Alexandria Real Estate Equities, Inc. Reports First Quarter Ended March 31, 2013 Financial and Operating Results

 Alexandria Real Estate Equities, Inc. Reports First Quarter Ended March 31,
                     2013 Financial and Operating Results

FFO Per Share - Diluted, of $1.11, Up 3%, for the Three Months Ended 1Q13 Over
1Q12

AFFO Per Share - Diluted of $1.08, Up 6%, for the Three Months Ended 1Q13 Over
1Q12

EPS − Diluted of $0.36, Up 20%, for the Three Months Ended 1Q13 Over 1Q12

Total Revenues of $150.4 Million, Up 11%, for the Three Months Ended 1Q13 Over
1Q12

NOI from Continuing Operations of $105.2 Million, Up 10%, for the Three Months
Ended 1Q13 Over 1Q12

PR Newswire

PASADENA, Calif., April 29, 2013

PASADENA, Calif., April 29, 2013 /PRNewswire/ --Alexandria Real Estate
Equities, Inc. (NYSE: ARE) today announced financial and operating results for
the first quarter ended March 31, 2013.

First Quarter Ended March 31, 2013, Highlights

Results

  oFunds from operations ("FFO") attributable to Alexandria Real Estate
    Equities, Inc.'s common stockholders – diluted, for the three months ended
    March 31, 2013, was $1.11 per share, up 3%, compared to FFO attributable
    to Alexandria Real Estate Equities, Inc.'s common stockholders – diluted,
    as adjusted, for the three months ended March 31, 2012, of $1.08 per
    share.
  oAdjusted funds from operations ("AFFO") attributable to Alexandria Real
    Estate Equities, Inc.'s common stockholders – diluted, for the three
    months ended March 31, 2013, was $1.08 per share, up 6%, compared to AFFO
    attributable to Alexandria Real Estate Equities, Inc.'s common
    stockholders – diluted, for the three months ended March 31, 2012, of
    $1.02 per share
  oNet income attributable to Alexandria Real Estate Equities, Inc.'s common
    stockholders – diluted, for the three months ended March 31, 2013, was
    $0.36 per share, up 20%, compared to net income attributable to Alexandria
    Real Estate Equities, Inc.'s common stockholders – diluted, for the three
    months ended March 31, 2012, of $0.30 per share

Core Operating Metrics

  oTotal revenues were $150.4 Million, up 11%, for the three months ended
    March 31, 2013, compared to total revenues for the three months ended
    March 31, 2012, of $135.7 million
  oNet operating income ("NOI") was $105.2 million, up 10%, for the three
    months ended March 31, 2013, compared to NOI for the three months ended
    March 31, 2012, of $95.3 million
  oInvestment-grade client tenants represented 46% of total annualized base
    rent ("ABR")
  oInvestment-grade client tenants represented 78% of top 10 client tenants'
    ABR
  oOperating margins remained steady at 70% for the three months ended March
    31, 2013
  oAnnual rent escalations in 96% of leases
  oSame property net operating income increased by 8.8% and 0.4% on a cash
    and GAAP basis, respectively, for the three months ended March 31, 2013,
    compared to same property net operating income for the three months ended
    March 31, 2012
  oSolid leasing activity during the three months ended March 31, 2013

       oExecuted 44 leases for 703,000 rentable square feet ("RSF"),
         including 457,000 RSF of development and redevelopment space
       oRSF of remaining expiring leases in 2013 are modest at 4.1% of total
         RSF
       oRental rate increase of 5.9% and 12.7% on a cash and GAAP basis,
         respectively, on renewed/re-leased space
       oKey life science space leasing

            oARIAD Pharmaceuticals, Inc. leased 244,000 RSF in the Greater
              Boston market
            oOnyx Pharmaceuticals, Inc. leased 107,250 RSF in the San
              Francisco Bay Area market

  oOccupancy of 94.2% for North America operating properties as of March 31,
    2013, and occupancy of 91.8% for North America operating and redevelopment
    properties as of March 31, 2013, compared to occupancy of 94.6% for North
    America operating properties as of December 31, 2012, and occupancy of
    91.6% for North America operating and redevelopment properties as of
    December 31, 2012

Value-Added Opportunities and External Growth

During the three months ended March 31, 2013, we executed leases aggregating
355,000 and 102,000 RSF, respectively, related to our development and
redevelopment projects.

Our initial stabilized yield on a cash basis reflects cash rents at date of
stabilization and does not reflect contractual rent escalations beyond the
stabilization date. Our cash rents related to our value-added projects are
expected to increase over time and our average stabilized cash yields are
expected, in general, to be greater than our initial stabilized yields.
Initial stabilized yield is calculated as the quotient of the estimated
amounts of NOI and our investment in the property at stabilization ("Initial
Stabilized Yield").



ALEXANDRIA REAL ESTATE EQUITIES, INC.
First Quarter Ended March 31, 2013, Financial and Operating Results
(Tabular dollar amounts in thousands, except per square foot amounts)
(Unaudited)

Development commencements

The following table summarizes the commencement of key development
projects:



                                                   Investment           Initial
                Commencement           Pre-Leased  at             Cost  Stabilized  Key
                                                                  Per   Yield
Address/Market  Date          RSF      %           Completion (1) RSF   Cash  GAAP  Client Tenant
Development
75/125 Binney                                      $           $                ARIAD
Street/Greater  January 2013  386,275  63%         351,439            8.0%  8.2%  Pharmaceuticals,
Boston                                                            910              Inc.
269 East Grand                                                    $                Onyx
Avenue/San      March 2013    107,250  100%        $               8.1%  9.3%  Pharmaceuticals,
FranciscoBay                                      51,300        478              Inc.
Area
(1) See page 4 for additional details on current assumptions included in our guidance for
funding the cost to complete the development of 75/125 Binney Street.



Balance Sheet Strategy and Significant Milestones

  oBalance sheet strategy continues to focus on our leverage of net debt to
    adjusted EBITDA of approximately 6.5x targeted by December 31, 2013, by
    funding our significant Class A development and redevelopment projects in
    top life science cluster locations with leverage-neutral sources of
    capital and with the continuing execution of our asset recycling program.
    Our leverage will reflect periodic increases and decreases quarter to
    quarter as we execute and deliver our construction projects and execute
    our capital plan, including our asset sales program. See "Sources and
    Uses" table on page 4 for additional information. Our strategy to improve
    leverage includes:

       oGrowth in annualized EBITDA from the fourth quarter 2012 to the
         fourth quarter 2013 due primarily to the completion of significant
         value-added projects; 93% leased
       oAsset recycling program to monetize non-strategic income-producing
         and non-income-producing assets will reduce outstanding debt and
         provide funds for reinvestment into Class A, CBD, and urban locations
         in close proximity to leading academic medical research centers

            oSold $124.3 million of income-producing assets during the three
              months ended March 31, 2013; assets sold in first quarter of
              2013 generated a weighted-average unlevered internal rate of
              return of 11% during our ownership period
            oSales of $209 million to $259 million of non-income-producing
              assets targeted for remainder of the year ended December 31,
              2013

                 o$45 million of non-income-producing asset sales under
                   negotiation
                 o$60 million to $70 million projected partial sale of an
                   interest in the ground-up development of 75/125 Binney
                   Street
                 o$104 million to $144 million to be identified in the near
                   term

  oMinimizing the issuance of common equity to achieve net debt to adjusted
    EBITDA of approximately 6.5x targeted by December 31, 2013
  oLiquidity available under unsecured senior line of credit and from cash
    and cash equivalents was approximately $1.0 billion as of March 31, 2013
  oUnhedged variable rate debt as a percentage of total debt of less than 18%
    targeted by December 31, 2013

As of March of 2013, we have completed all significant sales of
income-producing assets targeted for 2013. The following table presents our
completed real estate asset sales during the three months ended March 31,
2013:

                                                          Annualized           Sales  Gain/
                                       Date               GAAP        Sales    Price  (Loss)  Unlevered
             Date of                                                           per     on
Description  Purchase   Location       of Sale   RSF      NOI (1)     Price    RSF    Sale    IRR (3)
                                                                                      (2)
Sales
completed
in 1Q13
1124                    Seattle -      January            $       $       $    $  
Columbia     May 1996   First Hill     2013      203,817  6,802       42,600            11.9%
Street                                                                         209     −

                                                                                     
25/35/45                                                                                
West                                                                                 
Watkins      October    Suburban                                                          
Mill Road    1996       Washington,                                            $    $  
                        D.C. -         February  282,523  $       41,400            11.2
1201         May 1998   Gaithersburg   2013               7,795                147    53
Clopper
Road


One          January
Innovation   1999
Drive                   Greater
             September  Boston -       February           $                $    $  
377          1998       Route          2013      300,313  6,605       40,250             9.6
Plantation              495/Worcester                                          134    (392)
Street       March
             1999
381
Plantation
Street
Total/weighted average                                                $                       11.0%
                                                                      124,250
Sales
completed
in 2Q13
702                                    April              $       $      $    $  
Electronic   June 1998  Pennsylvania   2013      40,171    438       4,362             10.0%
Drive                                                                          109    268
Total/weighted average                                                $                     10.0%
                                                                      4,362



(1) Annualized using actual year-to-date results as of the quarter ended
prior to date of sale or March 31, 2013.
(2) Excludes impairment charges aggregating $11.4 million recognized
during the year ended December 31, 2012.
(3) See definition of Unlevered IRR in Non-GAAP Measures section on page
12.

In addition to the asset sales completed in the table above, we have targeted
the sale of non-income-producing assets ranging from $209 million to $259
million in 2013. See page 3 for additional information.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
First Quarter Ended March 31, 2013, Financial and Operating Results
(Unaudited)

GUIDANCE

Earnings outlook

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



Guidance for the Year Ended December   Reported on April   Reported on
31, 2013                               29, 2013            February 7, 2013
Earnings per share attributable to
Alexandria Real Estate
                                       $1.43 to $1.59      $1.41 to $1.61
Equities, Inc.'s common 
stockholders – diluted
Depreciation and amortization          $2.95 to $3.11      $2.93 to $3.13
Loss on sale of real estate            $0.01               −
Other                                  $(0.01)             −
FFO per share attributable to
Alexandria Real Estate
                                       $4.46 to $4.62      $4.44 to $4.64
Equities, Inc.'s common 
stockholders – diluted
Key projection assumptions:
 Same property net operating        4% to 7%            4% to 7%
income growth – cash basis
 Same property net operating        Up to 3%            0% to 3%
income growth – GAAP basis
 Rental rate steps on lease                             Flat to slightly
renewals and re-leasing of space –     Up to 2%            positive
cash basis
 Rental rate steps on lease
renewals and re-leasing of space –     Up 5% to 10%        Up 5% to 10%
GAAP basis
 Occupancy percentage for all
operating properties at December 31,   93.9% to 94.3%      93.9% to 94.3%
2013
 Straight-line rents                $24 to $26 million  $24 to $26 million
 Amortization of above and below    $3 to $4 million    $3 to $4 million
market leases
 General and administrative         $48 to $51 million  $48 to $51 million
expenses
 Capitalization of interest         $47 to $53 million  $47 to $53 million
 Interest expense, net              $74 to $84 million  $74 to $84 million
 Net debt to adjusted EBITDA for
the annualized three months ended      6.5x                6.5x
December 31, 2013
 Fixed charge coverage ratio for
the annualized three months ended      2.9x to 3.0x        2.9x to 3.0x
December 31, 2013

On a short-term basis, our unhedged variable rate debt as a percentage of
total debt may range up to 30%. Our strategy is to have unhedged variable rate
debt available for repayment as we issue unsecured senior notes payable,
extend our maturity profile, transition variable rate debt to fixed rate debt,
and enhance our long-term capital structure. Our unhedged variable rate debt
as a percentage of total debt is targeted to decrease to less than 18% by
December 31, 2013.

Monetization of non-income-producing assets

Non-income-producing assets as a percentage of our gross investments in real
estate is targeted to decrease to a range of 15% to 17% by December 31, 2013.
As of March 31, 2013, we had approximately $579 million and $141 million of
construction in progress related to our five North American development and
seven North American redevelopment projects, respectively. The completion of
these projects, along with recently delivered projects, certain future
projects, and contributions from same properties, is expected to contribute
significant increases in rental income, NOI, and cash flows. Operating
performance assumptions related to the completion of our North American
development and redevelopment projects, including the timing of initial
occupancy, stabilization dates, and Initial Stabilized Yields, are included on
pages 5 and 6. Certain key assumptions regarding our projections, including
the impact of various development and redevelopment projects, are included in
the tables above and on the following page. 

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

Our guidance for 2013 includes the following targeted sales of
non-income-producing assets (in millions):

                                    2013 Non-Income-Producing Asset Sales
                                    Identified       TBD          Total
2013 non-income-producing asset
sales initially targeted for 4Q12
closing
 Book value of land subject to   $         $       $     
sale negotiations                       34                 
                                                     −            34
 Subtotal                        34               −            34
2013 non-income-producing asset
sales initially projected on
December 5, 2012
 Book value of land subject    11               −            11
to sale negotiations
Projected proceeds from the
partial sale of the 75/125 Binney   60 -70          −            60 -70
Street project (1)
 Future non-income-producing
asset sales expected to be          −                104 -144    104 -144
identified in the next several
months
 Subtotal                      71 -81          104 -144    175 -225
Total 2013 non-income-producing     $          $       $     
asset sales target                  105 -115       104 -144   209 -259
(1) See further details regarding our guidance related to our projected
unconsolidated joint venture on page 4.



ALEXANDRIA REAL ESTATE EQUITIES, INC.
First Quarter Ended March 31, 2013, Financial and Operating Results
(Unaudited)

Sources and uses of capital

We expect that our principal liquidity needs for the year ended December 31,
2013, will be satisfied by the following multiple sources of capital as shown
in the table below. There can be no assurance that our sources and uses of
capital will not be materially higher or lower than these expectations. Our
liquidity available under our unsecured senior line of credit and from cash
and cash equivalents was approximately $1.0 billion as of March 31, 2013.

                                                                  Reported
                          Reported on                             on

                          April 29, 2013                          February
                                                                  7, 2013
Sources and Uses of
Capital for the Year      Completed    Projected       Total      Total
Ended December 31, 2013
(in millions)
Sources of capital:
 Net cash          $        $           $       $    
provided by operating               96          130        130
activities less            34         -116           -150      -150
dividends (1)
 2013 asset
sales initially           43           34         (2)  77         77
targeted for 4Q12
closing
 2013 asset
sales initially
projected on December
5, 2012
           −            175 -225  (2)  175        175-225
Non-income-producing                                   -225
           82           0 -13          82 -95    75 -125
Income-producing
 Secured
construction loan         17           3 -13          20 -30    20 -30
borrowings
 Unsecured         −            350 -450       350        350 -450
senior notes payable                                   -450
 Issuances under                                125
"at the market" common    −            125 -175       -175      125 -175
stock offering program
Total sources of          $        $            $        $   
capital                           783            959        952
                          176          -1,026         -1,202    -1,232
Uses of capital:
 Development,      $        $           $       $    
redevelopment, and                 466           570        545
construction (3)          104          -516           -620      -595
 Seller
financing of asset        39           −               39         39
sales (4)
 Acquisitions      −            −               −          −
(5)
 Secured notes     3            34              37         37
payable repayments
 Unsecured                                      125
senior bank term loan     −            125 -175       -175      125 -175
repayment
 Paydown of                                     188
unsecured senior line     30           158 -301       -331      206 -386
of credit
                          $        $            $        $   
Total uses of capital             783            959        952
                          176          -1,026         -1,202    -1,232
(1) See "Key Projection Assumptions" on the previous page.
(2) See table at bottom of page 3 for further information.
(3) Total construction spending for 2013 increased approximately $25
million at the mid-point of our guidance since last quarter primarily as a
result of our estimated share of capital required for the commencement of two
new ground-up development projects during the first quarter of 2013. Our
estimated construction spend for 2013 increased by approximately $13 million
as a result of the commencement of our 100% pre-leased development at 269 East
Grand Avenue. The total estimated cost at completion for 75/125 Binney Street
has not changed since our estimate as of December 31, 2012; however, the
timing of construction and completion of our projected joint venture results
in an increase in our estimated share of capital contributions to fund the
completion of the project by approximately $10 million. 
(4) Represents a $29.8 million note receivable with an interest rate of
3.25% and a maturity date of January 21, 2015, and a $9.0 million note
receivable with an interest rate of 4.00% and a maturity date of March 1,
2019.
(5) Our guidance has assumed no acquisitions, but we continuously and
intensively review a pipeline of opportunistic acquisitions in our key core
cluster markets that we would expect to fund on a leverage-neutral basis.

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

Projected unconsolidated joint venture

Our guidance for the year ended December 31, 2013, assumes a transfer of 50%
of our ownership interest in the 75/125 Binney Street project to a new joint
venture partner which will be accounted for as a sale of an interest in our
investment in the ground-up development, with the resulting entity presented
as an unconsolidated joint venture (the "Binney JV") in our financial
statements. This projected sale of an interest in our investment in the
ground-up development is included in our total non-income-producing asset
sales target for 2013. We expect the sale proceeds to range from $60 million
to $70 million and to exceed our share of the remaining investment of $44
million through the completion of the project. We also anticipate the
unconsolidated Binney JV to obtain a secured construction loan to fund 60% to
70% of the total project costs.

 The following assumptions are included in our guidance for
funding the cost to complete the 75/125 Binney Street project (in millions).



                            Cost to Complete (1)
                            Nine Months
                            Ended December   Thereafter        Total
                            31, 2013
75/125 Binney Street        $         $          $     
project – remaining cost                    163      
to complete                 91                                254
Projected unconsolidated
joint venture funding:
Binney JV partner
capital/Binney JV           (47)             (163)             (210)
construction loan
ARE investment in Binney    $         $          $     
JV project                                            (2)
                            44              −                 44



(1) Represent the mid points of our guidance assumptions related to
estimated funding amounts provided by joint venture partner capital, joint
venture construction loan, and Alexandria.
(2) Represents our share of incremental investment into the Binney JV
and is included in our guidance for 2013 development, redevelopment, and
construction spending in a range from $570 million to $620 million. Binney JV
partner capital and secured construction loan funding for 75/125 Binney Street
related to our projected unconsolidated joint venture have been excluded from
our construction spend forecast for 2013.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
All Active Development Projects in North America
March 31, 2013
(Dollars in thousands, except per square foot amounts)
(Unaudited)

                 Project RSF (1)       Leased Status RSF (1)
                                                                                         % Leased/
Property/Market  CIP        Total      Leased   Negotiating     Marketing     Total      Negotiating  Client Tenants
– Submarket
All active
development
projects in
North America

Consolidated
development
projects in
North America
225 Binney
Street/Greater   305,212    305,212    305,212  −               −             305,212    100%         Biogen Idec Inc.
Boston –
Cambridge
499 Illinois
Street/San
Francisco Bay    222,780    222,780    −        162,549         60,231        222,780    73%          TBA
Area – Mission
Bay
269 East Grand
Avenue/San                                                                                            Onyx
Francisco Bay    107,250    107,250    107,250  −               −             107,250    100%         Pharmaceuticals,
Area – South                                                                                          Inc.
San Francisco
430 East 29th
Street/Greater   419,806    419,806    60,816   152,488     (2) 206,502       419,806    51%          Roche/TBA
NYC – Manhattan

Projected
unconsolidated
joint venture
75/125 Binney                                                                                         ARIAD
Street/Greater   386,275    386,275    244,123  −               142,152   (3) 386,275    63%          Pharmaceuticals,
Boston –                                                                                              Inc.
Cambridge
Consolidated
development      1,441,323  1,441,323  717,401  315,037         408,885       1,441,323  72%
projects in
North America

Unconsolidated
joint venture
360 Longwood                                                                                          Dana-Farber
Avenue/Greater   413,536    413,536    154,100  −               259,436       413,536    37%          Cancer
Boston –                                                                                              Institute, Inc.
Longwood
Total/weighted   1,854,859  1,854,859  871,501  315,037         668,321       1,854,859  64%
average



                   Investment (1)
                                                       Projected                Cost   Initial     Project  Initial
                                                                                       Stabilized
                               Cost To Complete        Sale        Total at     Per    Yield (1)   Start    Occupancy  Stabilization
Property/Market    CIP         2013       Thereafter   of          Completion   RSF    Cash  GAAP  Date     Date (1)   Date (1)
– Submarket                                            Interest                                    (1)
All active
development
projects in
North America

Consolidated
development
projects in
North America
225 Binney
Street/Greater   $ 118,595   $ 61,678   $ −          $ −         $ 180,273    $ 591    7.5%  8.1%  4Q11     4Q13       4Q13
Boston –
Cambridge
499 Illinois
Street/San
Francisco Bay    $ 116,110   $ 14,298   $ 22,801     $ −         $ 153,209    $ 688    6.4%  7.2%  2Q11     2Q14       2014
Area – Mission
Bay
269 East Grand
Avenue/San
Francisco Bay    $ 8,037     $ 13,100   $ 30,163     $ −         $ 51,300     $ 478    8.1%  9.3%  1Q13     4Q14       2014
Area – South San
Francisco (4)
430 East 29th
Street/Greater   $ 239,086   $ 113,879  $ 110,280    $ −         $ 463,245    $ 1,103  6.6%  6.5%  4Q12     4Q13       2015
NYC – Manhattan
Projected
unconsolidated
joint venture
75/125 Binney
Street/Greater   $ 97,445    $ 90,871   $ 163,123    $ −         $ 351,439    $ 910    8.0%  8.2%  1Q13     1Q15       2015
Boston –
Cambridge (5)
 JV
partner
capital/JV       $ −         $ (47,025) $ (163,123)  $ −         $ (210,148)
construction
loan
 Projected $ −         $ −        $ −          $ (65,000)  $ (65,000)
sale of interest
 ARE                                                         
investment in    $ 97,445    $ 43,846   $ −          $ (65,000)  $
75/125 Binney                                                      76,291
Street project
Consolidated
development      $ 579,273   $ 246,801  $ 163,244    $ (65,000)  $ 924,318
projects in
North America

Unconsolidated
joint venture
360 Longwood
Avenue/Greater   $ 148,596   $ 67,744   $ 133,660    $ −         $ 350,000    $ 846    8.3%  8.9%  2Q12     4Q14       2016
Boston –
Longwood
 JV
partner
capital/JV       $ (123,638) $ (51,761) $ (133,660)  $ −         $ (309,059)
construction
loan
 ARE
investment in    $ 24,958    $ 15,983   $ −          $ −         $ 40,941
360 Longwood
Avenue
Total/weighted                                         $    
average          $ 604,231   $ 262,784  $ 163,244    $        $ 965,259
                                                       (65,000)



(1) All project information, including rentable square feet; investment;
Initial Stabilized Yields; and project start, occupancy and stabilization
dates, relates to the discrete portion of each property undergoing active
development or redevelopment. A redevelopment project does not necessarily
represent the entire property or the entire vacant portion of a property. Our
Initial Stabilized Yield on a cash basis reflects cash rents at date of
stabilization and does not reflect contractual rent escalations beyond the
stabilization date. Our cash rents related to our value-added projects are
expected to increase over time and our average stabilized cash yields are
expected, in general, to be greater than our Initial Stabilized Yields. Our
estimates for initial cash and GAAP yields, and total costs at completion,
represent our initial estimates at the commencement of the project. We expect
to update this information upon completion of the project, or sooner if there
are significant changes to the expected project yields or costs. As of March
31, 2013, 96% of our leases contained annual rent escalations that were either
fixed or based on a consumer price index or another index
(2) Represents 131,000 rentable square feet subject to an executed
letter of intent with the remainder subject to letters of intent or lease
negotiations.
(3) ARIAD Pharmaceuticals, Inc. has potential additional expansion
opportunities at 75 Binney Street through June 2014.
(4) Funding for 70% of the estimated total investment at completion for
269 East Grand Avenue is expected to be provided primarily by a secured
construction loan.
(5) Represent the mid points of our guidance assumptions related to
estimated funding amounts provided by joint venture partner capital, joint
venture construction loan, and Alexandria. See page 4 for additional
information on our range of guidance for funding on this project.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
All Active Redevelopment Projects in North America
March 31, 2013
(Dollars in thousands, except per square foot amounts)
(Unaudited) 

                 Project RSF (1)            Leased Status RSF (1)
                 In                                                                   % Leased/    Former             Use After
Property/Market  Service  CIP      Total    Leased   Negotiating  Marketing  Total    Negotiating  Use                Conversion  Client
− Submarket                                                                                                                       Tenants
All active
redevelopment
projects in
North America
                                                                                                                                  Ragon
                                                                                                                                  Institute of
400 Technology                                                                                                                    MGH, MIT and
Square/                                                                                                                           Harvard;
                 162,153  49,971   212,124  169,939  −            42,185     212,124  80%          Office             Laboratory  Epizyme,
                                                                                                                          Inc.; Warp
Greater Boston                                                                                                                    Drive Bio,
– Cambridge                                                                                                                       LLC; Aramco
                                                                                                                                  Services
                                                                                                                                  Company, Inc.
285 Bear Hill                                                                                      Office/                        Intelligent
Road/Greater     −        26,270   26,270   26,270   −            −          26,270   100%                            Laboratory  Medical
Boston – Route                                                                                     Manufacturing                  Devices, Inc.
128
343 Oyster
Point/                                                                                                                            Calithera
                                                                                                                                  BioSciences,
 San     −        53,980   53,980   42,445   −            11,535     53,980   79%          Office             Laboratory  Inc.; CytomX
Francisco Bay                                                                                                                     Therapeutics,
Area – South                                                                                                                      Inc.
San Francisco
4757 Nexus
Center Drive/                                                                                      Manufacturing/
                                                                                                                                  Genomatica,
 San     −        68,423   68,423   68,423   −            −          68,423   100%         Warehouse/         Laboratory  Inc.
Diego –
University Town                                                                                    Office/R&D
Center
9800 Medical
Center Drive/
                                                                                                                                  National
         8,001    67,055   75,056   75,056   −            −          75,056   100%         Office/Laboratory  Laboratory  Institutes of
Suburban                                                                                                                          Health
Washington,
D.C. –
Rockville
1551 Eastlake                                                                                                                     Puget Sound
Avenue/Seattle   77,821   39,661   117,482  77,821   −            39,661     117,482  66%          Office             Laboratory  Blood Center
– Lake Union                                                                                                                      and Program
1616 Eastlake                                                                                                                     Infectious
Avenue/Seattle   40,756   26,020   66,776   40,756   −            26,020     66,776   61%          Office             Laboratory  Disease
– Lake Union                                                                                                                      Research
                                                                                                                                  Institute
Total/weighted   288,731  331,380  620,111  500,710  −            119,401    620,111  81%
average



                 Investment (1)                                           Initial     Project  Initial
                                                                          Stabilized
                 March 31, 2013     To Complete         Total at    Cost  Yield (1)   Start    Occupancy  Stabilization
                                                                    Per
Property/Market  In                                                                   
− Submarket      Service  CIP       2013    Thereafter  Completion  RSF   Cash  GAAP  Date     Date (1)   Date (1)
                                                                                      (1)
All active
redevelopment
projects in
North America
400 Technology                                                      $ 
Square/          $     $      $     $       $        
                                                          8.1%  8.9%  4Q11     4Q12       4Q13
                 32,212         3,320      144,688     
Greater Boston   99,980             9,176                            
– Cambridge                                                         682
                                                                    $ 
285 Bear Hill    $     $      $     $       $        
Road/Greater                                         8.4%  8.8%  4Q11     3Q13       2013
Boston – Route        4,654            −       9,196       
128               −               4,542                            
                                                                    350
343 Oyster                                                          $ 
Point/           $               $                              
                      $           $       $        
 San                                            9.6%  9.8%  1Q12     3Q13       2014
Francisco Bay     −     10,912   5,560   867         17,339      
Area – South                                                        321
San Francisco
4757 Nexus                                                          $ 
Center Drive/    $               $                              
                      $           $       $        
 San                                              7.6%  7.8%  4Q12     4Q13       4Q13 (2)
Diego –           −     5,879    23,747  5,203      34,829      
University Town                                                     509
Center
9800 Medical
Center Drive/
                 $     $      $     $       $    
                                           (3)   5.4%  5.4%  3Q09     1Q13       2013
Suburban                61,251            −       80,704
Washington,      7,454              11,999
D.C. –
Rockville
                                                                    $ 
1551 Eastlake    $     $      $     $       $        
Avenue/Seattle                                         6.7%  6.7%  4Q11     4Q11       4Q13
– Lake Union             16,841           −       64,010      
                 40,711             6,458                            
                                                                    545
                                                                    $ 
1616 Eastlake    $     $      $     $       $        
Avenue/Seattle                                          8.4%  8.6%  4Q12     2Q13       2014
– Lake Union             9,721         4,653      37,816      
                 22,589             853                             
                                                                    566
                 $     $      $     $       $    
Total/weighted                                 
average          170,734  141,470         14,043     388,582
                                    62,335



(1) All project information, including rentable square feet; investment;
Initial Stabilized Yields; and project start, occupancy and stabilization
dates, relates to the discrete portion of each property undergoing active
development or redevelopment. A redevelopment project does not necessarily
represent the entire property or the entire vacant portion of a property. Our
Initial Stabilized Yield on a cash basis reflects cash rents at date of
stabilization and does not reflect contractual rent escalations beyond the
stabilization date. Our cash rents related to our value-added projects are
expected to increase over time and our average stabilized cash yields are
expected, in general, to be greater than our Initial Stabilized Yields. Our
estimates for initial cash and GAAP yields, and total costs at completion,
represent our initial estimates at the commencement of the project. We expect
to update this information upon completion of the project, or sooner if there
are significant changes to the expected project yields or costs. As of March
31, 2013, 96% of our leases contained annual rent escalations that were either
fixed or based on a consumer price index or another index.
(2) We expect to deliver 54,102 rentable square feet, or 79% of the
total project, to Genomatica, Inc. in the fourth quarter of 2013. Genomatica,
Inc. is contractually required to lease the remaining 14,411 rentable square
feet 18 to 24 months following the delivery of the initial 54,102 rentable
square foot space.
(3) Our multi-tenant four building property at 9800 Medical Center Drive
contains an aggregate of 281,586 rentable square feet. Our total cash
investment in the entire four building property upon completion of the
redevelopment will approximate $580 per square foot. Our total expected cash
investment for the four building property of approximately $580 per square
foot includes our expected total investment at completion related to the
75,056 rentable square foot redevelopment of approximately $1,075 per square
foot.

ALEXANDRIA REAL ESTATE EQUITIES, INC.
First Quarter Ended March 31, 2013, Financial and Operating Results

EARNINGS CALL INFORMATION

We will host a conference call on Tuesday, April 30, 2013, at 3:00 p.m.
Eastern Time ("ET")/12:00 p.m. noon Pacific Time ("PT") that is open to the
general public to discuss our financial and operating results for the three
months ended March 31, 2013. To participate in this conference call, dial
(888) 245-0988 or (913) 312-1513 and confirmation code 3766517, shortly before
3:00 p.m. ET/12:00 p.m. noon PT. The audio web cast can be accessed at:
www.are.com, in the "For Investors" section. A replay of the call will be
available for a limited time from 5:30 p.m. ET/2:30 p.m. PT on Tuesday, April
30, 2013. The replay number is (888) 203-1112 or (719) 457-0820 and the
confirmation code is 3766517.

Additionally, a copy of this Earnings Press Release and Supplemental
Information for the first quarter ended March 31, 2013, is available in the
"For Investors" section of our website at www.are.com.

About the Company

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

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

                     Three Months Ended
                     3/31/13     12/31/12    9/30/12     6/30/12     3/31/12
Revenues:
Rental               $        $        $        $        $   
                     111,776     112,048     106,216     104,329     101,201
Tenant               35,611      35,721      34,006      31,881      31,882
recoveries
Other income         2,993       3,785       2,628       9,383       2,628
Total revenues       150,380     151,554     142,850     145,593     135,711
Expenses:
Rental               45,224      46,176      44,203      42,102      40,453
operations
General and          11,648      12,635      12,470      12,298      10,357
administrative
Interest             18,020      17,941      17,092      17,922      16,226
Depreciation
and                  46,065      47,515      46,584      50,741      41,786
amortization
Impairment      −           2,050       −           −           −
of land parcel
Loss on
early                −           −           −           1,602       623
extinguishment
of debt
Total expenses       120,957     126,317     120,349     124,665     109,445
Income from
continuing           29,423      25,237      22,501      20,928      26,266
operations
Income (loss)
from
discontinued
operations
Income from
discontinued
operations before    814         5,171       5,603       4,713       4,645
impairment of real
estate
Impairment of        −           (1,601)     (9,799)     −           −
real estate
Income (loss)
from                 814         3,570       (4,196)     4,713       4,645
discontinued
operations, net
Gain on sale of      −           −           −           −           1,864
land parcel
Net income           30,237      28,807      18,305      25,641      32,775
Net income
attributable to      982         1,012       828         851         711
noncontrolling
interests
Dividends on         6,471       6,471       6,471       6,903       7,483
preferred stock
Preferred stock
redemption           −           −           −           −           5,978
charge
Net income
attributable to
unvested             342         324         360         271         235
restricted stock
awards
Net income
attributable to
Alexandria Real      $       $       $       $       $    
Estate Equities,     22,442      21,000      10,646      17,616      18,368
Inc.'s common
stockholders
Earnings per share
attributable to
Alexandria Real
Estate Equities,
Inc.'s
commonstockholders
– basic and
diluted:
Continuing           $       $       $       $       $    
operations            0.35      0.27      0.24      0.21      0.22
Discontinued         0.01        0.06        (0.07)      0.08        0.08
operations, net
Earnings per         $       $       $       $       $    
share – basic         0.36      0.33      0.17      0.29      0.30
and diluted
Weighted average
shares of common
stock outstanding
for calculating
earnings per share
attributable to      63,161,319  63,091,781  62,364,210  61,663,367  61,507,807
Alexandria Real
Estate Equities,
Inc.'s common
stockholders –
basic
Dilutive effect
of stock             −           −           −           173         1,160
options
Weighted average
shares of common
stock outstanding
for calculating
earnings per share
attributable to      63,161,319  63,091,781  62,364,210  61,663,540  61,508,967
Alexandria Real
Estate Equities,
Inc.'s common
stockholders –
diluted

ALEXANDRIA REAL ESTATE EQUITIES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

                 March 31,    December     September   June 30,    March 31,
                              31,          30,
                 2013         2012         2012        2012        2012
Assets
Investments in   $        $        $       $       $    
real estate,     6,375,182   6,424,578   6,300,027  6,208,354  6,113,252
net
Cash and cash    87,001       140,971      94,904      80,937      77,361
equivalents
Restricted cash  30,008       39,947       44,863      41,897      39,803
Tenant           9,261        8,449        10,124      6,143       8,836
receivables
Deferred rent    170,100      170,396      160,914     155,295     150,515
Deferred
leasing and      159,872      160,048      152,021     151,355     143,754
financing
costs, net
Investments      123,543      115,048      107,808     104,454     98,152
Other assets     135,952      90,679       94,356      93,304      86,418
Total assets     $        $        $       $       $    
                 7,090,919   7,150,116   6,965,017  6,841,739  6,718,091
Liabilities,
Noncontrolling
Interests, and
Equity
Secured notes    $       $       $       $       $    
payable           730,714     716,144                         
                                           719,350     719,977     721,715
Unsecured
senior notes     549,816      549,805      549,794     549,783     550,772
payable
Unsecured
senior line of   554,000      566,000      413,000     379,000     167,000
credit
Unsecured
senior bank      1,350,000    1,350,000    1,350,000   1,350,000   1,350,000
term loans
Accounts
payable,
accrued          367,153      423,708      376,785     348,037     323,002
expenses, and
tenant security
deposits
Dividends        43,955       41,401       39,468      38,357      36,962
payable
Preferred stock
redemption       −            −            −           −           129,638
liability
Total            3,595,638    3,647,058    3,448,397   3,385,154   3,279,089
liabilities
Commitments and
contingencies
Redeemable 
noncontrolling   14,534       14,564       15,610      15,817      15,819
interests
Alexandria Real
Estate
Equities,
Inc.'s
stockholders'
equity:
Series D
Convertible      250,000      250,000      250,000     250,000     250,000
Preferred Stock
Series E         130,000      130,000      130,000     130,000     130,000
Preferred Stock
Common stock     633          632          632         622         616
Additional       3,075,860    3,086,052    3,094,987   3,053,269   3,022,242
paid-in capital
Accumulated
other            (22,890)     (24,833)     (19,729)    (37,370)    (23,088)
comprehensive
loss
Alexandria Real
Estate
Equities,        3,433,603    3,441,851    3,455,890   3,396,521   3,379,770
Inc.'s
stockholders'
equity
Noncontrolling   47,144       46,643       45,120      44,247      43,413
interests
Total equity     3,480,747    3,488,494    3,501,010   3,440,768   3,423,183
Total 
liabilities,     $        $        $       $       $    
noncontrolling   7,090,919   7,150,116   6,965,017  6,841,739  6,718,091
interests, and
equity



ALEXANDRIA REAL ESTATE EQUITIES, INC.
Funds From Operations and Adjusted Funds From Operations
(Dollars in thousands, except per share amounts)
(Unaudited)

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

                                 Three Months Ended
                                 3/31/13  12/31/12  9/30/12  6/30/12  3/31/12
Net income attributable to       $     $      $     $     $   
Alexandria Real Estate                                            
Equities, Inc.'s  common         22,442  21,000   10,646  17,616  18,368
stockholders – basic
 Depreciation and           46,995   48,072    48,173   52,355   43,405
amortization
 Loss (gain) on             340      −         (1,562)  (2)      −
sale of real estate
 Impairment of real         −        1,601     9,799    −        −
estate
 Gain on sale of            −        −         −        −        (1,864)
land parcel
 Amount
attributable to
noncontrolling
interests/unvested stock
awards:
 Net income           1,324    1,336     1,188    1,122    946
 FFO                  (1,064)  (1,109)   (1,148)  (1,133)  (1,156)
FFO attributable to Alexandria
Real Estate Equities, Inc.'s     70,037   70,900    67,096   69,958   59,699
common stockholders – basic
 Assumed conversion
of 8.00% Unsecured               5        5         5        6        5
Senior Convertible Notes
FFO attributable to Alexandria
Real Estate Equities, Inc.'s     70,042   70,905    67,101   69,964   59,704
common stockholders – diluted
Realized gain on equity
investment primarily related to  −        −         −        (5,811)  −
one non-tenant life science
entity
 Impairment of land         −        2,050     −        −        −
parcel
 Loss on early              −        −         −        1,602    623
extinguishment of debt
 Preferred stock            −        −         −        −        5,978
redemption charge
 Allocation to
unvested restricted              −        (19)      −        35       (53)
stock awards
FFO attributable to Alexandria
Real Estate Equities, Inc.'s     70,042   72,936    67,101   65,790   66,252
common stockholders – diluted,
as adjusted

Non-revenue-enhancing
capital expenditures:
 Building                  (596)    (329)     (935)    (594)    (210)
improvements
 Tenant
improvements and leasing         (882)    (3,170)   (1,844)  (2,148)  (2,019)
commissions
 Straight-line rent         (6,198)  (9,240)   (5,225)  (5,195)  (8,796)
 Straight-line rent         538      471       201      1,207    1,406
on ground leases
 Capitalized income
from development                 22       45        50       72       478
projects
 Amortization of
acquired above and below         (830)    (844)     (778)    (778)    (800)
market leases
 Amortization of            2,386    2,505     2,470    2,214    2,643
loan fees
 Amortization of            115      110       112      110      179
debt premiums/discounts
 Stock compensation         3,349    3,748     3,845    3,274    3,293
 Allocation to
unvested restricted              19       63        19       15       31
stock awards
AFFO attributable to Alexandria  $     $      $     $     $   
Real Estate Equities, Inc.'s                                      
common stockholders – diluted    67,965  66,295   65,016  63,967  62,457

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



                                 Three Months Ended
                                 3/31/13  12/31/12  9/30/12  6/30/12  3/31/12
Net income per share             $     $      $     $     $   
attributable to Alexandria Real                          
Estate Equities, Inc.'s  common  0.36     0.33      0.17     0.29     0.30
stockholders – basic
 Depreciation and           0.74     0.76      0.78     0.84     0.70
amortization
 Loss (gain) on sale        0.01     −         (0.03)   −        −
of real estate
 Impairment of real         −        0.03      0.16     −        −
estate
 Gain on sale of            −        −         −        −        (0.03)
land parcel
 Amount attributable
to noncontrolling
interests/unvested stock
awards:
 Net income           0.02     0.02      0.02     0.02     0.02
 FFO                  (0.02)   (0.02)    (0.02)   (0.02)   (0.02)
FFO per share attributable to
Alexandria Real Estate           1.11     1.12      1.08     1.13     0.97
Equities, Inc.'s  common
stockholders – basic
 Assumed conversion
of 8.00% Unsecured Senior        −        −         −        −        −
Convertible Notes
FFO per share attributable to
Alexandria Real Estate           1.11     1.12      1.08     1.13     0.97
Equities, Inc.'s  common
stockholders – diluted
Realized gain on equity
investment primarily related to  −        −         −        (0.09)   −
one non-tenant life science
entity
 Impairment of land         −        0.04      −        −        −
parcel
 Loss on early              −        −         −        0.03     0.01
extinguishment of debt
 Preferred stock            −        −         −        −        0.10
redemption charge
FFO per share attributable to
Alexandria Real Estate
Equities, Inc.'s  common         1.11     1.16      1.08     1.07     1.08
stockholders – diluted,

as adjusted

Non-revenue-enhancing
capital expenditures:
 Building                  (0.01)   (0.01)    (0.01)   (0.01)   −
improvements
Tenant
improvements and leasing         (0.01)   (0.05)    (0.03)   (0.03)   (0.03)
commissions
 Straight-line rent         (0.10)   (0.15)    (0.08)   (0.08)   (0.14)
 Straight-line rent         0.01     0.01      −        0.02     0.02
on ground leases
 Capitalized income         −        −         −        −        0.01
from development projects
 Amortization of
acquired above and below         (0.01)   (0.01)    (0.01)   (0.01)   (0.01)
market leases
 Amortization of            0.04     0.04      0.03     0.03     0.04
loan fees
 Amortization of            −        −         −        −        −
debt premiums/discounts
 Stock compensation         0.05     0.06      0.06     0.05     0.05
AFFO per share attributable to   $     $      $     $     $   
Alexandria Real Estate                                   
Equities, Inc.'s  common         1.08     1.05      1.04     1.04     1.02
stockholders – diluted



ALEXANDRIA REAL ESTATE EQUITIES, INC.
Non-GAAP Measures
(Unaudited)

Funds from operations and funds from operations, as adjusted

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

Adjusted funds from operations

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

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

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

ALEXANDRIA REAL ESTATE EQUITIES, INC.
Non-GAAP Measures
(Dollars in thousands)
(Unaudited)

NOI

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

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

                                     Three Months Ended
Continuing operations                March 31, 2013       March 31, 2012
Total revenues                       $           $         
                                     150,380             135,711
Rental operations                    45,224               40,453
Net operating income                 105,156              95,258
Operating margins                    70%                  70%
General and administrative           11,648               10,357
Interest                             18,020               16,226
Depreciation and amortization        46,065               41,786
Loss on early extinguishment of      −                    623
debt
Income from continuing               $           $         
operations                             29,423            26,266
Discontinued operations
Total revenues                       $           $         
                                        3,496            9,308
Rental operations                    1,412                3,043
Net operating income (1)             2,084                6,265
Operating margins                    60%                  67%
Interest                             −                    1
Depreciation and amortization        930                  1,619
Loss on sale of real estate          340                  −
Income from discontinued             $           $         
operations, net                          814           4,645

(1) Net operating income from discontinued operations for the three
months ended March 31, 2013, is comprised of $0.2 million for the three assets
classified as "held for sale" as of March 31, 2013, and $1.9 million for the 6
assets sold during the three months ended March 31, 2013. Net operating
income from discontinued operations for the three months ended March 31, 2012,
is comprised of $0.3 million for the three assets classified as "held for
sale" as of March 31, 2013, and $6.0 million for the 12 assets sold since
January 1, 2012.

Unlevered IRR

We believe Unlevered IRR is a useful supplemental performance measure used by
investors to evaluate the performance of a specific real estate investment.
Unlevered IRR is the annualized implied discount rate calculated from the cash
flows of a real estate asset over the holding period for such asset.
Unlevered IRR represents the return that equates the present value of all
capital invested in a real estate asset to the present value of all cash flows
generated by that real estate asset, or the discount rate that provides a net
present value of all cash flows related to a real estate asset to zero.
Unlevered IRR is calculated based upon the actual timing of cash flows,
including among others i) the initial cash purchase price; ii) cash NOI (GAAP
NOI excluding the impact of straight-line rents); iii) capital expenditures;
iv) leasing costs, and v) the net sales proceeds of each respective real
estate asset. Losses incurred upon sale or non-cash impairment charges
recognized during our ownership period are reflected in the unlevered IRR
through the net sales proceeds of each real estate asset. The calculation of
Unlevered IRR does not include general and administrative costs of the Company
or interest expense related to the Company's financing costs, because they are
not directly related or attributable to the operations of the real estate
asset.

SOURCE Alexandria Real Estate Equities, Inc.

Website: http://www.are.com
Contact: Joel S. Marcus, Chairman, Chief Executive Officer, & Founder,
Alexandria Real Estate Equities, Inc., (626) 578-9693
 
Press spacebar to pause and continue. Press esc to stop.