674 63,569 Eastern Massachusetts 38 3,076,689 310,349 3,387,038 107,322 International - Canada 4 296,362 46,032 342,394 6,879 New Jersey/ Suburban Philadelphia 8 441,504 - 441,504 9,176 Southeast 12 596,172 62,234 658,406 10,423 Suburban Washington D.C. 31 2,430,402 69,366 2,499,768 48,004 Washington - Seattle 13 1,040,113 11,291 1,051,404 30,488 ————— ————— ————— ————- —————— Total Properties (Continuing Operations) 164 11,215,074 774,519 11,989,593 $319,822 ========== ========== ========== ========= ============ Occupancy Percentage —————————————————————— 12/31/07 (1)(2) 12/31/06 (3) 9/30/07 (4) ——————— ——————— ——————— Markets California - Los Angeles Metro 70.8% 82.5% 70.8% California - San Diego 94.9 89.5 94.6 California - San Francisco Bay 95.8 94.0 95.1 Eastern Massachusetts 94.7 95.9 96.0 International - Canada 100.0 100.0 100.0 New Jersey/Suburban Philadelphia 96.6 96.6 96.3 Southeast 86.0(5) 78.1(5) 87.3(5) Suburban Washington D.C. 90.1 92.5 92.3 Washington - Seattle 97.2 94.9 93.4 ——————— ——————— ——————— Total Properties (Continuing Operations) 93.8% 93.1% 94.1% ============== ============== ============== (1) Excludes spaces at properties totaling approximately 774,519 rentable square feet undergoing a permanent change in use to office/laboratory space through redevelopment and two properties totaling approximately 136,399 rentable square feet that are classified as \"held for sale.\" (2) Including spaces undergoing a permanent change in use to office/laboratory space through redevelopment, occupancy as of December 31, 2007 was 87.8%. See page 17 for additional information on our redevelopment program. (3) Excludes spaces at properties totaling approximately 612,699 rentable square feet undergoing a permanent change in use to office/laboratory space through redevelopment as of December 31, 2006. Including spaces undergoing a permanent change in use to office/laboratory space through redevelopment, occupancy as of December 31, 2006 was 88.0%. See page 17 for additional information on our redevelopment program. (4) Excludes spaces at properties totaling approximately 795,202 rentable square feet undergoing a permanent change in use to office/laboratory space through redevelopment and one property totaling approximately 49,437 rentable square feet that was classified as \"held for sale\" as of September 30, 2007. Including spaces undergoing a permanent change in use to office/laboratory space through redevelopment, occupancy as of September 30, 2007 was 87.8%. See page 17 for additional information on our redevelopment program. (5) Substantially all of the vacant space is office or warehouse space. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Leasing Activity For the Quarter Ended December 31, 2007 TI's/Lease Commissions Rentable Rental Per Average Number Square Expiring New Rate Square Lease of Leases Footage Rates Rates Changes Foot Terms ————- ————- ————- ——— ———- ———— ———- Leasing Activity Lease Expirations Cash Basis 40 409,374 $28.28 - - - - GAAP Basis 40 409,374 $26.03 - - - - Renewed/Released Space Leased Cash Basis 19 200,847 $30.67 $33.67 9.8% $1.90 2.8 years GAAP Basis 19 200,847 $30.17 $33.91 12.4% $1.90 2.8 years Redeveloped/Developed/ Vacant Space Leased Cash Basis 24 231,365 - $26.91 - $6.76 8.6 years GAAP Basis 24 231,365 - $29.50 - $6.76 8.6 years Month-to-Month Leases In Effect Cash Basis 16 85,087 $25.07 $24.66 - - - GAAP Basis 16 85,087 $24.69 $24.66 - - - Leasing Activity Summary Excluding Month-to-Month Leases Cash Basis 43 432,212 - $30.05 - $4.50 5.9 years GAAP Basis 43 432,212 - $31.55 - $4.50 5.9 years Including Month-to-Month Leases Cash Basis 59 517,299 - $29.16 - - - GAAP Basis 59 517,299 - $30.42 - - - ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Leasing Activity For the Year Ended December 31, 2007 TI's/Lease Commissions Rentable Rental Per Average Number Square Expiring New Rate Square Lease of Leases Footage Rates Rates Changes Foot Terms ————- ————- ————- ——— ———- ———— ———- Leasing Activity Lease Expirations Cash Basis 108 1,626,033 $25.98 - - - - GAAP Basis 108 1,626,033 $26.97 - - - - Renewed/Released Space Leased Cash Basis 61 895,894 $29.38 $31.41 6.9% $4.49 4.0 years GAAP Basis 61 895,894 $28.66 $31.48 9.8% $4.49 4.0 years Redeveloped/Developed/ Vacant Space Leased Cash Basis 75 686,856 - $31.59 - $10.14 6.5 years GAAP Basis 75 686,856 - $33.68 - $10.14 6.5 years Month-to-Month Leases In Effect Cash Basis 16 85,087 $25.07 $24.66 - - - GAAP Basis 16 85,087 $24.69 $24.66 - - - Leasing Activity Summary Excluding Month-to-Month Leases Cash Basis 136 1,582,750 - $31.49 - $6.95 5.1 years GAAP Basis 136 1,582,750 - $32.44 - $6.95 5.1 years Including Month-to-Month Leases Cash Basis 152 1,667,837 - $31.14 - - - GAAP Basis 152 1,667,837 - $32.04 - - - ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Lease Expirations December 31, 2007 Rentable Number Square Year of of Footage of Percentage of Annualized Base Rent Lease Leases Expiring Aggregate of Expiring Leases Expiration Expiring Leases Leased Square Feet (per square foot) ————— ————— ————— ————————— —————————— 2008 67(1) 846,022(1) 8.0% $25.59 2009 63 896,692 8.5 24.75 2010 50 1,025,693 9.7 28.16 2011 60 1,721,434 16.4 27.28 2012 58 1,405,285 13.4 33.56 Rentable Square Footage of Expiring Leases Markets 2008 2009 ——————————————— ——————- ——————- California - Los Angeles Metro 4,006 4,354 California - San Diego 93,250 203,464 California - San Francisco Bay 287,888 101,165 Eastern Massachusetts 267,776 152,697 International - Canada - - New Jersey/Suburban Philadelphia 40,000 21,000 Southeast 22,440 85,412 Suburban Washington D.C. 84,184 294,664 Washington - Seattle 46,478 33,936 ——————- ——————- Total 846,022(1) 896,692 ============= ============= (1) Includes 16 month-to-month leases for approximately 85,000 rentable square feet. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Additions and Dispositions of Properties For the Quarter Ended December 31, 2007 (Dollars in thousands) Acquisition Month of Rentable Markets Amount Acquisition Square Feet ———————————————- —————— —————— —————— Additions to Operating Properties: Eastern Massachusetts $150,000 (1) October 369,831 New Jersey/Suburban Philadelphia 9,089 October 35,155 —————— —————— Total Additions to Operating Properties: $159,089 404,986 ============ ============ Acquisition Month of Developable Markets Amount Acquisition Square Feet ———————————————- —————— —————— —————— Additions to Land: Eastern Massachusetts $70,000 (2) November 350,000 ============ ============ Disposition Month of Rentable Markets Amount Disposition Square Feet ———————————————- —————— —————— —————— Dispositions: California - San Francisco Bay $10,550 (3) December 49,874 ============ ============ (1) In connection with the purchase of this property, we closed two secured notes totaling approximately $57.9 million. In addition to the existing rentable square footage of approximately 369,831, this property also has an additional 390,786 developable square footage. This additional future developable square footage is included in our Imbedded Future Development and Redevelopment Square Footage on page 19. (2) In connection with the purchase of this property, we closed a $62.0 million pre-construction secured loan of which approximately $38.2 million was drawn and outstanding as of December 31, 2007. The Company has a 55% interest in this development project located in the Longwood Medical submarket, Boston, MA. The 350,000 future developable square footage is included in our Imbedded Future Development and Redevelopment Square Footage on page 19. (3) Represents sale of one office/industrial building in a small submarket south of the city of San Francisco. ALEXANDRIA REAL ESTATE EQUITIES, INC. Summary of Square Footage Undergoing Redevelopment December 31, 2007 Esti- mated Placed Esti- Invest- Square in mated ment Footage Re- In- Per Undergoing Markets/ develop- Service Square Redevelopment/ Submarkets ment Dates Foot Total Property Status ————————— ———- ———- ———- ———————- ——————— California - Los Angeles Metro 2006 2008 $80-100 29,660/29,660 Construction California - San Diego/ Torrey Pines 2004 2009 $100-120 87,140/87,140 Design/ Construction(1) California - San Diego/ Torrey Pines 2006 2009 $80-100 43,600/43,600 Construction California - San Diego/Sorrento 2006 2008 $70-80 30,147/30,147 Construction California - San Diego/ Torrey Pines 2007 2009 $80-100 15,259/107,709 Construction California - San Diego/ Torrey Pines 2007 2009 $80-100 39,224/76,084 Construction California - San Francisco Bay/ Peninsula 2007 2008 $80-100 30,217/82,712 Construction Eastern Massachusetts/ Suburban 2007 2009 $100-120 23,000/38,000 Construction Eastern Massachusetts/ Suburban 2007 2009 $70-80 113,045/113,045 Redesign/ Construction Eastern Massachusetts/ 2008/ Cambridge 2006 2009 $120-175 105,850/155,090 Design/ Construction Eastern Massachusetts/ Cambridge 2007 2009 $100-130 68,454/369,831 Design/ Demolition International - Canada 2007 2008 $140-160 46,032/46,032 Construction Southeast/Florida 2006 2008 $80-100 45,841/45,841 Construction Southeast/ Research Triangle Park 2007 2008 $100-120 16,393/77,395 Design/ Construction Suburban Washington D.C./ Shady Grove 2007 2009 $70-80 69,366/125,004 Construction Washington - Seattle 2007 2009 $125-150 11,291/32,279 Design ————————- 774,519/1,459,569 =================

Our redevelopment program involves ongoing activities necessary for the permanent change of use of applicable redevelopment space to office/laboratory space. Spaces currently built out with laboratory improvements are generally not placed into our value-add redevelopment program. As required under GAAP, interest and other costs directly related and essential to the project are capitalized on redevelopment properties on the basis allocable only to that portion of space undergoing redevelopment. In addition to properties undergoing redevelopment, as of December 31, 2007, our asset base co