Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]     No [     ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K.    [ ]

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [X]     No [     ]

      The aggregate market value of the shares of Common Stock held by non-affiliates was approximately $1.1 billion based on the closing price for such shares on the New York Stock Exchange on June 30, 2004.

      As of March 11, 2005, the registrant had outstanding 19,638,293 shares of Common Stock.

Documents Incorporated By Reference

      Part III of this report incorporates certain information by reference from the registrant's definitive proxy statement to be filed within 120 days of the end of the fiscal year covered by this report in connection with the registrant's annual meeting of stockholders to be held on or about May 19, 2005.

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify some of the forward-looking statements by the use of forward-looking words such as "believes", "expects", "may", "will", "should", "seeks", "intends", "plans", "estimates" or "anticipates", or the negative of these words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking statements, including, but not limited to, those described below under the headings "Item 1. Business-Business Risks" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations". We do not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements, whether as a result of new information, future events or otherwise.

As used in this Form 10-K, references to the "Company", "we", "our", and "us" refer to Alexandria Real Estate Equities, Inc. and its subsidiaries.

We are a Maryland corporation formed in October 1994 that has elected to be taxed as a real estate investment trust ("REIT") for federal income tax purposes. We are engaged primarily in the ownership, operation, management, acquisition, expansion and selective redevelopment and development of high quality, strategically located properties containing office/ laboratory space designed and improved for lease primarily to pharmaceutical, biotechnology, life science product, service, biodefense, educational and translational medicine institutions/entities, as well as related government agencies (collectively, the "life science industry"). Properties leased to tenants in the life science industry typically consist of suburban office buildings containing scientific research and development laboratories and other improvements that are generic to tenants operating in the life science industry. We refer to such properties as "life science properties". As of December 31, 2004, we owned 112 properties (collectively, the "properties") in nine states containing approximately 7.4 million rentable square feet of office/ laboratory space.

We focus our property operations and investment activities principally in the following life science markets:

California (in the San Diego, Pasadena and San Francisco Bay areas).

Seattle.

Suburban Washington D.C. (including Maryland and Virginia).

Eastern Massachusetts.

New Jersey and Suburban Philadelphia.

the Southeast (including North Carolina and Georgia).

Our tenant base is broad and diverse within the life science industry and reflects our focus on regional, national and international tenants with substantial financial and operational resources. For a more detailed description of our properties and tenants, see "Item 2. Properties." We have an experienced Board of Directors and are led by a senior management team with extensive experience in both the real estate and life science industries.

We seek to maximize growth in funds from operations ("FFO") and cash available for distribution to stockholders through the ownership, operation, management, acquisition, expansion and selective redevelopment and development of life science properties. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Funds from Operations" for a discussion of how we compute and view FFO, as well as a discussion of other measures of cash flow. In particular, we seek to increase FFO and cash available for distribution by:

acquiring high quality life science properties in our life science markets at prices that will enable us to realize attractive returns;

redeveloping or expanding existing or newly acquired office, warehouse or vacant space into generic laboratory space that can be leased at higher rental rates;

selectively developing properties, primarily on a build-to-suit basis;

retenanting and releasing space within our portfolio at higher rental rates and with minimal non-revenue enhancing tenant improvement costs;

realizing contractual rental rate escalations, which are currently provided for in approximately 89% of our leases;

leasing vacant space to improve overall portfolio occupancy;

implementing effective cost control measures, including negotiating pass-through provisions in tenant leases for operating expenses and certain capital expenditures; and

managing the level of debt on our balance sheet and our exposure to floating rate debt.

Internal Growth. We seek to achieve internal growth from several sources. For example, we seek to:

include rental rate escalation provisions in our leases;

improve investment returns through releasing of vacant space and replacement of existing tenants with new tenants at higher rental rates;

achieve higher rental rates from existing tenants as leases expire;

expand existing properties that are fully leased and/or redevelop existing and/or newly acquired space to higher rent, generic laboratory space; and

implement effective cost control measures, including negotiating pass-through provisions in tenant leases for operating expenses and certain capital expenditures.

Our ability to negotiate contractual rent escalations in future leases and to achieve increases in rental rates will depend upon market conditions and the demand for life science properties at the time the leases are negotiated and the increases are proposed.

Acquisitions. We seek to identify and acquire high quality life science properties in our target markets on a selective basis. Critical evaluation of prospective property acquisitions is an essential component of our acquisition strategy. When evaluating acquisition opportunities, we assess a full range of matters relating to the properties, including the:

location of the property and our strategy in the relevant market;

quality of existing and prospective tenants;

condition and capacity of the building infrastructure;

quality and generic characteristics of laboratory facilities;

physical condition of the structure and common area improvements;

opportunities available for leasing vacant space and for retenanting occupied space;

opportunities to redevelop existing space into higher rent generic laboratory space; and

opportunities to expand the existing property.

Redevelopment. We seek to enhance our growth by redeveloping existing office, warehouse or vacant space as generic laboratory space that can be leased at higher rates. As of December 31, 2004, we had 17 properties in our redevelopment program that contained a total of approximately 1,296,000 square feet. Of this total, approximately 669,000 square feet were under redevelopment and currently vacant, and the remaining approximately 627,000 square feet were currently leased. We have also identified approximately 625,000 square feet of additional space in our existing portfolio for potential redevelopment.

Development. Our development strategy is primarily to pursue selective build-to-suit projects where we expect to achieve investment returns that will equal or exceed our returns on acquisitions. We generally have undertaken build-to-suit projects only if our investment in infrastructure will be substantially made for generic, rather than tenant-specific, improvements. As of December 31, 2004, we had six parcels of land under development for approximately 358,000 square feet of office/laboratory space. In addition, we currently own parcels of land and may expand existing properties, representing an aggregate future development potential of approximately 3,719,000 rentable square feet of office/laboratory space.

Financing/Working Capital. We believe that cash provided by operations, our unsecured line of credit and our unsecured term loan will be sufficient to fund our working capital requirements. We generally expect to finance future acquisitions and redevelopment and development projects through our unsecured line of credit and unsecured term loan and, then, to refinance some or all of that indebtedness periodically with additional equity or debt capital. We may also issue shares of our common stock, preferred stock or interests in our subsidiaries to fund future operations. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Unsecured Line of Credit and Unsecured Term Loan".

We seek to maintain a balance between the amounts of our fixed and variable debt with a view to moderating our exposure to interest rate risk. We also use financial instruments, such as interest rate swap agreements, to hedge a portion of our exposure to the variable interest rates associated with our unsecured line of credit and unsecured term loan. Interest rate swap agreements involve an exchange of fixed and floating interest rate payments without the exchange of the underlying principal or "notional amount". Interest received under our current interest rate swap agreements is based on the one-month LIBOR rate. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources" for a more complete discussion of our unsecured line of credit, unsecured term loan, interest rate swap agreements and other outstanding indebtedness.

Preferred Securities. We have in the last year, and expect to continue, to issue additional series of preferred stock that are senior to our common stock. At December 31, 2004, we had approximately $187.0 million of preferred stock outstanding. The preferred stock has general preference rights with respect to liquidation and quarterly distributions. In June 2004, we completed a public offering of 5,185,500 shares of our 8.375% Series C cumulative redeemable preferred stock with aggregate proceeds of approximately $124.0 million. In July 2004, we redeemed all 1,543,500 outstanding shares of our 9.50% Series A cumulative redeemable preferred stock. Future redemptions or repurchases of our preferred securities may occur after their respective call dates. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Other Resources and Liquidity Requirements".

In general, our strategy is to invest primarily in properties used by tenants in the life science industry. Our business could be adversely affected if the life science industry experiences an economic downturn. Because of our industry focus, events within the life science industry may have a more pronounced effect on our ability to make distributions to our stockholders than if we had more diversified investments. Also, some of our properties may be better suited for a particular life science industry tenant and could require modification before we are able to release vacant space to another life science industry tenant. Generally, our properties may not be suitable for lease to traditional office tenants without significant expenditures on renovations.

Our life science industry tenants are subject to a number of risks, including the following, any one or more of which may adversely affect their ability to make rental payments to us.

Some of our tenants require significant funding to develop and commercialize their products and technologies, which funding must be obtained from private investors, the public markets, companies in the life science industry or federal, state and local governments. Such funding may become unavailable or difficult to obtain, which in turn may adversely affect a tenant's ability to generate revenues or to pay us rent.

Even with sufficient funding, some of our tenants may not be able to discover or identify potential drug targets in humans, or potential drugs for use in humans, or to create tools or technologies which are commercially useful in the discovery or identification of potential drug targets or drugs.

Some of our tenants developing potential drugs may find that their drugs are not effective, or may even be harmful, when tested in humans.

Some of our tenants may not be able to manufacture their drugs economically, even if such drugs are proven through human clinical trials to be safe and effective in humans.

Drugs that are developed and manufactured by some of our tenants require regulatory approval prior to being made, marketed, sold and used. The regulatory approval process to manufacture and market drugs is costly, typically takes several years, requires the expenditure of substantial resources and is often unpredictable. A tenant may fail or experience significant delays in obtaining these approvals.

Some of our tenants and their licensors require patent, copyright or trade secret protection to develop, make, market and sell their products and technologies. A tenant may be unable to commercialize its products or technologies if patents covering such products or technologies do not issue, or are successfully challenged, narrowed, invalidated or circumvented by third parties, or if a tenant fails to obtain licenses to the discoveries of third parties necessary to commercialize its products or technologies.

A drug made by a tenant may not be well accepted by doctors and patients, or may be less effective or accepted than competitor's drugs, or may be subsequently recalled from the market, even if it is successfully developed, proven safe and effective in human clinical trials, manufactured and the requisite regulatory approvals are obtained.

We cannot assure you that our tenants will be able to develop, make, market or sell their products and technologies due to the risks inherent in the life science industry. Any tenant that is unable to avoid, or sufficiently mitigate, the risks described above, may have difficulty making rental payments to us.

Many of our life science industry tenants engage in research and development activities that involve the controlled use of hazardous materials, chemicals and biological and radioactive compounds. In the event of contamination or injury from the use of these hazardous materials, we could be held liable for damages that result. This liability could exceed our resources and any recovery available through any applicable environmental remediation insurance coverage, and could adversely affect our ability to make distributions to our stockholders.

Together with our tenants, we must comply with federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials and waste products. Failure to comply with, or changes in, these laws and regulations could adversely affect our business or our tenants' business and their ability to make rental payments to us.

Our revenues are derived primarily from rental payments and reimbursement of operating expenses under our leases. If our tenants, especially significant tenants, fail to make rental payments under their leases, our financial condition, cash flow and our ability to make distributions to our stockholders could be adversely affected.

As of December 31, 2004, we had 249 leases with a total of 213 tenants. Of our 112 properties, 64 properties were occupied by a single tenant. Our three largest tenants accounted for approximately 11.6% of our aggregate annualized base rent, or approximately 5.2%, 3.7% and 2.7%, respectively. "Annualized base rent" means the annualized fixed base rental amount in effect as of December 31, 2004, using rental revenues calculated on a straight-line basis in accordance with generally accepted accounting principles ("GAAP"). Annualized base rent does not include reimbursements for real estate taxes and insurance, common area and other operating expenses, substantially all of which are borne by the tenants in the case of triple net leases.

The bankruptcy or insolvency of a major tenant may also adversely affect the income produced by a property. If any of our tenants becomes a debtor in a case under the U.S. Bankruptcy Code, we cannot evict that tenant solely because of its bankruptcy. The bankruptcy court may authorize the tenant to reject and terminate its lease with us. Our claim against such a tenant for unpaid future rent would be subject to a statutory limitation that might be substantially less than the remaining rent actually owed to us under the tenant's lease. Any shortfall in rent payments could adversely affect our cash flow and our ability to make distributions to our stockholders.

U.S. government tenants may be subject to annual appropriations. If one of our U.S. government tenants fails to receive its annual appropriation, it might not be able to make its lease payments to us. In addition, defaults under leases with federal government tenants are governed by federal statute and not by state eviction or rent deficiency laws. All of our leases with U.S. government tenants provide that the government tenant may terminate the lease under certain circumstances. As of December 31, 2004, leases with U.S. government tenants at our properties accounted for approximately 4.2% of our aggregate annualized base rent.

A tenant may not renew its lease upon the expiration of the initial term. In addition, we may not be able to locate a qualified replacement tenant upon expiration or termination of a lease. Consequently, we could lose the cash flow from the affected property, which could negatively impact our business. We may have to divert cash flow generated by other properties to meet our mortgage payments, if any, or to pay other expenses related to owning the affected property. As of December 31, 2004, leases at our properties representing approximately 6.4% and 11.8% of the total square footage of our properties were scheduled to expire in 2005 and 2006, respectively.

Our properties are located only in the following markets:

California (in the San Diego, Pasadena and San Francisco Bay areas).

Seattle.

Suburban Washington D.C. (including Maryland and Virginia).

Eastern Massachusetts.

New Jersey and Suburban Philadelphia.

the Southeast (including North Carolina and Georgia).

As a result of our geographic concentration, we depend upon the local economic conditions in these markets, including local real estate conditions. We are, therefore, subject to increased exposure (positive or negative) to economic and other competitive factors specific to markets in confined geographic areas. Our operations may also be affected if too many competing properties are built in any of these markets. An economic downturn in any of these markets could adversely affect our operations and our ability to make distributions to stockholders. We cannot assure you that these markets will continue to grow or will remain favorable to the life science industry.

We expect to continue to grow by acquiring, redeveloping and selectively developing additional properties. To manage our growth effectively, we must successfully integrate new properties into our existing operations. We may not succeed with the integration. In addition, we may not effectively manage new properties, and new properties may not perform as expected. Our business could be adversely affected if we are unsuccessful in managing our growth.

We use debt to finance our operations, including acquisitions of properties. Our use of debt may have adverse consequences, including the following:

Our cash flow from operations may not be sufficient to meet required payments of principal and interest.

We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt.

We may default on our debt obligations, and the lenders or mortgagees may foreclose on our properties that secure those loans.

A foreclosure on one of our properties could create taxable income without any accompanying cash proceeds to pay the tax.

A default under a mortgage loan that has cross default provisions may cause us to automatically default on another loan.

We may not be able to refinance or extend our existing debt.

The terms of any refinancing or extension may not be as favorable as the terms of our existing debt.

We may be subject to a significant increase in the variable interest rates on our unsecured line of credit or unsecured term loan, which could adversely impact our operations.

As of December 31, 2004, we had outstanding mortgage indebtedness of approximately $639.0 million, secured by 54 properties and seven land development parcels, and outstanding debt under our unsecured line of credit and unsecured term loan of $548.0 million.

Our unsecured line of credit and unsecured term loan facilities contain customary negative covenants and other financial and operating covenants that, among other things:

restrict our ability to incur additional indebtedness;

restrict our ability to make certain investments;

restrict our ability to merge with another company;

restrict our ability to make distributions to stockholders;

require us to maintain financial coverage ratios; and

require us to maintain a pool of unencumbered assets approved by the lenders.

These restrictions could cause us to default on our unsecured line of credit and unsecured term loan or negatively affect our operations and our ability to make distributions to our stockholders.

Our ability to acquire, redevelop or develop properties depends upon our ability to obtain capital. Periodically, the real estate industry experiences reduced supplies of favorably-priced equity or debt capital, which decreases the level of new investment activity by publicly-traded real estate companies. A prolonged period in which we cannot effectively access the public equity or debt markets may result in heavier reliance on alternative financing sources to undertake new investments. An inability to obtain equity or debt capital on acceptable terms could delay or prevent us from acquiring, structuring and completing desirable investments, which could adversely affect our business. Also, the issuance of additional shares of capital stock or interests in subsidiaries to fund future operations could dilute the ownership of then existing stockholders.

We have filed a "shelf" registration statement on Form S-3, under which we may offer from time to time and at our discretion, common stock, preferred stock, warrants and debt securities with an aggregate public offering price of up to $500,000,000, in amounts, at prices and on terms to be determined at the time of offering.

Borrowings outstanding under our unsecured line of credit, unsecured term loan and certain other borrowings bear interest at a variable rate, and we may incur additional variable rate debt in the future. Increases in market interest rates would increase our interest expense under these debt instruments and would increase the costs of refinancing existing indebtedness or obtaining new debt. Accordingly, these increases could adversely affect our financial position and our ability to make distributions to stockholders.

Our success depends in large part upon our ability to acquire additional properties on satisfactory terms and to operate them successfully. If we are unable to do so, our business could be adversely affected. In addition, the acquisition of life science properties generally involves a higher per square foot price than the acquisition of traditional suburban office properties.

The acquisition, ownership and operation of real estate is subject to many risks that may adversely affect our business and our ability to make payments to stockholders, including the risks that:

Our properties may not perform as we expect.

We may not be able to acquire a desired property because of competition from other real estate investors with significant capital.

We may lease space at rates below our expectations.

We may not be able to obtain financing on acceptable terms.

We may overpay for new acquisitions.

We may underestimate the cost of improvements required to bring an acquired property up to standards established for the market position intended for that property.

If we encounter any of these risks, our business and our ability to make payments to stockholders could be adversely affected.

Our redevelopment and development activities subject us to many risks, including those associated with:

We believe that our insurance policy specifications, insured limits and deductibles are consistent with or superior to those customarily carried for similar properties. Our tenants are also required to maintain comprehensive insurance, including liability and casualty insurance, that is customarily obtained for similar properties. There are, however, certain types of losses that we and our tenants do not generally insure against because they are uninsurable or because it is not economical to insure against them. In the current market, there have recently been substantial increases in the premium cost of property and liability insurance. The availability of coverage against certain types of losses, such as from terrorism or toxic mold, has become more limited and, when available, is at a significantly higher premium cost. We cannot predict whether insurance coverage against terrorism or toxic mold will remain available for our properties because insurance companies may no longer offer coverage against such losses or, if offered, such coverage may become prohibitively expensive. Most, but not all, of our properties are low-rise buildings in suburban areas. Toxic mold has not presented any material problems at any of our properties.

Federal, state and local environmental laws and regulations may require us, as a current or prior owner or operator of real estate, to investigate and clean up hazardous or toxic substances or petroleum products released at or from any of our properties. The cost of investigating and cleaning up contamination could be substantial and could exceed the amount of any environmental remediation insurance coverage available to us. In addition, the presence of contamination, or the failure to properly clean it up, may adversely affect our ability to lease or sell an affected property, or to borrow funds using that property as collateral.

We will provide, upon request and free of charge, paper copies of our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments to the foregoing reports, as soon as is reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission. These materials, along with our corporate governance guidelines, business integrity policy and board committee charters, are also available through our corporate website at http://www.labspace.com. The public may also download these materials from the Securities and Exchange Commission's website at http://www.sec.gov. Any amendments to, and waivers of, our business integrity policy will be posted on our corporate website.

                                                               % of
                                                Total         Total
                                    Number     Rentable      Rentable                    % of
                                     of         Square        Square     Annualized   Annualized
Markets                           Properties    Footage      Footage    Base Rent(1)   Base Rent  Encumbrances(2)
- ---------------                   ----------  ------------  ----------  ------------- ----------- ---------------

California - Pasadena                  1          31,343        0.4%     $     524         0.3%      $        -

California - San Diego                25       1,201,984       16.2%        28,171        16.8%         122,549

California - San Francisco Bay        15       1,067,596       14.4%        31,919        19.1%          23,496

Eastern Massachusetts                 15         922,123       12.4%        23,948        14.2%          74,433

New Jersey/Suburban Philadelphia       8         501,223        6.7%         7,820         4.7%               -

Southeast                              7         460,910        6.2%         7,209         4.3%          20,273

Suburban Washington D.C.              30       2,427,116       32.7%        42,808        25.6%         187,392

Washington - Seattle                  11         819,085       11.0%        25,047        15.0%          65,803
                                  ----------  ------------  ----------  ------------- ----------- ---------------
       Total                         112       7,431,380      100.0%     $ 167,446       100.0%      $  493,946
                                  ==========  ============  ==========  ============= =========== ===============

                                                 Remaining                                                                          Percentage
                                                  Initial                                               Percentage                 of Aggregate
                                                   Lease     Approximate   Percentage                  of Aggregate   Annualized     Portfolio
                                         Number    Term       Aggregate   of Aggregate   Annualized      Portfolio   Net Effective   Annualized
                                           of       in         Rentable      Leased     Base Rent(in    Annualized     Rent (in    Net Effective
Tenant                                   Leases    Years     Square Feet   Square Feet  thousands)(1)    Base Rent   thousands)(2)     Rent
- ---------------------------------------- ------- ---------   -----------  ------------  ------------   ------------  ------------- -------------

ZymoGenetics, Inc.                         2       14.4         203,369        3.1%         8,747          5.2%        $  8,742          5.8%

Theravance, Inc.                           2        7.3         170,244        2.6%         6,136          3.7%           5,885          3.9%

Merck & Co., Inc.                          3        5.8         166,007        2.6%         4,452          2.7%           4,203          2.8%

Oscient Pharmaceuticals Corporation        1        6.2          68,460        1.1%         4,442          2.7%           4,346          2.9%

Quest Diagnostics Incorporated             1       12.0         248,186        3.8%         4,341          2.6%           4,340          2.9%

Infinity Pharmaceuticals, Inc.             2        8.0          67,167        1.0%         4,302          2.6%           3,467          2.3%

Telik, Inc.                                1        9.4          91,644        1.4%         3,491          2.1%           3,389          2.3%

Fred Hutchinson Cancer Research Center     2        9.1(3)      111,457        1.7%         3,280          2.0%           3,134          2.1%

Corixa Corporation                         2        1.2(4)       83,880        1.3%         3,147          1.9%           2,784          1.9%

Senomyx, Inc.                              1        2.0          86,962        1.3%         3,021          1.8%           2,888          1.9%

Sunesis Pharmaceuticals, Inc.              1        8.5          53,980        0.8%         2,813          1.7%           2,231          1.5%

Gene Logic Inc.                            3        4.7 (5)     123,041        1.9%         2,804          1.7%           2,065          1.4%

TransForm Pharmaceuticals, Inc.(6)         1        7.7          59,000        0.9%         2,671          1.6%           2,011          1.3%

Amylin Pharmaceuticals, Inc.               2       10.1          86,764        1.3%         2,657          1.6%           2,523          1.7%

Digene Corporation                         1        5.0         109,750        1.7%         2,634          1.6%           1,607          1.1%

Dendreon Corporation                       1        4.0          70,647        1.1%         2,533          1.5%           2,077          1.4%

Bill & Melinda Gates Foundation            1        6.8         121,790        1.9%         2,466          1.5%           2,467          1.6%

Avigen, Inc.                               2        4.9(7)      112,830        1.7%         2,458          1.5%           2,351          1.6%

Acusphere, Inc.                            1        7.0          47,500        0.7%         2,350          1.4%           1,843          1.2%

Biogen Idec Inc.                           1        5.6          74,557        1.2%         2,310          1.4%           1,562          1.0%

                                        -------  ---------   -----------  ------------  ------------  ------------  ------------- -------------
Total/Weighted Average (8):               31        7.7       2,157,235       33.4%        71,055         42.4%       $  63,915         42.5%
                                        =======  =========   ===========  ============  ============  ============  ============= =============

                                                            Per Share
Period                                   High       Low    Distribution
- ------                                  ------    ------   ------------
2004
Fourth Quarter........................  $75.24    $65.51      $0.66
Third Quarter.........................  $66.67    $56.50      $0.64
Second Quarter........................  $64.76    $50.88      $0.62
First Quarter.........................  $65.20    $57.30      $0.60

2003
Fourth Quarter........................  $58.99    $48.03      $0.58
Third Quarter.........................  $48.55    $44.34      $0.56
Second Quarter........................  $45.63    $41.61      $0.53
First Quarter.........................  $42.80    $39.81      $0.53

                                                                                             Year Ended December 31,
                                                                            ----------------------------------------------------------
                                                                              2004         2003        2002        2001       2000
                                                                            ----------  ----------  ----------  ----------  ----------
                                                                                 (Dollars in thousands, except per share amounts)
Operating Data:
Total revenue ............................................................  $ 183,284   $ 160,558   $ 142,271  $  120,861   $ 100,122
Total expenses ...........................................................    124,715     112,054     104,000      93,279      76,685
                                                                            ----------  ----------  ----------  ----------  ----------
Income from continuing operations.........................................     58,569      48,504      38,271      27,582      23,437
Income from  discontinued operations, net.................................      1,626      11,139       1,761       2,695       2,572
                                                                            ----------  ----------  ----------  ----------  ----------
Net income................................................................     60,195      59,643      40,032      30,277      26,009

Dividends on preferred stock..............................................     12,595       8,898       8,579       3,666       3,666

Preferred stock redemption charge.........................................      1,876           -           -           -           -
                                                                            ----------  ----------  ----------  ----------  ----------
Net income available to common stockholders...............................  $  45,724   $  50,745   $  31,453   $  26,611   $  22,343
                                                                            ==========  ==========  ==========  ==========  ==========
Basic income per common share:
       Income from continuing operations (net of preferred stock dividends
          and preferred stock redemption charge) .........................  $    2.28   $    2.09   $    1.69   $    1.50   $    1.37
                                                                            ==========  ==========  ==========  ==========  ==========
       Income from discontinued operations, net...........................  $    0.08   $    0.59   $    0.10   $    0.17   $    0.18
                                                                            ==========  ==========  ==========  ==========  ==========
       Net income available to common stockholders........................  $    2.37   $    2.67   $    1.79   $    1.67   $    1.55
                                                                            ==========  ==========  ==========  ==========  ==========

Diluted income per common share:
       Income from continuing operations (net of preferred stock dividends
          and preferred stock redemption charge) .........................  $    2.24   $    2.06   $    1.66   $    1.48   $    1.35
                                                                            ==========  ==========  ==========  ==========  ==========
       Income from discontinued operations, net...........................  $    0.08   $    0.58   $    0.10   $    0.17   $    0.17
                                                                            ==========  ==========  ==========  ==========  ==========
       Net income available to common stockholders........................  $    2.33   $    2.64   $    1.76   $    1.64   $    1.52
                                                                            ==========  ==========  ==========  ==========  ==========

Weighted average shares of common stock outstanding
       Basic .............................................................  19,315,364  18,993,856  17,594,228  15,953,459  14,460,711
                                                                            ==========  ==========  ==========  ==========  ==========
       Diluted ...........................................................  19,658,759  19,247,790  17,859,787  16,208,178  14,699,478
                                                                            ==========  ==========  ==========  ==========  ==========
Cash dividends declared per share of common stock.........................  $    2.52   $    2.20   $    2.00   $    1.84   $    1.72
                                                                            ==========  ==========  ==========  ==========  ==========

                                                                                                   Year Ended December 31,
                                                                           -------------------------------------------------------------------
                                                                              2004           2003         2002          2001         2000
                                                                           ------------  ------------  ------------  -----------  ------------
                                                                                           (Dollars in thousands)
Balance Sheet Data (at year end):
Rental properties - net of accumulated depreciation....................    $ 1,427,853   $   982,297   $   976,422   $   796,626   $   679,653
Total assets ..........................................................    $ 1,872,284   $ 1,272,577   $ 1,159,243   $   962,146   $   780,984
Secured notes payable, unsecured line of credit and unsecured term loan    $ 1,186,946   $   709,007   $   614,878   $   573,161   $   431,256
Total liabilities .....................................................    $ 1,251,811   $   765,442   $   673,390   $   629,508   $   461,832
Stockholders' equity ..................................................    $   620,473   $   507,135   $   485,853   $   332,638   $   319,152

Reconciliation of Net Income to Funds from Operations:
Net income.............................................................    $    60,195   $    59,643   $    40,032   $    30,277   $    26,009
Add:
Depreciation and amortization(1).......................................         42,523        38,901        34,071        30,578        24,251
Impairment of investments..............................................             --            --         2,545            --            --
Subtract:
Dividends on preferred stock...........................................        (12,595)       (8,898)       (8,579)       (3,666)       (3,666)
Preferred stock redemption charge(2)...................................         (1,876)           --            --            --            --
Gain/loss on sales of property(3)......................................         (1,627)       (8,286)           --            --            --
                                                                           ------------  ------------  ------------  ------------  ------------
Funds from operations(4)...............................................    $    86,620   $    81,360   $    68,069   $    57,189   $    46,594
                                                                           ============  ============  ============  ============  ============
Other Data:
Cash flows from operating activities ..................................    $    67,752   $    74,847   $    67,050   $    60,340   $    32,931
Cash flows from investing activities ..................................    $  (450,688)  $  (139,810)  $  (227,840)  $  (192,179)  $  (132,480)
Cash flows from financing activities ..................................    $   381,109   $    66,158   $   162,204   $   131,439   $    98,879
Number of properties owned at year end ................................            112            89            89            83            76
Rentable square feet of properties owned at year end...................      7,431,380     5,694,466     5,765,558     5,338,481     4,885,391
Occupancy of properties owned at year end .............................            87%           88%           89%           89%           91%
Occupancy of properties owned at year end, excluding properties under
   redevelopment.......................................................            95%           94%           96%           99%           98%

                                                       Payments by Period
                                          -----------------------------------------------
                               Total          2005     2006-2007   2008-2009   Thereafter
- -----------------------------------------------------------------------------------------
Secured notes payable(1)     $   635,432   $  23,227   $ 223,598   $ 157,724   $  230,883

Unsecured line of credit and
  unsecured term loan            548,000          --     298,000     250,000           --

Ground lease obligations          65,346       1,805       3,683       3,801       56,057

Other obligations                  4,814         425       1,277       1,208        1,904
                            ------------  ----------  ----------  ----------  -----------
Total                        $ 1,253,592   $  25,457   $ 526,558   $ 412,733   $  288,844
                            ============  ==========  ==========  ==========  ===========