possible delays in construction;

budget overruns;

increasing costs of materials;

financing availability;

volatility in interest rates;

labor availability;

timing of the commencement of rental payments;

other property development uncertainties; and

entitlement and permitting delay or denial.

In addition, expansion and development activities, regardless of whether they are ultimately successful, typically require a substantial portion of management's time and attention. This may distract management from focusing on other operational activities. If we are unable to complete expansion and development projects successfully, our business may be adversely affected.

If our properties do not generate revenues sufficient to meet our operating expenses, including debt service and other capital expenditures, we may have to borrow additional amounts to cover fixed costs and cash flow needs. This could adversely affect our ability to make distributions to our stockholders. Factors that could adversely affect the revenues from and the value of our properties include:

national and local economic conditions;

competition from other life science facilities;

changes within the life science industry;

real estate conditions in our target markets;

our ability to collect rent payments;

availability of financing;

changes in interest rate levels;

vacancies at our properties and our ability to release space;

changes in tax or other regulatory laws;

costs of compliance with government regulation;

illiquidity of real estate investments; and

increased operating costs.

In addition, if a lease at a property is not a triple net lease, we will have greater expenses associated with that property and greater exposure to increases in such expenses. Significant expenditures, such as mortgage payments, real estate taxes, insurance and maintenance costs, generally are fixed and do not decrease when revenues at the related property decrease.

Our properties contain generic infrastructure improvements that are more costly than other property types. These improvements include:

reinforced concrete floors;

upgraded roof loading capacity;

increased floor to ceiling heights;

heavy-duty HVAC systems;

enhanced environmental control technology;

significantly upgraded electrical, gas and plumbing infrastructure; and

laboratory benches.

Although we have historically been able to reflect the additional investment in generic infrastructure improvements in higher rental rates, we are not sure that we will be able to continue to do so in the future.

Investments in real estate are relatively illiquid. Accordingly, we may not be able to sell our properties when we desire or at acceptable prices in response to changes in economic or other conditions. In addition, the Internal Revenue Code limits our ability to sell properties held for fewer than four years. These limitations on our ability to sell our properties may adversely affect our cash flows and our ability to make distributions to stockholders.

The significant competition for business in our target markets could have an adverse effect on our operations. We compete for investment opportunities with:

insurance companies;

pension and investment funds;

partnerships;

developers;

investment companies;

other REITs; and

owner/occupants.

Many of these entities have substantially greater financial resources than we do and may be able to accept more risk than we can manage. These entities may be less sensitive to risks with respect to the creditworthiness of a tenant or the geographic proximity of its investments. Competition from other entities also may reduce the number of suitable investment opportunities offered to us or may increase the bargaining power of property owners seeking to sell.

Although we review the physical condition of our properties before they are acquired, and on a periodic basis after acquisition, any of our properties may have characteristics or deficiencies unknown to us that could adversely affect the property's valuation or revenue potential.

If in any taxable year we fail to qualify as a REIT:

we would be subject to federal income tax on our taxable income at regular corporate rates;

we would not be allowed a deduction for distributions to stockholders in computing taxable income;

unless we were entitled to relief under the Internal Revenue Code, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification; and

we would no longer be required by the Internal Revenue Code to make any distributions to our stockholders.

As a result of the additional tax liability, we might need to borrow funds or liquidate certain investments in order to pay the applicable tax. Accordingly, funds available for investment or distribution to our stockholders would be reduced for each of the years involved.

Qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code to our operations and the determination of various factual matters and circumstances not entirely within our control. There are only limited judicial or administrative interpretations of these provisions. Although we believe that we have operated since January 1996 in a manner so as to qualify as a REIT, we cannot assure you that we are or will remain so qualified.

In addition, although we are not aware of any pending tax legislation that would adversely affect our ability to operate as a REIT, new legislation, regulations, administrative interpretations or court decisions could change the tax laws or interpretations of the tax laws regarding qualification as a REIT, or the federal income tax consequences of that qualification, in an adverse manner.

Although certain of our officers and directors have extensive experience in the acquisition, leasing, operation, financing and development of real properties, prior to commencement of our operations, no officer had significant experience in operating a business in accordance with the requirements for maintaining qualification as a REIT under the Internal Revenue Code.

The Internal Revenue Code provides that, in order for us to maintain our qualification as a REIT, not more than 50% of the value of our outstanding capital stock may be owned, directly or constructively, by five or fewer individuals or entities.

In addition, our charter prohibits, with certain limited exceptions, direct or constructive ownership of shares of our capital stock representing more than 9.8% of the combined total value of outstanding shares of our capital stock by any person (the "Ownership Limit"). Our Board of Directors may exempt a stockholder from the Ownership Limit if, prior to the exemption, our Board of Directors receives all information it deems necessary to determine or ensure our status as a REIT.

The constructive ownership rules are complex and may cause shares of our common stock owned directly or constructively by a group of related individuals or entities to be constructively owned by one individual or entity. A transfer of shares to a person who, as a result of the transfer, violates the Ownership Limit may be void or may be transferred to a trust, for the benefit of one or more qualified charitable organizations designated by us. In that case, the intended transferee will have only a right to share, to the extent of the transferee's original purchase price for such shares, in proceeds from the trust's sale of those shares.

Our charter allows our Board of Directors to cause us to issue additional authorized but unissued shares of our common stock or preferred stock without any stockholder approval. The issuance of preferred stock could make it more difficult for another party to gain control of Alexandria. In addition, our Board of Directors could establish a series of preferred stock that could delay, defer or prevent a transaction that might involve a premium price for our common stock or otherwise be in the best interest of our common stockholders. Our Board of Directors could also establish one or more additional series of preferred stock that has a dividend preference, which may adversely affect our ability to pay dividends on our common stock.

Under our Stockholder Rights Plan, if a stockholder acquires beneficial ownership of 15% or more of our common stock, other stockholders would become entitled to purchase our common stock at half the market price, which would likely result in substantial dilution to the 15% or greater stockholder. This, as well as the Ownership Limit described above and the additional provisions of our charter and bylaws described below, could have the effect of delaying or preventing a change in control or other transaction that might involve a premium price for our common stock or otherwise be considered by stockholders to be in their best interest.

As authorized by Maryland law, our charter permits our Board of Directors to authorize the issuance of additional authorized but unissued shares of our common or preferred stock, and to classify or reclassify unissued shares of common or preferred stock, without obtaining stockholder approval. The issuance of preferred stock could, in addition to reducing our ability to pay dividends on our common stock, make it more difficult for another party to gain control of Alexandria. In addition, our charter permits the removal of a director only upon two-thirds vote of the votes entitled to be cast at a meeting of stockholders and our bylaws require advance notice of a stockholder's intention to nominate directors or present business for consideration by stockholders at an annual meeting of our stockholders.

If we experience a loss at any of our properties that is not covered by insurance or that exceeds our insurance policy limits, we could lose the capital invested in the affected property and, possibly, future revenues from that property. In addition, we would continue to be obligated on any mortgage indebtedness or other obligations related to the affected properties.

We carry comprehensive liability, fire, extended coverage and rental loss insurance with respect to our properties. We have obtained earthquake insurance for all of our properties because many of them are located in the vicinity of active earthquake faults. We also carry environmental remediation insurance and have title insurance policies on all of our properties. We obtain our title insurance policies when we acquire the property. As a result, each policy covers an amount equal to the initial purchase price of each property. Any of our title insurance policies may be in an amount less than the current value of the related property.

Under environmental laws and regulations, we may have to pay governmental entities or third parties for property damage and for investigation and clean-up costs incurred by those parties relating to contaminated properties regardless of whether we knew of or caused the contamination. Even if more than one person may have been responsible for the contamination, we may be held responsible for all of the clean-up costs. In addition, third parties may sue us for damages and costs resulting from environmental contamination or jointly responsible parties may contest their responsibility or be financially unable to pay their share of such costs.

Environmental laws also govern the presence, maintenance and removal of asbestos-containing materials. These laws may impose fines and penalties on us for the release of asbestos-containing materials and may allow third parties to seek recovery from us for personal injury from exposure to asbestos fibers. We have detected asbestos-containing materials at some of our properties, but we do not expect that it will result in material environmental costs or liabilities to us.

Environmental laws and regulations also require the removal or upgrading of certain underground storage tanks and regulate:

the discharge of storm water, wastewater and any water pollutants;

the emission of air pollutants;

the generation, management and disposal of hazardous or toxic chemicals, substances or wastes; and

workplace health and safety.

Some of our tenants routinely handle hazardous substances and wastes as part of their operations at our properties. Environmental laws and regulations subject our tenants, and potentially us, to liability resulting from these activities. Environmental liabilities could also affect a tenant's ability to make rental payments to us. We require our tenants to comply with these environmental laws and regulations and to indemnify us for any related liabilities.

Independent environmental consultants have conducted Phase I or similar environmental assessments at all of our properties. We intend to use consultants to conduct similar environmental assessments on our future acquisitions. This type of assessment generally includes a site inspection, interviews and a public records review, but no subsurface sampling. These assessments and certain additional investigations of our properties have not to date revealed any environmental liability that we believe would have a material adverse effect on our business or results of operations.

The additional investigations included, as appropriate:

asbestos surveys;

radon surveys;

lead surveys;

additional public records review;

subsurface sampling; and

other testing.

Nevertheless, it is possible that the assessments on our properties have not revealed, or that the assessments on future acquisitions will not reveal, all environmental liabilities. Consequently, there may be material environmental liabilities of which we are unaware that may result in substantial costs to us or our tenants and that could have a material adverse effect on our business.

Under the Americans with Disabilities Act, places of public accommodation and/or commercial facilities are required to meet federal requirements related to access and use by disabled persons. We may be required to make substantial capital expenditures at our properties to comply with this law. In addition, our noncompliance could result in the imposition of fines or an award of damages to private litigants.

A number of additional federal, state and local laws and regulations exist regarding access by disabled persons. These regulations may require modifications to our properties or may affect future renovations. This may limit the overall returns on our investments.

We believe that our properties are substantially in compliance with the present requirements of the Americans with Disabilities Act and similar laws. We have not, however, conducted an audit or an investigation of all of our properties to determine our compliance.

Our properties are subject to many federal, state and local regulatory requirements and to state and local fire and life-safety requirements. If we do not comply with all of these requirements, we may have to pay fines to governmental authorities or damage awards to private litigants.

We believe that our properties are currently in compliance with all of these regulatory requirements. We do not know whether these requirements will change or whether new requirements will be imposed. Changes in these regulatory requirements could require us to make significant unanticipated expenditures. These expenditures could have an adverse effect on us and our ability to make distributions to stockholders.

We depend upon the services of relatively few executive officers. The loss of services of any one of our executive officers could have an adverse effect on our business, financial condition and prospects. We use the extensive personal and business relationships that members of our management have developed over time with owners of life science facilities and with major life science industry tenants. We have employment agreements with most of our executive officers, but we cannot assure you that our executive officers will remain employed with us.

Our Board of Directors determines all of our business policies, with management's input, including our:

status as a REIT;

investment initiatives;

growth management;

debt incurrence and limitations on maximum targeted levels of debt;

general financing;

acquisition and selective development activities;

shareholder distributions; and

operations.

Our Board of Directors may amend or revise these policies at any time without a vote of our stockholders. A change in these policies could adversely affect our business and our ability to make distributions to our stockholders.

Our organizational documents do not limit the amount of debt that we may incur. Therefore, we could become highly leveraged. This would result in an increase in our debt service obligations that could adversely affect our cash flow and our ability to make distributions to our stockholders.

We have adopted a policy of incurring debt only if upon such incurrence our debt to total market capitalization ratio would not exceed 57.5%. Our total market capitalization is the market value of our capital stock, including interests exchangeable for shares of capital stock, plus total debt. Our Board of Directors could, however, change or eliminate this policy at any time. Higher leverage also increases the risk of default on our debt obligations.

We may not continue our current level of distributions to stockholders. Our Board of Directors will determine future distributions based on a number of factors, including:

our amount of cash available for distribution;

our financial condition;

any decision by our Board of Directors to reinvest funds rather than to distribute such funds;

our capital expenditures;

the annual distribution requirements under the REIT provisions of the Internal Revenue Code; and

other factors our Board of Directors deems relevant.

We cannot predict the effect, if any, of future sales of shares of our common stock on the market price of our common stock from time to time. Sales of substantial amounts of capital stock (including common stock issued upon the exercise of stock options), or the perception that such sales may occur, could adversely affect prevailing market prices for our common stock.

We have reserved for issuance to our officers, directors and employees pursuant to our Amended and Restated 1997 Stock Award and Incentive Plan (the "Plan") that number of shares of our common stock that equals 12% of the total number of shares outstanding at any time, provided that in no event may the number of shares of our common stock available for issuance under the Plan exceed 3,000,000 shares at any time.

As of December 31, 2001, options to purchase 849,870 shares of our common stock were outstanding, of which options to purchase 497,040 shares of our common stock were exercisable. We have filed a registration statement with respect to the issuance of shares of our common stock pursuant to grants under the stock option plan. In addition, any shares issued under our stock option plan will be available for sale in the public market from time to time without restriction by persons who are not our Affiliates (as defined in Rule 144 adopted under the Securities Act of 1933). Affiliates will be able to sell shares of our common stock pursuant to exemptions from the registration requirements or upon registration.

As of December 31, 2001, we had 53 full-time employees and one part-time employee. We believe that we have good relations with our employees.

Our properties range in size from approximately 15,000 to 248,000 square feet, are built to accommodate single or multiple tenants and are generally one or two story concrete tilt-up, block and/or steel frame structures. The exteriors typically resemble traditional suburban office properties, but interior infrastructures are designed to accommodate the needs of life science industry tenants. These improvements typically are generic to life science industry tenants rather than being specific to a particular tenant. As a result, we believe that the improvements have long-term value and utility and are usable by a wide range of life science industry tenants. Generic infrastructure improvements include:

reinforced concrete floors;

upgraded roof loading capacity;

increased floor to ceiling heights;

heavy-duty HVAC systems;

enhanced environmental control technology;

significantly upgraded electrical, gas and plumbing infrastructure; and

laboratory benches.

We own fee simple title in each of our properties, except with respect to:

1311, 1401 and 1431 Harbor Bay Parkway, in which we own a commercial condominium interest, together with an undivided interest in the common areas of the project of which the property is a part; and

2425 Garcia Avenue, 2400/2450 Bayshore Parkway, 2625/2627/2631 Hanover Street, 108 Alexander Road, Buildings 79 & 96, Charlestown Navy Yard, and 8000/9000/10000 Virginia Manor Road, in which we own ground leasehold interests.

As of December 31, 2001, we had 194 leases with a total of 167 tenants, and 45 of our properties were single-tenant properties. Leases in our multi-tenant buildings typically have terms of three to seven years, while the single-tenant building leases typically have initial terms of 10 to 20 years. As of December 31, 2001:

approximately 82% of our leases (on a square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses (including increases thereto) in addition to base rent, and, in addition to our triple net leases, approximately 13% of our leases (on a square footage basis) required the tenants to pay a majority of operating expenses;

approximately 92% of our leases (on a square footage basis) contained effective annual rent escalations that are either fixed (generally ranging from 3% to 4%) or indexed based on a consumer price index or other index; and

approximately 87% of our leases (on a square footage basis) provided for the recapture of certain capital expenditures (such as HVAC systems maintenance and/or replacement, roof replacement and parking lot resurfacing), which we believe would typically be borne by the landlord in traditional office leases.

Our leases also typically give us the right to review and approve tenant alterations to the property. Generally, tenant-installed improvements to the facilities remain our property after termination of the lease at our election. However, we are permitted under the terms of most of our leases to require that the tenant remove the improvements and restore the premises to their original condition.

As of December 31, 2001, we managed all of our properties.

The following table sets forth information with respect to our properties as of December 31, 2001:

                                                                                                    Annualized
                                                                                PercentageAnnualized   Net
                                                                                   of       Base    Effective
                                                                                Aggregate Rent Per  Rent Per
                                              Rentable              Annualized  Portfolio  Leased    Leased
                                Year Built/    Square   Percentage     Base     Annualized Square    Square
Properties                      Renovated (1)   Feet    Leased (2) Rent (2) (3) Base Rent Foot (3)  Foot (4)               Major Tenants
- -------------------------------------------- ---------- ---------- ------------ --------- --------- --------- ---------------------------------------
San Diego

North Torrey Pines Road #1       1971/1994     107,753        100%  $2,718,696       2.5%   $25.23    $23.41  The Scripps Research Institute
   San Diego, CA                                                                                              Advanced Tissue Sciences, Inc.

Science Park Road                   2000        74,557        100%   2,309,771       2.1%    30.98     23.30  IDEC Pharmaceuticals Corporation
   San Diego, CA

North Torrey Pines Road #2       1986/1996      86,962        100%   3,201,087       2.9%    36.81     33.55  Pfizer, Inc.
   San Diego, CA                                                                                              Senomyx, Inc.

General Atomics Court #1         1986/1991      76,084        100%   2,683,633       2.5%    35.27     34.28  Merck & Co., Inc.
   San Diego, CA

General Atomics Court #2            1991        43,600        100%   1,758,141       1.6%    40.32     40.30  Pfizer, Inc.
   San Diego, CA

Roselle Street #1                1983/1998      18,173        100%     401,568       0.4%    22.10     16.78  Collateral Therapeutics, Inc. (5)
   San Diego, CA

Nexus Centre Drive                  1989        67,050        100%   2,107,557       1.9%    31.43     24.53  Matrix Pharmaceutical, Inc. (6)
   San Diego, CA

Nancy Ridge Drive #1                1997        29,333        100%     638,606       0.6%    21.77     15.44  Arena Pharmaceuticals, Inc.
   San Diego, CA

Roselle Street #2                   late        17,603        100%     476,944       0.4%    27.09     21.84  Structural GenomiX, Inc.
   San Diego, CA                1970's/1999

Tansy Street                     1978/1999      15,410        100%     409,171       0.4%    26.55     20.81  Structural GenomiX, Inc.
   San Diego, CA

John Hopkins Court #1               2000        34,723        100%     671,101       0.6%    19.33     16.81  Merck & Co., Inc.
   San Diego, CA

John Hopkins Court #2               1999        55,200        100%   1,096,769       1.0%    19.87     18.37  Merck & Co., Inc.
   San Diego, CA

Towne Centre Drive #1               1987        45,030        100%     864,871       0.8%    19.21     19.16  Orincon Industries, Inc.
   San Diego, CA                                                                                              Amylin Pharmaceuticals, Inc.

Towne Centre Drive #2            1987/2000      52,228        100%   1,354,580       1.2%    25.94     22.35  Amylin Pharmaceuticals, Inc.
   San Diego, CA                                                                                              Vical Incorporated

Towne Centre Drive #3            1987/2000      41,554        100%   1,093,390       1.0%    26.31     16.36  Conforma Therapeutics, Inc.
   San Diego, CA                                                                                              Nereus Pharmaceuticals, Inc.

Roselle Street #3                   1981        18,193        100%     463,922       0.4%    25.50     25.38  Selective Genetics, Inc.
   San Diego, CA

Roselle Street #4                1981/1998      30,147        100%     741,901       0.7%    24.61     24.53  Integra Life Science Holdings Corporation
   San Diego, CA                                                                                              Universal Preservation Technologies, Inc.

Roselle Street #5                1981/1995      22,577        100%     639,241       0.6%    28.31     27.62  Cell Geneysys, Inc.
   San Diego, CA

Roselle Street #6                1981/1999      17,433        100%     234,822       0.2%    13.47     13.47  Biosite Incorporated
   San Diego, CA

Roselle Street #7                1981/1995      24,208        100%     685,421       0.6%    28.31     27.63  Cell Geneysys, Inc.
   San Diego, CA

Nancy Ridge Drive #2            early 1980's    21,940         52%     330,177       0.3%    29.20     21.34  GeneOhm Sciences, Inc.
   San Diego, CA

Campus Point Drive               1986/1992/     71,510        100%   2,390,948       2.2%    33.44     33.44  LION Bioscience AG
   San Diego, CA                    1998

Pasadena

North Hill Avenue               1940's/2001     31,343         25%     202,035       0.2%    25.51     23.18  Biocatalytics, Inc.
   Pasadena, CA                                                                                               Starbucks Corporation

San Francisco Bay Area

Harbor Bay Parkway #1            1983/1999      61,015        100%   1,003,690       0.9%    16.45     12.43  Avigen, Inc.
   Alameda, CA                                                                                                Lucent Technologies Inc.

Harbor Bay Parkway #2            1984/2000      27,745        100%     654,910       0.6%    23.60     18.18  Berkeley HeartLab, Inc.
   Alameda, CA                                                                                                Applera Corporation

Harbor Bay Parkway #3            1986/1994      47,777        100%     757,820       0.7%    15.86     14.74  Applera Corporation
   Alameda, CA

Harbor Bay Parkway #4            1985/1994      68,711        100%   1,413,968       1.3%    20.58     19.65  U.S. Food & Drug Administration
   Alameda, CA

Mitten Road & Malcolm Road       1962/1997     153,837         84%   2,991,508       2.7%    23.21     17.41  Valentis, Inc.
   Burlingame, CA                                                                                             Berkeley HeartLab, Inc.
                                                                                                              U.S. Federal Aviation Administration

Hanover Street                   1968/1985/     32,074         79%   1,609,040       1.5%    63.80     56.48  Xenoport, Inc.
   Palo Alto, CA                    2000

Garcia Avenue & Bayshore         1980/2000      98,964        100%   4,001,119       3.7%    40.43     36.19  Equinix, Inc.
   Parkway                                                                                                    Google Inc.
   Mountain View, CA

Oyster Point Boulevard #1           2001        53,980        100%   2,812,914       2.6%    52.11     43.36  Sunesis Pharmaceuticals, Inc.
   S. San Francisco, CA

Oyster Point Boulevard #2           2001        53,980        100%   1,740,891       1.6%    32.25     31.20  ViroLogic, Inc.
   S. San Francisco, CA

Durant Avenue                       1930        25,000         -            -           -         -         - Vacant (7)
   Berkeley, CA

Seattle

Columbia Street                  1975/1997     209,361         88%   5,541,794       5.1%    30.08     25.93  Corixa Corporation
   Seattle, WA                                                                                                Primal, Inc.

Western Avenue                   1929/1990/     47,746        100%   1,576,856       1.4%    33.03     28.41  University of Washington
   Seattle, Washington              2000

First Avenue                     1980/1990/     70,647        100%   2,532,667       2.3%    35.85     29.45  Dendreon Corporation
   Seattle, Washington              2000

Suburban Washington, D.C.

Professional Drive #1            1989/1999      47,558        100%   1,084,349       1.0%    22.80     17.57  Antex Biologics Inc.
   Gaithersburg, MD                                                                                           Wisor Telecom, Inc.

Professional Drive #2               1987        62,739        100%   1,038,585       1.0%    16.55     16.54  The Gillette Company
   Gaithersburg, MD

West Watkins Mill Road #1        1989/1997     138,938        100%   1,984,161       1.8%    14.28     13.08  MedImmune, Inc.
   Gaithersburg, MD                                                                                           Genetic Therapy, Inc.(8)

Quince Orchard Road #1           1982/1997      49,225        100%   1,461,699       1.3%    29.69     18.33  Gene Logic Inc.
   Gaithersburg, MD

Clopper Road #1                     1989        44,464        100%     693,317       0.6%    15.59     12.59  Advancis Pharmaceuticals, Inc.
   Gaithersburg, MD                                                                                           Fiserv Securities, Inc.

Research Boulevard #1               1966        48,800        100%     837,340       0.8%    17.16     16.39  U.S. Bureau of Alcohol Tobacco and
   Rockville, MD                                                                                              Firearms

East Gude Drive #1               1981/1986      45,989        100%     662,570       0.6%    14.41     13.04  bioMerieux SA
   Rockville, MD                                                                                              MacroGenics, Inc.

Research Boulevard #2            1967/1996/    105,000        100%   1,815,917       1.7%    17.29     15.71  U.S. Army Corps of Engineers
   Rockville, MD                    2000

East Gude Drive #2               1981/1995      44,500        100%     735,374       0.7%    16.53     16.07  Shire Pharmaceuticals Group plc
   Rockville, MD

Piccard Drive                    1978/1994     131,511         34%   1,037,771       1.0%    23.12     16.79  Advanced Bioscience Laboratories, Inc.
   Rockville, MD                                                                                              Tibotec, Inc.

Newbrook Drive                      1992       248,186        100%   4,341,125       4.0%    17.49     17.49  American Medical Laboratories, Inc. (9)
   Chantilly, VA

Virginia Manor Road                 1990       191,884         90%   2,052,126       1.9%    11.88     11.15  Baxter International Inc.
   Beltsville, MD                                                                                             Bank of America

Old Columbia Road                1983/1997      75,500        100%   1,087,343       1.0%    14.40     11.37  Baxter International Inc.
   Columbia, MD

Firstfield Road #1               1974/2000      25,175        100%     626,102       0.6%    24.87     21.28  Psychiatric Genomics, Inc.
   Gaithersburg, MD                                                                                           Avalon Pharmaceuticals, Inc.

Shady Grove Road                    1987        41,062        100%     773,683       0.7%    18.84     11.57  Human Genome Sciences, Inc.
   Gaithersburg, MD

Aliceanna Street                   early       179,397         91%     918,192       0.8%     5.63      5.57  Maryland Economic Development
   Baltimore, MD                1950's/1995                                                                     Corporation
                                                                                                              The National Aquarium of Baltimore, Inc.

West Watkins Mill Road #2        1988/2000      57,410        100%     875,452       0.8%    15.25     12.79  Gene Logic Inc.
   Gaithersburg, MD

Clopper Road #2                     2000        92,990        100%   2,634,285       2.4%    28.33     17.21  Digene Corporation (10)
   Gaithersburg, MD

Firstfield Road #2               1980/2001      53,416         90%   1,001,455       0.9%    20.93     17.15  IOMAI Corporation
   Gaithersburg, MD                                                                                           Surgi-Vision, Inc.

Firstfield Road #3                  1980        53,595         50%     537,208       0.5%    20.05     15.19  Provident Bank of Maryland
   Gaithersburg, MD                                                                                           Gene Logic Inc.

Quince Orchard Road #2              1981        54,874        100%     812,584       0.7%    14.81     14.77  Montgomery County, Maryland
   Gaithersburg, MD

Clopper Road #3                  1989/1992      59,838        100%     813,334       0.7%    13.59     11.12  Pro-Virus, Inc.
   Gaithersburg, MD

Research Place                      1972        58,632         -            -           -         -         - Vacant (7)
   Rockville, MD


Eastern Massachusetts

Charlestown Navy Yard            1880/1991      24,940        100%     710,000       0.7%    28.47     28.47  Diacrin, Inc.
    Boston, MA

Pond Street                      1965/1990      24,867        100%     434,368       0.4%    17.47     17.36  Ares Advanced Technology, Inc.
   Randolph, MA

Westview Street                     1975        40,000         -            -           -         -         - Vacant (7)
   Lexington, MA

Plantation Street #1                1993        92,711        100%   2,224,331       2.0%    23.99     23.95  University of Massachusetts
   Worcester, MA                                                                                              Athena Diagnostics, Inc.


Memorial Drive                  1920's/1997/    96,500        100%   3,950,048       3.6%    40.93     40.89  Pfizer, Inc.
   Cambridge, MA                    1999

Innovation Drive                    1991       113,956        100%   2,394,026       2.2%    21.01     19.57  AstraZeneca plc
   Worcester, MA                                                                                              ViaCell, Inc.


Plantation Street #2                2000        92,423         87%   2,028,757       1.9%    25.23     12.54  Abbott Laboratories, Inc.
   Worcester, MA                                                                                              Hypnion, Inc.

Arsenal Street #1                1978/1984/     92,500        100%   4,346,481       4.0%    46.99     45.89  Enanta Pharmaceuticals, Inc.
   Watertown, MA                    2001                                                                      Acusphere, Inc.

Hartwell Avenue                 1972/1996-199   59,000         -            -           -         -         - Vacant (7)
   Lexington, MA

Arsenal Street #2                   1980        96,150         -            -           -         -         - Vacant (7)
   Watertown, MA


New Jersey/Suburban Philadelphia

College Road                     1968/1974/    106,036        100%   1,704,824       1.6%    16.08     14.55  Synaptic Pharmaceutical Corporation
   Paramus, NJ                      1984                                                                      Gryphon Development, Inc.

Williams Drive                   1982/1994      37,000        100%     536,500       0.5%    14.50     14.47   Alteon Inc.
   Ramsey, NJ

Phillips Parkway                late 1960's/    75,972        100%   1,680,900       1.5%    22.13     14.44  Memory Pharmaceuticals Corp.
   Montvale, NJ                     1999                                                                      Ferolie Corporation

Campus Drive                        1989        42,782        100%     586,948       0.5%    13.72     12.67  Genaera Corporation
   Plymouth Meeting, PA                                                                                       Pharmerica, Inc.

Electronic Drive                 1983/1998      40,000        100%     937,527       0.9%    23.44     15.86  Cell Pathways, Inc.
   Horsham, PA

Princeton Road                   1984/1999      42,600        100%     530,182       0.5%    12.45      8.44  Lexicon Genetics, Inc.
   Princeton, NJ

Southeast

Capitola Drive #1                   1986        65,114         93%     967,847       0.9%    16.10     11.36  American Social Health Association, Inc.
   Durham, NC                                                                                                 Batelle Survey Research, Inc.

Capitola Drive #2                   1985       119,916         79%   1,404,425       1.3%    14.86     12.26  Integrated Laboratory Systems, Inc.
   Durham, NC                                                                                                 Artecel Sciences, Inc.

Technology Parkway               1976/1985/     37,080         60%     288,896       0.3%    12.97     11.89  CytRx Corporation
   Norcross, GA                     1993                                                                      Atherogenics, Inc.

Triangle Drive                      1981        32,120        100%     490,239       0.5%    15.26     15.03  Mantech Environmental Technology, Inc.
   Research Triangle Park, NC                                                                                 City Search, Inc.

Alexander Road                      2000        86,239        100%   1,849,188       1.7%    21.44     19.78  Paradigm Genetics, Inc.
   Research Triangle Park, NC

Kit Creek Road                      1995        37,908         37%     272,461       0.3%    19.49     13.52  AM Pappas & Associates, L.L.C.
   Research Triangle Park, NC                                                                                 Biogen, Inc.
                                             ---------- ---------- ------------ --------- --------- ---------
Total/Weighted Average (11):                 5,319,945        89%  109,273,449       100%   $23.18    $20.16
                                             ========== ========== ============ ========= ========= =========

________________

Includes year in which construction was completed and, where applicable, year of most recent major renovation.

Based on all leases at the respective property in effect as of December 31, 2001.

Annualized base rent means the annualized fixed base rental amount in effect as of December 31, 2001 (using rental revenue computed on a straight-line basis in accordance with GAAP), paid by tenants under the terms of their leases. This amount, divided by the rentable square feet leased at the property as of December 31, 2001, is the annualized base rent per leased square foot.

Annualized net effective rent is the annualized base rent in effect as of December 31, 2001 (using rental revenue computed on a straight-line basis in accordance with GAAP), less (for gross leases) real estate taxes and insurance, common area and other operating expenses and (for all leases) amortization of tenant improvements and leasing commissions. This amount, divided by the rentable square feet leased at the property as of December 31, 2001, is the annualized net effective rent per leased square foot.

In March 2002, Schering AG announced an agreement to acquire Collateral Therapeutics, Inc. in a transaction expected to close in 2002.

In January 2002, Chiron Corporation announced an agreement to acquire Matrix Pharmaceutical, Inc. in a transaction expected to close in 2002.

All or a significant portion of this property is currently under redevelopment.

Genetic Therapy, Inc. is a wholly owned subsidiary of Novartis AG.

In February 2002, Quest Diagnostics, Inc. announced an agreement to acquire American Medical Laboratories, Inc. in a transaction expected to close in 2002.

In February 2002, Cytyc Corporation announced an agreement to acquire Digene Corporation in a transaction expected to close in 2002.

Weighted average based on a percentage of aggregate leased square feet.

The following table sets forth, as of December 31, 2001, the total rentable square footage and annualized base rent of our properties in each of our existing markets.

                                Total Rentable % of Total Rentable   Annualized   % of Annualized
Geographic Area                 Square Footage   Square Footage    Base Rent (1)     Base Rent
- ---------------                 -------------- ------------------- -------------- ----------------

San Diego                             971,268                18.3%   $27,272,316             25.0%

Pasadena                               31,343                 0.5%       202,035              0.2%

San Francisco Bay Area                623,083                11.7%    16,985,859             15.5%

Seattle                               327,754                 6.2%     9,651,318              8.8%

Suburban Washington, D.C            1,910,683                35.9%    27,823,972             25.5%

Eastern Massachusetts                 733,047                13.8%    16,088,012             14.7%

New Jersey/Suburban Philadelphi       344,390                 6.5%     5,976,880              5.5%

Southeast                             378,377                 7.1%     5,273,057              4.8%
                                -------------- ------------------- -------------- ----------------
       Total                        5,319,945               100.0%  $109,273,449            100.0%
                                ============== =================== ============== ================

________________

Annualized base rent means the annualized fixed base rental amount in effect as of December 31, 2001 (using rental revenue computed on a straight-line basis in accordance with GAAP) paid by tenants under the terms of their leases.

                                         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
- ---------------------------------------- -------- ------------ ------------ -------------- ------------ -------------- -------------

Pfizer, Inc.                          3     10.3      167,006          3.5%        $6,589          6.0%        $6,583           6.9%
                                             4.8
                                             0.8

Merck & Co., Inc.                     3      8.8      166,007          3.5%         4,452          4.1%         4,206           4.4%

American Medical Laboratories,        1     15.0      248,186          5.3%         4,341          4.0%         4,341           4.6%
   Inc. (3)

Corixa Corporation                    3      3.0       86,887          1.8%         3,139          2.9%         2,797           2.9%
                                             0.5

Sunesis Pharmaceuticals, Inc.         1     11.5       53,980          1.1%         2,813          2.6%         2,340           2.5%

Digene Corporation (4)                1      8.0       92,990          2.0%         2,634          2.4%         1,600           1.7%

Equinix, Inc.                         2      5.3       56,332          1.2%         2,565          2.3%         2,261           2.4%

Dendreon Corporation                  1      7.0       70,647          1.5%         2,533          2.3%         2,081           2.2%

Gene Logic, Inc.                      3      9.0      112,271          2.4%         2,435          2.2%         1,735           1.8%
                                             5.9

LION Bioscience AG                    1      6.3       71,510          1.5%         2,391          2.2%         2,391           2.5%

Acusphere, Inc.                       1     10.0       47,500          1.0%         2,340          2.1%         2,293           2.4%

Senomyx, Inc.                         1      5.0       60,056          1.3%         2,320          2.1%         2,037           2.1%

IDEC Pharmaceuticals                  1      8.5       74,557          1.6%         2,310          2.1%         1,737           1.8%
   Corporation

Matrix Pharmaceutical, Inc.(5)        1      9.2       67,050          1.4%         2,108          1.9%         1,644           1.7%

Baxter International, Inc.            2      9.7      145,881          3.1%         2,078          1.9%         1,810           1.9%
                                             6.2

Advanced Tissue Sciences, Inc.        2      4.0       84,524          1.8%         2,039          1.9%         1,854           2.0%

Enanta Phamaceuticals, Inc.           1      9.8       45,000          1.0%         2,006          1.8%         1,952           2.1%

Paradigm Genetics, Inc.               2      8.8       86,239          1.8%         1,849          1.7%         1,706           1.8%

U.S. Army Corps of Engineers          1      5.4      105,000          2.2%         1,816          1.7%         1,649           1.7%

ViroLogic, Inc.                       1      9.5       53,980          1.1%         1,741          1.6%         1,684           1.8%

                                 ------- -------- ------------ ------------ -------------- ------------ -------------- -------------
Total/Weighted Average (6):          32      8.4    1,895,603         40.1%       $54,499         49.8%       $48,701          51.2%
                                 ======= ======== ============ ============ ============== ============ ============== =============

                                                            Per Share
Period                                   High       Low    Disribution
- ------                                  ------    ------   ------------
2000
First Quarter.........................  $32.00    $29.00      $0.43
Second Quarter........................  $34.88    $30.00      $0.43
Third Quarter.........................  $37.13    $31.50      $0.43
Fourth Quarter........................  $38.56    $33.13      $0.43

2001
First Quarter.........................  $37.43    $34.19      $0.46
Second Quarter........................  $38.44    $34.64      $0.46
Third Quarter.........................  $41.00    $36.16      $0.46
Fourth Quarter........................  $41.53    $36.93      $0.46

                                                                                Year Ended December 31,
                                                        ---------------------------------------------------------------
                                                           2001         2000         1999         1998         1997
                                                        -----------  -----------  -----------  -----------  -----------
                                                                    (Dollars in thousands, except per share amounts)
Operating Data:
Total revenue ........................................ $  $127,790  $  $106,910  $   $86,262  $   $61,016  $   $34,846
Total expenses .......................................      97,513       80,901       64,209       41,613       37,643
                                                        -----------  -----------  -----------  -----------  -----------
Net income (loss)..................................... $    30,277  $    26,009  $    22,053  $    19,403  $    (2,797)
                                                        ===========  ===========  ===========  ===========  ===========
Net income (loss) per share of common stock (pro
   forma for 1997)
     - Basic ......................................... $      1.67  $      1.55  $      1.48  $      1.60  $     (0.35)
                                                        ===========  ===========  ===========  ===========  ===========
     - Diluted ....................................... $      1.64  $      1.52  $      1.46  $      1.58  $     (0.35)
                                                        ===========  ===========  ===========  ===========  ===========
Weighted average shares of common stock
   outstanding (pro forma for 1997)   (1)
     - Basic .........................................  15,953,459   14,460,711   13,525,840   12,098,959    8,075,864
                                                        ===========  ===========  ===========  ===========  ===========
     - Diluted .......................................  16,208,178   14,699,478   13,670,568   12,306,470    8,075,864
                                                        ===========  ===========  ===========  ===========  ===========
Cash dividends declared per share of common
   stock (pro forma for 1997)......................... $      1.84  $      1.72  $      1.69  $      1.60  $      1.60
                                                        ===========  ===========  ===========  ===========  ===========
Balance Sheet Data (at year end):
Rental properties - net of accumulated depreciation... $   796,626      679,653      554,706      471,907      227,076
Total assets ......................................... $   962,146      780,984      643,118      530,296      248,454
Secured notes payable, unsecured line of credit
   and term loan ..................................... $   573,161      431,256      350,512      309,829       70,817
Total liabilities .................................... $   629,508      461,832      380,535      330,527       81,537
Stockholders' equity ................................. $   332,638      319,152      262,583      199,769      166,917

Other Data:
Net income (loss) .................................... $    30,277       26,009       22,053       19,403       (2,797)
Less:
Dividends on preferred stock .........................      (3,666)      (3,666)      (2,036)           -            -
Add:
Depreciation and amortization ........................      30,578       24,251       18,532       10,296        4,866
                                                        ----------- ------------ ------------ ------------  -----------
Funds from operations (2) ............................ $    57,189       46,594       38,549       29,699        2,069
                                                        =========== ============ ============ ============  ===========
Cash flows from operating activities ................. $    60,340       32,931       46,011       26,111        3,883
Cash flows from investing activities ................. $  (192,179)    (132,480)    (113,549)    (246,753)     (87,620)
Cash flows from financing activities ................. $   131,439       98,879       69,430      220,136       84,101
Number of properties owned at year end ...............          82           75           58           51           22
Rentable square feet of properties owned
   at year end .......................................   5,319,945    4,856,650    4,046,126    3,588,154    1,747,837
Occupancy of properties owned at year end ............        89% (3)     91% (3)      92% (3)      93% (3)         97%

                                                 Year Ended
                                                December 31,
                                          ----------------------
                                             2001        2000       Change
                                          ----------  ----------  ----------
GAAP Basis:
Revenue                                  $   79,400  $   75,600         5.0%
Rental operating expenses                    17,693      16,710         5.9%
                                          ----------  ----------  ----------
Net operating income                     $   61,707  $   58,890         4.8%
                                          ==========  ==========  ==========
Cash Basis:
Revenue                                  $   78,155  $   73,945         5.7%
Rental operating expenses                    17,693      16,710         5.9%
                                          ----------  ----------  ----------
Net operating income                     $   60,462  $   57,235         5.6%
                                          ==========  ==========  ==========

                                                Year Ended
                                                December 31,
                                          ----------------------
                                             2000        1999       Change
                                          ----------  ----------  ----------
GAAP Basis:
Revenue                                  $   74,620  $   70,210         6.3%
Rental operating expenses                    17,070      16,116         5.9%
                                          ----------  ----------  ----------
Net operating income                     $   57,550  $   54,094         6.4%
                                          ==========  ==========  ==========
Cash Basis:
Revenue                                  $   73,097  $   68,065         7.4%
Rental operating expenses                    17,070      16,116         5.9%
                                          ----------  ----------  ----------
Net operating income                     $   56,027  $   51,949         7.9%
                                          ==========  ==========  ==========

                                                           December 31,
                                                      ----------------------
                                                         2001        2000
                                                      ----------  ----------
Funds held in trust as additional security
    required under the terms of certain
    secured notes payable                            $    5,583  $    5,103

Security deposit funds based on the terms
    of certain lease agreements                           1,647       1,892

Funds held in escrow to complete the development
    of an office/laboratory facility                      4,298           -
                                                      ----------  ----------
                                                     $   11,528  $    6,995
                                                      ==========  ==========

                                      Balance at     Stated
                                     December 31,   Interest
Collateral                               2001         Rate        Maturity Date
- ------------------------------------ ------------ -------------  ---------------

Worcester, MA (1)                        $10,799          8.75%  January 2006

Durham, NC (two properties)               12,182          8.68%  December 2006

Gaithersburg, MD (three properties)        9,907          8.25%  August 2007

Cambridge, MA (2)                         19,158         9.125%  October 2007

Chantilly, VA and Seattle, WA             35,264          7.22%  May 2008

Worcester, MA and San Diego, CA           18,676          8.71%  January 2010

Gaithersburg, MD (two properties)         24,508          8.33%  November 2010

San Diego, CA (six properties)            24,030          7.75%  July 2011

San Diego, CA                             11,912          7.50%  August 2011

Gaithersburg, MD (three properties)       28,250          7.40%  January 2012

Alameda, CA                                4,811         7.165%  January 2014

San Diego, CA (two properties)             7,882          9.00%  December 2014

Seattle, WA                               18,842          7.75%  June 2016

San Francisco, CA (two properties) (3     18,940   LIBOR + 1.70% June 2003
                                     ------------
                                        $245,161
                                     ============

                     Year               Amount
            -----------------------   -----------

            2002                     $     5,638
            2003                          25,062
            2004                           5,901
            2005                           5,713
            2006                          24,764
            Thereafter                   175,970
                                      -----------
            Subtotal                     243,048
            Unamortized premium            2,113
                                      -----------
                                     $   245,161
                                      ===========

                                      Notional      Interest     Termination
Transaction Date    Effective Date     Amount       Pay Rate         Date         Fair Value
- ----------------   ---------------- -------------   --------   ----------------   ----------
April 2000           May 20, 2000    $  50,000        6.995%   January 2, 2003    $  (2,385)

July 2000            May 31, 2001       50,000        7.070%     May 31, 2003        (3,033)

January 2001       January 31, 2001     50,000        6.350%   December 31, 2002     (2,035)
                                                                                  -----------
                                                                                  $  (7,453)
                                                                                  ===========

                                      Total/
                                     Weighted
                                      Average       2001         2000        1999        1998        1997
                                    -----------  -----------  ----------  ----------  ----------  ----------
Capital expenditures:
   Weighted average square feet
     in portfolio                   17,637,461    5,131,176   4,448,916   3,823,290   2,891,863   1,342,216
   Property related capital
     expenditures                  $ 3,374,000  $ 1,230,000  $  778,000  $  478,000  $  341,000  $  547,000
   Per weighted average square
     foot in portfolio             $      0.19  $      0.24  $     0.17  $     0.13  $     0.12  $     0.41

Tenant improvements and leasing
costs:
  Retenanted space (1)
    Retenanted square feet             612,978      151,161     112,286     220,397      88,181      40,953
    Tenant improvements and
      leasing costs                $ 3,358,000  $   466,000  $  796,000  $1,454,000  $  478,000  $  164,000
    Per square foot leased         $      5.48  $      3.08  $     7.09  $     6.60  $     5.42  $     4.00

  Renewal space
    Renewal square feet                837,671      432,717     233,017      93,667      77,038       1,232
    Tenant improvements and
      leasing costs                $   793,000  $   451,000  $  124,000  $  149,000  $   69,000  $        -
    Per square foot leased         $      0.95  $      1.04  $     0.53  $     1.59  $     0.90  $        -

                                                Year Ended December 31,
                                          ----------------------------------
                                             2001        2000        1999
                                          ----------  ----------  ----------

Net income                                  $30,277     $26,009     $22,053
Less:
   Dividends on preferred stock              (3,666)     (3,666)     (2,036)
Add:
   Depreciation and amortization             30,578      24,251      18,532
                                          ----------  ----------  ----------
Funds from operations                       $57,189     $46,594     $38,549
                                          ==========  ==========  ==========

                                                  Rentable    Annualized
                                      Number of    Square       Base     Occupancy
                                      Properties    Feet        Rent    Percentage
                                      ---------- -----------  --------- -----------

Suburban Washington, D.C.                    19   1,613,529  $  25,248        97.8%(1)
California - San Diego                       21     949,328     26,942       100.0%
California - San Francisco Bay                7     412,172     12,385       100.0%
Southeast                                     3     183,473      3,307        97.5%(1)
New Jersey/Suburban Philadelphia              6     344,390      5,977       100.0%
Eastern Massachusetts                         6     445,474     14,059       100.0%
Washington - Seattle                          2     118,393      4,110       100.0%
                                      ---------- -----------  --------- -----------
Subtotal                                     64   4,066,759     92,028        99.0%
Redevelopment Properties                     18   1,253,186     17,246        54.9%
                                      ---------- -----------  --------- -----------
Total                                        82   5,319,945  $ 109,274        88.6%
                                      ========== ===========  ========= ===========

                                       Square     Square Footage   Annualized Base
           Year of      Number of    Footage of   as a Percentage  Rent of Expiring
            Lease       Expiring      Expiring      of Leased        Leases (Per
          Expiration     Leases        Leases       Portfolio       Square Foot)
          ----------   -----------   ----------   --------------   ---------------

          2002                 52      476,422             10.1%           $21.45
          2003                 27      483,343             10.3%           $19.03
          2004                 25      423,550              9.0%           $21.01
          2005                 16      319,426              6.8%           $25.90
          2006                 29      665,796             14.1%           $22.51
          Thereafter           45    2,346,596             49.7%           $24.59

                                                                               Rental     TI's/Lease    Average
                                    Number     Square    Expiring      New      Rate     Commissions     Lease
                                   of Leases   Footage     Rate       Rate    Increase     Per Foot      Term
                                  ----------- ---------  ---------  --------- ---------  ------------ -----------
Lease Activity - Expired Leases

Lease Expirations
    Cash Rent                             61   964,329     $19.21       -         -           -            -
    GAAP Rent                             61   964,329     $19.07       -         -           -            -
Renewed / Released Space
    Cash Rent                             40   654,495     $21.05     $22.85       8.6%     $4.52        4.1 Years
    GAAP Rent                             40   654,495     $20.86     $24.05      15.3%     $4.52        4.1 Years
Month-to-Month Leases
    Cash Rent                             14    72,599     $12.16     $16.79      38.1%       -            -
    GAAP Rent                             14    72,599     $11.88     $16.79      41.3%       -            -
Total Leasing
    Cash Rent                             54   727,094     $20.16     $22.24      10.3%       -            -
    GAAP Rent                             54   727,094     $19.96     $23.32      16.8%       -            -

Vacant Space Leased
    Cash Rent                             27   287,235       -        $27.45      -         $21.02       6.4 Years
    GAAP Rent                             27   287,235       -        $30.96      -         $21.02       6.4 Years

All Lease Activity
    Cash Rent                             81  1,014,329      -        $23.72      -           -            -
    GAAP Rent                             81  1,014,329      -        $25.49      -           -            -

                                                                  December 31,
                                                             --------------------
                                                               2001       2000
                                                             ---------  ---------
                          Assets
Rental properties, net                                      $ 796,626  $ 679,653
Property under development                                     65,250     26,092
Cash and cash equivalents                                       2,376      2,776
Tenant security deposits and other restricted cash             11,528      6,995
Secured note receivable                                         6,000      6,000
Tenant receivables                                              3,123      2,835
Deferred rent                                                  20,593     14,945
Other assets                                                   56,650     41,688
                                                             ---------  ---------
Total assets                                                $ 962,146  $ 780,984
                                                             =========  =========

           Liabilities and Stockholders' Equity
Secured notes payable                                       $ 245,161  $ 200,256
Unsecured line of credit and unsecured term loan              328,000    231,000
Accounts payable, accrued expenses and tenant security
  deposits                                                     48,057     23,123
Dividends payable                                               8,290      7,453
                                                             ---------  ---------
                                                              629,508    461,832

Commitments and contingencies

Stockholders' equity:
   9.50% Series A cumulative redeemable preferred
     stock, $0.01 par value per share, 1,610,000
     shares authorized; 1,543,500 shares issued and
     outstanding at December 31, 2001 and 2000; $25.00
     liquidation value                                         38,588     38,588
   Common stock, $0.01 par value per share, 100,000,000
     shares authorized; 16,354,541 and 15,548,356 shares
     issued and outstanding at December 31, 2001
     and 2000, respectively                                       163        155
   Additional paid-in capital                                 301,818    278,868
   Deferred compensation                                       (1,782)      (296)
   Retained earnings                                                -          -
   Accumulated other comprehensive income                      (6,149)     1,837
                                                             ---------  ---------
Total stockholders' equity                                    332,638    319,152
                                                             ---------  ---------
Total liabilities and stockholders' equity                  $ 962,146  $ 780,984
                                                             =========  =========

                                                  Year Ended December 31,
                                           -------------------------------------
                                              2001         2000         1999
                                           -----------  -----------  -----------
Revenues
   Rental                                 $    99,171  $    82,499  $    68,425
   Tenant recoveries                           25,351       20,905       16,305
   Interest and other income                    3,268        3,506        1,532
                                           -----------  -----------  -----------
                                              127,790      106,910       86,262
Expenses
   Rental operations                           26,115       21,873       19,003
   General and administrative                  11,694        8,986        6,977
   Interest                                    29,126       25,791       19,697
   Depreciation and amortization               30,578       24,251       18,532
                                           -----------  -----------  -----------
                                               97,513       80,901       64,209
                                           -----------  -----------  -----------
Net income                                $    30,277  $    26,009  $    22,053
                                           ===========  ===========  ===========

Dividends on preferred stock              $     3,666  $     3,666  $     2,036
                                           ===========  ===========  ===========
Net income allocated to common
 stockholders                             $    26,611  $    22,343  $    20,017
                                           ===========  ===========  ===========
Net income per share of common stock:
     - Basic                              $      1.67  $      1.55  $      1.48
                                           ===========  ===========  ===========
     - Diluted                            $      1.64  $      1.52  $      1.46
                                           ===========  ===========  ===========
Weighted average shares of common
   stock outstanding:
     - Basic                               15,953,459   14,460,711   13,525,840
                                           ===========  ===========  ===========
     - Diluted                             16,208,178   14,699,478   13,670,568
                                           ===========  ===========  ===========

                                                                                                                               Accumulated
                                                          Series A   Number of            Additional                              Other
                                                         Preferred    Common     Common    Paid-In    Deferred     Retained    Comprehensive
                                                           Stock      Shares      Stock    Capital   Compensation  Earnings       Income       Total
                                                         ---------- -----------  -------  ---------  -----------  -----------  ------------  ----------
Balance at December 31, 1998                            $        -  12,586,263  $   126  $ 199,643  $         -  $         -  $          -  $  199,769
   Net income                                                    -           -        -          -            -       22,053             -      22,053
   Unrealized gain on marketable securities                      -           -        -          -            -            -           172         172
                                                                                                                                             ----------
   Comprehensive income                                          -           -        -          -            -            -             -      22,225
   Issuance of common stock, net of offering costs               -   1,150,000       11     29,818            -            -             -      29,829
   Repurchase of common stock                                    -    (145,343)      (1)    (3,458)           -            -             -      (3,459)
   Issuance of preferred stock, net of offering costs       38,588           -        -     (1,712)           -            -             -      36,876
   Stock compensation expense                                    -     105,800        1      3,151       (3,152)           -             -           -
   Amortization of stock compensation expense                    -           -        -          -        1,658            -             -       1,658
   Exercise of stock options                                     -      48,902        -        874            -            -             -         874
   Dividends declared on preferred stock                         -           -        -          -            -       (2,036)            -      (2,036)
   Dividends declared on common stock                            -           -        -     (3,136)           -      (20,017)            -     (23,153)
                                                         ---------- -----------  -------  ---------  -----------  -----------  ------------  ----------
Balance at December 31, 1999                                38,588  13,745,622      137    225,180       (1,494)           -           172     262,583
   Net income                                                    -           -        -          -            -       26,009             -      26,009
   Unrealized gain on marketable securities                      -           -        -          -            -            -         1,665       1,665
                                                                                                                                             ----------
   Comprehensive income                                          -           -        -          -            -            -             -      27,674
   Issuances of common stock, net of offering costs              -   1,625,000       16     52,101            -            -             -      52,117
   Stock compensation expense                                    -      18,400        -        633         (633)           -             -           -
   Amortization of stock compensation expense                    -           -        -          -        1,831            -             -       1,831
   Exercise of stock options                                     -     159,334        2      4,113            -            -             -       4,115
   Dividends declared on preferred stock                         -           -        -          -            -       (3,666)            -      (3,666)
   Dividends declared on common stock                            -           -        -     (3,159)           -      (22,343)            -     (25,502)
                                                         ---------- -----------  -------  ---------  -----------  -----------  ------------  ----------
Balance at December 31, 2000                                38,588  15,548,356      155    278,868         (296)           -         1,837     319,152
   FAS 133 transition adjustment                                 -           -        -          -            -            -        (3,461)     (3,461)
   Net income                                                    -           -        -          -            -       30,277             -      30,277
   Unrealized loss on marketable securities                      -           -        -          -            -            -        (1,008)     (1,008)
   Unrealized loss on swap agreements                            -           -        -          -            -            -        (3,517)     (3,517)
                                                                                                                                             ----------
   Comprehensive income                                          -           -        -          -            -            -             -      25,752
   Issuance of common stock, net of offering costs               -     500,000        5     16,746            -            -             -      16,751
   Stock compensation expense                                    -     122,555        1      4,326       (4,327)           -             -           -
   Amortization of stock compensation expense                    -           -        -          -        2,841            -             -       2,841
   Exercise of stock options                                     -     183,630        2      5,198            -            -             -       5,200
   Dividends declared on preferred stock                         -           -        -          -            -       (3,666)            -      (3,666)
   Dividends declared on common stock                            -           -        -     (3,320)           -      (26,611)            -     (29,931)
                                                         ---------- -----------  -------  ---------  -----------  -----------  ------------  ----------
Balance at December 31, 2001                            $   38,588  16,354,541  $   163  $ 301,818  $    (1,782) $         -  $     (6,149) $  332,638
                                                         ========== ===========  =======  =========  ===========  ===========  ============  ==========

                                                                           Year Ended December 31,
                                                                      -------------------------------
                                                                        2001       2000       1999
                                                                      ---------  ---------  ---------
Operating Activities
Net income                                                           $  30,277  $  26,009  $  22,053
Adjustments to reconcile net income to net cash
     provided by operating activities:
Depreciation and amortization                                           30,578     24,251     18,532
Amortization of loan fees and costs                                      1,275      1,021        748
Amortization of premiums on secured notes                                 (343)      (331)      (310)
Stock compensation expense                                               2,841      1,831      1,658
Changes in operating assets and liabilities:
     Tenant security deposits and other restricted cash                 (4,533)    (2,314)     2,810
     Tenant receivables                                                   (288)       597       (548)
     Deferred rent                                                      (5,648)    (5,931)    (3,419)
     Other assets                                                      (11,774)   (11,976)    (3,199)
     Accounts payable, accrued expenses and tenant
        security deposits                                               17,955       (226)     7,686
                                                                      ---------  ---------  ---------
Net cash provided by operating activities                               60,340     32,931     46,011

Investing Activities
Purchase of rental properties                                          (55,746)   (48,584)   (63,896)
Additions to rental properties                                         (69,530)   (40,539)   (16,807)
Additions to property under development                                (57,390)   (29,813)   (29,130)
Additions to investments, net                                           (9,513)   (13,544)    (3,716)
Issuance of note receivable                                                  -          -          -
                                                                      ---------  ---------  ---------
Net cash used in investing activities                                 (192,179)  (132,480)  (113,549)

Financing Activities
Proceeds from secured notes payable                                     57,293     38,061     34,163
Net proceeds from issuances of common stock                             16,751     52,117     29,829
Net proceeds from issuance of preferred stock                                -          -     36,876
Exercise of stock options                                                5,200      4,115        874
Net borrowings from (principal reductions to) unsecured
     line of credit and unsecured term loan                             97,000     39,000     (2,000)
Principal reductions on secured notes payable                          (12,042)    (6,026)    (3,303)
Dividends paid on common stock                                         (29,097)   (24,722)   (22,278)
Dividends paid on preferred stock                                       (3,666)    (3,666)    (1,272)
Repurchase of common stock                                                   -          -     (3,459)
                                                                      ---------  ---------  ---------
Net cash provided by financing activities                              131,439     98,879     69,430

Net (decrease) increase in cash and cash equivalents                      (400)      (670)     1,892
Cash and cash equivalents at beginning of year                           2,776      3,446      1,554
                                                                      ---------  ---------  ---------
Cash and cash equivalents at end of year                             $   2,376  $   2,776  $   3,446
                                                                      =========  =========  =========
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for interest, net of interest capitalized  $  29,447  $  25,315  $  23,512
                                                                      =========  =========  =========

                                        December 31,
                                   ---------------------
                                      2001       2000
                                   ---------- ----------
Unrealized gain on marketable
   securities                      $     829  $   1,837
Unrealized loss on interest rate
   swap agreements                    (6,978)         -
                                   ---------- ----------
                                   $  (6,149) $   1,837
                                   ========== ==========

                                         December 31,
                                    --------------------
                                       2001       2000
                                    ---------  ---------
Cost of available-for-sale          $  3,192   $  2,311
   securities

Gross unrealized gains                 1,527      2,249

Gross unrealized losses                 (698)      (412)
                                    ---------  ---------
Fair value of
   available-for-sale securities    $  4,021   $  4,148
                                    =========  =========

                             Year Ended December 31,
                             --------------------
                                2001       2000
                             ---------  ---------

Gross realized gains         $  2,408   $  1,575

Gross realized losses            (860)      (129)
                             ---------  ---------
Investment income            $  1,548   $  1,446
                             =========  =========

                                                           December 31,
                                                      ----------------------
                                                         2001        2000
                                                      ----------  ----------
Funds held in trust as additional security
    required under the terms of certain
    secured notes payable                            $    5,583  $    5,103

Security deposit funds based on the terms
    of certain lease agreements                           1,647       1,892

Funds held in escrow to complete the development
    of an office/laboratory facility                      4,298           -
                                                      ----------  ----------
                                                     $   11,528  $    6,995
                                                      ==========  ==========

                                                 Year Ended December 31,
                                          ------------------------------------
                                             2001         2000        1999
                                          -----------  ----------- -----------
                                          (Dollars in thousands, except per share amounts)

Net income available to common
   stockholders                          $    26,611  $    22,343 $    20,017
                                          ===========  =========== ===========
Weighted average shares of common stock
   outstanding - basic                    15,953,459   14,460,711  13,525,840
Add: dilutive effect of stock options        254,719      238,767     144,728
                                          -----------  ----------- -----------
Weighted average shares of common stock
   outstanding - diluted                  16,208,178   14,699,478  13,670,568
                                          ===========  =========== ===========
Net income per common share -
   basic                                 $      1.67  $      1.55 $      1.48
                                          ===========  =========== ===========
Net income per common share -
   diluted                               $      1.64  $      1.52 $      1.46
                                          ===========  =========== ===========

Common dividends declared per share      $      1.84  $      1.72 $      1.69
                                          ===========  =========== ===========

                                                December 31,
                                          ------------------------
                                             2001         2000
                                          -----------  -----------

Land                                     $   121,005  $    99,373
Building and improvements                    667,435      575,212
Tenant and other improvements                 92,276       62,622
                                          -----------  -----------
                                             880,716      737,207
Less accumulated depreciation                (84,090)     (57,554)
                                          -----------  -----------
                                         $   796,626  $   679,653
                                          ===========  ===========

2002                                     $    98,525
2003                                          89,941
2004                                          82,988
2005                                          75,412
2006                                          65,849
Thereafter                                   245,756
                                          -----------
                                         $   658,471
                                          ===========

                                       Notional     Interest     Termination
Transaction Date    Effective Date      Amount      Pay Rate         Date         Fair Value
- ----------------   ---------------- -------------   --------   ----------------   ----------
April 2000           May 20, 2000    $  50,000        6.995%   January 2, 2003    $  (2,385)

July 2000            May 31, 2001       50,000        7.070%     May 31, 2003        (3,033)

January 2001       January 31, 2001     50,000        6.350%   December 31, 2002     (2,035)
                                                                                 -----------
                                                                                  $  (7,453)
                                                                                 ===========

                                                                                    December 31,
                                                                                -------------------
                                                                                  2001      2000
                                                                                --------- ---------
8.75% note, due January 2006, with an effective interest rate of 7.25%
   (includes unamortized premium of $494 and $611 at December 31, 2001
   and 2000, respectively), secured by one property in Worcester, MA           $  10,799 $  11,276
8.68% note, due December 2006, secured by two properties in Durham, NC            12,182    12,314
8.25% note, due August 2007, secured by three properties in Gaithersburg, MD       9,907     9,998
9.125% note, due October 2007, with an effective interest rate of 7.25%
   (includes unamortized premium of $1,619 and $1,845 at December 31, 2001
   and 2000, respectively), secured by one property in Cambridge, MA              19,158    19,513
7.22% note, due May 2008, secured by two properties, one in Chantilly, VA
   and the other in Seattle, WA                                                   35,264    35,646
8.71% note, due January 2010, secured by two properties, one in Worcester,
   MA and the other in San Diego, CA                                              18,676    18,798
8.33% note, due November 2010, secured by two properties in Gaithersburg, MD      24,508    24,675
7.75% note, due July 2011, secured by six properties in San Diego, CA             24,030         -
7.50% note, due August 2011, secured by one propety in San Diego, CA              11,912         -
7.40% note, due January 2012, secured by three properties in Gaithersburg, MD     28,250         -
7.165% note, due January 2014, secured by one property in Alameda, CA              4,811     6,018
9.00% note, due December 2014, secured by two properties in San Diego, CA          7,882    16,499
7.75% note, due June 2016, secured by one property in Seattle, WA                 18,842    19,520
Construction loan at LIBOR plus 1.75%, due January 2002, providing for
   borrowings of up to $19,000,000, secured by one property in Gaithersburg,           -    18,981
Construction loan at LIBOR plus 1.70%, due June 2003, providing for borrowings
   of up to $25,175,000, secured by two properties in San Francisco, CA           18,940     7,018
                                                                                --------- ---------
                                                                               $ 245,161 $ 200,256
                                                                                ========= =========

2002                                     $     5,638
2003                                          25,062
2004                                           5,901
2005                                           5,713
2006                                          24,764
Thereafter                                   175,970
                                          -----------
Subtotal                                     243,048
Unamortized premium                            2,113
                                          -----------
                                         $   245,161
                                          ===========

                                              2001         2000
                                          -----------  -----------

Aggregate purchase price                 $    20,350  $    18,000
Secured notes payable assumed                 12,000       10,040
                                          -----------  -----------
Cash paid for the properties             $     8,350  $     7,960
                                          ===========  ===========

                                                  Year Ended December 31,
                                          ------------------------------------
                                             2001         2000        1999
                                          -----------  ----------- -----------

Risk-free interest rate                         4.68%        5.15%       6.48%
Dividend yield                                  4.49%        4.78%       5.66%
Volatility factor of the expected
  market price                                  22.4%        23.2%       24.6%
Weighted average expected life of
  the options                               5.2 years    4.7 years   5.8 years

                                                  Year Ended December 31,
                                          ----------- ------------------------
                                             2001         2000        1999
                                          -----------  ----------- -----------

Pro forma net income available to common
     stockholders                        $    25,690  $    21,532 $    19,083
Pro forma net income per common share:
     - Basic                             $      1.61  $      1.49 $      1.41
     - Diluted                           $      1.59  $      1.46 $      1.40

                                             2001                 2000                 1999
                                    -------------------- -------------------- --------------------

                                               Weighted             Weighted             Weighted
                                                Average              Average              Average
                                      Stock    Exercise    Stock    Exercise    Stock    Exercise
                                     Options     Price    Options     Price    Options     Price
                                    ---------  --------- ---------  --------- ---------  ---------
Outstanding-beginning of year        901,000  $   27.73   785,000  $   25.37   821,500  $   24.49
Granted                              193,500      38.27   316,000      33.78    70,500      29.56
Exercised                           (183,630)     27.58  (145,334)     26.38   (75,000)     20.11
Forfeited                            (61,000)     34.48   (54,666)     32.45   (32,000)     23.98
                                    ---------  --------- ---------  --------- ---------  ---------
Outstanding-end of year              849,870  $   29.68   901,000  $   27.73   785,000  $   25.37
                                    =========  ========= =========  ========= =========  =========

Exercisable at end of year           497,040  $   25.29   519,001  $   23.94   426,003  $   24.36
                                    =========  ========= =========  ========= =========  =========
Weighted average fair value of
options granted                               $    6.19            $    5.51            $    5.28
                                               =========            =========            =========

                                                   Quarter
                                  ------------------------------------------
                                    First     Second      Third     Fourth
                                  ---------  ---------  ---------  ---------
                                    (In thousands, except per share amounts)
2001
- ----
Revenues                         $  30,995  $  30,399  $  32,730  $  33,666
Net income available to common
   stockholders                  $   6,390  $   6,408  $   6,535  $   7,280
Net income per share:
     - Basic                     $    0.41  $    0.40  $    0.41  $    0.45
     - Diluted                   $    0.41  $    0.39  $    0.40  $    0.44

2000
- ----
Revenues                         $  23,962  $  24,910  $  28,475  $  29,563
Net income available to common
   stockholders                  $   4,821  $   5,425  $   5,615  $   6,484
Net income per share:
     - Basic                     $    0.35  $    0.38  $    0.39  $    0.42
     - Diluted                   $    0.35  $    0.38  $    0.38  $    0.41

                                                 Initial Costs          Costs           Total Costs
                                            -----------------------  Capitalized   ----------------------
                                  Square              Buildings and  Subsequent to           Buildings and              Accumulated                        Year Built/
         Property Name           Footage      Land    Improvements   Acquisition     Land    Improvements    Total    Depreciation (1)  Encumbrances        Renovated
         -------------          ----------  --------  -------------  ------------  --------  ------------  ---------  ----------------  -----------    -------------------
North Torrey Pines Road #1        107,753  $  3,903  $       5,960  $      1,104  $  3,903  $      7,064  $  10,967  $          2,040  $         _     1971/1994
Science Park Road                  74,557         _              _        15,553         _        15,553     15,553             1,023            _     2000
North Torrey Pines Road #2         86,962     2,663         10,649         2,644     2,663        13,293     15,956             3,639            _     1986/1996
General Atomics Court #1           76,084     2,651         18,046         1,430     2,651        19,476     22,127             4,461        5,182     1986/1991
General Atomics Court #2           43,600     1,227          9,554             1     1,227         9,555     10,782             2,243        2,700     1991
Roselle Street #1                  18,173       463          1,840           833       463         2,673      3,136               702            _ (2) 1983/1998
Nexus Centre Drive                 67,050     2,548         13,638             _     2,548        13,638     16,186             3,080            _     1989
Nancy Ridge Drive #1               29,333       733          2,273         1,851       733         4,124      4,857               746            _ (3) 1997
Roselle Street #2                  17,603       444          1,699         1,601       444         3,300      3,744               408            _     late 1970's/1999
Tansy Street                       15,410       651          1,375         1,789       651         3,164      3,815               349            _     1978/1999
John Hopkins Court #1              34,723     1,122              _         3,861     1,122         3,861      4,983               155            _     2000
John Hopkins Court #2              55,200     1,683              _         5,631     1,683         5,631      7,314               403            _     1999
Towne Centre Drive #1              45,030       275          8,621            46       275         8,667      8,942               540            _     1987
Towne Centre Drive #2              52,228       320         10,070           744       320        10,814     11,134               919            _     1987/2000
Towne Centre Drive #3              41,554       258          8,170         5,198       258        13,368     13,626               771            _     1987/2000
Roselle Street #3                  18,193       455          2,581             4       455         2,585      3,040                98       24,030 (2) 1981
Roselle Street #4                  30,147       754          4,288             4       754         4,292      5,046               167            _ (2) 1981/1998
Roselle Street #5                  22,577       564          3,224             4       564         3,228      3,792               128            _ (2) 1981/1995
Roselle Street #6                  17,433       436          2,480             5       436         2,485      2,921                97            _ (2) 1981/1999
Roselle Street #7                  24,208       605          3,459             4       605         3,463      4,068               138            _ (2) 1981/1995
Nancy Ridge Drive #2               21,940       515          1,566         2,217       515         3,783      4,298               101            _     early 1980's
Campus Point Drive                 71,510     4,246         16,165            87     4,246        16,252     20,498               190       11,912     1986/1992/1998
North Hill Avenue                  31,343     2,172            812         7,139     2,172         7,951     10,123               103                  1940's/2001
Harbor Bay Parkway #1              61,015     1,506          5,357         2,280     1,506         7,637      9,143             1,433            _     1983/1999
Harbor Bay Parkway #2              27,745       775          1,917         1,403       775         3,320      4,095               445            _     1984/2000
Harbor Bay Parkway #3              47,777     1,200          3,880           252     1,200         4,132      5,332               548            _     1986/1994
Harbor Bay Parkway #4              68,711     1,800          9,731           216     1,800         9,947     11,747             1,309        4,811     1985/1994
Mitten Road & Malcolm Road        153,837     4,751         12,612         4,094     4,751        16,706     21,457             1,766            _     1962/1997
Hanover Street                     32,074         _          6,628         3,011         _         9,639      9,639             2,539            _     1968/1985/2000
Garcia Avenue & Bayshore
   Parkway                         98,964         _         21,323         1,651         _        22,974     22,974             2,522            _     1980/2000
Oyster Point Boulevard #1          53,980     3,519              _        11,962     3,519        11,962     15,481               346       18,940     2001
Oyster Point Boulevard #2          53,980     3,519              _         6,323     3,519         6,323      9,842               130            _     2001
Durant Avenue                      25,000     3,313            966         2,756     3,313         3,722      7,035                 _            _     1930
Columbia Street                   209,361     6,566         23,528        10,751     6,566        34,279     40,845             5,277       18,842     1975/1997
Western Avenue                     47,746     1,432          7,497         2,118     1,432         9,615     11,047             1,518       35,264 (4) 1929/1990/2000
First Avenue                       70,647     2,119         11,275         4,564     2,119        15,839     17,958             1,894            _     1980/1990/2000
Professional Drive #1              47,558       871          5,362         2,968       871         8,330      9,201             1,098            _     1989/1999
Professional Drive #2              62,739     1,129          6,940            20     1,129         6,960      8,089               971            _     1987
West Watkins Mill Road #1         138,938     3,281         14,416           164     3,281        14,580     17,861             2,019       24,508 (5) 1989/1997
Quince Orchard Road #1             49,225     1,267          3,031         5,147     1,267         8,178      9,445             2,261            _ (5) 1982/1997
Clopper Road #1                    44,464       900          2,732         1,503       900         4,235      5,135               564            _ (6) 1989
Research Boulevard #1              48,800       602          4,391           692       602         5,083      5,685               545            _     1966
East Guide Drive #1                45,989       748          3,609         1,058       748         4,667      5,415               598            _     1981/1986
Research Boulevard #2             105,000     1,733          9,611           471     1,733        10,082     11,815             1,393            _     1967/1996/2000
East Guide Drive #2                44,500       775          4,122           164       775         4,286      5,061               541            _     1981/1995
Piccard Drive                     131,511     2,800         11,533         1,674     2,800        13,207     16,007             1,410            _     1978/1994
Newbrook Drive                    248,186     4,800         27,639           375     4,800        28,014     32,814             3,388            _ (4) 1992
Virginia Manor Road               191,884         _         13,679           470         _        14,149     14,149             1,585            _     1990
Old Columbia Road                  75,500     1,510          5,210         1,612     1,510         6,822      8,332             1,066            _     1983/1997
Firstfield Road #1                 25,175       376          3,192         2,085       376         5,277      5,653               380            _     1974/2000
Shady Grove Road                   41,062       840          3,115            36       840         3,151      3,991               371            _     1987
Aliceanna Street                  179,397     1,848          6,120         1,124     1,848         7,244      9,092               638            _     early 1950's/1995
West Watkins Mill Road #2          57,410       859          4,149         1,458       859         5,607      6,466               440            _     1988/2000
Clopper Road #2                    92,990     2,463            493        17,994     2,463        18,487     20,950             2,393       28,250 (6) 2000
Firstfield Road #2                 53,416       971          5,141         3,504       971         8,645      9,616               215            _ (7) 1980/2001
Firstfield Road #3                 53,595       947          5,092           913       947         6,005      6,952               232            _ (7) 1980
Quince Orchard Road #2             54,874       970          5,138           960       970         6,098      7,068               199        9,907 (7) 1981
Clopper Road #3                    59,838       983          6,638            70       983         6,708      7,691               206            _ (6) 1989/1992
Research Place                     58,632     1,466          5,708           476     1,466         6,184      7,650                 _            _     1972
Charlestown Navy Yard              24,940         _          6,247            19         _         6,266      6,266               657            _     1880/1991
Pond Street                        24,867       622          3,053            38       622         3,091      3,713               314            _     1965/1990
Westview Street                    40,000       960          3,032           374       960         3,406      4,366               298            _     1975
Plantation Street #1               92,711     2,352         14,173           167     2,352        14,340     16,692             1,260       18,676 (3) 1993
Memorial Drive                     96,500     2,440         37,754            62     2,440        37,816     40,256             3,062       19,158     1920's/1997/1999
Innovation Drive                  113,956     2,734         14,567           689     2,734        15,256     17,990             1,348       10,799     1991
Plantation Street #2               92,423       651              _        15,395       651        15,395     16,046             3,043            _     2000
Arsenal Street #1                  92,500     3,360          7,316        15,600     3,360        22,916     26,276                72            _     1978/1984/2001
Hartwell Avenue                    59,000     1,475          7,194         1,443     1,475         8,637     10,112                 _            _     1972/1996-1999
Arsenal Street #2                  96,150     6,413          5,457         1,189     6,413         6,646     13,059                 _            _     1980
College Road                      106,036     1,943          9,764           929     1,943        10,693     12,636             1,205            _     1968/1974/1984
Williams Drive                     37,000       740          4,506            47       740         4,553      5,293               444            _     1982/1994
Phillips Parkway                   75,972     1,840          2,298        10,887     1,840        13,185     15,025               828            _     late 1960's/1999
Campus Drive                       42,782       654          4,234           119       654         4,353      5,007               473            _     1989
Electronic Drive                   40,000       600          3,110         3,065       600         6,175      6,775             1,381            _     1983/1998
Princeton Road                     42,600     1,075          1,438         2,950     1,075         4,388      5,463             1,165            _     1984/1999
Capitola Drive #1                  65,114       337          5,795           172       337         5,967      6,304               755            _ (8) 1986
Capitola Drive #2                 119,916       577         11,688         1,874       577        13,562     14,139             1,489       12,182 (8) 1985
Technology Parkway                 37,080       370          4,191           479       370         4,670      5,040               438            _     1976/1985/1993
Triangle Drive                     32,120       161          3,410            92       161         3,502      3,663               356            _     1981
Alexander Road                     86,239         _            376        11,614         _        11,990     11,990               556            _     2000
Kit Creek Road                     37,908       374          3,383         3,207       374         6,590      6,964               205            _     1995
                                ----------  --------  -------------  ------------  --------  ------------  ---------  ----------------  -----------
                                5,319,945  $121,005  $     541,231  $    218,480  $121,005  $    759,711  $ 880,716  $         84,090  $   245,161
                                ==========  ========  =============  ============  ========  ============  =========  ================  ===========

                                                   Rental Properties
                                                 Year Ended December 31,
                                          ------------------------------------
                                             2001         2000        1999
                                          -----------  ----------- -----------
Balance at beginning of period           $   737,207  $   590,202 $   490,518
Purchase of rental properties                 55,746       48,584      63,896
Additions to rental properties                69,530       40,539      16,807
Transfer of costs for completed
   development projects                       18,233       57,882      18,981
                                          -----------  ----------- -----------
Balance at end of period                 $   880,716  $   737,207 $   590,202
                                          ===========  =========== ===========

                                                 Accumulated Depreciation
                                                       December 31,
                                          ------------------------------------
                                             2001         2000        1999
                                          -----------  ----------- -----------

Balance at beginning of period               $57,554      $35,496     $18,611
Depreciation expense                          26,536       22,058      16,885
                                          -----------  ----------- -----------
Balance at end of period                     $84,090      $57,554     $35,496
                                          ===========  =========== ===========