Rhonda Chiger – Investor Relations Joel Marcus – Chief Executive Officer Dean Shigenaga – Chief Financial Officer Jim Richardson – President

Michael Bilerman – Citigroup Irwin Guzman – Citigroup Anthony Paolone – J.P. Morgan Philip Martin – Cantor Fitzgerald Dave Aubuchon – Robert W. Baird

Welcome to the Alexandria Real Estate Equities first quarter 2008 conference call. (Operator instructions) At this time for opening remarks and introductions, I would like to turn the call over to Rhonda Chiger.

This conference call contains forward-looking statements, including earnings guidance within the meaning of the Federal securities law. 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. And now I would like to turn the call over to Joel Marcus. Please go ahead.

Joining me here today are Jim Richardson, Dean Shigenaga and Pete Nelson. I want to start off the call with some brief macro comments. As all of you know the liquidity crisis and debt crunch which certainly came to the forefront during the first quarter actually has benefited the pharma sector. Those companies with cash hoards have bound better strategic buying opportunities now when they don’t have to compete with players who are debt financed. As an example our number one tenant Novartis is making a complex acquisition of Alcon a Swiss company actually owned by Nestle for about $37 billion in total consideration. That company produces everything from contact lenses to surgical equipment to pharmaceuticals. Our number two tenant, GlaxoSmithKline announced the acquisition of another one of our key tenants in the Cambridge market, Sirtris Pharmaceutical, a very cutting edge anti-aging company for more than $700 million. And so while striving to cut SG&A more and more the multi-nationals are increasingly interested in making investments in the area of biologics. Pfizer announced a new R&D center for cancer biologics and I think this bodes very well for the biotech sector and really our great both tenant base and asset base. On the biotech side, generally the first quarter of 08 was positive. Our top ten tenant Genentech got approval for Avastin for advanced breast cancer in addition to the already approved colon and non-small cell lung cancer indications. And then finally yesterday California awarded $271 million in grants to build 12 new stem cell centers in the state. The universities and research institutes that are receiving the money have said they would spend an additional $560 million on laboratory construction, the resulting total of about $831 million, with that nearly 800,000 square feet of research space to house some…

Our results for the first quarter of 2008 reflect the strength or our unique roadmap for growth and our continued ability to execute and deliver consistent and predictable results period after period. The first quarter of 2008 represents our forty-third consecutive quarter in growth in FFO per share diluted, our forty-third consecutive quarter of positive same property growth on a GAAP basis and a solid start toward our eleventh full calendar year with positive leasing activity. For the first quarter of 2008, FFO per share diluted was $1.48, up 7% over the first quarter of 07 after the supplemental adjustments for non-cash impairment and preferred stock redemption charges. Let me quickly cover a few important items starting with our guidance for 08, non-cash impairment charges, our balance sheet and our 2008 capital plan and then I’ll cover some key items on our solid fundamental operating results. Guidance for 2008 after supplemental adjustments for non-cash impairment charges related to assets held for sale and certain investments and is reflective of the ongoing strength of our core operations as shown in the operating results for the quarter. We continue to generate consistent and predictable operating results which is a key component to our updated guidance for 2008. From our solid leasing activity year after year, the positive same property performance quarter after quarter to our solid quadruple net lease structure, to our unique ability to underwrite the life science industry and client tenants. These key attributes have proven to be an important component to our strong and consistent operating performance and will provide a solid base for our growth through 2008 and into 2009 and 2010. Our updated guidance assumes no acquisitions and assumes the sale of at least two additional assets which are currently held for sale. Other opportunistic sales may…

So let me take you through some quick broad market commentary before I get into specific leasing performance. In that context, the general conditions that I described during the year end call have continued to prevail over the first four months of 2008. And those are vacancy rates remaining low while threats to supply shock remain very nominal. Tenant demand is diverse and fairly robust across a wide array of all size and industry segments with the academic, institutional and governmental client base continuing to be most active. Rents are either stable or increasing in every one of the core markets that we’re in. Sales transaction activity is very limited given the aforementioned state of the capital markets. However we haven’t really seen any evidence of any real significant value erosion in the core markets that we’re in. We are encouraged by the consistent demand we’ve seen from emerging stage companies in most of our markets and as we have mentioned many times in the past, this is critical for the growth and health of the commercial component of the life sciences business over the long term. And then finally we have not observed an extension of transaction timelines due to the capital market disruption from a leasing perspective, however as is probably fairly obvious, the larger the transaction, the longer it takes to negotiate and conclude it, particularly given the complex nature of our facilities. Turning to leasing performance, as both Dean and Joel have mentioned, the first quarter was a very strong start to the year for us with 570,000 square feet of new leases which represents one of the strongest quarters we’ve ever had. 14.1% GAAP rental rate increases on new and renewal leases also reinforces these positive trends in our core markets. The activity was heavily…

Okay operator we’d like to open it up for Q&A now.

(Operator instructions) Your first question comes from Michael Bilerman – Citigroup. Michael Bilerman – Citigroup: Irwin Guzman is on the phone with me as well. Dean you touched a little bit on the securities side and talking a little bit about the gains you experienced. And currently at least on the public side, on a $5.6 million investment you’re sitting on, a total basis of $28 million, so almost five times your basis, can you talk a little bit about the spread of how many investments that goes over? And then also talk about the private side of it where you’ve got $56 million invested, how many investments that goes over and sort of what you think the imbedded mark to market is today, just to give a little bit more color on these activities.

I think broadly speaking, we probably have, very rough numbers, maybe 100 investments or so in private and publicly traded companies. All of our investments, keep in mind, in the public companies by and large from what I can recall, originated from an investment in a private entity that has gone public and we still hold the securities. So that’s kind of the mix. As far as imbedded value on the private side, I think if you can look at the historical performance, the imbedded value in public securities we hold, I think that’s a pretty decent indication of some really imbedded value on the private side which the accounting rules require us to account for on historical cost basis. So I think there’s reasonable upside imbedded there. Michael Bilerman – Citigroup: And when you look at, so you generated $22 million of gains in terms of liquidation over the last three years, what sort of return has there been on your sort of initial capital?

It’s kind of hard to tell because each investment varies. Michael Bilerman – Citigroup: Is this a 2 X type business for you or a 3 X?

I think if you look at an IRR based valuation you would get probably into the high teens or low 20’s. Irwin Guzman – Citigroup: You outlined in some detail the level of leasing you’ve accomplished in ground up developments but can you talk about the redevelopment inventory, specifically the inventory that you’re going to be delivering by the end of the year, it looks like a little over $100 million of investment, can you talk about the lease strength in those assets and the level of activity that you have for the reaming space that’s not leased?

There is a small redevelopment going on in kind of North of San Diego. There are a couple of activities, nothing to report there of significance. So I would say that’s kind of quiet. I may want to have Jim run down the San Diego ones because those are ones that are actually pretty active here.

Yes, we have a couple of assets that have turned over, over the last year or so that we’re redeveloping and that have, in the San Diego markets specifically, and I would say just on a quick look, about half of that space we’re in negotiation or have leased. So we’re making very good progress down in San Diego. And just looking through the balance, we have some pretty good activity in Massachusetts as well we’re we’ve got I think four assets that are in redevelopment there and it looks like just again kind of off the top, it looks like probably 30-40% of that space we’re in pretty active negotiation on. So it’s spread across the portfolio. If you look at maybe two large opportunities, one would be the tech square opportunity, we have some very good leasing ongoing at the LOI stage or beyond. So you’ll be hearing more about that, so I think that market, there’s some good things happening. And then in the Gaithersburg or Shady Grove market, I think some very good activity on that. So I think you’ll see that as these come forward with completion of the construction and fit out and delivery, that there’ll be some pretty good things happening. I think we had a pretty strong occupancy quarter on redevelopments delivered this quarter. Irwin Guzman – Citigroup: On the international front you’ve spoken in the past about bringing in a JV partner to help fund the developments in China and India, is that something you’re still looking at doing and what type of a partnership are you looking for in terms of percentage ownership from the third party and in terms of your share of capital investment versus the partner’s share.

I think it’s too early for us to really make that call. I think over time we clearly think that those are markets that contain half the world’s population and so they deserve a lot of effort, although they’re a little bit, they’re still in the early and vital stages. So I don’t think, I mean I have an idea of how we want to structure and fund it but I don’t think we have really spent I would say any great amount of brain power doing that because we really need to assemble our pipeline in a fairly dramatic way before we then take the next step on the funding plant. Irwin Guzman – Citigroup: Would that partner, would the purpose of that partner be just sort of capital or would it also be local expertise?

No actually we’re going to have the local expertise, we have operating teams on the ground everywhere where we are. So it would be likely a capital source only.

Your next question comes from Anthony Paolone – J.P. Morgan. Anthony Paolone – J.P. Morgan: Can we go through some of your developments, particularly in Mission Bay, some of those you gave square footage and others you just said, for instance, like someone looking at an entire building, can you just maybe go through square footage specifically, like I think Jim you mentioned a building I think in East Campus that you’re talking with somebody about?

Those would be in imbedded in the pre-construction but not under active development, so just so everybody knows, but go ahead.

So on those specifically, Tony, we have a couple buildings on the North Campus parcel that each of them is 105,000 square feet, that’s the intended developed size. And so we had a signed letter of intent for one of those buildings. And then the other one that I mentioned, we have another building that’s on the West Campus that’s a tower building which is approximately 240,000 square feet as currently designed and we’ve got a user for a majority of that that we’re in late stage negotiations with on an LOI. So As Joel said, neither of those are in the active development pipeline. They are substantially through the permitting process and enough so that we can be negotiating very specifically with tenants. Anthony Paolone – J.P. Morgan: And then on East River Science Park, how many square feet is a floor and a half?

It would be somewhere between 30,000-40,000. Anthony Paolone – J.P. Morgan: And then as we think about the 115,000 square feet in Seattle that you’re negotiating on and some of these Mission Bay assets where you’ve got letters of intent and even East River Science Park, can you put some probability or just assess the risk of that moving from a letter of intent to an actual lease and kind of what needs to happen?

Well I think if you go back on the active developments, the 158,000 square foot building at Mission Bay, I think Jim confirmed we have a 50,000 square foot acre institutional tenant with a signed lease. South San Francisco, the building, 135,000 we have a signed lease for 65,000 plus that tenant has an option or right to take down the balance this year. South China, our joint venture partner has committed to 50,000 square feet there and in East River as we said, we have about 30,000-40,000 that will be signed shortly. And the balance, I would say it’s hard to say, but those are kind of 50/50 on the remaining 400,000 square feet of demand. And the Seattle is a signed LOI and in lease negotiations, so I would put that probability at extremely high. Anthony Paolone – J.P. Morgan: In terms of just general operations, can you talk about whether or not there’s been any real change in the behavior of tenants or prospective tenants in leasing in terms of either pushback on rents or concessions or time to make decisions etc.

I don’t think so, in fact I think I commented at the outset that there really hasn’t been an extension in transaction times associated with this capital markets challenge that everybody is dealing with. I really believe that as we’ve said many times that our industry marches to the beat of a different drummer and we have, we’re really encouraged at the diversity of the activity, both from a size perspective, from a market perspective and then from the various industry segments. It’s really been encouraging. So and rents have not gone in the wrong direction in every single market, they’re either stable or they have been increasing. Now I will say that I do believe that we have very uniquely located asset locations and so this may not translate into secondary quality locations. But at least in our portfolio, it’s been pretty much the same as it has been. Anthony Paolone – J.P. Morgan: With respect to the investment portfolio, can you just go through the strategic rationale and benefit of engaging in that business, given what seems like quite a few relatively small investments and kind of going through the brain damage to make each one of those and what you derive from that?

Yeah we started this effort, I personally started it with our former Chairman Jerry Sudarsky back in 1996, so it’s been now 12 years. And we’ve established I think an unparalleled knowledge base and really proprietary capability to analyze and understand and even target. If you look at kind of what we call the horizontal space, which are really all the critical technologies emerging and then you look at the vertical space below those which are the particular disease targets or particular areas of focus within say a cancer area, that has given us the ability to avoid tenant defaults, has given us the ability to target desirable tenants like Sirtris which was just announced being bought by GlaxoSmithKline, we have a great relationship with the management team and the founders out of MIT and because of our sector knowledge and expertise to a large extent that tenant came to us because of that. So the financial success that we’ve had is really secondary to the strategic desirability of doing what we do and I would say of all the things we do in the company, the proprietary real estate research we really do coupled with the sector research and capability is really not only second to none but indispensable to our success.

Your next question comes from Philip Martin – Cantor Fitzgerald. Philip Martin – Cantor Fitzgerald: Joel you’ve talked a bit about this at the outset of the call but if you could just go through it a little bit more, in more detail if possible, but the business models and the growth strategies of your tenant base. It sounds like they remain as healthy if not a bit healthier and on target and I just thought if you could address that a little bit more, given the economic downturn and just trying to gauge the strength of this tenant base and again to Jim’s comment about marching to a different drummer.

As you know we have a multi-faceted tenant base that’s made up of big pharma and we’ve mentioned two of the big tenants which are Novartis and Glaxo. Clearly we focus on the institutional side which Jim mentioned is a very fast growing area. And I mentioned in my comments the rather dramatic amount of dollars flowing out of you know really huge budget deficit time in California out of the [CIRN] program that looks to build quite a number of facilities and employ quite a number of people. So in addition to big pharma which for right now accounts for probably about 20% plus of our rental base, the institutional side is approaching about 15% and that’s a very fast growing area. Traditional office is a bit of a sliver. Private biotech companies, but unique ones, Sirtris was one of those just a year ago, is about 12% and those are where we have this unique and special way to underwrite. Another big sector which is between 15-20% of net effective rents is essentially product and service companies. These are Quest Diagnostics, Lab Corp, very strong companies that sell into our out of this industry, so a very diversified tenant base. And then public biotechs account for a little less than 30% of the company’s revenues, heavily made up of many of the big cap companies including in our top ten, Genentech, [Amalon] and others. So we have sought to try to craft this asset base and the tenant base in a very diversified I think very healthy and really among the best players and I think that’s really served us well and made this ten years of really outstanding performance. It doesn’t happen automatically, it really is done through tough pick and shovel work and I think the diversity and the way we have lined up our tenant base and kept it at the highest levels is really a great credit to how we performed. Philip Martin – Cantor Fitzgerald: Even from the demand standpoint, have you seen any let up in demand for potential new projects or new space needs, expanding space needs? Does that continue to be pretty robust across your tenant base and even in terms of new tenants?

Yes, I think the answer is yes, I think Jim spoke to the fact that if you look at the biotech sector and the number of small to medium leases and again if you pick the right horse, two companies that have performed extraordinarily well that started in very small space, Alnylam Pharmaceutical which started in 2,000 with two people in Cambridge is now a multi-billion dollar equity market cap and I think Roche just announced, I think it was Roche, that they’re stepping up their investment there. Also Sirtris was again started in a pretty small space. So that segment of the market, I think again, if you pick the very high quality companies, that tends to have good constant demand and with the relationships, that has certainly benefited us on the leasing and occupancy side. I think big pharma is a little different, they are much more strategic about what they do. So you have to have the relationship and you have to be in the right place for them to work with you, otherwise sometimes they just do it off their own balance sheet. I think one of the fastest growing sectors is clearly the institutional sector as we’ve alluded to. And obviously growth in the public biotech sector, selectively has been very important for us as well. So I think again with the right selectivity, each of the sectors have their own unique growth and future opportunities and locations sometimes matter in the different regions, but clearly the best locations as Jim said is what really matters and a landlord who has deep understanding of the platform, the physical platform and also the scientific side of it is pretty indispensable to them. Philip Martin – Cantor Fitzgerald: And then on the leasing side, I mean it’s certainly a very good leasing quarter here. The space that was leased, a breakdown was given, but would you characterize this as pretty typical space within your portfolio or was there some anomaly that led to such a good leasing quarter? And what do you expect going forward, I know you said 5-10% range for leases over the next 12-18 months but I’m just trying to get a sense of what specifically drove this good leasing quarter?

I think without going lease by lease it would be hard to give you an absolute conclusion, I think some of it is timing, certainly, but it was spread over, well I mentioned three primary geographies or locations, but it’s split over a lot of buildings and a lot of space resulting in that average lease size that was just slightly more than 10,000 square feet. So I don’t think there was anything unique and special about the rollover and in how we resolved it in the first quarter. I think as I mentioned it looks very good for the balance of the 2008 rollover and I think I would probably interpret that more as just broadly good quality space and locations and then this fairly consistent diverse demand that both Joel and I have talked about as opposed to a unique set of assets that happen to be rolling at the right time. Philip Martin – Cantor Fitzgerald: And is it fair to assume that there’s some real pricing power in this portfolio?

I think with respect to unique locations, that’s absolutely true. I mean some of the assets in Cambridge for example, certainly Mission Bay. I think people make decisions and obviously there are a variety of opportunities that if you want to be in the best locations then there is clearly some pricing power in the best locations. And frankly lesser quality tenants go to secondary and tertiary locations which is fine. But I’d rather be in the AAA locations.

I would also say that one of the things that we’ve mentioned many times on calls is we have fully integrated operations, particularly in these three markets that we talked about. So we’re very close with these tenants. I mean we’re working on transactions now that might be three or four years out, trying to strategize with the company to renew them, expand them etc. So if we were trying to navigate this thing from 3,000 miles away, it’d just be a whole different ballgame. So we’re on the ground in the spaces with those tenants everyday and so I think pricing power gets built into that and just our overall success.

Your next question comes from Dave Abuochon – Robert W. Baird. Dave Aubuchon – Robert W. Baird: Can you detail a little bit more the assets that you sold in the East Bay, at first glance and crunching the numbers it looks like it’s a fairly low price per square foot, $170.00, and I know you said they were fully occupied assets but were the near term lease rollovers one of the reasons for what I would think is a discounted price for those assets?

I wouldn’t say it was a discounted price. I think I might even have talked about this on the last call, I think on the stabilized cash flow it was like a low sevens cap rate. The buildings were substantially populated by a good quality user but there was near term lease rollover exposure and we just felt like it was a market that was thin enough that we didn’t want to try to sort through that exposure. I think that the cash flow itself and I have to go back and look, I don’t have it in front of me, might have been such that the rents were low enough that even at that cap rate it drives the lower per square foot cost.

Right and these are East Bay and the Alameda region, these are somewhat older buildings, these are not Class A buildings, they’re probably Class B buildings. And they are dated buildings as well. Dave Aubuchon – Robert W. Baird: Obviously there has been a tremendous amount of disruption in the credit markets over the last three or four months and you were marking these assets I assume right in the middle of that. Was pricing in line with your expectations?

It was, actually it was and we’ve been looking at doing this for a little bit but we had several interest parties, they liked the cash flow, they actually like the, every buyer seems to have some interest and there were a number of buyers that liked the East Bay that liked Alameda specifically, think it’s a good long term growth area. So we did, I think in light of the credit market situation, I think we did pretty well there.

Yes it was a high quality local developer with a pension funder, so they didn’t rely on outside debt. Dave Aubuchon – Robert W. Baird: I believe Jim I think you said that there was a tech company interested in one of the Mission Bay buildings, any particular reason or reasons why they would select Mission Bay versus South San Francisco maybe?

I think there’s a lot of reasons but I don’t know that the trade off would necessarily be South San Francisco, that’s much more of a life science driven market. But it would be down through the peninsula into the Silicon Valley and as I think I’ve noted on prior calls, there’s been a lot of migration of some of the tech sector into San Francisco because of the labor base, the 24/7 quality of life, Mission Bay in particular has so many different transportation routes into that area at relatively low hassle rates. And you can get a campus environment and an essentially waterfront view and you’ve got all of that intellectual capital that’s relevant there with UCSF etc. So there’s just a lot of amenities resident at Mission Bay and being in San Francisco that you can’t get down in the Silicon Valley necessarily. That’s what has been the draw I would say primarily it’s the labor base.

Absolutely and I just want to FYI on the tech side, if you look at an interesting statistic this week, I’m not a video game player but Grand Theft Auto which is the number on video game ever sold a $0.5 billion in sales in the first six days. There are companies in the broad and diverse tech sector that have a lot of cash. Dave Aubuchon – Robert W. Baird: I believe you said this was in the Mission Bay East, the 240,000 square foot building?

I’m sorry, Mission Bay West, if I said East I meant West.

Your final question comes from Anthony Paolone – J.P. Morgan. Anthony Paolone – J.P. Morgan: On the redevelopment that was put back into service in the first quarter, can you give just a sense as to how much all in cost and roughly what the yield was on that just to give us an update on how those are going?

Yes I think the incremental spending was probably in the $80-$100 range on average. And it was substantial stabilized upon a delivery into operations. Anthony Paolone – J.P. Morgan: But I’m just trying to get a sense, do you calculate after you put that $80-$100 a foot into the properties, what your all in basis is into those assets and when you bring it back in what the yield is on that basis?

Correct we do look at our leasing activity across all aspects on an all in cost basis and so the anticipated yields that we target on redevelopments being in the double digits is what we expect to and have historically been able to perform at.

And so I think what actually happened on these five properties, San Diego, San Francisco, the Northwest, there was a small thing in Florida which is not very relevant and then in Maryland I think you could say fairly that the yield on the incremental dollars was within our range and I think given some of the basis that we have in some of these assets, the overall net over the term of the lease would be consistent with the target range given to you. Anthony Paolone – J.P. Morgan: On the future development pipeline, I noticed from last quarter in Seattle your future development pipeline I think went from 595,000 square foot to 843,000, was that just an increase in density because I didn’t see you buy anymore land it seems.

You’re correct there weren’t any land acquisitions during the quarter but what we do from time to time is carefully review our imbedded opportunities and in certain circumstances we’re not comfortable with projecting the opportunity as we evaluate ultimately what we’ll do with a particular project. So this was as a result of a very thorough review that went over probably about six months and we drew some conclusions that we’re comfortable with the future development opportunities in Seattle and classifying it as such.

I guess I’ll now turn the conference back over to you for any addition or closing remarks.

Luckily we’ve done it in less than an hour so I want to thank everybody for joining and we’ll talk to you come second quarter. Thanks again.