M A N A G E M E N T ’ S A N N U A L R E P O RT O N I N T E R N A L C O N T R O L O V E R F I N A N C I A L R E P O RT I N G Alexandria Real Estate Equities, Inc. and Subsidiaries The management of Alexandria Real Estate Equities, Inc. and subsidiaries (the “Company”) is respon- sible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accor- dance with U.S. generally accepted accounting principles.The Company’s internal control over finan- cial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial state- ments in accordance with U.S. generally accepted accounting principles, and that receipts and expendi- tures are being made only in accordance with the authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements. Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in “Internal Control – Integrated Framework”. Management concluded that based on its assessment, the Company’s internal control over financial reporting was effective as of December 31, 2004. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 has been audited by Ernst &Young LLP, an independent registered public accounting firm, as stated in their report on the next page.  P 19