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diversified geographically. These combined strengths should enable continued growth during both positive and challenging economic environments. 

During 2004, we raised our quarterly cash dividend on three separate occasions, rep- resenting a cumulative increase in our cash dividend per common share of 14%. These increases reflect our policy to seek managed growth in dividends while retaining a sig- nificant level of free cash flow. During 2004, Alexandria generated substantial free cash flow (FFO less straight-line rent adjustments, capital expenditures and dividends on com- mon stock), providing important internal funding for our core organic growth. Additionally, our dividend payout ratio remained among the industry’s lowest at approx- imately 57% as of December 31, 2004. Our low payout ratio will provide both near-term and long-term opportunities for future growth in dividends to our fellow shareholders. 

Our growth has been achieved without compromising our strong and flexible capi- tal base.We take pride in the achievement of these significant milestones and in our quest to continually create and increase shareholder value. 

T H E L I F E S C I E N C E I N D U S T R Y Breakthrough treatments and products are being generated in the laboratory, as well as making significant contributions to our economy, our home- land securty and national defense, and helping us to live better and healthier lives.The life science industry is increasingly focused on moving research conducted at the laboratory bench to the patient’s bedside in order to accelerate and improve 

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the positive impact on human healthcare. 

The life science industry will advance the frontiers of medical science by continuing to more rapidly develop new life- saving, cost-effective medicines, vaccines, and other therapies created to predict, prevent, diagnose, treat and cure disease. New discoveries will be made which will enable patients to lead longer, healthier, happier, and more productive lives. We are comfortable with the sustainability of life science industry research and its economic drivers, and are optimistic about its future space requirements. It is important to note that the life 

