EXHIBIT 3.1

ARTICLES OF AMENDMENT AND RESTATEMENT

ARTICLE I

NAME

The name of the corporation (the "Corporation") is:

Alexandria Real Estate Equities, Inc.

ARTICLE II

PURPOSES

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, engaging in business as a real estate investment trust under the Internal Revenue Code of 1986, as amended, or any successor statute (the "Code")) for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force. For purposes of these Articles, "REIT" means a real estate investment trust under Sections 856 through 860 of the Code.

ARTICLE III

PRINCIPAL OFFICE IN STATE

The address of the principal office of the Corporation in the State of Maryland is c/o The Prentice-Hall Corporation System, Maryland, 11 East Chase Street, Suite 7C, Baltimore, Maryland 21202.

ARTICLE IV

RESIDENT AGENT

The name of the resident agent of the Corporation in the State of Maryland is c/o The Prentice-Hall Corporation System, Maryland, 11 East Chase Street, Suite 7C, Baltimore, Maryland 21202. The resident agent is a Maryland corporation.

ARTICLE V

PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

Jerry M. Sudarsky Joel S. Marcus Alan D. Gold Joe Elmaleh Viren Mehta David Petrone Anthony Solomon

The directors may increase the number of directors and may fill any vacancy, whether resulting from an increase in the number of directors or otherwise, on the Board of Directors in the manner provided in the Bylaws. Each director shall be elected to hold office for a term ending on the date of the next annual meeting of stockholders and until a successor is duly elected and qualifies.

ARTICLE VI

STOCK

1. Fractional Shares; Stated Value. The Series T Preferred Stock is issuable solely in whole shares that shall entitle the holder thereof to exercise the voting rights, to participate in the distributions and to have the benefit of all other rights of holders of the Series T Preferred Stock as set forth in the charter of the Corporation. The Stated Value of each such share of Series T Preferred Stock shall be $100.

2. Dividends.

(a) Subject to any preference rights with respect to the payment of dividends attaching to any other stock of the Corporation ranking prior to the Series T Preferred Stock, holders of each share of Series T Preferred Stock shall be entitled to receive out of the assets of the Corporation, at the time legally available therefor, dividends at an annual rate equal to 8.5% of the Stated Value thereof, and no more, which shall be fully cumulative, shall accrue from January 1, 1995, and shall be payable, in cash, semi-annually in arrears on July 1 and January 1 of each year (as used in this Section 6.3(b), each such date a "Dividend Payment Date"), commencing July 1, 1995, as set forth below (except that, if any such date is a Saturday, Sunday or legal holiday, then such dividend shall be payable on the next day that is not a Saturday, Sunday or legal holiday), to holders of record as they appear upon the stock transfer books of the Corporation at the close of business ten business days preceding the related Dividend Payment Dates, or on such other date fixed by the Board (as used in this Section 6.3(b), each such date a "Record Date"). Subject to
Section 6.3(b)(2)(d) hereof, dividends on account of arrearages for any past Dividend Payment Date may be authorized, declared and paid at any time, without reference to any regular Dividend Payment Date. Holders at the close of business on a Record Date of shares of Series T Preferred Stock that are called for redemption on a redemption date during the period between such Record Date and the corresponding Dividend Payment Date shall not, in their capacity as such, be entitled to receive the dividend payment on such Dividend Payment Date.

(b) The dividend payable on each share of Series T Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The aggregate dividend paid to a holder of shares of Series T Preferred Stock shall be based on the aggregate number of shares of Series T Preferred Stock held by such holder at the close of business on the applicable Record Date and rounded to the nearest whole cent (with one-half cent rounded upward). Unless otherwise provided herein, dividends on each share of Series T Preferred Stock shall accrue from and including January 1, 1995 to and excluding the earliest to occur of (i) the date of redemption of such share and (ii) the date of final distribution of assets upon Liquidation (as defined below). All dividend payments made on shares of Series T Preferred Stock shall first be credited against the earliest accumulated but unpaid dividends with respect to such shares.

(c) If, on any Dividend Payment Date, the holders of the Series T Preferred Stock shall not have received the full dividends provided for herein, then such dividends shall cumulate, whether or not earned, authorized or declared, with additional

dividends thereon for each succeeding full dividend period during which such dividend shall remain unpaid.

(d) No dividends or other distributions (other than a dividend or distribution in Common Stock or any other stock of the Corporation ranking junior to the Series T Preferred Stock as to dividends and upon a liquidation, dissolution or winding up of the Corporation or other distribution of the Corporation's assets among stockholders for the purpose of winding up the Corporation's affairs, whether voluntary or involuntary (any such event, a "Liquidation")) shall be authorized, declared, made or paid, or set apart for payment or distribution, upon the Common Stock or upon any other stock of the Corporation ranking junior to or on a parity with the Series T Preferred Stock as to dividends, nor may any Common Stock or any other stock of the Corporation ranking junior to or on a parity with the Series T Preferred Stock as to dividends or upon Liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of such stock) by the Corporation (except by conversion into or in exchange for Common Stock or any other stock of the Corporation ranking junior to the Series T Preferred Stock as to dividends and upon Liquidation), unless full accrued dividends on all outstanding shares of the Series T Preferred Stock have been, or contemporaneously are, authorized, declared and paid, or authorized, declared and a sum sufficient for the payment thereof is set apart for the payment thereof, to the date of such authorization, declaration, payment, distribution, setting apart, making monies available, redemption, purchase or acquisition. Notwithstanding the foregoing, (i) nothing herein shall prevent the Corporation from making contributions to, or purchasing stock in connection with, any employee benefit or dividend reinvestment plans or
(ii) if at any time full accrued or accumulated dividends have not been authorized, declared and paid on the Series T Preferred Stock and on any of the Corporation's Preferred Stock ranking on a parity as to dividends with the Series T Preferred Stock, partial dividends may be authorized, declared and paid on the Series T Preferred Stock and such other Preferred Stock so long as such dividends are authorized, declared and paid pro rata so that the amounts of dividends authorized, declared and paid per share on the Series T Preferred Stock and such other Preferred Stock will in all cases bear to each other the same ratio that accrued or accumulated and unpaid dividends per share on the Series T Preferred Stock and such other Preferred Stock bear to each other.

(e) Any reference to "distribution" contained in this Section 6.3(b)(2) shall not include any distribution made in connection with any Liquidation.

3. Liquidation Preference. In the event of any Liquidation, and subject to the rights, privileges, conditions and restrictions attaching to any other stock of the Corporation ranking prior to the Series T Preferred Stock upon Liquidation, each holder of a share of Series T Preferred Stock shall be entitled to receive, and be paid out of the assets of the Corporation available for distribution to its stockholders, an amount in cash per share equal to 100% of the Stated Value thereof, plus all accrued and unpaid dividends on such share to the date of final distribution to the holders of shares of Series T Preferred Stock, whether or not authorized and declared, and no more, before any payment shall be made or any assets distributed to the holders of Common Stock or any other class or series of the Corporation's stock ranking junior to the Series T Preferred Stock upon such Liquidation. If, upon any Liquidation

the amounts payable with respect to the liquidation preference of the Series T Preferred Stock and any other shares of the Corporation's stock ranking on a parity with the Series T Preferred Stock upon such Liquidation are not paid in full, holders of the Series T Preferred Stock and of such other shares will share pro rata in the amounts payable and other property distributable with respect to such Liquidation so that the per share amounts to which holders of the Series T Preferred Stock and such other shares are entitled will in all cases bear to each other the same ratio that the liquidation preferences of the Series T Preferred Stock and such other stock bear to each other. After payment in full of the preferences in respect of shares of the Series T Preferred Stock upon Liquidation, the holders of such shares in their capacity as such shall not be entitled to any further right or claim to any remaining assets of the Corporation. For purposes hereof, a consolidation or merger of the Corporation with or into another corporation, or a merger of any other corporation with or into the Corporation, or the sale of all or substantially all of the Corporation's property or business (other than in connection with a winding up of its business) will not be considered a Liquidation.

4. Redemption at Option of the Corporation.

(a) Shares of the Series T Preferred Stock may be redeemed by the Corporation, at its option, on any date set by the Board, in whole or from time to time in part, out of assets legally available therefor, at a redemption price per share of 100% of the Stated Value thereof plus, in each case, an amount equal to all accrued and unpaid dividends thereon, whether or not authorized and declared, to but excluding the date fixed for redemption (as used in this
Section 6.3(b), the "Redemption Price"). The aggregate Redemption Price paid to a holder of shares of the Series T Preferred Stock shall be the product of the aggregate number of shares of Series T Preferred Stock redeemed from such holder and the per share Redemption Price, with such product being rounded to the nearest whole cent (with one-half cent rounded upward), and shall be payable in cash. In case of the redemption of less than all of the then outstanding shares of Series T Preferred Stock, the Corporation shall designate the shares to be redeemed pro rata so that the number of shares redeemed from each holder will in all cases bear to each other the same ratio that the aggregate number of shares held by each holder bear to each other. The Corporation shall not redeem less than all of the shares of Series T Preferred Stock at any time outstanding unless all dividends accumulated and in arrears upon all shares of Series T Preferred Stock shall have been paid for all dividend periods ending on or prior to the redemption date.

(b) Not more than sixty nor less than thirty days prior to the redemption date fixed by the Board, notice by first class mail, postage prepaid, shall be given to the holders of record of shares of the Series T Preferred Stock to be redeemed, addressed to such holders at their last addresses as shown upon the stock transfer books of the Corporation. Each such notice of redemption shall specify (i) the date fixed for redemption, (ii) the number of shares of Series T Preferred Stock to be redeemed, and if less than all shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the Redemption Price, (iv) the place or places of payment,
(v) that payment will be made upon presentation and surrender of the certificates representing shares of the Series T Preferred Stock at the place designated in such notice and (vi) that on and after the date fixed

for redemption dividends will cease to accrue on such shares (unless the Corporation defaults in the payment of the Redemption Price).

(c) Any notice that is mailed as provided herein shall be conclusively presumed to have been duly given, whether or not the holder of shares of the Series T Preferred Stock receives such notice; and failure to give such notice by mail, or any defect in such notice to the holders of any shares designated for redemption, shall not affect the validity of the proceedings for the redemption of any other shares of the Series T Preferred Stock. On or after the date fixed for redemption as stated in such notice, each holder of shares of the Series T Preferred Stock called for redemption shall surrender the certificate representing such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the Redemption Price for each such share. If less than all shares of the Series T Preferred Stock represented by any surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares of Series T Preferred Stock, such unredeemed shares shall remain outstanding and the rights of holders of such shares of Series T Preferred Stock thereafter shall continue to be only those of a holder of shares of the Series T Preferred Stock. Notice having been given as aforesaid, if, on the date fixed for redemption, assets necessary for the redemption shall be legally available therefor and shall have been irrevocably deposited or set aside, then, notwithstanding that the certificates representing any shares of the Series T Preferred Stock so called for redemption shall not have been surrendered, (i) dividends with respect to the shares so called for redemption shall cease to accrue on the date fixed for redemption,
(ii) such shares shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be stockholders of the Corporation to the extent of their interest in such shares and (iv) all rights whatsoever with respect to the shares so called for redemption (except the right of the holders to receive the Redemption Price for each such share, without interest or any sum of money in lieu of interest thereon, upon surrender of their certificates therefor at a place designated in such notice) shall terminate. If assets legally available for such purpose are not sufficient for redemption of all of the shares of Series T Preferred Stock that were to be redeemed, then such assets shall be applied pro rata to the redemption of all of the shares of Series T Preferred Stock to be redeemed.

(d) Shares of the Series T Preferred Stock shall not be subject to the operation of any mandatory redemption, purchase, retirement or sinking fund and holders of shares of the Series T Preferred Stock shall have no right to require redemption of the Series T Preferred Stock.

5. Voting Rights.

(a) General. In addition to the voting rights provided in Section 6.3(b)(5)(b) hereof, the holders of each share of Series T Preferred Stock shall be entitled to one vote upon all matters upon which holders of the Common Stock have the right to vote, such vote to be counted together with all other shares of stock having general voting powers and not separately as a class. In all cases where the holders of shares of Series T Preferred Stock have the right to vote separately as a class, such holders shall be entitled to one vote for each such share held by them respectively. Any shares of Series T Preferred Stock held by the Corporation, or any subsidiary of the Corporation in which the Corporation owns shares

entitled to cast a majority of all votes entitled to be cast, shall not have voting rights, and shall not be counted in determining the presence of a quorum or in calculating any percentage of shares, under this Section 6.3(b)(5).

(b) Class Voting Rights. So long as shares of the Series T Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of at least a majority of all outstanding shares of Series T Preferred Stock, voting separately as a class, amend any provision of the charter of the Corporation so as to change the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption of the Series T Preferred Stock. A class vote on the part of the Series T Preferred Stock shall not be required (except as otherwise required by resolution of the Board) in connection with any other matter.

6. Ranking. Any class or series of stock of the Corporation shall be deemed to rank:

(a) prior to the Series T Preferred Stock, as to dividends or upon Liquidation, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in preference or priority to the holders of Series T Preferred Stock;

(b) on a parity with the Series T Preferred Stock, as to dividends or upon Liquidation, whether or not the dividend rates, dividend payment dates or redemption or liquidation preferences per share thereof are different from those of the Series T Preferred Stock, if the holders of such class or series of stock and the Series T Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in proportion to their respective amounts of accumulated or accrued and unpaid dividends per share or liquidation preferences, as the case may be, without preferences or priority one over the other; and

(c) junior to the Series T Preferred Stock, as to dividends or upon Liquidation, if such stock shall be Common Stock or any other class or series of stock of the Corporation if the holders of Series T Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in preference or priority to the holders of shares of such stock.

7. Outstanding Shares. For purposes hereof, all shares of the Series T Preferred Stock issued by the Corporation shall be deemed outstanding except (i) as provided in Section 6.3(b)(4) hereof and (ii) from the date of surrender of a certificate representing shares of Series T Preferred Stock, all shares of Series T Preferred Stock represented by such certificate.

8. Status of Acquired Shares. Shares of the Series T Preferred Stock redeemed or otherwise acquired by the Corporation constitute authorized but unissued shares of Preferred Stock, and may thereafter be issued, but not as shares of Series T Preferred Stock.

1. Fractional Shares; and Stated Value. The Series U Preferred Stock is issuable solely in whole shares that shall entitle the holder thereof to exercise the voting rights, to participate in the distributions and to have the benefit of all other rights of holders of the Series U Preferred Stock as set forth in the charter of the Corporation. The Stated Value of each such share of Series U Preferred Stock shall be $500.

2. Dividends.

(a) Subject to any preference rights with respect to the payment of dividends attaching to any other stock of the Corporation ranking prior to the Series U Preferred Stock as to the payment of dividends, holders of each share of Series U Preferred Stock shall be entitled to receive out of the assets of the Corporation, at the time legally available therefor, dividends at an annual rate equal to 8.5% of the Stated Value thereof, and no more, which shall be fully cumulative, shall accrue from the date shares of the Series U Preferred Stock are first issued by the Corporation (as used in this Section 6.3(c), the "Issue Date"), and shall be payable, in cash, annually in arrears on January 1 of each year (as used in this Section 6.3(c), each such date a "Dividend Payment Date"), commencing January 1, 1997, as set forth below (except that, if any such date is a Saturday, Sunday or legal holiday, then such dividend shall be payable on the next day that is not a Saturday, Sunday or legal holiday), to holders of record as they appear upon the stock transfer books of the Corporation at the close of business on such record dates, not more than sixty days nor less than ten days preceding the related Dividend Payment Dates, as are fixed by the Board (as used in this Section 6.3(c), each such date a "Record Date"). Subject to subsection 2(d) of this Section 6.3(c), dividends on account of arrearages for any past Dividend Payment Date may be authorized, declared and paid at any time, without reference to any regular Dividend Payment Date. Holders at the close of business on a Record Date of shares of Series U Preferred Stock that are called for redemption on a redemption date during the period (as used herein, the "Ex- Dividend Period") between such Record Date and the corresponding Dividend Payment Date shall not, in their capacity as such, be entitled to receive the dividend payment on such Dividend Payment Date.

(b) The dividend payable on each share of Series U Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The aggregate dividend paid to a holder of shares of Series U Preferred Stock shall be based on the aggregate number of shares of Series U Preferred Stock held by such holder at the close of business on the applicable Record Date and rounded to the nearest whole cent (with one-half cent rounded upward). Unless otherwise provided herein, dividends on each share of Series U Preferred Stock shall accrue from and including the Issue Date to and excluding the earliest to occur of (i) the date of redemption of such share, (ii) the date of conversion of such share and (iii) the date of final distribution of assets upon any Liquidation. All dividend payments made on shares of Series U Preferred Stock shall first be credited against the earliest accumulated but unpaid dividends with respect to such shares.

(c) If, on any Dividend Payment Date, the holders of the Series U Preferred Stock shall not have received the full dividends provided for herein, then

such dividends shall cumulate, whether or not earned, authorized or declared, with additional dividends thereon for each succeeding full dividend period during which such dividend shall remain unpaid.

(d) No dividends or other distributions (other than a dividend or distribution in Common Stock or any other stock of the Corporation ranking junior to the Series U Preferred Stock as to dividends and upon Liquidation) shall be authorized, declared, made or paid, or set apart for payment or distribution, upon the Common Stock, or upon any other stock of the Corporation ranking junior to or on a parity with the Series U Preferred Stock as to dividends, nor may any Common Stock or any other stock of the Corporation ranking junior to or on a parity with the Series U Preferred Stock as to dividends or upon Liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of such stock) by the Corporation (except by conversion into or in exchange for Common Stock or any other stock of the Corporation ranking junior to the Series U Preferred Stock as to dividends and upon Liquidation), unless full accrued dividends on all outstanding shares of the Series U Preferred Stock have been, or contemporaneously are, authorized, declared and paid, or authorized, declared and a sum sufficient for the payment thereof is set apart for the payment thereof, to the date of such authorization, declaration, payment, distribution, setting apart, making monies available, redemption, purchase or acquisition. Notwithstanding the foregoing, (i) nothing herein shall prevent the Corporation from making contributions to, or purchasing stock in connection with, any employee benefit or dividend reinvestment plans or
(ii) if at any time full accrued or accumulated dividends have not been authorized, declared and paid on the Series U Preferred Stock and on any of the Corporation's Preferred Stock ranking on a parity as to dividends with the Series U Preferred Stock, partial dividends may be authorized, declared and paid on the Series U Preferred Stock and such other Preferred Stock so long as such dividends are authorized, declared and paid pro rata so that the amounts of dividends authorized, declared and paid per share on the Series U Preferred Stock and such other Preferred Stock will in all cases bear to each other the same ratio that accrued or accumulated and unpaid dividends per share on the Series U Preferred Stock and such other Preferred Stock bear to each other.

(e) Any reference to "distribution" contained in this subsection 2 of this Section 6.3(c) shall not include any distribution made in connection with any Liquidation.

3. Liquidation Preference. In the event of any Liquidation, and subject to the rights, privileges, conditions and restrictions attaching to any other stock of the Corporation ranking prior to the Series U Preferred Stock upon Liquidation, each holder of a share of Series U Preferred Stock shall be entitled to receive, and be paid out of the assets of the Corporation available for distribution to its stockholders, an amount in cash per share equal to 100% of the Stated Value thereof, plus all accrued and unpaid dividends on such share to the date of final distribution to the holders of shares of Series U Preferred Stock, whether or not authorized and declared, and no more, before any payment shall be made or any assets distributed to the holders of Common Stock or any other class or series of the Corporation's stock ranking junior to the Series U Preferred Stock upon such Liquidation. If, upon any Liquidation the amounts payable with respect to the liquidation preference of the Series U Preferred Stock

and any other shares of the Corporation's stock ranking on a parity with the Series U Preferred Stock upon such Liquidation are not paid in full, holders of the Series U Preferred Stock and of such other shares will share pro rata in the amounts payable and other property distributable with respect to such Liquidation so that the per share amounts to which holders of the Series U Preferred Stock and such other shares are entitled will in all cases bear to each other the same ratio that the liquidation preferences of the Series U Preferred Stock and such other stock bear to each other. After payment in full of the preferences in respect of shares of the Series U Preferred Stock upon Liquidation, the holders of such shares in their capacity as such shall not be entitled to any further right or claim to any remaining assets of the Corporation. For purposes of this Section, a consolidation or merger of the Corporation with or into another corporation, or a merger of any other corporation with or into the Corporation, or the sale of all or substantially all of the Corporation's property or business (other than in connection with a winding up of its business) will not be considered a Liquidation.

4. Redemption at Option of the Corporation.

(a) Commencing on the fifth anniversary of the Issue Date, shares of the Series U Preferred Stock may be redeemed by the Corporation, at its option, on any date set by the Board, in whole or from time to time in part, out of assets legally available therefor, at a redemption price per share of 135% of the Stated Value thereof plus, in each case, an amount equal to all accrued and unpaid dividends thereon, whether or not authorized and declared, to but excluding the date fixed for redemption (as used in this Section 6.3(c), the "Redemption Price"). The aggregate Redemption Price paid to a holder of shares of the Series U Preferred Stock shall be the product of the aggregate number of shares of Series U Preferred Stock redeemed from such holder and the per share Redemption Price, with such product being rounded to the nearest whole cent (with one-half cent rounded upward), and shall be payable in cash. In case of the redemption of less than all of the then outstanding shares of Series U Preferred Stock, the Corporation shall designate the shares to be redeemed pro rata so that the number of shares redeemed from each holder will in all cases bear to each other the same ratio that the aggregate number of shares held by each holder bear to each other. The Corporation shall not redeem less than all of the shares of Series U Preferred Stock at any time outstanding unless all dividends accumulated and in arrears upon all shares of Series U Preferred Stock shall have been paid for all dividend periods ending on or prior to the redemption date.

(b) Not more than sixty nor less than thirty days prior to the redemption date fixed by the Board, notice by first class mail, postage prepaid, shall be given to the holders of record of shares of the Series U Preferred Stock to be redeemed, addressed to such holders at their last addresses as shown upon the stock transfer books of the Corporation. Each such notice of redemption shall specify (i) the date fixed for redemption, (ii) the number of shares of Series U Preferred Stock to be redeemed, and if less than all shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the Redemption Price, (iv) the place or places of payment,
(v) that payment will be made upon presentation and surrender of the certificates representing shares of the Series U Preferred Stock at the place designated in such notice and (vi) that on and after the date fixed for redemption dividends will cease to accrue on such shares (unless the Corporation defaults in the payment of the Redemption Price).

(c) Any notice that is mailed as provided herein shall be conclusively presumed to have been duly given, whether or not the holder of shares of the Series U Preferred Stock receives such notice; and failure to give such notice by mail, or any defect in such notice to the holders of any shares designated for redemption, shall not affect the validity of the proceedings for the redemption of any other shares of the Series U Preferred Stock. On or after the date fixed for redemption as stated in such notice, each holder of shares of the Series U Preferred Stock called for redemption shall surrender the certificate representing such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the Redemption Price for each such share. If less than all shares of the Series U Preferred Stock represented by any surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares of Series U Preferred Stock, such unredeemed shares shall remain outstanding and the rights of holders of such shares of Series U Preferred Stock thereafter shall continue to be those of a holder of shares of the Series U Preferred Stock. Notice having been given as aforesaid, if, on the date fixed for redemption, assets necessary for the redemption shall be legally available therefor and shall have been irrevocably deposited or set aside, then, notwithstanding that the certificates representing any shares of the Series U Preferred Stock so called for redemption shall not have been surrendered, (i) dividends with respect to the shares so called for redemption shall cease to accrue on the date fixed for redemption, (ii) such shares shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be stockholders of the Corporation to the extent of their interest in such shares and (iv) all rights whatsoever with respect to the shares so called for redemption (except the right of the holders to receive the Redemption Price for each such share, without interest or any sum of money in lieu of interest thereon, upon surrender of their certificates therefor at a place designated in such notice) shall terminate. If assets legally available for such purpose are not sufficient for redemption of all of the shares of Series U Preferred Stock that were to be redeemed, then such assets shall be applied pro rata to the redemption of all of the shares of Series U Preferred Stock to be redeemed.

(d) Shares of the Series U Preferred Stock shall not be subject to the operation of any mandatory redemption, purchase, retirement or sinking fund and holders of shares of the Series U Preferred Stock shall have no right to require redemption of the Series U Preferred Stock.

5. Mandatory Conversion.

(a) On the first date on which (i) shares of Common Stock are registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to an effective registration statement, and (ii) the Corporation has entered into an underwriting agreement to sell shares of Common Stock (which underwriting agreement sets forth the price at which such shares will be offered for sale (as used in this Section 6.3(c), the "Offering Price")), the shares of Series U Preferred Stock held by each holder not otherwise re deemed in accordance herewith shall automatically convert as of the date immediately prior thereto (as used in this Section 6.3(c), the "Conversion Date") without further action on the part of the Corporation or any such holder, into that number of fully paid and nonassessable shares of Common Stock (calculated to the nearest 1/100th of a share, with .5/100 rounded upwards) determined by dividing (i) the product of (x) 135%, (y) the Stated Value thereof (plus all ac-

crued and unpaid dividends thereon to but excluding the Conversion Date, unless the Corporation shall elect to pay such amount in cash on such date) and (z) the aggregate number of shares of Series U Preferred Stock held at such time by such holder by (ii) the Offering Price.

(b) Each holder of shares of Series U Preferred Stock shall, as soon as practicable after the Conversion Date, surrender all shares of Series U Preferred Stock held by such holder and the Corporation shall, as soon as practicable after such surrender, deliver at the offices of the Corporation to such holder, or to the nominee or nominees of such holder, certificates representing the number of full shares of Common Stock to which such holder shall be entitled, together with a cash payment in respect of any accrued and unpaid dividends and any fraction of a share of Common Stock, in each case as provided below. Conversion of shares of Series U Preferred Stock shall be deemed to have been effected on the Conversion Date, without regard to the time of surrender of such shares of Series U Preferred Stock and (i) dividends with respect to such shares of Series U Preferred Stock shall cease to accrue and accumulate on the Conversion Date, (ii) such shares of Series U Preferred Stock shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be stockholders of the Corporation to the extent of their interest in such shares, (iv) all rights whatsoever with respect to shares of Series U Preferred Stock shall terminate (except the right of a holder to receive certificates representing the number of full shares of Common Stock to which such holder shall be entitled, together with a cash payment in respect of any fraction of a share of Common Stock as provided herein) and (v) the holders entitled to receive the shares of Common Stock deliverable upon conversion of such shares of Series U Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date, unless the stock transfer books of the Corporation shall be closed on such date, in which event such person or persons shall be deemed to become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the Conversion Date.

6. No Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon conversion of shares of Series U Preferred Stock. If a certificate or certificates representing more than one share of Series U Preferred Stock shall be surrendered for conversion at one time by the same record holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series U Preferred Stock so surrendered by such record holder. In lieu of any fractional share of Common Stock that would otherwise be issuable upon conversion of any shares of Series U Preferred Stock, the Corpora tion shall pay a cash adjustment in respect of such fractional share in an amount equal to the same fraction as the Offering Price, calculated to the nearest whole cent, with one-half cent rounded upward.

7. Reservation of Shares; Transfer Taxes. The Corporation shall at all times reserve and keep available, out of its authorized and unissued stock, solely for the purpose of effecting the conversion of shares of Series U Preferred Stock, such number of shares of Common Stock free of preemptive rights as shall be sufficient to effect the conversion of all shares of Series U Preferred Stock outstanding. The Corporation shall, in accordance with the laws of the State of Maryland, use its reasonable best efforts to increase the authorized

number of shares of Common Stock if at such time the number of shares of authorized and unissued Common Stock shall not be sufficient to permit the conversion of all the then outstanding shares of Series U Preferred Stock. The Corporation shall not be required to deliver shares of Common Stock upon conversion if, in the opinion of its counsel, such delivery would violate the laws of the State of Maryland or any other United States jurisdiction or any jurisdiction outside the United States.

The Corporation shall pay any and all issue or other taxes that may be payable in respect of any issue or delivery of shares of Common Stock upon conversion of the Series U Preferred Stock. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of Common Stock in a name other than that in which the shares of Series U Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of such tax or has established to the satisfaction of the Corporation that such tax has been paid.

8. Voting Rights.

(a) General. Holders of shares of the Series U Preferred Stock shall not have any voting rights except as set forth below. In connection with any such right to vote, each holder of shares of the Series U Preferred Stock will have one vote for each such share held. Any shares of Series U Preferred Stock held by the Corporation, or any subsidiary of the Corporation in which the Corporation owns shares entitled to cast a majority of all votes entitled to be cast, shall not have voting rights, and shall not be counted in determining the presence of a quorum or in calculating any percentage of shares, under this
Section 6.3(c).8.

(b) Class Voting Rights. So long as shares of the Series U Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of at least a majority (or such higher percentage, if any, as may then be required by applicable law) of all outstanding shares of Series U Preferred Stock, voting separately as a class, (i) amend any provision of the charter of the Corporation so as to change the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption of the Series U Preferred Stock or (ii) create, authorize or issue, or reclassify any authorized stock of the Corporation into, or increase the authorized amount of, any class or series of stock of the Corporation ranking senior to the Series U Preferred Stock as to dividends or upon Liquidation (other than up to $50.0 million aggregate liquidation preference of Preferred Stock, to accredited investors who are not current holders of any class or series of stock of the Corporation (or of any other securities of the Corporation convertible into, or exchangeable or exercisable for, such stock of the Corporation) in an offering exempt from the registration requirements of the Securities Act, such stock to have the designation, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, terms or conditions of redemption, and Stated Value thereof, as determined by the Board). A class vote on the part of the Series U Preferred Stock shall not be required (except as otherwise required by law or resolution of the Board) in connection with any other matter, including, without

limitation, the authorization, issuance or increase in the authorized amount of any shares of any class or series of stock of the Corporation that either (A) ranks junior to, or on a parity with, the Series U Preferred Stock as to dividends and upon Liquidation or (B) is, at the time of such increase, undesignated as to ranking with respect to dividends and upon Liquidation.

9. Ranking. Any class or series of stock of the Corporation shall be deemed to rank:

(a) prior to the Series U Preferred Stock, as to dividends or upon Liquidation, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in preference or priority to the holders of Series U Preferred Stock;

(b) on a parity with the Series U Preferred Stock, as to dividends or upon Liquidation, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof are different from those of the Series U Preferred Stock, if the holders of such class or series of stock and the Series U Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in proportion to their respective amounts of accumulated or accrued and unpaid dividends per share or liquidation prices, as the case may be, without preferences or priority one over the other; and

(c) junior to the Series U Preferred Stock, as to dividends or upon Liquidation, if such stock shall be Common Stock or any other class or series of stock of the Corporation if the holders of Series U Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon Liquidation, as the case may be, in preference or priority to the holders of shares of such stock.

For purposes hereof, the Series T Preferred Stock shall rank on parity with the Series U Preferred Stock as to dividends and upon Liquidation.

10. Outstanding Shares. For purposes hereof, all shares of the Series U Preferred Stock issued by the Corporation shall be deemed outstanding except (i) as provided in subsections 4 and 5 of this Section 6.3(c) and
(ii) from the date of surrender of a certificate representing shares of Series U Preferred Stock, all shares of Series U Preferred Stock represented by such certificate.

11. Status of Acquired Shares. Shares of the Series U Preferred Stock redeemed or otherwise acquired by the Corporation constitute authorized but unissued shares of undesignated Preferred Stock, and may thereafter be issued, but not as shares of Series U Preferred Stock.

1. Designation, Notice, Fractional Shares, Taxes.

then, in addition to such other remedies as shall be available to the holder of such Series V Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, reasonably be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

2. Cumulative Dividends.

including the approval of the Series V Directors, may pay dividends to Parent on the Common Stock before October 31, 1996 in an aggregate amount equal to the lesser of (i) the aggregate amount of the Corporation's net income (for book purposes) for the period from April 1, 1996 through September 9, 1996, and (ii) $942,528, and (b) such dividends shall be excluded in the calculation of Assumed Common Dividend.

Such dividends shall be payable quarterly in immediately available funds, when, as and if authorized by the Board of Directors on a date which shall not be later than the last day of the applicable Dividend Period;

in this Section 6.3(d). No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series V Preferred Stock that may be in arrears.

3. Liquidation Preference.

4. Conversion at the Option of the Holder.

Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be shares of Additional Stock issued as of the time of such issue, provided that Additional Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to subsection 4(c)(v) hereof) of such Additional Stock will be less than the Conversion Price in effect on the date of and immediately prior to such issue and provided further that in any such case in which Additional Stock is deemed to be issued:

(A) no further adjustment in the Conversion Share Price shall be made upon the subsequent issue of Options or Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities for which adjustment has been made as a result of a deemed issuance pursuant to this subsection 4(c)(iii);

(B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase or decrease in the consideration payable to the Corporation, or in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Conversion Share Price computed upon the original issue thereof, and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or rights of conversion or exchange under such Convertible Securities;

(C) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Conversion Price computed upon the original issue thereof, and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if:

(I) in the case of Convertible Securities or Options for Common Stock, the only Additional Stock issued was Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issue of all such Convertible Securities whether or not actually converted or exchanged plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and

(II) in the case of Options for Convertible Securities, only the Additional Stock, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options,

and the consideration received by the Corporation for the shares of Additional Stock deemed to have been then issued was consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation upon the issue of the Convertible Securities with respect to which such Options were actually exercised;

(D) no readjustment pursuant to Clause (B) or (C) above shall have the effect of increasing the Conversion Share Price to an amount which exceeds the lower of (i) the Conversion Share Price on the date immediately prior to the original adjustment date, or (ii) the Conversion Price that would have resulted from any issuance of Additional Stock between such date and such readjustment date; and

(E) in the case of any Options or Convertible Securities which expire by their terms not more than ninety (90) days after the date of issue thereof, no adjustment of the Conversion Share Price shall be made until the expiration, conversion or exercise of all such Options or Convertible Securities.

into a lesser number of shares of Common Stock, the Conversion Share Price then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased.

setting forth (i) such adjustments and readjustments, (ii) the Conversion Share Price then in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of such Series V Preferred Stock.

5. Conversion and Redemption at the Option of the Corporation.

Notwithstanding the Corporation's right to require a Partial Cash Exchange, not later than 15 days after receipt of a written Notice of Exchange (as defined below) of such Partial Cash Exchange, a holder of Series V Preferred Stock may elect, in its sole discretion, to convert up to 100% of such holder's shares of Series V Preferred Stock into that number of shares of Common Stock determined by multiplying the number of shares of Series V Preferred Stock by the Conversion Share Ratio if such holder provides written notice (in accordance with subsection 1(b) of this Section 6.3(d)) of such election to the Corporation. Such election may be conditioned upon consummation of the IPO. If requested by the underwriter in an IPO, any shares of Common Stock issuable upon a Partial Cash Exchange (including shares issuable if the holder elects to convert 100% of such holder's shares of Series V Preferred Stock) shall be subject to a lock-up of not greater than three hundred and sixty (360) days provided that all officers, directors and substantially all 1% shareholders of the Corporation are bound by the same lock-up terms.

first anniversary of the Issue Date, a minimum holding period of one year shall be assumed for purposes of calculating the 20% Internal Rate of Return; and

payment of an amount equal to the dividend payable on such shares on such Dividend Payment Date. A holder of Series V Preferred Stock on a dividend payment record date whose (or whose transferee's) shares are subject to a Partial Cash Exchange on the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on Series V Preferred Stock on such date.

6. Mandatory Conversion. Unless all shares of Series V Preferred Stock are earlier converted or redeemed pursuant to subsections 4, 5 or 7 of this Section 6.3(d) and provided that the holders of Series V Preferred Stock have approved the terms of an IPO as required in accordance with subsection 8 hereof, then on the first Trading Day of the Corporation's Common Stock (the

of Series V Preferred Stock shall terminate (except the right of a holder to receive certificates representing the number of full shares of Common Stock to which such holder shall be entitled, together with a cash payment in respect of any fraction of a share of Common Stock as provided herein), and (v) the holder entitled to receive the shares of Common Stock deliverable upon conversion of such shares of Series V Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

7. Redemption. The shares of Series V Preferred Stock shall be subject to the redemption as follows:

On or after the date fixed for redemption as stated in such notice, each holder of shares of the Series V Preferred Stock called for redemption shall surrender the certificate representing such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the redemption price for each such share. Notice having been given as aforesaid, if, on the date fixed for redemption, the cash funds necessary for the redemption shall be legally available therefor and shall have been irrevocably deposited or set aside in trust with a bank or trust company, then, notwithstanding that any certificates representing any shares of the Series V Preferred Stock so called for redemption shall not have been surrendered, (i) dividends with respect to the shares so called for redemption shall cease to accrue on the date fixed for redemption, (ii) such shares shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be stockholders of the Corporation to the extent of their interest in such shares and (iv) all rights whatsoever with respect to the shares so called for redemption (except the right of the holders to receive the redemption price for each such share, without interest or any sum of money in lieu of interest thereon, upon surrender of their certificates therefor at a place designated in such notice) shall terminate.

found in other industries and required to be recognized as expenses in the calculation of net income. Items classified by generally accepted accounting principles as extraordinary or unusual, along with significant non-recurring items of income or expense that materially distort the comparative measurement of the Corporation's performance over time, are not meant to be reductions or increases in FFO, and should be disregarded in its calculation. The use of a corporate form versus a partnership form for unconsolidated partnerships and joint ventures should not affect the determination of whether an entity is to be treated as a joint venture for purposes of the definition. Gains or losses on sales of securities or undepreciated land shall be included in FFO, unless they are unusual and non-recurring. Notwithstanding any other provision hereof, dividends on the Series V Preferred Stock shall not be deducted from net income in computing FAD.

The redemption price for each share of the Series V Preferred Stock to be redeemed pursuant to this subsection (b) shall be the cash amount equal to the Stated Value plus an Internal Rate of Return of 20%, except that an Internal Rate of Return of 15% shall be paid in connection with a redemption on account of the failure of the Corporation to consummate an IPO of the Corporation's Common Stock by the fourth anniversary of the Issue Date as specified in subsection (vii) above. Notwithstanding subsections (iv), (v) and (vi) above, the Corporation shall not be deemed to have failed the FAD tests set forth in such sections if and to the extent that any such failure is based directly on lost revenues or expenses incurred arising out of a casualty, civil unrest, natural disaster or similar act of God as to which the Corporation was not insured (and prudent institutional owners in the market or markets where the affected assets are located would not have been insured) or the Corporation has experienced a delay in the receipt of insurance proceeds for reasons beyond the reasonable control of the Corporation, provided that no single casualty event shall operate to excuse failure to satisfy a FAD test as to more than one calendar year.

right to have shares of Series V Preferred Stock redeemed as a result of such occurrence. No such waiver shall constitute the waiver of rights with respect to any subsequent occurrence.

V Preferred Stock for which a redemption payment has not been made on a redemption date shall be considered to be outstanding for all purposes. Nothing in this subsection (f) is intended to limit the other rights of holders of the Series V Preferred Stock relating to failure of the Corporation to make a redemption payment.

8. Protective Provisions. In addition to any other approval that may be required by law and the charter of the Corporation, (A) the Corporation shall not take any of the following actions (other than the actions specified in clause (vii) below) and the Corporation shall not permit any subsidiary of the Corporation (the "Subsidiary") to take any of the actions specified in clauses
(i), (ii), (iii), (iv), (v), (vi) or (viii) below without first obtaining prior written approval of (x) the holders of a majority of the outstanding shares of Series V Preferred Stock or (y) if AEW does not own a majority of the outstanding shares of Series V Preferred Stock, the directors elected by the holders of Series V Preferred Stock and (B) the Corporation shall not take any of the actions specified in clause (vii) below without first obtaining prior unanimous approval of the board of directors:

(i) the issuance of or modification in a manner materially adverse to the Corporation or Subsidiary of any debt if the principal amount of such debt exceeds $10 million or the conversion to a term loan of any amounts owed to PaineWebber Incorporated, provided that such approval will not be required upon such issuance or modification necessary in connection with the redemption in full of the Series V Preferred Stock in accordance with Section 7 hereof or an IPO in which the shares of Series V Preferred Stock are converted and redeemed in accordance with Section 5(a) hereof.

(ii) new investments, including a purchase of a real estate operating company or REIT, with a purchase price equal to or greater than $10 million, or any series of investments within any 90-day period with an aggregate purchase price exceeding $25 million;

(iii) issuance of any equity securities by the Corporation or Subsidiary in an IPO of Common Stock other than an IPO in which the shares of Series V Preferred Stock are converted and redeemed in accordance with Section 5(a) hereof or redeemed in accordance with Section 7(a) hereof.

(iv) issuance of any equity security by the Subsidiary (other than to the Corporation) or issuance of any equity security by the Corporation (other than (i) securities issuable upon conversion, exercise or exchange of any Share of Series V Preferred Stock, Convertible Security (provided the issuance of such Convertible Security was made in accordance with the provisions of this Section
8), Option or Permitted Option, (ii) securities issuable in consideration of the acquisition of assets or shares of another entity as long as the acquisition is approved in accordance with this Section 8, (iii) securities issuable in connection with any stock split or stock dividend payable in Common Stock or
(iv) Substitute Securities (as defined in the Series V Convertible Stock Purchase Agreement, dated as of September 9, 1996, between the Corporation, Health Science Properties Holding Corporation and AEW Partners II, L.P.)) unless the following conditions are satisfied, (A) such securities do not rank senior in liquidation preferences, dividend payment or redemption to the Series V Preferred Stock, (B) the rights of such securities do not impair the voting or approval rights of the holders of the

Series V Preferred Stock or prevent the holders of shares of Series V Preferred Stock from electing a majority of the members of the Board of Directors under circumstances set forth in Section 11 of this Section 6.3(d), (C) the holders of the Series V Preferred Stock are offered transferable preemptive rights to purchase their Pro Rata Portion (as defined below) of such securities on terms no less favorable to the Corporation, and (D) if such securities are Common Stock or securities convertible into Common Stock, and if the Common Stock purchase price or Common Stock conversion share price is less than the then Conversion Share Price then the Conversion Share Price will be adjusted as set forth in Section 4 (and the Conversion Share Ratio adjusted accordingly), provided however that prior approval will not be required upon issuance of any equity securities fully to redeem the Series V Preferred Stock or as part of an IPO in which the shares of Series V Preferred Stock are converted and redeemed in accordance with Section 5(a) hereof.

(v) payment of dividends on any equity securities when the Corporation's FAD fails to equal the required dividends payable on the outstanding Series V Preferred Stock and the assumed dividends on the outstanding Common Stock as set forth in any of Sections 7(b)(iv), 7(b)(v) or 7(b)(vi) hereof;

(vii) institution of any bankruptcy action (as defined below) provided, however, that such approval will not be required in connection with such bankruptcy action if obtaining such approval is determined by a court of competent jurisdiction to be unenforceable under applicable state or federal law;

(viii) sale, consolidation or merger of the Corporation or Subsidiary;

(ix) the voluntary termination of the Corporation's status as a REIT for tax purposes;

(x) any substantial change in the Corporation's current business strategies substantially as described in the Corporation's Confidential Offering Memorandum dated September 11, 1995;

(xi) Jerry Sudarsky ceasing to serve as the full-time Chairman of the Corporation (other than by reason of his death or disability) during the period ending on the earlier of January 1, 1998 or consummation of a public offering of the securities of the Corporation or Joel Marcus ceasing to serve as the full-time Chief Executive Officer or Chief Operating Officer of the Corporation (other than by reason of his death or disability);

(xii) the sale or disposition by Mr. Sudarsky or Mr. Marcus of 20% or more of his stock ownership interest in the Parent as of the Issue Date. For the purposes of this paragraph, shares held in (a) a trust for estate planning purposes for the benefit of Mr. Sudarsky or Mr. Marcus or members of their immediate families (spouse, issues and siblings), or (b) held by members of their immediate families or (c) an entity wholly-owned by any of the foregoing, shall be deemed to be held by Mr. Sudarsky or Mr. Marcus as the case may be;

The term "Pro Rata Share" shall mean a fraction of the entire issuance of equity securities the numerator of which shall be the sum of the number of the shares of Common Stock then owned (or issuable upon conversion of Shares then owned) by the holder of Series V Preferred Stock and the denominator of which shall be the total number of the shares of Common Stock outstanding immediately prior to the issuance of such equity securities assuming full conversion or exercise of all outstanding Common Stock and Shares, Convertible Securities, Options and Permitted Options.

Any offer of equity securities made to the holders of Series V Preferred Stock shall be made by notice in writing at least 20 days prior to the date on which the Corporation intends to issue and sell such securities. Such notice shall set forth (i) the number and type of securities proposed to be issued and sold and the terms of such securities, (ii) the approximate price at which such securities are proposed to be sold and the terms of payment, (iii) the number of securities offered to the holders of Series V Preferred Stock in compliance with the provisions of this Section, and (iv) the proposed date of issuance and sale of such securities. Not later than 10 Business Days after receipt of such notice, each holder of Series V Preferred Stock shall notify the Corporation in writing whether it elects to purchase all or any portion of its Pro Rata Portion of the securities offered pursuant to such notice. If any holder of Series V Preferred Stock does not so notify the Corporation, such holder shall be deemed to have waived rights to purchase any of the securities. If a holder of Series V Preferred Stock shall elect to purchase any such securities, the securities which it shall have elected to purchase shall be issued and sold to such holder by the Corporation at the same time and on the same terms and conditions as the securities are issued and sold to third parties. If, for any reason, the sale of securities to third parties is not consummated, such holder's election shall terminate, subject to such holder's ongoing subscription right with respect to issuances of securities at later dates or times.

The term "bankruptcy action" shall mean:

(a) Commencing any case, proceeding or other action seeking protection for the Corporation as a debtor under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors;

(b) Consenting to the entry of an order of relief in any involuntary bankruptcy case against the Corporation;

(c) Filing an answer in any involuntary case described in clause (b) above admitting the material allegations of the petition therein;

(d) Seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Corporation or for a substantial portion of its properties;

(e) Making any assignment for the benefit of the creditors of the Corporation; and

(f) Admitting in writing the inability of the Corporation to generally pay its debts as they mature or that the Corporation is generally not paying its debts as they become due.

If any director of the Corporation votes against the initiation of any bankruptcy action, such director shall not be liable for monetary damages to the Corporation or its stockholders for voting against such bankruptcy action. This exculpation shall be in addition to, and shall not in any way limit or modify any other exculpation contained in the charter of the Corporation.

With respect to each of the above transactions, if their approval is required, the holders of Series V Preferred Stock shall be provided with the information regarding the proposed transaction at least 10 Business Days prior to the scheduled approval date. If the holders of the Series V Preferred Stock shall not deliver written notice objecting to the particular transaction before the end of such 10 Business Day period, such holders shall be deemed to have consented to such transaction.

9. Shares to Be Retired. All shares of Series V Preferred Stock which shall have been issued and reacquired in any manner by the Corporation shall be restored to the status of authorized but unissued shares of Preferred Stock of the Corporation, without designation as to class or series.

10. Ranking. Any class or series of stock of the Corporation shall be deemed to rank:

(b) on a parity with the Series V Preferred Stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up if such stock or series shall be Parity Shares;

(c) junior to the Series V Preferred Stock, as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding up, if such stock or series shall be Junior Shares; and

(d) junior to the Series V Preferred Stock, as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, if such stock or series shall be Fully Junior Shares.

11. Voting Rights. Except as expressly provided below or otherwise in this charter or required by law, the holders of Series V Preferred Stock shall have no voting rights.

(i) the Corporation has failed in two consecutive quarters to pay in full the quarterly dividends on Series V Preferred Stock as required by subsection 2 of this Section 6.3(d) (including all dividends accumulated but unpaid for all prior quarters);

(ii) the Corporation violates Section 8(xi) and (xii) hereof;

(iii) the Corporation has failed to close an IPO of its Common Stock by the fourth anniversary of the Issue Date; or

(iv) the Corporation fails to pay the full redemption price on the Series V Preferred Stock subject to redemption pursuant to subsection 7(b) on any redemption date (provided, that such redemption was made at the request of the holders of the majority of the then-outstanding shares of Series V Preferred Stock), then the holders of Series V Preferred Stock shall immediately (and regardless of any subsequent cure) and thereafter be entitled to elect the smallest number of directors constituting a majority of the Board of Directors, and the holders of Common Stock, as a class, shall retain the right to elect the remaining directors. In order to facilitate the effective control of the Board of Directors by the holders of Series V Preferred Stock upon the occurrence of any event identified in (i), (ii), (iii) or (iv) above, the size of the Board shall automatically be increased to 15, and the holders of Series V Preferred Stock, voting together as a single class, shall have the exclusive right to elect six persons to fill

such newly created vacancies on the Board of Directors. All Directors elected by a vote of the holders of Series V Preferred Stock shall be referred to as "Series V Directors." The initial two Series V Directors serving as directors of the Corporation shall be a Class B Director and a Class C Director. If more than the two Series V Directors are serving then they shall be assigned to classes to make the number of directors in each class as nearly equal as possible. Holders of Series V Preferred Stock may elect the Series V Directors by unanimous written consent, by a special meeting of the holders of the Series V Preferred Stock, or at an annual meeting of stockholders of the Corporation. Any special meeting of the holders of the Series V Preferred Stock may be called by holders who hold at least 10% of the outstanding shares of Series V Preferred Stock or by a Series V Director and shall be held at a time and place specified by the holder or Series V Director calling a meeting. The presence in person or by proxy at a meeting of persons entitled to cast a majority of all the votes entitled to be cast by the holders of a majority of the outstanding shares of Series V Preferred Stock shall constitute a quorum for the purposes of any such special meeting. In the case of any vacancy occurring among the Series V Directors, a majority of the remaining Series V Directors, if any, may elect a successor to hold office until the earlier of the expiration of the remaining term of such Series V Director or the next meeting of the stockholders of that class or series, which shall not be later than the next annual meeting of holders of the Common Stock. If all Series V Directors shall cease to serve as directors before their terms expire, the holders of Series V Preferred Stock then outstanding may, by unanimous written consent or at an annual or special meeting of the holders of Series V Preferred Stock, elect successors to hold office for the unexpired terms of the Series V Directors.

to any one or more Series V Directors terminates in accordance with this Subsection (c), the term of any such Series V Director elected in accordance herewith shall immediately terminate.

12. Record Holders. The Corporation and the Transfer Agent may deem and treat the record holder of any Series V Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the Transfer Agent shall be affected by any notice to the contrary.

13. Fees and Expenses. In the event any holder of Series V Preferred Stock takes any legal action to enforce any of its rights under this Section 6.3(d) of the Corporation's charter, the non-prevailing party shall be required to pay the costs and expenses of the prevailing party in connection with such action, including reasonable attorney and witness fees.

EXHIBIT 3.2

CERTIFICATE OF CORRECTION

Alexandria Real Estate Equities, Inc., a Maryland corporation (the "Corporation"), hereby certifies that:

1. The fourth line of the definition of "Excepted Holder Limit" in Article VII, Section 7.1, currently reads as follows:

"disposed of by AEW or any such assignee after May 23, 1997, and increased in each case in the"

2. The first sentence of Article VII, Section 7.2.9(b), currently reads as follows:

"AEW may Transfer or assign all or a portion of its interest held in Common Stock of the Corporation on May 23, 1997 to another Person, provided that, as a result of such Transfer, no Individual would Beneficially Own shares of Capital Stock in excess of the Ownership Limit."

1. The fourth line of the definition of "Excepted Holder Limit" in Article VII, Section 7.1, shall read as follows:

"disposed of by AEW or any such assignee after May 28, 1997, and increased in each case in the"

2. The first sentence of Article VII, Section 7.2.9(b), shall read as follows:

"AEW may Transfer or assign all or a portion of its interest held in Common Stock of the Corporation on May 28, 1997 to

another Person, provided that, as a result of such Transfer, no Individual would Beneficially Own shares of Capital Stock in excess of the Ownership Limit."

The undersigned Chairman of the Board acknowledges this Certificate of Correction to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned Chairman of the Board acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Correction to be signed in its name and on its behalf by its Chairman of the

Broad and attested to by its Secretary on this 20th day of    June       , 1997.
                                               -----       --------------


ATTEST:                             ALEXANDRIA REAL ESTATE
                                    EQUITIES, INC.



  /s/ Peter J. Nelson               By:  /s/ Jerry M. Sudarsky (SEAL)
------------------------               -----------------------


Secretary                              Chairman of the Board