Welcome everyone to the Alexandria Real Estate Equities Incorporated, first quarter 2010 conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Rhonda Chiger. Please go ahead, ma'am.

Good afternoon and thank you for joining us. This conference call includes forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 as amended and Section 21-E of the Securities Exchange Act 1934 as amended. Such forward-looking statements include without limitation statements regarding our 2010 earnings per share diluted attributable to Alexandria Real Estate Equity, Inc. common stockholders, 2010 FFO per share diluted attributed to Alexandria Real Estate Equity's common stockholders, the business plans of certain tenants and the expected impact of the conversion of our unsecured convertible notes. Our actual results may differ materially from those projected in such forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital, debt construction financing and/or equity or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing develop, our failure to successfully operate or lease acquired properties, decreased rental rates or increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, general and local economic conditions and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission. Forward-looking statements are made as of the date of this call and we assume no obligation to update this information. Now, I would like to turn the call over to Mr. Marcus. Please go ahead.

Thank you Rhonda and welcome everybody to the first quarter 2010 Alexandria. Real Estate call. With me today are Dean Shigenaga, Peter Moglia, Peter Nelson and Krupal Raval. Let start off as I always do, with some macro comments. We are very pleased to report another quarter our 51st of solid, stable and consistent financial and operating performance and as at the end of last year the fittest performance of all REITS of all equity REITS on a total return basis in IPL. Although as most of you know the capital markets have shown a remarkable resiliency since the first quarter of 2009 actually a mere 12 months ago. It's hard to imagine when the markets were still on free fall, the underlying health of the real estate markets are finally stabilizing but still challenging in some locations. Our job over the last year has been to focus, really focus strongly on, managements focus on prudent risk management and maintaining solid stable performance and emphasis on strong business practices and a laser focus on our clients and their business, maintaining our innovative and sound business strategy which we pioneered continuing the innovation of our unique product offerings as landlord choice to the broadened life science industry and continuing to focus on obviously revenue and profit growth. This quarter witnessed the PPACA reform in healthcare signed in law by President Obama on March 23, entitled the Patient Protection and Affordable Care Act, kind of a simplistic notion for something that’s incredibly complicated. I think it's important to remember as I have said many times our biopharmaceutical products really only are, the only part of the healthcare expenditure pie that can truly, ultimately contain in lower cost and that should serve us well in the years ahead. If you look at the…

Thank you, Joel. The first quarter of 2010 was quarter that could be described as a quarter flushed with capital for REITs. Recent access to a variety of sources of the capital is proven by the announcement of various debt and equity deals. Banks and insurance companies continue to compete aggressively for financing of high quality real estate owned by quality REITs sponsors with limited or no new quality transactions for lenders to finance. In terms for secured loans have tightened significantly in favor of borrowers. It’s an odd time period with REITs having access to significant amounts of capital with very limited high quality opportunities to deploy capital through acquisitions. Alexandria is in a unique position with highly desirable land for build to suite projects. Let me move on to our solid operating results and then circle back momentarily to our balance sheet sources and uses of capital in our 2010 guidance. The key elements to our business model including but not limited to our favorable lease structure, you need life science underwriting team, highly experienced real estate team and laboratory facilities focused on locations adjacent to key research institutions and key life science submarkets, continues to provide stable and consistent operating results. 88% of our leases are triple net leases, with an additional 8% providing for the recovery of the majority of operating expenses. 94% of our leases provide for annual rent escalations and approximately 92% of our leases provide of recovery of major capital expenditures. Our average occupancy percentage at December 31 of each year from 1998 through 2009 and March 31, 2010 was over 95%. We are through the first of four quarters and on our way to our 12 year positive increases in rental rates on new and renewal leases for previous lease base. In…

Okay. Operator we are ready for questions please.

(Operator Instructions). We will take our first question from Anthony Paolone from JPMorgan.

Thank you. My first question is on the leasing spreads in the quarter; the cash spreads were up I think was 8.7% and GAAP was up 0.8%. It would seem like that spread should be wider, given typically you have contractual lease bumps in the lease. I am just wondering if there is something in the quarter that cause that to be so tight.

Yes, I don’t think there is anything usual. I think you can run a model on the statistics and find that you can probably achieve about something in the 2.55 to 3% on steps and end up with that a leasing statistic.

Okay. So there was no change in the typical bumps that you get in new leases.

No, nothing unusual on average for that square feet that was completed in the period.

Okay. On the balance sheet sequentially I don’t know if you had mentioned this, but the land held for development went up by $40 million. Do that come out somewhere else or what was that?

You said land held for development?

Yes.

Yes, we had in my comments earlier, Tony, we had moved few portions of our Mission Bay West parcel, 290,000 square feet that have completed reconstruction activities that basically we have advanced the reconstruction work. In fact we also have piles on the ground on one of the sites, which allows us to shrink the time to deliver once we are engaged in a tenant negotiation for those new project. Basically the majority of that increase in land held for future development is related to that, but I should also comment that its also skewed to the upside. It makes the basis look a little bit high because there is a fairly significant change in the balance in the current quarter related to our foreign currency translation for our project in foreign markets basically. It's substantially in Canada. That foreign currency translation entry is booked every quarter when we report and flushes through equity not through the P&L but it results in this quarter an uptick in our land held for future development.

Okay. The your running through this and I think missed it, you’d mentioned some of the items that you see its capitalizing in the quarter. What were those I guess this was one of them?

During the quarter we obviously had deliver the building for Gilead and we had, well actually that was we completed also what we brought in to redevelopment projects in to our active development. We completed one development project for about 50 some odd thousand square feet. We delivered the Gilead building, which I mentioned and then we also had some critical construction activities ongoing with our project in Toronto during the period.

Okay. Then those the Toronto stuff stopped is that it?

Yes, correct. I believe as at quarter end we had completed those activities.

Okay. Then just a little bit bigger picture, can you give us an update on the deals you think were working on with universities and something like that that you talked about in the last couple of quarters?

Yeah, we have a number of ongoing initiatives, Tony, that I described that would be, I would say primarily on land of institutions of where they would put up the land and we would partner with them to create a facility that is needed and they would be leasing the space. The most advanced one is one that I have referred to before which I hope will be in a position at some point to announce when you are dealing with institutional clients. It sometimes is a long process, given approvals and just diligence issues that go through a variety of different committees, but the first one we are looking at is a gateway building to a very large campus, three stories probably about 90,000 square foot building used for various state-of-the-art life science and technology uses.

Is there anything else? Any update in terms of Scotland or India you could provide?

In Asia, we continue to move ahead our projects; particularly we have a small project in South China which we hope to finish at the end of this year, and ultimately tenant not for life science, but ultimately probably technology and manufacturing project. It was our first project and we kind of got our feet wet, and but not one we would want to stay in that location, it was really driven by a partner of ours, who ultimately decided to not take part of the building for just their own business reasons in China, and then we have a two building complex in North China about 300,000 square feet that we are working on. Hopefully, we will finish the shelves during the last quarter or two of this year and we are working on a laming at tenant, we are in discussions with the tenant to fill at least hopefully part of one of the buildings. It’s a US tenant we are bringing to China, and actively marketing the balance, so stay tuned, we hope to have some good news there. In Scotland, we are working on the possible sale of several of the land parcels that we have rights to at some gains, and again those are just working their way through those are complicated for a variety of reasons, but the buyer is there, the seller is willing us and we just need to work through a number of hurdles. So, hopefully we will have that done maybe through the balance of the year. Then just stay tuned on that because there will be some updates on that over the coming quarter or two.

We will take our next question from Michael Bilerman from Citi.

Dean, just on the capitalization, relative to the fourth quarter, it sounds like things have certainly came out the redevelopment, the development as well as the Mission Bay moving from pre-construction to just land which you are not capitalizing anymore. What was the average balance that you are capitalizing interest on sequentially in and did the rate change. It looks like 5.2% in the first quarter.

Michael, if you turn to page 16 of our supplemental, the top half of the page shows a weighted average interest rate use for capitalization. It is an average rate for the three months and the period was 5.2% versus the average for the three months ended or the fourth quarter period was 5.42%. So, the interest rate itself dropped about 20 basis points. The average basis substantially appears in the [CIT] schedule…

It's in the…

It was $1.4 billion last quarter.

Then the $1.5 billion this quarter, so I thought it would have come down, not up by 100 million.

CIT was 1.3 as of quarter end. It did go down.

I guess during the quarter the balance of your capitalizing on was 1.5, just to get the $19.5 million of capitalized interest.

That is right, Michael. I think the primary driver although is driven by few things. We did add about 130,000 square feet of two new redevelopment projects, almost I think right at the beginning of the quarter, which added probably to the basis that you may not have originally estimated. We also had as I mentioned, some important construction activities related to our project in Toronto that were advanced during the quarter, which you may not have anticipated as well. So those are probably the primary drivers relative to your model.

Your last expected cap interest for the year to be $60 million, you are now expecting it to be above 60s. Is that 65 or 62?

One of the challenges, Michael is that the forecast for cap interest is highly dependent on variety of factors, which is the exact timing of delivery or completion of construction projects combined with the interest rate assumptions and because it’s a forward-looking estimate, it's subject to some variability. On average my outlook for cap interest really hasn’t changed the whole lot. I think last quarter I said it was in the $60 million range. I think I just give guidance in the low $60 million range. So I am still in that general area. I think we’ll end up sub 65, but I am saying that very cautiously because there are lot of variables that impact that number every day.

Okay. In terms of land you have the one land parcel held for sale. What’s the book value of that land? If you book again, is that gain included in guidance and I guess it sounds like you said a couple of times in the call that you expect monetization of land parcels to accelerate. I am just trying to get a sense of what volumes you are targeting?

Sure. The asset that that’s help for sell as of quarter-end is a small parcel. The book basis is about $3 million. There is no gain included in our FFO guidance related to that parcel or any other parcels. The magnitude of land sales going forward will be highly dependent on our negotiations and our appetite for specific parcels, but I can share with you that they do range in size from this very small parcel up to a transaction size that would be very significantly north of $100 million range.

In that southeast of Mission Bay where are you in terms of marketing the space from the Tech IT perspective on the campus?

Yeah, we have a number of users who are looking at the east parcels which aggregate about a million square feet, and those discussions and negotiations continue and we think there will ultimately be a favorable resolution of that, and then as we said last quarter we also are well into discussions on the South parcels about 500 square feet to go medical office again, parcels that we probably would not hold long-term. Then the hospital, I think there are now about had a one point some billion dollars they are, I think just about a 100 million or so short of their total goal. So there is no doubt if you go by the site, there is a huge, amount of work going on there. So that is going forward without doubt and there is no medical office or administrative space, office space available on that over a million square feet campus. So we think that, that’s going to be a very nice opportunity for somebody with, you know medical office focus.

One last one, on the same-store expenses, is there anything…?

Yes, they were down to 4% year over year, which was certainly a larger decline than I would have thought.

Is there anything happening there?

No, not-not-not really Michael, the majority, and keep in mind the majority of the decline in OpEx in the same-store pool actually result in a corresponding decline in the recoveries. That's why in the same-store page you see a decline in revenues, yet positive growth and NOI. The growth in NOI is coming off the top line and growth in rental income.

We will move on to a [Jeanette Allen] from Bank of America/Merrill Lynch. Jeanette Allen - Bank of America/Merrill Lynch: You discussed some of the acquisitions that you decided to pass on. I was hoping that may be you could discuss some of the assets that you are seeing coming to market or is that you expect to come market and if they seem to be more quality or something that you would be interested in.

That’s a little hard to do given the competitive landscape, but I would say in each market, we are seeing much more of a willingness of sellers either because they are recognizing there is a more robust environment for sale transactions or on the other hand people who are looking to exit and achieve liquidity. I think we still don’t see any really distressed dollars out there in our niche. They are maybe in the office world, but we certainly haven’t seen it, but we think there are number of opportunities that we see and we will keep you posted on those. Again our criteria must be very well located, obviously high quality facilities and obviously a tenancy that we think can meets our standard and a return on invested capital, but does it well. Jeanette Allen - Bank of America/Merrill Lynch: Just to follow-up on what led to some of the weakness in San Diego and Seattle markets and what are kind of your prospects for re-leasing the space?

There is no weakness in Seattle. We are over 98% leased and the only downturn was due to Gilead movement. We have them in a smaller space, the exited and moved to a build to suit and we are backfilling that space. So I wouldn’t sense that weakness at all. If somebody in this market has 98% of a market leased, that’s got to be a huge win. San Diego, I think I have said many times is really a result of a multi-year kind of perfect storm events where a number of big pharmas who went to San Diego have exited that market in favor of say the Bay area or other markets. The institutional demand and focus which has been the primary stalwart on Torrey Pines has slackened the last couple of years heavily due to a number of the institutions focus on Florida, where number three of the institutions I think achieved ramps and other benefits that exceeded the $1 billion from Jeb Bush and others. So that took away a lot of their focus out of La Jolla area for expansion and then I think just the structural downturn cost a lot of biotechs certainly they need less space and so that reduced the focus in San Diego and then the two leading San Diego companies that really one would expect to kind of lead the space anchoring space, which are Biogen Idec and Amylin, both are having shareholder challenges from Carl Icahn on increasing valuations for those companies. So, I think there is a kind of a set of reasons why you see what you see in San Diego, but it’s not certainly unique. It’s certainly as true of all lab landlords and even the office landlords, I think Kilroy and others certainly experienced some pretty significant weakness in the San Diego market. We think its kind of bottomed, but its one market certainly we are pretty focused on to help stabilize.

(Operations instructions). We will take our next question from Will Marks from JMP Securities.

Actually all the extensive discussion has cleared out any issues I had. So, thanks.

(Operations instructions). It appears we have no further questions at this time. I would like to turn the conference back over to our presenters for any closing or additional remarks.

We will thank you. I think we have made within sight of an hour, which makes that efficient. We thank you for you time and participation and look forward to talking to you in late July with second quarter results.

That concludes today’s presentation. Thank you for you participation.