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Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

August 1, 2012

 

 

American Assets Trust, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-35030    27-3338708

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

   (I.R.S. Employer

Identification No.)

11455 El Camino Real, Suite 200

San Diego, California 92130

   92130
(Address of principal executive offices)    (Zip Code)

(858) 350-2600

Registrant’s telephone number, including area code:

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On August 1, 2012, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ended June 30, 2012. Also on August 1, 2012, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter ended June 30, 2012. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

Exhibits 99.1 and 99.2, are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 7.01 Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ended June 30, 2012 and made available on its website certain supplement information relating thereto.

The information being furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

The following exhibits are furnished with this Current Report on Form 8-K:

 

Exhibit
Number

 

Exhibit Description

99.1**   Press release issued by American Assets Trust, Inc. on August 1, 2012.
99.2**   American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2012.

 

** Furnished herewith


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

American Assets Trust, Inc.

By:

 

/s/ Robert F. Barton

Robert F. Barton

Executive Vice President, CFO

August 1, 2012


EXHIBIT INDEX

 

Exhibit
Number

  

Exhibit Description

99.1    Press release issued by American Assets Trust, Inc. on August 1, 2012.
99.2    American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2012.
Press release

Exhibit 99.1

 

LOGO

American Assets Trust, Inc. Reports Second Quarter 2012 Financial Results

Company Release – 8/1//12

SAN DIEGO—American Assets Trust, Inc. (NYSE: AAT) (the “Company”) today reported financial results for its second quarter ended June 30, 2012.

Financial Results and Recent Developments

 

   

Funds From Operations of $0.30 and $0.62 per diluted share/unit for the three and six months ended June 30, 2012, respectively

   

Company increased the lower end of 2012 annual guidance 3% to a range of $1.17 to $1.22 of FFO per share

   

Multifamily occupancy increased to 97.7% at June 30, 2012 compared to 88.4% at March 31, 2012

   

Embassy Suites—Waikiki Beach WalkTM increased Revenue per Available Room by 9% compared to the same period last year

   

Signed 32 office and retail leases for 205,500 square feet

During the second quarter of 2012, the Company generated funds from operations (“FFO”) for common stockholders and unitholders of $17.2 million, or $0.30 per diluted share/unit, compared to $14.6 million or $0.26 per diluted share/unit for the three months ended June 30, 2011. For the six months ended June 30, 2012, the Company generated FFO for common stockholders and unitholders of $35.2 million, or $0.62 per diluted share/unit, compared to $24.4 million or $0.47 per diluted share/unit for the six months ended June 30, 2011. Unitholders refers to holders of common units of our operating partnership. The increase in FFO was largely due to additional operating income from office properties of $4.1 million and $7.9 million for the three and six months ended June 30, 2012, respectively, including non-same store properties.

Net income attributable to common stockholders was $1.7 million, or $0.04 per basic and diluted share, for the three months ended June 30, 2012, compared to net income attributable to common stockholders of $0.2 million, or $0.01 per basic and diluted share, for the three months ended June 30, 2011. For the six months ended June 30, 2012, net income attributable to common stockholders was $3.5 million, or $0.09, per basic and diluted share, compared to net loss attributable to common stockholder of $(0.5) million, or $(0.01), per basic and diluted share, for the six months ended June 30, 2011. The increase in net income attributable to common stockholders was largely due to additional operating income from office properties, as noted above, and non-recurring IPO related costs incurred during the six months ended June 30, 2011.

FFO is a non-GAAP supplemental earnings measure which the Company considers meaningful in measuring its operating performance. Reconciliations of FFO to net income are attached to this press release.

 

1


Portfolio Results

The portfolio leased status as of the end of the indicated quarter was as follows:

 

     June 30, 2012     March 31, 2012     June 30, 2011  

Total Portfolio

      

Retail

     96.2     94.8     94.0

Office

     95.0     94.7     94.7

Multifamily

     97.7     88.4     97.7

Mixed-Use:

      

Retail

     93.9     98.8     97.6

Hotel

     88.7     92.2     89.5

Same-Store Portfolio

      

Retail

     96.2     94.5     96.4

Office

     96.7     96.8     96.2

Multifamily

     97.7     88.4     97.7

During the second quarter of 2012, the Company signed 32 leases for approximately 205,500 square feet of retail and office space, as well as 302 multifamily apartment leases. Renewals accounted for 86.7% of the comparable retail leases, 50.0% of the comparable office leases and 43.7% of the residential leases.

Retail

On a comparable space basis (i.e., leases for which there was a former tenant), the Company leased 85,000 square feet of retail space at an average cash-basis contractual rent increase of 3.6% during the second quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $32.25 per square foot, compared to an average contractual rent of $31.13 per square foot for the last year of the prior leases. On a GAAP basis (including the impact of straight-line rents), average rent per square foot for the comparable retail space increased 5.8% for the second quarter of 2012.

Office

On a comparable space basis, the Company leased 70,000 square feet of office space at an average cash-basis contractual rent increase of 29.8% during the second quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $44.88 per square foot, compared to an average contractual rent of $34.59 per square foot for the last year of the prior leases. On a GAAP basis (including the impact of straight-line rents), average rent per square foot for the comparable office space increased 49.4% for the second quarter of 2012.

Multifamily

At June 30, 2012, the average monthly base rent per leased unit was $1,304 compared to an average monthly base rent per leased unit of $1,407 at June 30, 2011.

Mixed-Use

Waikiki Beach Walk-Retail and Embassy SuitesTM had revenue of $11.3 million and net operating income of $4.4 million for the three months ended June 30, 2012. Revenue per available room, or RevPAR, increased 9% compared to the same period last year. RevPar was $222 for the three months ended June 30, 2012 and $204 for the three months ended June 30, 2011. Average Daily Rate also increased over 7% compared to same period last year.

 

2


Same-Store Net Operating Income

Same-store net operating income increased approximately 6.7% and decreased approximately 0.1% for the three and six months ended June 30, 2012, respectively, on a GAAP basis, compared to the corresponding periods in 2011. The same-store net operating income by segment was as follows (in thousands):

 

     Three Months Ended            Six Months Ended         
     June 30,            June 30,         
     2012      2011      Change     2012      2011      Change  

Retail

   $ 16,366       $ 16,072         1.8   $ 28,901       $ 29,084         (0.6 )% 

Office

     10,674         9,030         18.2        14,280         14,135         1.0   

Multifamily

     1,944         2,066         (5.9     4,172         4,198         (0.6

Mixed-Use

     4,411         4,131         6.8        —           —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
   $ 33,395       $ 31,299         6.7   $ 47,353       $ 47,417         (0.1 )% 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

The increase in same-store office net operating income reflects an increase in office rental revenue from salesforce.com at The Landmark at One Market and Portland Energy Conservation at First & Main. In addition, the office portfolio incurred lower rent expense for rental of the Annex at The Landmark at One Market, offset by higher premiums on our insurance policies.

Same-store multifamily net operating income decreased primarily due to additional real estate tax accruals during the second quarter and lower occupancy throughout the three months ended June 30, 2012, with an increase in occupancy at the end of the quarter.

The increase in mixed-use rental revenue was due to increased tourist travel to Hawaii and higher revenue per available room for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, with average occupancy for the three months ended June 30, 2012 of 88.7% compared to 87.0% for the three months ended June 30, 2011.

In the tables above, same-store property operating income excludes income from First & Main, which was acquired in March 2011, Lloyd District Portfolio, which was acquired in July 2011, One Beach Street, which was acquired in January 2012 and Solana Beach Town Centre, Solana Beach Corporate Centre and Waikiki Beach Walk, as these three properties represented noncontrolled properties that were not consolidated until our IPO in January 2011.

Balance Sheet and Liquidity

As of June 30, 2012, the Company had gross real estate assets of $1.7 billion and liquidity of $336.7 million, comprised of cash and cash equivalents of $98.6 million, marketable securities of $24.3 million and approximately $213.8 million of availability on its line of credit.

 

3


Dividends

The Company declared dividends on its shares of common stock of $0.21 per share for the second quarter of 2012. The dividends were declared on April 26, 2012 to holders of record on June 15, 2012 and were paid on June 29, 2012. Total dividends paid on shares of the Company’s common stock for the six months ended June 30, 2012 were $0.42.

In addition, the Company has declared a dividend on its common stock of $0.21 per share for the quarter ending September 30, 2012. The dividend will be paid on September 28, 2012 to stockholders of record on September 14, 2012.

2012 Guidance

The Company increased the lower end of its guidance for full year 2012 FFO per diluted share from the prior range of $1.14 to $1.22 to a range of $1.17 to $1.22 per share, which represents a 3% increase from the low point. The Company’s guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments. The Company will discuss key assumptions regarding the increase in guidance tomorrow on the conference call.

Conference Call

The Company will hold a conference call to discuss the results for the second quarter 2012 on Thursday, August 2, 2012 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-866-713-8562 and use the pass code 42093221. A telephonic replay of the conference call will be available beginning at 10:00 a.m. PT on Thursday, August 2, 2012 through Thursday, August 16, 2012. To access the replay, dial 1-888-286-8010 and use the pass code 65366263. A live on-demand audio webcast of the conference call will be available on the Company’s website at www.americanassetstrust.com. A replay of the call will also be available on the Company’s website.

Supplemental Information

Supplemental financial information regarding the Company’s second quarter 2012 results may be found in the “Investor Relations” section of the Company’s website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

 

4


Financial Information

American Assets Trust, Inc.

Consolidated Balance Sheets

(In Thousands, Except Share Data)

 

     June 30,
2012
    December 31,
2011
 
     (unaudited)        

Assets

    

Real estate, at cost

    

Operating real estate

   $ 1,691,809      $ 1,659,106   

Construction in progress

     27,612        3,495   

Held for development

     14,795        24,675   
  

 

 

   

 

 

 
     1,734,216        1,687,276   

Accumulated depreciation

     (255,485     (234,595
  

 

 

   

 

 

 

Net real estate

     1,478,731        1,452,681   

Cash and cash equivalents

     98,584        112,723   

Restricted cash

     10,973        9,216   

Marketable securities

     24,287        28,235   

Accounts receivable, net

     4,997        6,847   

Deferred rent receivables, net

     27,227        23,294   

Other assets, net

     68,649        76,285   
  

 

 

   

 

 

 

Total assets

   $ 1,713,448      $ 1,709,281   
  

 

 

   

 

 

 

Liabilities and equity

    

Liabilities:

    

Secured notes payable

   $ 964,538      $ 943,479   

Accounts payable and accrued expenses

     27,317        25,476   

Security deposits payable

     4,874        4,790   

Other liabilities and deferred credits

     54,316        55,808   
  

 

 

   

 

 

 

Total liabilities

     1,051,045        1,029,553   
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

American Assets Trust, Inc. stockholders’ equity

    

Common stock $0.01 par value, 490,000,000 shares authorized, 39,285,156 and 39,283,796 shares outstanding at June 30, 2012 and December 31, 2011, respectively

     393        393   

Additional paid-in capital

     655,087        653,645   

Accumulated dividends in excess of net income

     (40,699     (28,007
  

 

 

   

 

 

 

Total American Assets Trust, Inc. stockholders’ equity

     614,781        626,031   

Noncontrolling interests

     47,622        53,697   
  

 

 

   

 

 

 

Total equity

     662,403        679,728   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,713,448      $ 1,709,281   
  

 

 

   

 

 

 

 

5


American Assets Trust, Inc.

Unaudited Consolidated Statements of Operations

(In Thousands, Except Shares and Per Share Data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Revenue:

        

Rental income

   $ 54,964      $ 48,616      $ 109,284      $ 93,582   

Other property income

     2,845        2,484        5,563        4,401   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     57,809        51,100        114,847        97,983   

Expenses:

        

Rental expenses

     15,952        14,322        31,195        26,533   

Real estate taxes

     5,944        5,452        11,388        9,410   

General and administrative

     3,992        3,866        7,757        7,052   

Depreciation and amortization

     14,671        13,934        29,924        26,089   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     40,559        37,574        80,264        69,084   

Operating income

     17,250        13,526        34,583        28,899   

Interest expense

     (14,476     (14,063     (28,832     (27,054

Early extinguishment of debt

     —          —          —          (25,867

Loan transfer and consent fees

     —          —          —          (9,019

Gain on acquisition

     —          —          —          46,371   

Other income (expense), net

     (150     530        (256     (71
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     2,624        (7     5,495        13,259   

Results from discontinued operations

     —          462        —          792   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     2,624        455        5,495        14,051   

Net income attributable to restricted shares

     (131     (132     (263     (218

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     —          —          —          2,458   

Net income attributable to Predecessor’s controlled owners’ equity

     —          —          —          (16,995

Net (income) loss attributable to unitholders in the Operating Partnership

     (804     (104     (1,687     225   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to American Assets Trust, Inc. stockholders

   $ 1,689      $ 219      $ 3,545      $ (479
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income (loss) from continuing operations attributable to common stockholders per share

   $ 0.04      $ —        $ 0.09      $ (0.03

Basic net income from discontinued operations attributable to common stockholders per share

     —          0.01        —          0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income (loss) attributable to common stockholders per share

   $ 0.04      $ 0.01      $ 0.09      $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares of common stock outstanding—basic

     38,659,155        38,655,084        38,658,162        34,810,932   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income (loss) from continuing operations attributable to common stockholders per share

   $ 0.04      $ —        $ 0.09      $ (0.03

Diluted net income from discontinued operations attributable to common stockholders per share

     —          0.01        —          0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income (loss) attributable to common stockholders per share

   $ 0.04      $ 0.01      $ 0.09      $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares of common stock outstanding—diluted

     57,055,244        57,051,173        57,054,509        34,810,932   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per common share

   $ 0.21      $ 0.21      $ 0.42      $ 0.38   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6


Reconciliation of Net Income to Funds From Operations

The Company’s FFO attributable to common stockholders and operating partnership unitholders and a reconciliation to net income is as follows (in thousands except shares and per share data):

 

     Three Months Ended
June 30, 2012
    Six Months Ended
June 30, 2012
 

Funds From Operations (FFO)

    

Net income

   $ 2,624      $ 5,495   

Depreciation and amortization of real estate assets

     14,671        29,924   
  

 

 

   

 

 

 

FFO, as defined by NAREIT

     17,295        35,419   

Less: Nonforfeitable dividends on incentive stock awards

     (88     (177
  

 

 

   

 

 

 

FFO attributable to common stock and units

   $ 17,207      $ 35,242   
  

 

 

   

 

 

 

FFO per diluted share/unit

   $ 0.30      $ 0.62   
  

 

 

   

 

 

 

Weighted average number of common shares and units, diluted

     57,260,406        57,259,671   
  

 

 

   

 

 

 

Reported results are preliminary and not final until the filing of the Company’s Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.

Use of Non-GAAP Information

The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company’s operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. The Company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company’s operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company’s properties, all of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as supplements to net income as measures of the Company’s performance. FFO should not be used as measures of the Company’s liquidity, nor are they indicative of funds available to fund the Company’s cash needs, including the Company’s ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

About American Assets Trust, Inc.

The Company is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. For over 40 years, the Company has been acquiring, improving, developing and managing premier retail, office and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon and Hawaii. The Company’s retail portfolio comprises approximately 3.0 million rentable square feet, and its office portfolio comprises approximately 2.3 million square feet. In addition the company owns one mixed-use property (including approximately 97,000 rentable square feet of retail space and a 369-room all-suite hotel) and over 900 multifamily units. In 2011, the Company succeeded to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

 

7


Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Source: American Assets Trust, Inc.

Investor and Media Contact:

American Assets Trust

Robert F. Barton

Executive Vice President and Chief Financial Officer

858-350-2607

 

8

Supplemental Information

Exhibit 99.2

 

 

SECOND QUARTER 2012

Supplemental Information

 

 

 

 

LOGO

 

Investor and Media Contact

American Assets Trust

Robert F. Barton

Executive Vice President and Chief Financial Officer

858-350-2607

   LOGO


 

   LOGO

 

 

American Asset Trust, Inc.’s Portfolio is concentrated in high-barrier-to-entry markets with favorable supply/demand characteristics

 

 

LOGO

 

Market

   Property
Type
         No. of
Properties
         Square
Feet/Units
 

San

Diego

   Retail       6       1,217,919
     Office       2       668,772
     Multifamily       4       922 units (1)
                
 

San

Francisco

   Office       3       687,534
                
  Oahu    Retail       2       549,695
     Mixed-Use       1       96,569
(retail)/369
suites
                
  Monterey    Retail       1       675,385
                
 

San

Antonio

   Retail       1       589,501
                
  Portland    Office       2       971,036
                
                
                

 

         Square Feet    %

Note: Circled areas represent all markets in which American Assets Trust, Inc. (the “Company”) currently owns and operates its real
estate assets. Size of circle denotes approximation of square feet / units.

 

Data is as of June 30, 2012.

 

(1) Includes 122 RV spaces.

  Retail    3.0 million    57%
  Office    2.3 million    43%
  Totals    5.3 million       
             

 

 

  Second Quarter 2012 Supplemental Information    Page 2   


 

INDEX    LOGO

 

 

 

     SECOND QUARTER 2012 SUPPLEMENTAL INFORMATION       

1.

   FINANCIAL HIGHLIGHTS   
  

Consolidated Balance Sheets

     5   
  

Consolidated Statements of Operations

     6   
  

Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution

     7   
  

2012 Guidance

     9   
  

Same-Store Portfolio Net Operating Income (NOI)

     10   
  

Same-Store Portfolio NOI Comparison

     12   
  

NOI By Region

     13   
  

NOI Breakdown

     14   
  

Property Revenue and Operating Expenses

     15   
  

Segment Capital Expenditures

     17   
  

Summary of Outstanding Debt

     18   
  

Market Capitalization

     19   
  

Summary of Redevelopment Opportunities

     20   

2.

  

PORTFOLIO DATA

  
   Property Report      22   
   Retail Leasing Summary      24   
   Office Leasing Summary      25   
   Lease Expirations      26   
   Portfolio Leased Statistics      28   
   Top Tenants - Retail      29   
   Top Tenants - Office      30   

3.

   APPENDIX   
   Glossary of Terms      32   

This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

 

 

  Second Quarter 2012 Supplemental Information    Page 3   


 

   LOGO

 

 

 

FINANCIAL HIGHLIGHTS

 

 

 

 

  Second Quarter 2012 Supplemental Information      


 

CONSOLIDATED BALANCE SHEETS    LOGO

 

 

(Amounts in thousands, except share data)

 

     June  30,
2012
     December 31,
2011
 
     (unaudited)      (audited)  

Assets

     

Real estate, at cost

     

Operating real estate

     $     1,691,809            $     1,659,106      

Construction in progress

     27,612            3,495      

Held for development

     14,795            24,675      
  

 

 

    

 

 

 
     1,734,216            1,687,276      

Accumulated depreciation

     (255,485)           (234,595)     
  

 

 

    

 

 

 

Net real estate

     1,478,731            1,452,681      

Cash and cash equivalents

     98,584            112,723      

Restricted cash

     10,973            9,216      

Marketable securities

     24,287            28,235      

Accounts receivable, net

     4,997            6,847      

Deferred rent receivables, net

     27,227            23,294      

Other assets, net

     68,649            76,285      
  

 

 

    

 

 

 

Total assets

     $ 1,713,448            $ 1,709,281      
  

 

 

    

 

 

 

Liabilities and equity

     

Liabilities:

     

Secured notes payable

     $ 964,538            $ 943,479      

Accounts payable and accrued expenses

     27,317            25,476      

Security deposits payable

     4,874            4,790      

Other liabilities and deferred credits

     54,316            55,808      
  

 

 

    

 

 

 

Total liabilities

     1,051,045            1,029,553      
  

 

 

    

 

 

 

Commitments and contingencies

     

Equity:

     

American Assets Trust, Inc. stockholders’ equity

     

Common stock $0.01 par value, 490,000,000 shares authorized, 39,285,156 and 39,283,796 shares outstanding at June 30, 2012 and December 31, 2011, respectively

     393            393      

Additional paid in capital

     655,087            653,645      

Accumulated dividends in excess of net income

     (40,699)           (28,007)     
  

 

 

    

 

 

 

Total American Assets Trust, Inc. stockholders’ equity

     614,781            626,031      

Noncontrolling interests

     47,622            53,697      
  

 

 

    

 

 

 

Total equity

     662,403            679,728      
  

 

 

    

 

 

 

Total liabilities and equity

     $ 1,713,448            $     1,709,281      
  

 

 

    

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 5   


 

CONSOLIDATED STATEMENTS OF OPERATIONS    LOGO

 

 

 

(Unaudited, amounts in thousands, except shares and per share data)    Three Months Ended June 30,      Six Months Ended June 30,  
     2012      2011      2012      2011  

Revenue:

           

Rental income

       $ 54,964             $ 48,616             $ 109,284             $ 93,582     

Other property income

     2,845           2,484           5,563           4,401     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     57,809           51,100           114,847           97,983     

Expenses:

           

Rental expenses

     15,952           14,322           31,195           26,533     

Real estate taxes

     5,944           5,452           11,388           9,410     

General and administrative

     3,992           3,866           7,757           7,052     

Depreciation and amortization

     14,671           13,934           29,924           26,089     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     40,559           37,574           80,264           69,084     

Operating income

     17,250           13,526           34,583           28,899     

Interest expense

     (14,476)          (14,063)          (28,832)          (27,054)    

Early extinguishment of debt

     -               -               -               (25,867)    

Loan transfer and consent fees

     -               -               -               (9,019)    

Gain on acquisition

     -               -               -               46,371     

Other income (expense), net

     (150)          530           (256)          (71)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) from continuing operations

     2,624           (7)          5,495           13,259     

Discontinued operations

           

Results from discontinued operations

     -               462           -               792     
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     2,624           455           5,495           14,051     

Net income attributable to restricted shares

     (131)          (132)          (263)          (218)    

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     -               -               -               2,458     

Net income attributable to Predecessor’s controlled owners’ equity

     -               -               -               (16,995)    

Net (income) loss attributable to unitholders in the Operating Partnership

     (804)          (104)          (1,687)          225     
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income (loss) attributable to American Assets Trust, Inc. stockholders

       $ 1,689             $ 219             $ 3,545             $ (479)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net income (loss) from continuing operations attributable to common stockholders per share

       $ 0.04             $ -                 $ 0.09             $ (0.03)    

Basic net income from discontinued operations attributable to common stockholders per share

     -               0.01           -               0.02     
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net income (loss) attributable to common stockholders per share

       $ 0.04             $ 0.01             $ 0.09             $ (0.01)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares of common stock outstanding—basic

     38,659,155           38,655,084           38,658,162           34,810,932     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net income (loss) from continuing operations attributable to common stockholders per share

       $ 0.04             $ -                 $ 0.09             $ (0.03)    

Diluted net income from discontinued operations attributable to common stockholders per share

     -               0.01           -               0.02     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net income (loss) attributable to common stockholders per share

       $ 0.04             $ 0.01             $ 0.09             $ (0.01)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares of common stock outstanding—diluted

         57,055,244               57,051,173               57,054,509               34,810,932     
  

 

 

    

 

 

    

 

 

    

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 6   


 

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION

   LOGO

 

 

 

(Unaudited, amounts in thousands, except share and per share data)    Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

Funds from Operations (FFO) (1)

           

Net income

           $ 2,624                 $ 455                     $ 5,495                     $ 14,051     

Depreciation and amortization of real estate assets (2)

     14,671           14,277           29,924           26,767     

Depreciation and amortization on unconsolidated real estate joint ventures (pro rata)

     -               -               -               688     
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO, as defined by NAREIT

     17,295           14,732           35,419           41,506     

Less: FFO attributable to Predecessor’s controlled and noncontrolled owners’ equity

     -               -               -               (16,973)    

Less: Nonforfeitable dividends on incentive stock awards

     (88)          (89)          (177)          (139)    
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO attributable to common stock and common units

           $ 17,207                 $ 14,643                     $ 35,242                     $ 24,394     
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO per diluted share/unit

           $ 0.30                 $ 0.26                     $ 0.62                     $ 0.47     
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average number of common shares and common units, diluted (3)

         57,260,406               57,258,886               57,259,671               51,528,587     
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO As Adjusted (1)

           

FFO

           $ 17,295                 $ 14,732                     $ 35,419                     $ 41,506     

Early extinguishment of debt

     -               -               -               25,867     

Loan transfer and consent fees

     -               -               -               9,019     

Gain on acquisition of controlling interests (4)

     -               -               -               (46,371)    
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO As Adjusted

     17,295           14,732           35,419           30,021     

Less: FFO As Adjusted attributable to Predecessor’s controlled and noncontrolled owners’ equity

     -               -               -               (2,462)    

Less: Nonforfeitable dividends on incentive stock awards

     (88)          (89)          (177)          (139)    
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO As Adjusted attributable to common stock and units

           $ 17,207                 $ 14,643                     $ 35,242                     $ 27,420     
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO As Adjusted per diluted share/unit

           $ 0.30                 $ 0.26                     $ 0.62                     $ 0.53     
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average number of common shares and units, diluted (3)

     57,260,406           57,258,886           57,259,671           51,528,587     
  

 

 

    

 

 

    

 

 

    

 

 

 

Dividends

           

Dividends declared and paid

           $ 12,113                 $ 12,114                     $ 24,226                     $ 21,898     

Dividends declared and paid per share/unit

           $ 0.21                 $ 0.21                     $ 0.42                     $ 0.38     

 

 

  Second Quarter 2012 Supplemental Information    Page 7   


 

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION (CONTINUED)

   LOGO

 

 

 

(Unaudited, amounts in thousands, except share and per share data)

   Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

Funds Available for Distribution (FAD) (1)

           

FFO As Adjusted

           $         17,295                 $         14,732                 $         35,419                 $         30,021     

Adjustments:

           

Tenant improvements, leasing commissions and maintenance capital expenditures

     (5,332)          (2,163)          (9,859)          (3,237)    

Net effect of straight-line rents (5)

     (2,200)          (1,054)          (4,187)          (1,334)    

Amortization of net above (below) market rents (6)

     190           386           711           781     

Net effect of other lease intangibles (7)

     69           268           138           536     

Amortization of debt issuance costs and debt fair value adjustment

     1,005           1,007           1,979           1,872     

Non-cash compensation expense

     707           699           1,406           1,190     

Unrealized losses on marketable securities

     328           (318)          624           (53)    

Nonforfeitable dividends on incentive stock awards

     (88)          (89)          (177)          (139)    

Adjustments related to discontinued operations

     -               81           -               (362)    
  

 

 

    

 

 

    

 

 

    

 

 

 

FAD

           $ 11,974                 $ 13,549                 $ 26,054                 $ 29,275     
  

 

 

    

 

 

    

 

 

    

 

 

 

Summary of Capital Expenditures

           

Tenant improvements and leasing commissions

           $ 3,657                 $ 1,794                 $ 6,658                 $ 2,571     

Maintenance capital expenditures

     1,675           369           3,201           666     
  

 

 

    

 

 

    

 

 

    

 

 

 
           $ 5,332                 $ 2,163                 $ 9,859                 $ 3,237     
  

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1) See Glossary of Terms.
  (2) The six months ended June 30, 2011 includes depreciation and amortization on Valencia Corporate Center, which was sold on August 30, 2011 and is classified as discontinued operations.
  (3) For the six months ended June 30, 2012 and 2011, the weighted average common shares and common units used to compute FFO and FFO As Adjusted per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO and FFO As Adjusted per diluted share/unit include additional shares/units which were excluded from the computation of diluted EPS, as they were anti-dilutive for the periods presented.
  (4) Represents the gain recognized upon acquisition of the outside ownership interests in the Solana Beach Centre entities and the Waikiki Beach Walk entities on January 19, 2011, in which we previously held a noncontrolling interest.
  (5) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
  (6) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
  (7) Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our leases of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk—Retail.

 

 

  Second Quarter 2012 Supplemental Information    Page 8   


 

2012 GUIDANCE    LOGO

 

 

 

 

(Amounts in thousands, except share and per share data)    2012 Guidance Range (1)  

Funds from Operations (FFO)

     

Net income

           $ 8,865                 $ 11,967     

Depreciation and amortization of real estate assets

     58,525           58,525     
  

 

 

    

 

 

 

FFO, as defined by NAREIT

     67,390           70,492     

Less: Nonfortfeitable dividends on incentive stock awards

     (354)          (354)    
  

 

 

    

 

 

 

FFO attributable to common stock and units

           $ 67,036                 $ 70,138     
  

 

 

    

 

 

 

Weighted average number of common shares and units, diluted

         57,265,996               57,265,996      
  

 

 

    

 

 

 

FFO per diluted share

           $ 1.17                 $ 1.22     
  

 

 

    

 

 

 

Notes:

  (1) Our guidance for full year 2012 FFO per diluted share is a range of $1.17 to $1.22. Our guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments.

These estimates are forward-looking and reflect management’s view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates and the amount and timing of acquisition and development activities. Our actual results may differ materially from these estimates.

 

 

  Second Quarter 2012 Supplemental Information    Page 9   


 

SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended June 30, 2012  
     Retail      Office      Multifamily      Mixed-Use      Total  

Real estate rental revenue

              

Same-store portfolio

       $ 22,437             $     15,400             $     3,509         $     12,143             $     53,489     

Non-same store portfolio (1)

     15           4,305           -               -               4,320     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     22,452           19,705           3,509           12,143           57,809     

Real estate expenses

              

Same-store portfolio

     6,071           4,726           1,565           7,732           20,094     

Non-same store portfolio (1)

     23           1,779           -               -               1,802     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     6,094           6,505           1,565           7,732           21,896     

Net Operating Income (NOI), GAAP basis

              

Same-store portfolio

     16,366           10,674           1,944           4,411           33,395     

Non-same store portfolio (1)

     (8)          2,526           -               -               2,518     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       $ 16,358             $ 13,200             $ 1,944             $ 4,411             $ 35,913     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, GAAP basis

       $ 16,366             $ 10,674             $ 1,944             $ 4,411             $ 33,395     

Net effect of straight-line rents (2)

     (585)          (1,328)          -               (66)          (1,979)    

Amortization of net above (below) market rents (3)

     (184)          36           -               185           37     

Net effect of other lease intangibles (4)

     -               84           -               (16)          68     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, cash basis

       $     15,597             $ 9,466             $ 1,944             $ 4,514             $ 31,521     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1) Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2012 and June 30, 2011. See Glossary of Terms.
  (2) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
  (3) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
  (4) Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our lease of the Annex at The Landmark at One Market.

 

 

  Second Quarter 2012 Supplemental Information    Page 10   


 

SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)    LOGO

 

 

 

(Amounts in thousands)    Six Months Ended June 30, 2012  
     Retail      Office      Multifamily      Mixed-Use      Total  

Real estate rental revenue

              

Same-store portfolio

       $     39,967             $     21,169             $     7,051             $ -                 $     68,187     

Non-same store portfolio (1)

     4,176           18,012           -               24,472           46,660     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     44,143           39,181           7,051           24,472           114,847     

Real estate expenses

              

Same-store portfolio

     11,066           6,889           2,879           -               20,834     

Non-same store portfolio (1)

     754           5,762           -               15,233           21,749     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     11,820           12,651           2,879           15,233           42,583     

Net Operating Income (NOI), GAAP basis

              

Same-store portfolio

     28,901           14,280           4,172           -               47,353     

Non-same store portfolio (1)

     3,422           12,250           -               9,239           24,911     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       $     32,323             $ 26,530             $ 4,172             $ 9,239             $ 72,264     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, GAAP basis

       $     28,901             $ 14,280             $ 4,172             $ -                 $ 47,353     

Net effect of straight-line rents (2)

     (402)          (2,732)          -               -               (3,134)    

Amortization of net above (below) market rents (3)

     143           224           -               -               367     

Net effect of other lease intangibles (4)

     -               168           -               -               168     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, cash basis

       $     28,642             $ 11,940             $ 4,172             $ -                 $ 44,754     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1) Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2012 and June 30, 2011. See Glossary of Terms.
  (2) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
  (3) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
  (4) Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our lease of the Annex at The Landmark at One Market.

 

 

  Second Quarter 2012 Supplemental Information    Page 11   


 

SAME-STORE PORTFOLIO NOI COMPARISON    LOGO

 

 

 

(Amounts in thousands)

   Three Months Ended
June 30,
            Six Months Ended
June 30,
        
     2012      2011      Change      2012      2011      Change  

Cash Basis:

                 

Retail

         $     15,597                $     15,808                    (1.3) %               $     28,642                $     29,038            (1.4) %     

Office

     9,466            8,566            10.5                11,940            14,603            (18.2)         

Multifamily

     1,944            2,066            (5.9)               4,172            4,198            (0.6)         

Mixed-Use

     4,514            4,227            6.8                -                 -                 -           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
         $     31,521                $     30,667            2.8 %               $     44,754                $     47,839            (6.5) %     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

GAAP Basis:

                 

Retail

         $     16,366                $     16,072            1.8 %               $     28,901                $     29,084            (0.6) %     

Office

     10,674            9,030            18.2                14,280            14,135            1.0          

Multifamily

     1,944            2,066            (5.9)               4,172            4,198            (0.6)         

Mixed-Use

     4,411            4,131            6.8                -                 -                 -           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
         $     33,395              $     31,299            6.7 %               $     47,353                $     47,417            (0.1) %     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 12   


 

NOI BY REGION    LOGO

 

 

 

(Amounts in thousands)

   Three Months Ended June 30, 2012  
     Retail      Office      Multifamily      Mixed-Use      Total  

Southern California

              

NOI, GAAP basis (1)

               $ 6,733             $ 3,999                     $ 1,944                     $ -                     $     12,676     

Net effect of straight-line rents (2)

     (423)          42           -               -               (381)    

Amortization of net above (below) market rents (3)

     (213)          66           -               -               (147)    

Net effect of other lease intangibles (4)

     -               93           -               -               93     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     6,097           4,200           1,944           -               12,241     

Northern California

              

NOI, GAAP basis (1)

     2,054           5,141           -               -               7,195     

Net effect of straight-line rents (2)

     (39)          (1,501)          -               -               (1,540)    

Amortization of net above (below) market rents (3)

     (67)          (67)          -               -               (134)    

Net effect of other lease intangibles (4)

     -               (8)          -               -               (8)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     1,948           3,565           -               -               5,513     

Hawaii

              

NOI, GAAP basis (1)

     4,313           -               -               4,411           8,724     

Net effect of straight-line rents (2)

     108           -               -               (66)          42     

Amortization of net above (below) market rents (3)

     174           -               -               185           359     

Net effect of other lease intangibles (4)

     -               -               -               (16)          (16)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     4,595           -               -               4,514           9,109     

Oregon

              

NOI, GAAP basis (1)

     -               4,060           -               -               4,060     

Net effect of straight-line rents (2)

     -               (90)          -               -               (90)    

Amortization of net above (below) market rents (3)

     -               190           -               -               190     

Net effect of other lease intangibles (4)

     -               -               -               -               -         
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     -               4,160           -               -               4,160     

Texas

              

NOI, GAAP basis (1)

     3,258           -               -               -               3,258     

Net effect of straight-line rents (2)

     (231)          -               -               -               (231)    

Amortization of net above (below) market rents (3)

     (78)          -               -               -               (78)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     2,949           -               -               -               2,949     

Total

              

NOI, GAAP basis (1)

     16,358           13,200           1,944           4,411           35,913     

Net effect of straight-line rents (2)

     (585)          (1,549)          -               (66)          (2,200)    

Amortization of net above (below) market rents (3)

     (184)          189           -               185           190     

Net effect of other lease intangibles (4)

     -               85           -               (16)          69     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

               $     15,589             $     11,925                     $     1,944                     $     4,514                     $ 33,972     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1) See Glossary of Terms.
  (2) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
  (3) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
  (4) Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our leases of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk - Retail.

 

 

  Second Quarter 2012 Supplemental Information    Page 13   


 

NOI BREAKDOWN    LOGO

 

 

 

Three Months Ended June 30, 2012

 

 

 

LOGO

 

 

  Second Quarter 2012 Supplemental Information    Page 14   


 

PROPERTY REVENUE AND OPERATING EXPENSES    LOGO

 

 

 

 

(Amounts in thousands)    Three Months Ended June 30, 2012  

Property

   Base Rent (1)     Additional
Property
      Income (2)      
     Billed Expense
  Reimbursements (3)  
     Property
Operating
      Expenses (4)      
 

Retail Portfolio

          

Carmel Country Plaza

               $ 818           $ 27                    $ 173                $ (204)    

Carmel Mountain Plaza

     2,269         38          568          (973)    

South Bay Marketplace

     460         54          144          (183)    

Rancho Carmel Plaza

     191                 54          (54)    

Lomas Santa Fe Plaza

     1,305                 412          (369)    

Solana Beach Towne Centre

     1,359         38          356          (379)    

Del Monte Center

     2,027         161          901          (1,141)    

The Shops at Kalakaua

     391         21          40          (65)    

Waikele Center

     4,301         290          991          (1,374)    

Alamo Quarry Market

     2,931         64          1,331          (1,377)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Retail Portfolio

               $     16,052           $     711                    $ 4,970                $ (6,119)    

Office Portfolio

          

Torrey Reserve Campus

               $ 3,867  (5)        $ 118                    $ 216                $ (1,087)    

Solana Beach Corporate Centre

     1,600         38          76          (411)    

160 King Street

     1,015         459          (130)         (649)    

One Beach Street (6)

     696                 151          (267)    

The Landmark at One Market

     4,683         24          181          (1,889)    

First & Main

     2,740         106          196          (721)    

Lloyd District Portfolio (7)

     2,965         387                  (1,487)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Office Portfolio

               $ 17,566           $     1,135                    $         691                $     (6,511)    

Multifamily Portfolio

          

Loma Palisades

               $ 2,187           $ 175                    $ -                    $ (1,151)    

Imperial Beach Gardens

     606         46          -              (204)    

Mariner’s Point

     273         23          -              (109)    

Santa Fe Park RV Resort

     199         14          -              (102)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Multifamily Portfolio

               $ 3,265           $     258                    $     -                    $ (1,566)    

 

 

  Second Quarter 2012 Supplemental Information    Page 15   


 

PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended June 30, 2012  

Property

   Base Rent  (1)      Additional
Property
Income (2)
     Billed Expense
Reimbursements (3)
     Property
Operating
      Expenses (4)      
 

Mixed-Use Portfolio

           

Waikiki Beach Walk – Retail

           $ 2,363                 $ 947                 $                 897                 $ (1,658)    

Waikiki Beach Walk – Embassy Suites™

     7,461           586           -              (6,082)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Mixed-Use Portfolio

           $ 9,824                 $ 1,533                 $ 897                 $ (7,740)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

           $     46,707                 $     3,637                 $     6,558                 $       (21,936)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1)

Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended June 30, 2012 (before abatements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our retail and office portfolio were approximately $14 and $1,506, respectively, for the three months ended June 30, 2012. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended June 30, 2012. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Multifamily portfolio base rent represents base rent (including parking, before abatements) less vacancy allowance and employee rent credits and includes additional rents (additional rents include insufficient notice penalties, month-to-month charges and pet rent). Total abatements for our multifamily portfolio were $13 for the three months ended June 30, 2012. For Waikiki Beach Walk – Embassy Suites TM, base rent is equal to the actual room revenue for the three months ended June 30, 2012.

  (2) Represents additional property-related income for the three months ended June 30, 2012, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
  (3) Represents billed tenant expense reimbursements for the three months ended June 30, 2012.
  (4) Represents property operating expenses for the three months ended June 30, 2012. Property operating expenses includes all rental expenses, except non-cash rent expense and the provision for bad debt recorded for deferred rent receivables.
  (5) Base rent shown includes amounts related to American Assets Trust, L.P.’s lease at ICW Plaza. This intercompany rent is eliminated in the consolidated statement of operations. The base rent was $134 and abatements were $134 for the three months ended June 30, 2012.
  (6) Includes revenue and expenses since the acquisition of One Beach Street for the period from January 24, 2012 to June 30, 2012.
  (7) Includes parking income and expenses generated from the land held for development at Lloyd District Portfolio.

 

 

 

  Second Quarter 2012 Supplemental Information    Page 16   


 

SEGMENT CAPITAL EXPENDITURES    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended June 30, 2012  

Segment

   Tenant
Improvements and
Leasing Commissions
     Maintenance Capital
Expenditures
     Total Tenant
Improvements, Leasing
Commissions and
Maintenance Capital
Expenditures
     Redevelopment
and Expansions
     New Development      Total Capital
Expenditures
 

Retail Portfolio

               $ 2,488                     $ 1,017                     $ 3,505                     $ 398                     $ 109                     $ 4,012     

Office Portfolio

     1,169           305           1,474           -               1,159           2,633     

Multifamily Portfolio

     -               285           285           -               -               285     

Mixed-Use Portfolio

     -               68           68           -               -               68     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

               $         3,657                     $         1,675                     $         5,332                     $         398                     $         1,268                     $         6,998     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Six Months Ended June 30, 2012  

Segment

   Tenant
Improvements and
Leasing Commissions
     Maintenance Capital
Expenditures
     Total Tenant
Improvements, Leasing
Commissions and
Maintenance Capital
Expenditures
     Redevelopment
and Expansions
     New Development      Total Capital
Expenditures
 

Retail Portfolio

               $ 4,130                     $ 1,263                     $ 5,393                     $ 1,905                     $ 144                     $ 7,442     

Office Portfolio

     2,517           1,281           3,798           -               1,558           5,356     

Multifamily Portfolio

     -               523           523           -               -               523     

Mixed-Use Portfolio

     11           134           145           -               -               145     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

               $         6,658                     $         3,201                     $         9,859                     $         1,905                     $         1,702                     $         13,466     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 17   


 

SUMMARY OF OUTSTANDING DEBT    LOGO

 

 

 

(Amounts in thousands)    Amount Outstanding at
June 30, 2012
           Interest Rate                   Annual Debt       
Service
         Maturity Date          Balance at
        Maturity        
 

Debt

              

Alamo Quarry Market (1)(2)

               $ 94,999                        5.67 %                   $ 7,567            January 8, 2014                   $     91,717      

160 King Street (3)

     30,619            5.68              3,351            May 1, 2014         27,513      

Waikele Center (4)

     140,700            5.15              7,360            November 1, 2014         140,700      

The Shops at Kalakaua (4)

     19,000            5.45              1,053            May 1, 2015         19,000      

The Landmark at One Market (2)(4)

     133,000            5.61              7,558            July 5, 2015         133,000      

Del Monte Center (4)

     82,300            4.93              4,121            July 8, 2015         82,300      

First & Main (4)

     84,500            3.97              3,397            July 1, 2016         84,500      

Imperial Beach Gardens (4)

     20,000            6.16              1,250            September 1, 2016         20,000      

Mariner’s Point (4)

     7,700            6.09              476            September 1, 2016         7,700      

South Bay Marketplace (4)

     23,000            5.48              1,281            February 10, 2017         23,000      

Waikiki Beach Walk - Retail (4)

     130,310            5.39              7,020            July 1, 2017         130,310      

Solana Beach Corporate Centre III-IV (5)

     37,330            6.39              2,736            August 1, 2017         35,136      

Loma Palisades (4)

     73,744            6.09              4,553            July 1, 2018         73,744      

One Beach Street (4)

     21,900            3.94              875            April 1, 2019         21,900      

Torrey Reserve - North Court (1)

     21,793            7.22              1,836            June 1, 2019         19,443      

Torrey Reserve - VCI, VCII, VCIII (1)

     7,337            6.36              560            June 1, 2020         6,439      

Solana Beach Corporate Centre I-II (1)

     11,714            5.91              855            June 1, 2020         10,169      

Solana Beach Towne Centre (1)

     39,045            5.91              2,849            June 1, 2020         33,898      
  

 

 

    

 

 

    

 

 

       

 

 

 

Total / Weighted Average

               $     978,991            5.42 %                   $     58,698                         $     960,469      

Unamortized fair value adjustment

     (14,453)                
  

 

 

             

Debt Balance

               $ 964,538                  
  

 

 

             

Fixed Rate Debt Ratio

              

Fixed rate debt

     100 %                 

Variable rate debt

     -                       

Notes:

  (1) Principal payments based on a 30-year amortization schedule.
  (2) Maturity date is the earlier of the loan maturity date under the loan agreement, or the “Anticipated Repayment Date” as specifically defined in the loan agreement, which is the date after which substantial economic penalties apply if the loan has not been paid off.
  (3) Principal payments based on a 20-year amortization schedule.
  (4) Interest only.
  (5) Loan is interest only through August 2012. Beginning in September 2012, principal payments are based on a 30-year amortization schedule. Annual debt service is for the period July 1, 2012 through June 31, 2013.

 

 

  Second Quarter 2012 Supplemental Information    Page 18   


 

MARKET CAPITALIZATION    LOGO

 

 

 

(Amounts in thousands, except per share data)    June 30, 2012      LOGO

Market data

     

Common shares outstanding

     39,285       

Common units outstanding

     18,394       
  

 

 

    

Common shares and common units outstanding

     57,679       

Market price per common share

               $ 24.25       
  

 

 

    

Equity market capitalization

               $ 1,398,716       

Total debt

               $ 978,991       
  

 

 

    

Total market capitalization

               $         2,377,707       
  

 

 

    

Less: Cash on hand

               $ (122,871)  (1)    

Total enterprise value

               $ 2,254,836       
  

 

 

    

Total assets, gross

               $ 1,968,933       

Total debt/Total capitalization

     41.2%      

Total debt/Total enterprise value

     43.4%      

Net debt/Total enterprise value (2)

     38.0%      

Total debt/Total assets, gross

     49.7%      

Total debt/EBITDA (3)(4)

     7.7x      

Net debt/EBITDA (3)(4)

     6.7x      

Interest coverage ratio (5)

     2.3x      

Fixed charge coverage ratio (5)

     2.3x      

 

Notes:

(1) The cash balance includes marketable trading securities of $24.3 million.
(2) Net debt is equal to total debt less cash on hand.
(3) See Glossary of Terms for discussion of EBITDA.
(4) As used here, EBITDA represents the actual for the three months ended June 30, 2012 annualized.
(5) Calculated as EBITDA divided by interest on borrowed funds (including capitalized interest), excluding debt fair value adjustments.
(6) The revolving line of credit, which has a capacity of $250 million, matures in January 2016, but at June 30, 2012, it has no outstanding balance and is not included herein. The availability on the revolving line of credit was approximately $213.8 million at June 30, 2012.

 

 

  Second Quarter 2012 Supplemental Information    Page 19   


 

SUMMARY OF REDEVELOPMENT OPPORTUNITIES    LOGO

 

 

Our portfolio has numerous potential opportunities to create future shareholder value. These opportunities could be subject to government approvals, lender consents, tenant consents, market conditions, availability of debt and/or equity financing, etc. Many of these opportunities are in their preliminary stages and may not ultimately come to fruition. This schedule will update as we modify various assumptions and markets conditions change. Square footages and units set forth below are estimates only and ultimately may differ materially from actual square footages and units.

In-Process Development Projects

Office – Expansion – Development of unused land at Torrey Reserve resulting in approximately 81,500 of additional rentable square feet.

 

Property                         

  

Location          

  

Estimated

Start Date

  

Estimated Completion Date

  

Estimated Stabilization Date (1)

  

Estimated

Rentable Square Feet

  

Total Estimated Investment (2)

  

Estimated

Stabilized Yield (3)

Torrey Reserve III & IV    San Diego, CA    2012    2014    2015    81,500    $34,100,000    8.6%

 

Retail – Pad Site – Development of unused land at Carmel Mountain Plaza resulting in two ground leases totaling approximately 10,000 square feet.

 

Property                         

  

Location          

  

Estimated

Start Date

  

Estimated Completion Date

  

Estimated Stabilization Date (1)

  

Estimated Rentable Square Feet

  

Total Estimated Investment (2)

  

Estimated

Stabilized Yield (3)

Carmel Mountain Plaza    San Diego, CA    2012    2012    2013    10,000    $800,000    37.5%

 

Development/Redevelopment Pipeline

 

Retail – Expansion Opportunities – Opportunity to invest in order to expand and/or convert unused square footage into additional retail square footage.

 

Property                         

  

Location          

        

Estimated Square

Footage

           
Solana Beach Corporate Centre (Building 5)    Solana Beach, CA       10,000            
Lomas Santa Fe Plaza    Solana Beach, CA       45,000            

 

Office – Expansion Opportunities – Opportunity to invest in order to expand and/or convert unused square footage into additional office square footage.

 

Property            

  

Location        

        

Estimated Square

Footage

           
Sorrento Pointe    San Diego, CA       88,000            

 

Mixed-Use – Expansion Opportunities – Opportunity to invest in additional development rights that yield higher density.

 

Property            

  

Location        

        

Estimated Square Footage (4)

  

Multifamily Units

                 
Lloyd District Portfolio (5)    Portland, OR       60,000    655         
Solana Beach – Highway 101    Solana Beach, CA       48,000    36         

Notes:

  (1) Based on management’s estimation of stabilized occupancy (95%).
  (2) Excludes allocated land costs and capitalized interest costs capitalized in accordance with Accounting Standards Codification (“ASC”) 835-20-50-1.
  (3) Calculated as return on invested capital when project has reached stabilized occupancy, and excludes allocated land costs and interest cost capitalized in accordance with ASC 838-20-50-1.
  (4) Represents commercial portion of development opportunity.
  (5) Development plans began during the second quarter of 2012.

 

 

  Second Quarter 2012 Supplemental Information    Page 20   


 

   LOGO

 

 

 

PORTFOLIO DATA

 

 

 

 

  Second Quarter 2012 Supplemental Information      


 

PROPERTY REPORT    LOGO

 

 

 

As of June 30, 2012    Same - Store Retail and Office Portfolios

Property

   Location   Year Built/
Renovated
    Number
of
Buildings
    Net
Rentable
Square
Feet (1)
    Percentage
Leased (2)
    Annualized Base
Rent (3)
    Annualized
Base Rent
per Leased
Square Foot (4)
    Retail Anchor Tenant(s) (5)  

Other Principal Retail Tenants (6)

Retail Properties

                  

Carmel Country Plaza

   San Diego, CA     1991        9          78,098          100.0 %           $     3,291,188            $     42.14          Sharp Healthcare, Frazee Industries Inc.

Carmel Mountain Plaza (7)

   San Diego, CA     1994        13          520,228          90.4             9,029,534          19.20        Sears   Sports Authority, Nordstrom Rack

South Bay Marketplace (7)

   San Diego, CA     1997        9          132,873          100.0             1,858,397          13.99          Ross Dress for Less, Grocery Outlet

Rancho Carmel Plaza

   San Diego, CA     1993        3          30,421          89.3             759,715          27.97          Oggi’s Pizza & Brewing Co., Sprint PCS Assets

Lomas Santa Fe Plaza

   Solana Beach, CA     1972/1997        9          209,569          94.8             5,219,952          26.27          Vons, Ross Dress for Less

Del Monte Center (7)

   Monterey, CA     1967/1984/2006        16          675,385          97.7             9,002,307          13.64        Macy’s, KLA Monterrey   Century Theatres, Macy’s Furniture Gallery

The Shops at Kalakaua

   Honolulu, HI     1971/2006        3          11,671          100.0             1,569,640          134.49          Whalers General Store, Diesel U.S.A. Inc.

Waikele Center

   Waipahu, HI     1993/2008        9          538,024          94.7             17,290,600          33.94        Lowe’s, Kmart, Sports
Authority, Foodland Super
Market
  Old Navy, Officemax

Alamo Quarry Market (7)

   San Antonio, TX     1997/1999        16          589,501          99.2             11,755,953          20.10        Regal Cinemas   Bed Bath & Beyond, Whole Foods Market, Nordstrom Rack

Solana Beach Towne Centre

   Solana Beach, CA     1973/2000/2004        12          246,730          99.4             5,451,739          22.23          Dixieline Probuild, Marshalls
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Subtotal/Weighted Average Retail Portfolio

  

    99          3,032,500          96.2 %           $     65,229,025             $     22.36         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Office Properties

                  

Torrey Reserve Campus

   San Diego, CA     1996-2000        9          456,801          93.6 %         $15,634,626            $     36.57         

160 King Street

   San Francisco, CA     2002        1          167,986          97.9             5,603,467          34.07         

The Landmark at One Market (8)

   San Francisco, CA     1917/2000        1          421,934          100.0             18,899,614          44.79         

Solana Beach Corporate Centre

   Solana Beach, CA     1982/2005        4          211,971          91.9             6,530,048          33.52         

First & Main

   Portland, OR     2010        1          360,955          98.9             10,958,091          30.70         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Subtotal/Weighted Average Office Portfolio

  

    16          1,619,647          96.7 %           $     57,625,846            $     36.79         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Total/Weighted Average Retail and Office Portfolio

  

    115          4,652,147          96.4 %           $     122,854,871            $     27.39         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     
Non - Same Store Retail and Office Portfolios

Property

   Location   Year Built/
Renovated
    Number
of
Buildings
    Net
Rentable
Square
Feet (1)
    Percentage
Leased (2)
    Annualized Base
Rent (3)
    Annualized
Base Rent per
Leased
Square Foot (4)
    Retail Anchor Tenant(s) (5)  

Other Principal Retail Tenants (6)

Office Properties

                  

Lloyd District Portfolio

   Portland, OR     1940-2011        6          610,081          89.7             12,027,231          21.98         

One Beach Street

   San Francisco, CA    
 
1924/1972/1987
/1992
  
  
    1          97,614          100.0             2,786,371          28.54         

Subtotal/Weighted Average Office Portfolio

  

    7          707,695          91.1 %           $     14,813,602            $     22.98         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Total/Weighted Average Retail and Office Portfolio

  

    7          707,695          91.1 %           $     14,813,602            $     22.98         
      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

  Second Quarter 2012 Supplemental Information    Page 22   


 

PROPERTY REPORT (CONTINUED)    LOGO

 

 

 

As of June 30, 2012

   Same - Store Multifamily Portfolio

Property

   Location    Year Built/
Renovated
     Number
of
Buildings
     Units      Percentage
Leased (2)
     Annualized Base
Rent (3)
     Average
Monthly Base
Rent per
Leased Unit (4)
           

Loma Palisades

   San Diego, CA     

 

1958/  

2001-2008  

  

  

     80           548           98.7 %            $     9,419,424         $         1,451           

Imperial Beach Gardens

   Imperial Beach, CA     

 

1959/  

2008-present  

  

  

     26           160           99.4              2,555,880           1,339           

Mariner’s Point

   Imperial Beach,      1986           8           88           97.7              1,101,828           1,068           

Santa Fe Park RV Resort (9)

   San Diego, CA     

 

1971/  

2007-2008  

  

  

     1           126           91.0              1,022,496           743           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Total/Weighted Average Multifamily Portfolio

  

     115           922           97.7 %            $     14,099,628         $         1,304           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Same Store Mixed-Use Portfolio

Retail Portion

   Location    Year Built/
Renovated
     Number
of
Buildings
     Net
Rentable
Square
Feet (1)
     Percentage
Leased (2)
     Annualized
Base Rent (3)
     Annualized
Base Rent per
Leased
Square Foot (4)
    

Retail Anchor Tenant(s)  (5)

  

Other Principal Retail Tenants  (6)

Waikiki Beach Walk - Retail

   Honolulu, HI      2006           3           96,569           93.9 %            $     9,494,329         $ 104.70            Yardhouse, Ruths Chris

Hotel Portion

   Location    Year Built/
Renovated
     Number
of
Buildings
     Units      Average
Occupancy  (10)
     Average
Daily  Rate(10)
     Annualized
Revenue

per
Available
Room (10)
           

Waikiki Beach Walk - Embassy Suites™

   Honolulu, HI      2008           2           369           88.7 %            $ 250.41         $         222.04           

Notes:

  (1) The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines.

 

  (2) Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of June 30, 2012, including leases which may not have commenced as of June 30, 2012. Percentage leased for our multifamily properties includes total units rented as of June 30, 2012.

 

  (3) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2012, by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.

 

  (4) Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2012. Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of June 30, 2012.

 

  (5) Retail anchor tenants are defined as retail tenants leasing 50,000 square feet or more.

 

  (6) Other principal retail tenants are defined as the two tenants leasing the most square footage, excluding anchor tenants.

 

  (7) Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases in the following table:

 

Property                                 

   Number of Ground
Leases
     Square Footage
Leased Pursuant
to Ground Leases
     Aggregate
Annualized Base
Rent
 

Carmel Mountain Plaza

     6         127,112       $     1,020,900   

South Bay Marketplace

     1         2,824       $ 81,540   

Del Monte Center

     2         295,100       $ 201,291   

Alamo Quarry Market

     4         31,994       $ 428,250   

 

  (8) This property contains 421,934 net rentable square feet consisting of The Landmark at One Market (377,714 net rentable square feet) as well as a separate long-term leasehold interest in approximately 44,220 net rentable square feet of space located in an adjacent six-story leasehold known as the Annex. We currently lease the Annex from an affiliate of the Paramount Group pursuant to a long-term master lease effective through June 30, 2016, which we have the option to extend until 2026 pursuant to two five-year extension options.

 

  (9) The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended June 30, 2012, the highest average monthly occupancy rate for this property was 96%, occurring in July 2011. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.

 

  (10) Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2012, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended June 30, 2012, by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended June 30, 2012 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

 

 

  Second Quarter 2012 Supplemental Information    Page 23   


 

RETAIL LEASING SUMMARY    LOGO

 

 

As of June 30, 2012

Total Lease Summary - Comparable (1)

                                                  

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent
Per Sq. Ft. (2)
     Prior Rent Per
Sq. Ft. (3)
     Annual Change in
Rent
     Cash Basis %
Change
Over Prior Rent
     Straight-Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements &
Incentives Per
Sq. Ft.
 

2nd Quarter 2012

     15           100 %          84,805                $     32.25                    $         31.13            $ 95,543              3.6 %          5.8 %          5.0            $ 996,157            $ 11.75        

1st Quarter 2012

     13           100              27,115              43.83              46.10              (61,374)             (4.9)             4.0              5.6              293,673              10.83        

4th Quarter 2011

     24           100              77,770              30.37              29.59              61,134              2.7              8.9              6.3              537,420              6.91        

3rd Quarter 2011

     11           100              44,296              24.03              23.01              45,098              4.4              10.1              6.9              264,000              5.96        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     63           100 %          233,986                $ 31.41                    $ 30.81            $ 140,401              1.9 %          6.8 %          5.8            $ 2,091,250            $ 8.94        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

New Lease Summary - Comparable (1)

                                                  

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent

Per Sq. Ft. (2)
     Prior Rent Per
Sq. Ft. (3)
     Annual Change in
Rent
     Cash Basis %
Change

Over Prior Rent
     Straight- Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements &
Incentives Per
Sq. Ft.
 

2nd Quarter 2012

     2           13 %          8,418                $ 42.25                    $         30.59                $     98,174              38.1 %          42.5 %          9.5                $ 976,884                $     116.05        

1st Quarter 2012

     3           23              4,906              36.98              38.31              (6,541)             (3.5)             (6.2)             7.1              223,548              45.57        

4th Quarter 2011

     5           21              34,973              27.11              22.89              147,340              18.4              24.6              10.1              508,420              14.54        

3rd Quarter 2011

     1           9              5,280              23.00              16.48              34,407              39.5              34.0              10.0              264,000              50.00        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     11           17 %          53,577                $ 29.99                    $ 24.88                $     273,380              20.5 %          21.0 %          9.7                $     1,972,852                $ 36.82        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Renewal Lease Summary - Comparable (1)(5)

                                                  

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent

Per Sq. Ft. (2)
     Prior Rent Per
Sq. Ft. (3)
     Annual Change in
Rent
     Cash Basis %
Change

Over Prior Rent
     Straight- Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements &
Incentives Per
Sq. Ft.
 

2nd Quarter 2012

     13           87 %          76,387                $ 31.15                    $ 31.18                $ (2,631)             (0.1) %          1.9 %          4.5                $ 19,273                $ 0.25        

1st Quarter 2012

     10           77              22,209              45.35              47.82              (54,833)             (5.2)              6.0              5.2              70,125              3.16        

4th Quarter 2011

     19           79              42,797              33.04              35.05              (86,206)             (5.7)              0.4              3.2              29,000              0.68        

3rd Quarter 2011

     10           91              39,016              24.17              23.90              10,691              1.1               7.8              6.5              -                  -            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     52           83 %          180,409                $ 31.84                    $ 32.57                $ (132,979)             2.3 %          3.2 %          4.7                $ 118,398                $ 1.89        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Lease Summary - Comparable and Non-Comparable

                                                  

Quarter

   Number of
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent

Per Sq. Ft. (2)
     Weighted
Average
Lease Term (4)
     Tenant Improvements
& Incentives
     Tenant
Improvements &
Incentives Per Sq.
Ft.
                                    

2nd Quarter 2012

     19           122,440                $     32.16              6.4                    $     2,738,277                $ 22.36                       

1st Quarter 2012

     16           31,896              41.65              5.3              319,483              10.02                       

4th Quarter 2011

     26           136,417              27.34              7.9              3,595,900              26.36                       

3rd Quarter 2011

     14           49,542              24.35              6.7              361,904              7.30                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Total 12 months

     75           340,295                $     29.98              6.9                    $ 7,015,564                $ 20.62                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Notes:

  (1) Comparable leases represent those leases signed on spaces for which there was a previous lease.
  (2) Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
  (3) Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
  (4) Weighted average is calculated on the basis of square footage.
  (5) Excludes renewals at fixed contractual rates specified in the lease.

 

 

  Second Quarter 2012 Supplemental Information    Page 24   


 

OFFICE LEASING SUMMARY    LOGO

 

 

As of June 30, 2012

Total Lease Summary - Comparable (1)

                                                                            

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent
Per Sq. Ft. (2)
     Prior Rent
Per Sq. Ft. (3)
     Annual Change
in Rent
     Cash Basis %
Change
Over Prior Rent
     Straight-Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements
& Incentives
Per Sq. Ft.
 

2nd Quarter 2012

     10           100 %          70,231             $     44.88             $     34.59             $ 722,907           29.8 %          49.4 %          5.5             $ 339,141             $     4.83     

1st Quarter 2012

     13           100              52,132           30.26           34.69           (231,039)          (12.8)             (2.6)             4.2           710,939           13.64     

4th Quarter 2011

     14           100              40,587           27.70           27.35           14,415           1.3              2.9              5.1           84,057           2.07     

3rd Quarter 2011

     11           100              34,602           34.09           38.18           (141,785)          (10.7)             (8.8)             3.3           249,118           7.20     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     48           100 %          197,552             $ 35.60             $ 33.76             $     364,498           5.5 %          9.4 %          4.7             $     1,383,255             $ 7.00     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
New Lease Summary - Comparable (1)

  

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent Per Sq.
Ft. (2)
     Prior Rent Per
Sq. Ft. (3)
     Annual Change
in Rent
     Cash Basis %
Change Over
Prior Rent
     Straight- Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements
& Incentives
Per Sq. Ft.
 

2nd Quarter 2012

     5           50 %          39,469             $ 51.69             $ 33.05             $ 735,528           56.4 %          69.6 %          6.4             $ 274,361             $ 6.95     

1st Quarter 2012

     6           46              12,283           35.51           34.74           9,473           2.2              20.1              4.1           293,958               23.93     

4th Quarter 2011

     -           -                -                 -               -               -                -                -                -             -                 -           

3rd Quarter 2011

     5           45              20,109           38.11           42.28           (83,753)          (9.9)             (7.9)             3.7           229,004           11.39     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     16           33 %          71,861             $ 45.13             $ 35.92             $ 661,248           25.6 %          17.2 %          5.2             $ 797,323             $ 11.10     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Renewal Lease Summary - Comparable (1)(5)

  

Quarter

   Number of
Leases Signed
     % of Comparable
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent Per Sq.
Ft. (2)
     Prior Rent Per
Sq. Ft. (3)
     Annual Change
in Rent
     Cash Basis %
Change Over
Prior Rent
     Straight- Line
Basis % Change
Over Prior Rent
     Weighted
Average
Lease Term (4)
     Tenant
Improvements &
Incentives
     Tenant
Improvements
& Incentives
Per Sq. Ft.
 

2nd Quarter 2012

     5           50 %         30,762             $ 36.15             $ 36.56             $ (12,621)           (1.1) %          19.7  %          4.4             $ 64,780             $ 2.11     

1st Quarter 2012

     7           54             39,849           28.64           34.67           (240,512)           (17.4)              (9.0)              4.2           416,981           10.46     

4th Quarter 2011

     14           100             40,587           27.70           27.35           14,415            1.3               2.9               5.1           84,057           2.07     

3rd Quarter 2011

     6           55             14,493           28.50           32.50           (58,032)           (12.3)              (10.3)              2.8           20,114           1.39     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     32           67 %         125,691             $ 30.16             $ 32.52             $ (296,750)           (7.3) %          (0.5) %          4.4             $ 585,932             $ 4.66     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Total Lease Summary - Comparable and Non-Comparable

  

Quarter

   Number of
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent

Per Sq. Ft. (2)
     Weighted
Average
Lease Term (4)
     Tenant
Improvements

& Incentives
     Tenant
Improvements

& Incentives
Per Sq. Ft.
                                    

2nd Quarter 2012

     13           82,830             $     41.48           5.9             $     1,202,425             $     14.52                    

1st Quarter 2012

     16           63,969           29.02           4.0           907,761           14.19                    

4th Quarter 2011

     18           50,490           28.24           4.8           174,545           3.46                    

3rd Quarter 2011

     15           44,370           33.22           3.3           387,163           8.73                    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Total 12 months

     62           241,659             $ 33.90           4.7             $ 2,671,894         $ 11.06                    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Notes:

  (1) Comparable leases represent those leases signed on spaces for which there was a previous lease.
  (2) Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
  (3) Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
  (4) Weighted average is calculated on the basis of square footage.
  (5) Excludes renewals at fixed contractual rates specified in the lease.

 

 

  Second Quarter 2012 Supplemental Information    Page 25   


 

LEASE EXPIRATIONS    LOGO
[LOGO] 

 

 

As of June 30, 2012

Assumes no exercise of lease options                           
     Office     Retail     Mixed-Use (Retail Portion Only)     Total  

Year

  Expiring Sq.
Ft.
    % of
Office
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
          % of
Retail
Sq. Ft.
    % of
Total

Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
    % of
Mixed-Use
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
 

Month to Month

    29,956              1.3 %           0.5  %           $ 8.48          11,496                0.4  %             0.2  %         $   33.24              6,163            6.4  %           0.1  %           $ 15.85              47,615          0.9  %       $ 15.41     

2012

    116,394                5.0                 2.1              28.04          101,859            3.4              1.9              27.53          5,157          5.3              0.1              159.99              223,410          4.1              30.85     

2013

    206,920                8.9             3.8              31.72          455,613            15.0              8.4              23.68          7,735          8.0              0.1              155.98              670,268          12.3              27.69     

2014

    183,198                7.9             3.4              30.72          403,969            13.3              7.4              28.77          2,000          2.1              0.1              171.02              589,167          10.8              29.86     

2015

    409,341          (4)            17.6             7.5              32.03          229,576            7.6              4.2              25.17          7,775          8.1              0.1              235.03              646,692          11.9              32.03     

2016

    234,157                10.1             4.3              28.62          169,856            5.6              3.1              36.51          11,776          12.2              0.2              154.62              415,789          7.6              35.41     

2017

    93,809          (2)            4.0             1.7              56.37          251,363            8.3              4.6              23.69          5,655          5.9              0.1              151.15              350,827          6.4              34.48     

2018

    81,886                3.5             1.5              34.71          801,261            26.4              14.7              16.76          4,673          4.8              0.1              142.23              887,820          16.3              19.08     

2019

    290,811          (3)            12.5             5.3              40.78          71,553           (6)        2.4              1.3              28.16          11,690          12.1              0.2              53.16              374,054          6.9              38.75     

2020

    243,114          (5)            10.5             4.5              39.20          118,506            3.9              2.2              8.86          17,843          18.5              0.3              44.42              379,463          7.0              29.97     

2021

    161,702                7.0             3.0              35.64          41,170            1.4              0.8              39.25          -              -              -              -              202,872          3.7              36.37     

Thereafter

    63,919                2.6             1.2              25.62          159,800            5.2              2.9              22.42          9,382          9.6              0.2              47.04              233,101          4.1              24.29     

Signed Leases

                                 

Not Commenced

    94,843                4.1             1.7              -              100,961            3.3              1.9              -              850          0.9              -            -              196,654          3.6              -       

Available

    117,292                5.0             2.1              -              115,517            3.8              2.1              -              5,870          6.1              0.1              18.2              238,679          4.4              0.45     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        2,327,342            100.0 %           42.6  %           $     31.13          3,032,500                100.0  %             55.7  %         $   21.51          96,569            100.0  %           1.7  %           $     99.42            5,456,411          100.0  %           $ 26.99     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Assumes all lease options are exercised                                  
     Office     Retail     Mixed-Use (Retail Portion Only)     Total  

Year

  Expiring Sq.
Ft.
          % of
Office

Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
          % of
Retail
Sq. Ft.
    % of
Total

Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
    % of
Mixed-Use
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
    Expiring
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft.(1)
 

Month to Month

    29,956                1.3   %           0.5  %           $ 8.48          11,496              0.4  %              0.2  %         $   33.24          6,163              6.4  %           0.1  %       $ 15.85              47,615          0.9  %           $ 15.41     

2012

    111,714                4.8               2.1              27.66          74,414            2.5                1.4              27.58          4,093          4.2              0.1              137.94              190,221          3.5              30.00     

2013

    108,228                4.7               2.0              32.43          82,519            2.7                1.5              37.95          7,735          8.0              0.1              155.98              198,482          3.6              39.54     

2014

    35,861                1.5               0.7              32.09          194,773            6.4                3.6              31.55          2,000          2.1              -              171.02              232,634          4.3              32.83     

2015

    202,926                8.7               3.7              32.25          53,204            1.8                1.0              34.51          1,561          1.6              -              174.66              257,691          4.7              33.40     

2016

    179,283                7.7               3.3              28.35          69,306            2.3                1.3              30.03          8,812          9.1              0.2              181.51              257,401          4.7              34.04     

2017

    40,634                1.8               0.7              106.58          82,056            2.7                1.5              31.77          4,615          4.8              0.1              147.36              127,305          2.3              36.46     

2018

    96,377                4.1               1.8              30.92          157,822            5.2                2.9              22.39          4,673          4.8              0.1              142.23              258,872          4.7              27.73     

2019

    94,508                4.1               1.7              38.14          107,941            3.6                2.0              27.00          -              -              -              -              202,449          3.7              32.01     

2020

    213,457          (4)            9.2               3.9              33.70          315,342            10.4                5.8              15.32          1,951          2.0              -              131.19              530,750          9.7              23.55     

2021

    34,845                1.5               0.6              32.53          51,578            1.7                0.9              47.39          10,242          10.6              0.2              198.84              96,665          1.8              58.08     

Thereafter

    967,418          (2)(5)           41.5               17.7              34.69            1,615,571   (6)        53.2                29.6              20.59          38,004          39.4              0.7              46.69              2,620,993          48.1              27.67     

Signed Leases

                                 

Not Commenced

    94,843                4.1               1.7              -              100,961            3.3                1.9              -              850          0.9              -              -              196,654          3.6              -       

Available

    117,292                5.0               2.2              -              115,517            3.8                2.1              -              5,870          6.1              0.1              18.2              238,679          4.4              0.45     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        2,327,342            100.0  %            42.6  %           $     31.13            3,032,500                100.0    %             55.7  %         $   21.51          96,569            100.0  %           1.7  %           $     99.42            5,456,411          100.0  %           $ 26.99     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 26   


 

LEASE EXPIRATIONS (CONTINUED)    LOGO
[LOGO] 

 

 

 

As of June 30, 2012

Notes:

(1) Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2012 for the leases expiring during the applicable period, by (ii) 12.
(2) The expirations include 45,795 square feet currently leased by Microsoft Corporation at The Landmark at One Market, for which Autodesk, Inc. has signed an agreement to lease such space upon Microsoft’s lease termination from December 31, 2012 through December 31, 2017 with an option to extend the lease through December 31, 2024.
(3) The expirations include 9,327 square feet currently leased by Gunderson Dettmer at Torrey Reserve Campus, for which Pettit Kohn Ingrassia & Lutz has signed an agreement to lease such space upon Gunderson Dettmer’s lease termination from June 30, 2012 through July 31, 2019.
(4) The expirations include 1,635 square feet currently leased by Legacy Agency, Inc. at 160 King Street, for which Osterhout Design Group has signed an agreement to lease such space upon Legacy Agency, Inc’s lease termination from August 31, 2012 through June 30, 2015 with an option to extend the lease through June 30, 2020.
(5) The expirations include 27,276 square feet currently leased by Simpson Gumpterz & Heger at The Landmark at One Market, for which salesforce.com has signed an agreement to lease such space upon Simpson Gumpterz & Heger’s lease termination from October 31, 2013 through April 30, 2020 with an option to extend the lease through April 30, 2030.
(6) The expirations include 966 square feet currently leased by Quarry Nails at Alamo Quarry Market, for which Whole Earth Provision Co. has signed an agreement to lease such space upon Quarry Nails lease termination from August 31, 2012 through January 21, 2019 with an option to extend the lease through January 31, 2029.

 

 

  Second Quarter 2012 Supplemental Information    Page 27   


 

PORTFOLIO LEASED STATISTICS    LOGO

 

 

 

     At June 30, 2012     At June 30, 2011  

Type

   Size      Leased (1)      Leased %     Size      Leased (1)      Leased %  

Overall Portfolio Statistics

                

Retail Properties (square feet)

     3,032,500         2,917,972             96.2     3,031,032             2,849,270             94.0

Office Properties (square feet)

     2,327,342         2,210,324             95.0     1,622,455             1,536,630             94.7

Multifamily Properties (units)

     922         901             97.7     922             901             97.7

Mixed-Use Properties (square feet)

     96,569         90,699             93.9     96,569             94,287             97.6

Mixed-Use Properties (units)

     369         334 (3)         90.4     369             322 (3)         87.3

Same-Store(2) Statistics

                

Retail Properties (square feet)

     3,032,500         2,917,972             96.2     2,704,302 (4)         2,608,205             96.4

Office Properties (square feet)

     1,619,647         1,565,506             96.7     1,046,721 (5)         1,007,330             96.2

Multifamily Properties (units)

     922         901             97.7     922             901             97.7

Mixed-Use Properties (square feet)

     96,569         90,699             93.9     -  (6)         -                 -  

Mixed-Use Properties (units)

     369         334 (3)         90.4     -  (6)         -                 -  

Notes:

  (1) Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
  (2) See Glossary of Terms.
  (3) Represents average occupancy for the six months ended June 30, 2012 and June 30, 2011.
  (4) Excludes Solana Beach Towne Centre as the controlling interest in this entity was acquired on January 19, 2011.
  (5) Excludes Solana Beach Corporate Centre as the controlling interest in this entity was acquired on January 19, 2011. First & Main is excluded as it was acquired on March 11, 2011. Lloyd District Portfolio is excluded as it was acquired on July 1, 2011. One Beach Street is excluded as it was acquired on January 24, 2012.
  (6) Excludes the Waikiki Beach Walk property as the controlling interest in this entity was acquired on January 19, 2011.

 

 

  Second Quarter 2012 Supplemental Information    Page 28   


 

TOP TENANTS - RETAIL    LOGO

 

 

As of June 30, 2012

 

    

Tenant

 

Property(ies)

   Lease
Expiration
   Total
Leased
Square
Feet
     Rentable
Square Feet as
a Percentage of
Total  Retail
     Rentable
Square Feet as
a Percentage  of
Total
     Annualized
Base Rent
     Annualized
Base Rent as

a Percentage
of Total
Retail
     Annualized
Base Rent as a
Percentage
of Total
 

1

  Lowe’s   Waikele Center    5/31/2018          155,000               5.1 %          2.8 %          $ 4,221,786           6.5 %          2.9 %    

2

  Kmart   Waikele Center    6/30/2018      119,590                3.9                   2.2              3,826,880                5.9                   2.6        

3

  Foodland Super Market   Waikele Center    1/25/2014      50,000                1.6                   0.9              2,430,981                3.7                   1.7        

4

  Sports Authority   Carmel Mountain    11/30/13      90,722                3.0                   1.7              2,076,602                3.2                   1.4        
    Plaza,Waikele Center    7/18/13                  

5

  Ross Dress for Less   South Bay Marketplace, Lomas    1/31/13      81,125                2.7                   1.5              1,595,826                2.4                   1.1        
    Santa Fe Plaza, Carmel    1/31/14                  
    Mountain Plaza                     

6

  Old Navy   Alamo Quarry Market, Waikele    4/30/13      59,780                2.0                   1.1              *                 *                *          
    Center, South Bay Marketplace    7/31/16                  
       9/30/17                  

7

  Officemax   Waikele Center, Alamo Quarry    1/31/14      47,962                1.6                   0.9              1,164,761                1.8                   0.8        
    Market    9/30/17                  

8

  Marshalls   Solana Beach Towne Centre,    1/13/15      68,055                2.2                   1.2              1,106,146                1.7                   0.8        
    Carmel Mountain Plaza    1/31/19                  

9

  Vons   Lomas Santa Fe Plaza    12/31/2017      49,895                1.6                   0.9              1,058,000                1.6                   0.7        

10

  Sprouts Farmers Market   Carmel Mountain Plaza, Solana Beach Towne Centre    6/30/14      45,959                1.5                   0.8              1,037,824                1.6                   0.7        
       3/31/25                  
         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
  Top 10 Retail Tenants Total               768,088           25.2 %         14.0 %         $     18,518,806           28.4 %         12.7 %   
         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

* Data withheld at tenant’s request.

 

 

  Second Quarter 2012 Supplemental Information    Page 29   


 

TOP TENANTS - OFFICE    LOGO
[LOGO] 

 

 

As of June 30, 2012

 

    

Tenant

  

Property(ies)

   Lease
Expiration
   Total
Leased
Square
Feet
     Rentable
Square Feet as
a Percentage of
Total Office
     Rentable
Square

Feet as a
Percentage of
Total
     Annualized
Base Rent
     Annualized
Base Rent as
a Percentage
of Total
Office
     Annualized
Base Rent as a
Percentage
of Total
 
1    salesforce.com    The Landmark at One Market    6/30/2019          226,892               9.7 %                  4.2 %         $ 10,558,799               14.6 %                  7.2 %    
         4/30/2020                  
         5/31/2021                  
2    Veterans Benefits Administration    First & Main    8/31/2020      93,572           4.0              1.7              3,006,453           4.2              2.0        
3    Autodesk, Inc.    The Landmark at One Market    12/31/2015
12/31/2017
     68,869           3.0              1.3              2,984,838           4.1              2.0        
4    Microsoft Corporation    The Landmark at One Market    12/31/2012      45,795           2.0              0.8              2,976,675           4.1              2.0        
5    Ancestry.com    160 King Street    5/31/2015
5/31/2019
     64,992           2.8              1.2              2,729,664           3.8              1.9        
6    Treasury Tax Administration    First & Main    8/31/2015      70,660           3.0              1.3              2,583,330           3.6              1.8        
7    Insurance Company of the West    Torrey Reserve Campus    12/31/2016      81,040           3.5              1.5              2,449,631           3.4              1.7        
8    Treasury Call Center    First & Main    8/31/2020      63,648           2.7              1.2              2,184,302           3.0              1.5        
9    Alliant International University    One Beach Street    10/31/2019      64,161           2.8              1.2              1,775,176           2.5              1.2        
10    Portland Energy Conservation    First & Main    1/31/2021      73,422                 3.2              1.3              1,588,118           2.2              1.1        
           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   Top 10 Office Tenants Total         853,051           36.7 %         15.7 %         $     32,836,986           45.5 %         22.4 %   
           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

  Second Quarter 2012 Supplemental Information    Page 30   


 

   LOGO

 

 

 

APPENDIX

 

 

 

 

  Second Quarter 2012 Supplemental Information      


 

GLOSSARY OF TERMS    LOGO

 

 

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three months and six months ended June 30, 2012 and 2011 is as follows:

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

Net income

   $ 2,624         $ 455         $ 5,495         $ 14,051     

Depreciation and amortization

     14,671           13,934           29,924           26,089     

Interest expense

     14,476           14,063           28,832           27,054     

Interest income

     (65)          (786)          (152)          (697)    

Income tax expense

     215           129           393           380     
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $         31,921         $         27,795         $         64,492         $         66,877     
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that begins with EBITDA and includes adjustments for certain items that we believe are not representative of ongoing operating performance. We use Adjusted EBITDA as a supplemental performance measure because losses from early extinguishment of debt, loan transfer and consent fees and gains on acquisitions of controlling interests create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential. The adjustments noted resulted from our initial public offering and formation transactions.

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

EBITDA

   $ 31,921         $ 27,795         $ 64,492         $ 66,877     

Early extinguishment of debt

     -             -             -             25,867     

Loan transfer and consent fees

     -             -             -             9,019     

Gain on acquisition

     -             -             -             (46,371)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $         31,921         $         27,795         $         64,492         $         55,392     
  

 

 

    

 

 

    

 

 

    

 

 

 

Funds From Operations (FFO): FFO is a supplemental measure of real estate companies’ operating performances. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as follows: net income, computed in accordance with GAAP plus depreciation and amortization of real estate assets and excluding extraordinary items, gains and losses on sale of real estate and impairment losses. NAREIT developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider FFO a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.

Funds From Operations As Adjusted (FFO As Adjusted): FFO As Adjusted is a supplemental measure of real estate companies’ operating performances. We use FFO As Adjusted as a supplemental performance measure because losses from early extinguishment of debt, loan transfer and consent fees and gains on acquisitions of controlling interests create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential. The adjustments noted resulted from our initial public offering and formation transactions. However, other REITs may use different methodologies for defining adjustments and, accordingly, our FFO As Adjusted may not be comparable to other REITs.

 

 

 

  Second Quarter 2012 Supplemental Information    Page 32   


 

GLOSSARY OF TERMS (CONTINUED)    LOGO

 

 

Funds Available for Distribution (FAD): FAD is a supplemental measure of our liquidity. We compute FAD by subtracting from FFO As Adjusted tenant improvements, leasing commissions and maintenance capital expenditures, eliminating the net effect of straight-line rents, amortization of above (below) market rents for acquisition properties, the effects of other lease intangibles, adding noncash amortization of deferred financing costs and debt fair value adjustments, adding noncash compensation expense, and adding (subtracting) unrealized losses (gains) on marketable securities. FAD provides an additional perspective on our ability to fund cash needs and make distributions by adjusting FFO for the impact of certain cash and noncash items, as well as adjusting FFO for recurring capital expenditures and leasing costs. However, other REITs may use different methodologies for calculating FAD and, accordingly, our FAD may not be comparable to other REITs.

Net Operating Income (NOI): We define NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance). NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expense, other nonproperty income and losses, gains and losses from property dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Since NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. However, NOI should not be viewed as an alternative measure of our financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations.

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
Reconciliation of NOI to net income    2012      2011      2012      2011  

Total NOI

   $     35,913            $     31,326            $ 72,264            $     62,040        

General and administrative

     (3,992)             (3,866)             (7,757)             (7,052)       

Depreciation and amortization

     (14,671)             (13,934)             (29,924)             (26,089)       

Interest expense

     (14,476)             (14,063)             (28,832)             (27,054)       

Early extinguishment of debt

     -                 -                 -                 (25,867)       

Loan transfer and consent fees

     -                 -                 -                 (9,019)       

Gain on acquisition

     -                 -                 -                 46,371        

Other income (expense), net

     (150)             530              (256)             (71)       
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from continuing operations

     2,624              (7)             5,495              13,259        

Discontinued operations

           

Results from discontinued operations

     -                 462              -                 792        
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     2,624              455              5,495              14,051        

Net income attributable to restricted shares

     (131)             (132)             (263)             (218)       

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     -                 -                 -                 2,458        

Net income attributable to Predecessor’s controlled owners’ equity

     -                 -                 -                 (16,995)       

Net (income) loss attributable to unitholders in the Operating Partnership

     (804)             (104)             (1,687)             225       
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income (loss) attributable to American Assets Trust, Inc. stockholders

   $ 1,689            $ 219            $ 3,545            $ (479)       
  

 

 

    

 

 

    

 

 

    

 

 

 

Overall Portfolio: Includes all operating properties owned by us as of June 30, 2012.

 

 

  Second Quarter 2012 Supplemental Information    Page 33   


 

GLOSSARY OF TERMS (CONTINUED)    LOGO

 

 

Same-Store Portfolio and Non-Same Store Portfolio: Information provided on a same-store basis is provided for only those properties that were owned and operated for the entirety of both periods being compared and excludes properties that were redeveloped, expanded or under development and properties purchased or sold at any time during the periods being compared. The following table shows the properties included in the same-store and non-same store portfolio for the comparative periods presented.

 

     Comparison of Three Months Ended
June 30, 2012 to 2011
     Comparison of Six Months Ended
June 30, 2012 to 2011
 
     Same-Store      Non-Same Store      Same-Store      Non-Same Store  

Retail Properties

           

Carmel Country Plaza

     X            X      

Carmel Mountain Plaza

     X            X      

South Bay Marketplace

     X            X      

Rancho Carmel Plaza

     X            X      

Lomas Santa Fe Plaza

     X            X      

Solana Beach Towne Centre

     X               X   

Del Monte Center

     X            X      

The Shops at Kalakaua

     X            X      

Waikele Center

     X            X      

Alamo Quarry Market

     X            X      

Office Properties

           

Torrey Reserve Campus

     X            X      

Solana Beach Corporate Centre

     X               X   

160 King Street

     X            X      

One Beach Street

        X            X   

The Landmark at One Market

     X            X      

First & Main

     X               X   

Lloyd District Portfolio

        X            X   

Multifamily Properties

           

Loma Palisades

     X            X      

Imperial Beach Gardens

     X            X      

Mariner’s Point

     X            X      

Santa Fe Park RV Resort

     X            X      

Mixed-Use Properties

           

Waikiki Beach Walk - Retail

     X               X   

Waikiki Beach Walk - Embassy Suites™

     X               X   

Development Properties

           

Sorrento Pointe - Land

        X            X   

Torrey Reserve - Land

        X            X   

Solana Beach Corporate Centre - Land

        X            X   

Solana Beach - Highway 101 - Land

        X            X   

Lloyd District Portfolio - Land

        X            X   

Tenant Improvements and Incentives: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators, new entrances, etc.) which are required to make the space leasable. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

 

 

  Second Quarter 2012 Supplemental Information    Page 34