2003 LETTER TO SHAREHOLDERS TO FELLOW ALEXANDRIA REAL ESTATE EQUITIES, INC. OWNERS:  WE ARE VERY PROUD to be “The” Labspace ® Company. Alexandria, Landlord of Choice  to the Life Science Industry ® , is the only publicly-traded real estate operating company principally focused on the office/laboratory niche, offering World Class Labspace for World Class Life Science ® . With our truly unique road map for growth for all investor styles, we have succeeded in clearly distinguishing our- selves from the rest of our office REIT peer group. We have an enviable track record of consistency and predictability in our operations, growth, and earnings, and a coveted leadership position that we intend to maintain. Our continuing quality per- formance exemplifies Alexandria’s understanding of our client tenants and their Labspace requirements, as well as demon- strates our superior ability to meet those requirements on time and on budget.  Alexandria creates and owns Labspace of enduring value using state-of-the-art design and build-outs, supported by a strong commitment to outstanding technical service. We have pioneered our unique niche focus on Labspace by providing exceptional quality environments in which important and relevant science is conducted. Alexandria satisfies the critically important needs of our highly discriminating life science constituency and, in doing so, maintains the singular position as “The” Labspace Company. Alexandria’s values provide an unchanging ethical and moral compass that guides the actions of everyone in the company, to the benefit of our shareholders, client tenants, employees and business relationships. Our brand is a powerful, relevant, important and impactful symbol to our distinctive life science market niche. Alexandria’s solid core growth and earnings visibility have con- tinued to positively differentiate us. We are immensely proud that Alexandria has generated a compounded annual growth rate since our initial public offering (“IPO”) on May 28, 1997 through December 31, 2003, of approximately 23.5% (assuming reinvestment of all dividends), exceeding all benchmarks by a large margin. From the time of our initial IPO through December 31, 2003, Alexandria has increased shareholder value or common equity by approximately $800 million. These are truly astounding accomplishments achieved in spite of challenging and varying economic cycles. All of us at Alexandria are very pleased with our significant achieve- ments during 2003, and throughout the nearly seven years that we have been a public company.  Our mission is clear, our expertise and experience unparalleled, and our highly focused strategy carefully crafted and  executed. During 2003, and continuously every quarter since our IPO, we have reported consistent, stable and solid growth in funds from operations per share (diluted). This growth has been driven by the successful day-to-day execution of our differen- tiated strategy, unique multifaceted business model and strategic operating platform focused on the key life science cluster markets and participants. During 2003, we continued to maintain a well-balanced client tenant base representing a broad and diverse cross section of the life science industry. The average lease duration of our top 20 client tenants is approximately eight years. The strength and diversity of our client tenants, coupled with their average lease durations, provide Alexandria with reliable and consistent cash flow. In addition, our Life Science Properties SM are well-balanced and diversified geographically with markets strategically located in major biotech hubs along the east and west coasts. The combined strengths of Alexandria’s unique road map should enable continued growth during both prosperous and difficult economic environments. Our total shareholder return (assuming reinvestment of all dividends) from our IPO through December 31, 2003,  approximated 403%, significantly outperforming the NAREIT Index, which increased approximately 194%; the Russell 2000 Index, which increased approximately 162%; and, the S&P 500 Index, which increased approximately 146%. 12