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2Q15 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):
July 28, 2015
_________________________
American Assets Trust, Inc.
(Exact name of registrant as specified in its charter)

_________________________

Maryland
(State or other jurisdiction
of incorporation)
001-35030
(Commission
File No.)
27-3338708
(I.R.S. Employer
Identification No.)
11455 El Camino Real, Suite 200
San Diego, California 92130
(Address of principal executive offices)
 
92130  
 (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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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 July 28, 2015, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending June 30, 2015. Also on July 28, 2015, 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 ending June 30, 2015. 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 ending June 30, 2015 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 filed herewith:
Exhibit Number
 
Exhibit Description
99.1**
 
Press release issued by American Assets Trust, Inc. on July 28, 2015.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2015.
_____________________
** Furnished herewith

2



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
July 28, 2015
 
 

3




EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
Press release issued by American Assets Trust, Inc. on July 28, 2015.
99.2
 
American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2015.


4
2Q15 Earnings Release



American Assets Trust, Inc. Reports Second Quarter 2015 Financial Results

FFO per share increases 13% year-over-year for both the three and six months ended June 30, 2015
Same-Store Cash NOI increases 9.3% and 8.4% year-over-year for the three and six months ended June 30, 2015, respectively

SAN DIEGO, California - 7/28/2015 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its second quarter ended June 30, 2015.

Financial Results and Recent Developments
Funds From Operations increased 13% year over year to $0.44 and $0.88 per diluted share for both the three and six months ended June 30, 2015 compared to the same periods in 2014
Increasing 2015 annual guidance to a range of $1.73 to $1.77 of FFO per diluted share, a 1.4% increase over the prior midpoint
Net income available to common stockholders of $8.7 million and $16.7 million, respectively, for the three and six months ended June 30, 2015 or $0.20 and $0.38 per diluted share, respectively
Earned investment grade credit ratings in July 2015 from all three major U.S. credit rating agencies with a stable outlook
Same-store cash NOI increased 9.3% and 8.4%, respectively, for the three and six months ended June 30, 2015 compared to the same periods in 2014
Same-store GAAP NOI increased 9.4% and 7.9%, respectively, for the three and six months ended June 30, 2015 compared to the same periods in 2014
Leased approximately 129,200 comparable office square feet at an average cash-basis and GAAP-basis contractual rent increase of 40% and 50%, respectively, during the three months ended June 30, 2015
Leased approximately 67,600 comparable retail square feet at an average cash-basis and GAAP-basis contractual rent increase of 19% and 16%, respectively, during the three months ended June 30, 2015

During the second quarter of 2015, the company generated funds from operations (“FFO”) for common stockholders of $27.5 million, or $0.44 per diluted share, compared to $23.5 million, or $0.39 per diluted share, for the quarter ended June 30, 2014. For the six months ended June 30, 2015, the company generated FFO for common stockholders of $54.0 million, or $0.88 per diluted share, compared to $46.5 million, or $0.78 per diluted share, for the six months ended June 30, 2014. The increase in FFO from the corresponding periods in 2014 was due to growth in same-store net operating income, an increase in occupancy at the hotel portion of our mixed-use property, and a decrease in interest expense attributed to the company's payoff of outstanding secured mortgages encumbering Waikele Center, The Shops at Kalakaua, Del Monte Center and The Landmark at One Market offset with the issuance of senior guaranteed notes bearing lower interest rates and an increase in capitalized interest related to our development activity.

Net income attributable to common stockholders was $8.7 million, or $0.20 per basic and diluted share for the three months ended June 30, 2015 compared to $3.7 million, or $0.09 per basic and diluted share for the three months ended June 30, 2014. For the six months ended June 30, 2015, net income attributable to common stockholders was $16.7 million, or $0.38 per basic and diluted share, compared to net income attributable to common stockholders of $8.3 million, or $0.20 per basic and diluted share, for the six months ended June 30, 2014. The increase in net income attributable to common stockholders for the six months ended June 30, 2015 was due to growth in same-store net operating income, an increase in occupancy at the hotel portion of our mixed-use property and a decrease in interest expense as noted above.


1



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

Portfolio Results
The portfolio leased status as of the end of the indicated quarter was as follows:
 
June 30, 2015
March 31, 2015
June 30, 2014
Total Portfolio
 
 
 
Retail
98.5%
98.5%
98.8%
Office
92.9%
92.7%
88.5%
Multifamily
95.7%
96.4%
98.8%
Mixed-Use:
 
 
 
Retail
100.0%
100.0%
99.5%
Hotel
88.4%
89.0%
80.7%
 
 
 
 
Same-Store Portfolio
 
 
Retail
98.5%
98.5%
98.8%
Office
96.9%
96.0%
92.5%
Multifamily
95.7%
96.4%
98.8%
Mixed-Use:
 
 
 
Retail
100.0%
100.0%
99.5%
Hotel
88.4%
89.0%
80.7%

During the second quarter of 2015, the company signed 41 leases for approximately 225,500 square feet of retail and office space, as well as 195 multifamily apartment leases. Renewals accounted for 70.6% of the comparable retail leases, 62.5% of the comparable office leases and 50.8% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the second quarter of 2015 and trailing four quarters ending June 30, 2015, our retail and office leasing spreads are shown below:
 
 
Number of Leases Signed
Comparable Leased Sq. Ft.
Average Cash Basis % Change Over Prior Rent
Average Cash Contractual Rent Per Sq. Ft.
Prior Average Cash Contractual Rent Per Sq. Ft.
GAAP Straight-Line Basis % Change Over Prior Rent
Retail
Q2 2015
17
67,600
19.0%
$33.59
$28.23
16.3%
Last 4 Quarters
50
178,600
11.7%
$34.36
$30.77
13.0%
 
 
 
 
 
 
 
 
Office
Q2 2015
16
129,200
40.1%
$60.13
$42.93
50.0%
Last 4 Quarters
42
344,800
26.8%
$40.93
$32.28
36.2%

Multifamily
At June 30, 2015, the average monthly base rent per leased unit was $1,597 compared to an average monthly base rent per leased unit of $1,438 at June 30, 2014, an increase of 11.0%.


2



Same-Store Operating Income
For the three and six months ended June 30, 2015, same-store property operating income increased 9.3% and 8.4%, respectively, on a cash basis compared to the corresponding periods in 2014. For the three and six months ended June 30, 2015, same-store property operating income increased 9.4% and 7.9%, respectively, on a GAAP basis compared to the corresponding periods in 2014. The same-store property operating income by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Six Months Ended (1)
 
 
 
 
June 30,
 
 
 
 
June 30,
 
 
 
 
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,847

 
$
16,698

 
6.9

%
 
$
35,645

 
$
33,265

 
7.2

%
Office
11,417

 
10,697

 
6.7

 
 
22,664

 
20,719

 
9.4

 
Multifamily
2,803

 
2,656

 
5.5

 
 
5,629

 
5,359

 
5.0

 
Mixed-Use
5,700

 
4,501

 
26.6

 
 
11,497

 
10,256

 
12.1

 
 
$
37,767

 
$
34,552

 
9.3

%
 
$
75,435

 
$
69,599

 
8.4

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,152

 
$
17,136

 
5.9

%
 
$
36,231

 
$
34,072

 
6.3

%
Office
12,587

 
11,561

 
8.9

 
 
24,958

 
22,841

 
9.3

 
Multifamily
2,803

 
2,656

 
5.5

 
 
5,629

 
5,359

 
5.0

 
Mixed-Use
5,609

 
4,430

 
26.6

 
 
11,356

 
10,155

 
11.8

 
 
$
39,151

 
$
35,783

 
9.4

%
 
$
78,174

 
$
72,427

 
7.9

%
(1)
Same-store portfolio excludes (i) Torrey Reserve Campus and Lloyd District Portfolio due to significant redevelopment activity during the period and (ii) land held for development.

On a same-store basis, retail property operating income increased for the three and six months ended June 30, 2015 compared to the same periods in 2014 primarily due to higher annualized base rent attributed to new leases, specifically at Lomas Santa Fe Plaza, Carmel Mountain Plaza and Alamo Quarry Market.

On a same-store basis, office property operating income increased for the three and six months ended June 30, 2015 compared to the same periods in 2014 primarily due to higher annual base rents, specifically at The Landmark at One Market and an increase in percentage leased specifically at First & Main. These increases were offset by increase in real estate taxes, specifically at The Landmark at One Market.

On a same-store basis, multifamily property operating income increased for the three and six months ended June 30, 2015 compared to the corresponding periods in 2014 primarily due to an increase in average monthly base rent during 2015.

On a same-store basis, mixed-use property operating income increased for the three months and six months ended June 30, 2015 compared to the corresponding periods in 2014 primarily due to higher occupancy at the hotel portion of our mixed-use property, which is attributed to the completion of the 2014 hotel room refresh project.


3



Development
Hassalo on Eighth at Lloyd District Portfolio remains within budget and on schedule. Projected costs of the redevelopment are approximately $192 million, of which approximately $184 million has been incurred to date. We expect to incur the remaining costs for redevelopment of the Lloyd District Portfolio in 2015. On July 2, 2015, the Velomor at Hassalo on Eighth became available for occupancy by residential tenants. To date, we have leased 118 of the Velomor's 177 units, or approximately 67%. We expect the Aster Tower and Elwood at Hassalo on Eighth to become available for occupancy by residential tenants in the beginning of the fourth quarter of 2015. To date, we have leased 34 of Aster Tower's 337 units and 5 of the Elwood's 143 units. In total, to date, we have leased 157 units of 657 units at Hassalo on Eighth, or approximately 24%. We expect Hassalo on Eighth to be stabilized in 2017 with an estimated stabilized cash yield of approximately 6.25% to 7.25%.

Groundbreaking on Torrey Point occurred in July 2015. Projected costs of the redevelopment at Torrey Point has been revised to approximately $50.1 million, of which approximately $8.3 million has been incurred to date. We expect to incur the remaining costs for redevelopment of Torrey Point in 2015 and 2016. We expect the Torrey Point redevelopment to be stabilized in 2017 with an estimated stabilized cash yield of approximately 8.25% to 9.25%.

Our redevelopment and development opportunities are subject to market conditions and actual results may vary.

Balance Sheet and Liquidity
At June 30, 2015, the company had gross real estate assets of $2.2 billion and liquidity of $254.9 million, comprised of cash and cash equivalents of $34.9 million and $220.0 million of availability on its line of credit.

On May 6, 2013, we entered into an at-the-market (“ATM”) equity program with four sales agents that authorized the sale of up to $150.0 million of shares of our common stock. We completed $150.0 million of issuances under such ATM program on May 21, 2015. On May 27, 2015, we entered into a new ATM equity program with five sales agents in which we may, from time to time, offer and sell shares of our common stock having an aggregate offering price of up to $250.0 million. The sales of shares of our common stock made through the ATM equity programs are made in "at-the-market" offerings as defined in Rule 415 of the Securities Act of 1933, as amended.

For the three months ended June 30, 2015, we issued 1,092,126 shares of common stock through our ATM equity program at a weighted average price per share of $40.65, resulting in net proceeds of $43.7 million. For the six months ended June 30, 2015, we issued 1,145,926 shares of common stock through our ATM equity program at a weighted average price per share of $40.74, resulting in net proceeds of $45.9 million. We intend to use the net proceeds primarily to fund our development activities at Lloyd District Portfolio and Torrey Point. As of June 30, 2015, we had the capacity to issue up to an additional $235.7 million in shares of common stock under our ATM equity program.

Dividends
The company declared dividends on its shares of common stock of $0.2325 per share for the second quarter of 2015. The dividends were paid on June 26, 2015.

In addition, the company has declared a dividend on its common stock of $0.2325 per share for the quarter ending September 30, 2015. The dividend will be paid on September 25, 2015 to stockholders of record on September 11, 2015.


4



Guidance
The company increased its guidance for full year 2015 FFO per diluted share to a range of $1.73 to $1.77 per share from the prior range of $1.70 to $1.75 per share, an increase of 1.4% over the prior midpoint. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments. The company will discuss key assumptions regarding the guidance tomorrow on the conference call.
The foregoing 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. The company's actual results may differ materially from these estimates.
Conference Call
The company will hold a conference call to discuss the results for the second quarter of 2015 on Wednesday, July 29, 2015 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-866-318-8613 and use the pass code 22365992. A telephonic replay of the conference call will be available beginning at 1:00 p.m. PT on Wednesday, July 29, 2015 through Wednesday, August 5, 2015. To access the replay, dial 1-888-286-8010 and use the pass code 31310525. 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 2015 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.

5



Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
June 30, 2015
 
December 31, 2014
 
(unaudited)
 
 
 
Assets
 
 
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
1,951,039

 
$
1,931,698

Construction in progress
 
259,879

 
 
195,736

Held for development
 
9,418

 
 
9,390

 
 
2,220,336

 
 
2,136,824

Accumulated depreciation
 
(386,622
)
 
 
(361,424
)
Net real estate
 
1,833,714

 
 
1,775,400

Cash and cash equivalents
 
34,949

 
 
59,357

Restricted cash
 
11,311

 
 
10,994

Accounts receivable, net
 
5,721

 
 
6,727

Deferred rent receivables, net
 
37,008

 
 
35,883

Other assets, net
 
51,610

 
 
53,401

Total assets
$
1,974,313

 
$
1,941,762

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable
$
579,133

 
$
812,811

Unsecured notes payable
 
450,000

 
 
250,000

Unsecured line of credit
 
30,000

 
 

Accounts payable and accrued expenses
 
45,116

 
 
50,861

Security deposits payable
 
5,900

 
 
5,521

Other liabilities and deferred credits, net
 
53,882

 
 
55,993

Total liabilities
 
1,164,031

 
 
1,175,186

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 44,909,930 and 43,701,669 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
 
449

 
 
437

Additional paid-in capital
 
844,639

 
 
795,065

Accumulated dividends in excess of net income
 
(64,024
)
 
 
(60,291
)
Accumulated other comprehensive (loss) income
 
(339
)
 
 
92

Total American Assets Trust, Inc. stockholders' equity
 
780,725

 
 
735,303

Noncontrolling interests
 
29,557

 
 
31,273

Total equity
 
810,282

 
 
766,576

Total liabilities and equity
$
1,974,313

 
$
1,941,762


6



American Assets Trust, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Revenue:
 
 
 
 
 
 
 
Rental income
$
63,552

 
$
58,793

 
$
126,305

 
$
119,275

Other property income
3,217

 
3,406

 
6,499

 
6,904

Total revenue
66,769

 
62,199

 
132,804

 
126,179

Expenses:
 
 
 
 
 
 
 
Rental expenses
17,205

 
16,500

 
33,825

 
33,120

Real estate taxes
5,986

 
5,129

 
12,034

 
11,155

General and administrative
4,788

 
4,635

 
9,804

 
9,247

Depreciation and amortization
15,286

 
18,209

 
30,393

 
34,550

Total operating expenses
43,265

 
44,473

 
86,056

 
88,072

Operating income
23,504

 
17,726

 
46,748

 
38,107

Interest expense
(11,197
)
 
(13,439
)
 
(22,992
)
 
(27,071
)
Other income (expense), net
(23
)
 
1,064

 
(93
)
 
973

Net income
12,284

 
5,351

 
23,663

 
12,009

Net income attributable to restricted shares
(40
)
 
(94
)
 
(83
)
 
(164
)
Net income attributable to unitholders in the Operating Partnership
(3,536
)
 
(1,544
)
 
(6,845
)
 
(3,530
)
Net income attributable to American Assets Trust, Inc. stockholders
$
8,708

 
$
3,713

 
$
16,735

 
$
8,315

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.20

 
$
0.09

 
$
0.38

 
$
0.20

Weighted average shares of common stock outstanding - basic
44,092,631

 
41,816,379

 
43,758,055

 
41,202,993

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.20

 
$
0.09

 
$
0.38

 
$
0.20

Weighted average shares of common stock outstanding - diluted
61,992,147

 
59,721,636

 
61,658,650

 
59,110,450

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.2325

 
$
0.2200

 
$
0.4650

 
$
0.4400

 
 
 
 
 
 
 
 


7



Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2015
 
June 30, 2015
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
12,284

 
$
23,663

Depreciation and amortization of real estate assets
 
15,286

 
 
30,393

FFO, as defined by NAREIT
$
27,570

 
$
54,056

Less: Nonforfeitable dividends on incentive stock awards
 
(38
)
 
 
(78
)
FFO attributable to common stock and units
$
27,532

 
$
53,978

FFO per diluted share/unit
$
0.44

 
$
0.88

Weighted average number of common shares and units, diluted
 
61,995,268

 
 
61,661,946


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 a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it 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.

8



About American Assets Trust, Inc.
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, Washington and Hawaii. The company's retail portfolio comprises approximately 3.1 million rentable square feet, and its office portfolio comprises approximately 2.7 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 was formed to succeed 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.

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


9
2Q15 Supplemental exibit

 
 
 
SECOND QUARTER 2015
 
Supplemental Information
 
 






 
 
 
Investor and Media Contact
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607


 
 
 
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
Office
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,226,111

 
705,650

 
922

(1)

 

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,308

 

 

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
675,678

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
589,501

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Portland
 

 
942,844

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Seattle
 

 
494,781

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,075,754

 
2,660,260

 
922

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
 
Retail
 
3.1

million
 
53%
 
Office
 
2.7

million
 
47%
Data is as of June 30, 2015.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 

Second Quarter 2015 Supplemental Information
                               Page 2


 
 
INDEX
 
 

 
SECOND QUARTER 2015 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Income
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
Corporate Guidance
 
Same-Store Portfolio Net Operating Income (NOI)
 
Same-Store Portfolio NOI Comparison excluding Redevelopment
 
Same-Store Portfolio NOI Comparison with Redevelopment
 
NOI By Region
 
NOI Breakdown
 
Property Revenue and Operating Expenses
 
Segment Capital Expenditures
 
Summary of Outstanding Debt
 
Market Capitalization
 
Summary of Development Opportunities
2.
PORTFOLIO DATA
 
 
Property Report
 
Retail Leasing Summary
 
Office Leasing Summary
 
Multifamily Leasing Summary
 
Mixed-Use Leasing Summary
 
Lease Expirations
 
Portfolio Leased Statistics
 
Top Tenants - Retail
 
Top Tenants - Office
3.
APPENDIX
 
 
Glossary of Terms
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 2015 Supplemental Information
                               Page 3


 
 
 
 
 






FINANCIAL HIGHLIGHTS





Second Quarter 2015 Supplemental Information
                               Page 4


 
 
CONSOLIDATED BALANCE SHEETS
 
 

(Amounts in thousands, except shares and per share data)
June 30, 2015
 
December 31, 2014
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
1,951,039

 
$
1,931,698

Construction in progress
259,879

 
195,736

Held for development
9,418

 
9,390

 
2,220,336

 
2,136,824

Accumulated depreciation
(386,622
)
 
(361,424
)
Net real estate
1,833,714

 
1,775,400

Cash and cash equivalents
34,949

 
59,357

Restricted cash
11,311

 
10,994

Accounts receivable, net
5,721

 
6,727

Deferred rent receivable, net
37,008

 
35,883

Other assets, net
51,610

 
53,401

TOTAL ASSETS
$
1,974,313

 
$
1,941,762

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable
$
579,133

 
$
812,811

Unsecured notes payable
450,000

 
250,000

Unsecured line of credit
30,000

 

Accounts payable and accrued expenses
45,116

 
50,861

Security deposits payable
5,900

 
5,521

Other liabilities and deferred credits, net
53,882

 
55,993

Total liabilities
1,164,031

 
1,175,186

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 44,909,930 and 43,701,669 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
449

 
437

Additional paid in capital
844,639

 
795,065

Accumulated dividends in excess of net income
(64,024
)
 
(60,291
)
Accumulated other comprehensive income
(339
)
 
92

Total American Assets Trust, Inc. stockholders' equity
780,725

 
735,303

Noncontrolling interests
29,557

 
31,273

Total equity
810,282

 
766,576

TOTAL LIABILITIES AND EQUITY
$
1,974,313

 
$
1,941,762


Second Quarter 2015 Supplemental Information
                               Page 5


 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
REVENUE:
 
 
 
 
 
 
 
Rental income
$
63,552

 
$
58,793

 
$
126,305

 
$
119,275

Other property income
3,217

 
3,406

 
6,499

 
6,904

Total revenue
66,769

 
62,199

 
132,804

 
126,179

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
17,205

 
16,500

 
33,825

 
33,120

Real estate taxes
5,986

 
5,129

 
12,034

 
11,155

General and administrative
4,788

 
4,635

 
9,804

 
9,247

Depreciation and amortization
15,286

 
18,209

 
30,393

 
34,550

Total operating expenses
43,265

 
44,473

 
86,056

 
88,072

OPERATING INCOME
23,504

 
17,726

 
46,748

 
38,107

Interest expense
(11,197
)
 
(13,439
)
 
(22,992
)
 
(27,071
)
Other income (expense), net
(23
)
 
1,064

 
(93
)
 
973

NET INCOME
12,284

 
5,351

 
23,663

 
12,009

Net income attributable to restricted shares
(40
)
 
(94
)
 
(83
)
 
(164
)
Net income attributable to unitholders in the Operating Partnership
(3,536
)
 
(1,544
)
 
(6,845
)
 
(3,530
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
8,708

 
$
3,713

 
$
16,735

 
$
8,315

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.20

 
$
0.09

 
$
0.38

 
$
0.20

Weighted average shares of common stock outstanding - basic
44,092,631

 
41,816,379

 
43,758,055

 
41,202,993

Diluted income attributable to common stockholders per share
$
0.20

 
$
0.09

 
$
0.38

 
$
0.20

Weighted average shares of common stock outstanding - diluted
61,992,147

 
59,721,636

 
61,658,650

 
59,110,450

 
 
 
 
 
 
 
 

Second Quarter 2015 Supplemental Information
                               Page 6


 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
12,284

 
$
5,351

 
$
23,663

 
$
12,009

Depreciation and amortization of real estate assets
15,286

 
18,209

 
30,393

 
34,550

FFO, as defined by NAREIT
27,570

 
23,560

 
54,056

 
46,559

Less: Nonforfeitable dividends on incentive stock awards
(38
)
 
(25
)
 
(78
)
 
(71
)
FFO attributable to common stock and common units
$
27,532

 
$
23,535

 
$
53,978

 
$
46,488

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.44

 
$
0.39

 
$
0.88

 
$
0.78

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
61,995,268

 
60,011,025

 
61,661,946

 
59,399,188

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
19,107

 
$
17,580

 
$
39,351

 
$
34,402

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
14,524

 
$
13,313

 
$
28,874

 
$
26,453

Dividends declared and paid per share/unit
$
0.2325

 
$
0.2200

 
$
0.4650

 
$
0.4400


Second Quarter 2015 Supplemental Information
                               Page 7


 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
27,570

 
$
23,560

 
$
54,056

 
$
46,559

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(8,988
)
 
(6,679
)
 
(15,710
)
 
(12,736
)
Net effect of straight-line rents (3)
(633
)
 
(680
)
 
(1,340
)
 
(1,738
)
Amortization of net above (below) market rents (4)
(719
)
 
(655
)
 
(1,447
)
 
(1,242
)
Net effect of other lease intangibles (5)
20

 
36

 
40

 
73

Amortization of debt issuance costs and debt fair value adjustment
1,061

 
1,016

 
2,106

 
2,031

Non-cash compensation expense
834

 
1,007

 
1,724

 
1,526

Nonforfeitable dividends on incentive stock awards
(38
)
 
(25
)
 
(78
)
 
(71
)
FAD
$
19,107

 
$
17,580

 
$
39,351

 
$
34,402

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
5,285

 
$
2,519

 
$
9,721

 
$
5,698

Maintenance capital expenditures
3,703

 
4,160

 
5,989

 
7,038

 
$
8,988

 
$
6,679

 
$
15,710

 
$
12,736


Notes:
(1)
See Glossary of Terms.
(2)
For the three and six months ended June 30, 2015 and 2014, the weighted average common shares and common units used to compute FFO 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 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.
(3)
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.
(4)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(5)
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 2015 Supplemental Information
                               Page 8


 
 
CORPORATE GUIDANCE
 
 


(Unaudited, amounts in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior 2015 Guidance Range (1) (2)
 
Revised 2015 Guidance Range (2)
Funds from Operations (FFO):
 
 
 
 
 
 
 
 
Net income
 
$
45,071

 
$
48,153

 
$
46,452

 
$
48,971

Depreciation and amortization of real estate assets
 
60,423

 
60,423

 
61,320

 
61,320

FFO, as defined by NAREIT
 
105,494

 
108,576

 
107,772

 
110,291

Less: Nonforfeitable dividends on incentive stock awards
 
(160
)
 
(160
)
 
(154
)
 
(154
)
FFO attributable to common stock and units
 
$
105,334

 
$
108,416

 
$
107,618

 
$
110,137

Weighted average number of common shares and units, diluted
 
61,957,906

 
61,957,906

 
62,214,696

 
62,214,696

FFO per diluted share, updated
 
$
1.70

 
$
1.75

 
$
1.73

 
$
1.77


Notes:
(1)
Prior 2015 Guidance Range as reported in the Company's First Quarter 2015 Supplemental Information report.
(2)
The Company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future 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 2015 Supplemental Information
                               Page 9


 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2015
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
24,369

 
$
17,173

 
$
4,445

 
$
13,912

 
$
59,899

Non-same store portfolio (1)
7

 
6,863

 

 

 
6,870

Total
24,376

 
24,036

 
4,445

 
13,912

 
66,769

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
6,217

 
4,586

 
1,642

 
8,303

 
20,748

Non-same store portfolio (1)
41

 
2,402

 

 

 
2,443

Total
6,258

 
6,988

 
1,642

 
8,303

 
23,191

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
18,152

 
12,587

 
2,803

 
5,609

 
39,151

Non-same store portfolio (1)
(34
)
 
4,461

 

 

 
4,427

Total
$
18,118

 
$
17,048

 
$
2,803

 
$
5,609

 
$
43,578

Same-store portfolio NOI, GAAP basis
$
18,152

 
$
12,587

 
$
2,803

 
$
5,609

 
$
39,151

Net effect of straight-line rents (2)
(11
)
 
(547
)
 

 
5

 
(553
)
Amortization of net above (below) market rents (3)
(294
)
 
(581
)
 

 
117

 
(758
)
Net effect of other lease intangibles (4)

 
(42
)
 

 
(31
)
 
(73
)
Same-store portfolio NOI, cash basis
$
17,847

 
$
11,417

 
$
2,803

 
$
5,700

 
$
37,767


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2015 and 2014. 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 and retail space at Waikiki Beach Walk - Retail.

Second Quarter 2015 Supplemental Information
                               Page 10


 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI) (CONTINUED)
 
 

(Unaudited, amounts in thousands)
Six Months Ended June 30, 2015
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
48,401

 
$
34,085

 
$
8,755

 
$
28,022

 
$
119,263

Non-same store portfolio (1)
13

 
13,528

 

 

 
13,541

Total
48,414

 
47,613

 
8,755

 
28,022

 
132,804

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
12,170

 
9,127

 
3,126

 
16,666

 
41,089

Non-same store portfolio (1)
88

 
4,682

 

 

 
4,770

Total
12,258

 
13,809

 
3,126

 
16,666

 
45,859

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
36,231

 
24,958

 
5,629

 
11,356

 
78,174

Non-same store portfolio (1)
(75
)
 
8,846

 

 

 
8,771

Total
$
36,156

 
$
33,804

 
$
5,629

 
$
11,356

 
$
86,945

Same-store portfolio NOI, GAAP basis
$
36,231

 
$
24,958

 
$
5,629

 
$
11,356

 
$
78,174

Net effect of straight-line rents (2)
22

 
(1,049
)
 

 
(37
)
 
(1,064
)
Amortization of net above (below) market rents (3)
(608
)
 
(1,162
)
 

 
240

 
(1,530
)
Net effect of other lease intangibles (4)

 
(83
)
 

 
(62
)
 
(145
)
Same-store portfolio NOI, cash basis (5)
$
35,645

 
$
22,664

 
$
5,629

 
$
11,497

 
$
75,435


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2015 and 2014. 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 and retail space at Waikiki Beach Walk - Retail.

Second Quarter 2015 Supplemental Information
                               Page 11


 
 
SAME-STORE PORTFOLIO NOI COMPARISON EXCLUDING REDEVELOPMENT
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,847

 
$
16,698

 
6.9
%
 
$
35,645

 
$
33,265

 
7.2
%
Office
11,417

 
10,697

 
6.7

 
22,664

 
20,719

 
9.4

Multifamily
2,803

 
2,656

 
5.5

 
5,629

 
5,359

 
5.0

Mixed-Use
5,700

 
4,501

 
26.6

 
11,497

 
10,256

 
12.1

 
$
37,767

 
$
34,552

 
9.3
%
 
$
75,435

 
$
69,599

 
8.4
%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,152

 
$
17,136

 
5.9
%
 
$
36,231

 
$
34,072

 
6.3
%
Office
12,587

 
11,561

 
8.9

 
24,958

 
22,841

 
9.3

Multifamily
2,803

 
2,656

 
5.5

 
5,629

 
5,359

 
5.0

Mixed-Use
5,609

 
4,430

 
26.6

 
11,356

 
10,155

 
11.8

 
$
39,151

 
$
35,783

 
9.4
%
 
$
78,174

 
$
72,427

 
7.9
%


Second Quarter 2015 Supplemental Information
                               Page 12


 
 
SAME-STORE PORTFOLIO NOI COMPARISON WITH REDEVELOPMENT
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,847

 
$
16,698

 
6.9
%
 
$
35,645

 
$
33,265

 
7.2
%
Office
15,931

 
15,428

 
3.3

 
31,504

 
30,123

 
4.6

Multifamily
2,803

 
2,656

 
5.5

 
5,629

 
5,359

 
5.0

Mixed-Use
5,700

 
4,501

 
26.6

 
11,497

 
10,256

 
12.1

 
$
42,281

 
$
39,283

 
7.6
%
 
$
84,275

 
$
79,003

 
6.7
%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,152

 
$
17,136

 
5.9
%
 
$
36,231

 
$
34,072

 
6.3
%
Office
17,047

 
16,358

 
4.2

 
33,805

 
32,322

 
4.6

Multifamily
2,803

 
2,656

 
5.5

 
5,629

 
5,359

 
5.0

Mixed-Use
5,609

 
4,430

 
26.6

 
11,356

 
10,155

 
11.8

 
$
43,611

 
$
40,580

 
7.5
%
 
$
87,021

 
$
81,908

 
6.2
%

Second Quarter 2015 Supplemental Information
                               Page 13


 
 
NOI BY REGION
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2015
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Southern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
$
7,681

 
$
3,817

 
$
2,803

 
$

 
$
14,301

Net effect of straight-line rents (2)
(215
)
 
(20
)
 

 

 
(235
)
Amortization of net above (below) market rents (3)
(193
)
 

 

 

 
(193
)
Net effect of other lease intangibles (4)

 
93

 

 

 
93

NOI, cash basis
7,273

 
3,890

 
2,803

 

 
13,966

Northern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
2,760

 
4,514

 

 

 
7,274

Net effect of straight-line rents (2)
(1
)
 
(66
)
 

 

 
(67
)
Amortization of net above (below) market rents (3)
(97
)
 
(179
)
 

 

 
(276
)
Net effect of other lease intangibles (4)

 
(42
)
 

 

 
(42
)
NOI, cash basis
2,662

 
4,227

 

 

 
6,889

Hawaii
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
4,401

 

 

 
5,609

 
10,010

Net effect of straight-line rents (2)
172

 

 

 
5

 
177

Amortization of net above (below) market rents (3)
52

 

 

 
117

 
169

Net effect of other lease intangibles (4)

 

 

 
(31
)
 
(31
)
NOI, cash basis
4,625

 

 

 
5,700

 
10,325

Oregon
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)

 
4,358

 

 

 
4,358

Net effect of straight-line rents (2)

 
(511
)
 

 

 
(511
)
Amortization of net above (below) market rents (3)

 
(56
)
 

 

 
(56
)
Net effect of other lease intangibles (4)

 
1

 

 

 
1

NOI, cash basis

 
3,792

 

 

 
3,792

Texas
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
3,276

 

 

 

 
3,276

Net effect of straight-line rents (2)
33

 

 

 

 
33

Amortization of net above (below) market rents (3)
(56
)
 

 

 

 
(56
)
NOI, cash basis
3,253

 

 

 

 
3,253

Washington
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)

 
4,359

 

 

 
4,359

Net effect of straight-line rents (2)

 
(30
)
 

 

 
(30
)
Amortization of net above (below) market rents (3)

 
(307
)
 

 

 
(307
)
NOI, cash basis

 
4,022

 

 

 
4,022

Total
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
18,118

 
17,048

 
2,803

 
5,609

 
43,578

Net effect of straight-line rents (2)
(11
)
 
(627
)
 

 
5

 
(633
)
Amortization of net above (below) market rents (3)
(294
)
 
(542
)
 

 
117

 
(719
)
Net effect of other lease intangibles (4)

 
52

 

 
(31
)
 
21

NOI, cash basis
$
17,813

 
$
15,931

 
$
2,803

 
$
5,700

 
$
42,247

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 2015 Supplemental Information
                               Page 14


 
 
NOI BREAKDOWN
 
 


Three Months Ended June 30, 2015
Portfolio NOI, Cash Basis Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
 
 
 
 
 
 
 
Portfolio NOI, GAAP Basis Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
 
 
 
 

Second Quarter 2015 Supplemental Information
                               Page 15


 
 
PROPERTY REVENUE AND OPERATING EXPENSES
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2015
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Retail Portfolio
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
897

 
$
18

 
$
215

 
$
(196
)
Carmel Mountain Plaza
 
2,989

 
42

 
714

 
(741
)
South Bay Marketplace
 
565

 
4

 
214

 
(155
)
Rancho Carmel Plaza
 
192

 
10

 
55

 
(77
)
Lomas Santa Fe Plaza
 
1,288

 
8

 
262

 
(345
)
Solana Beach Towne Centre
 
1,478

 
16

 
437

 
(408
)
Del Monte Center
 
2,399

 
183

 
775

 
(998
)
Geary Marketplace
 
299

 

 
127

 
(123
)
The Shops at Kalakaua
 
458

 
24

 
39

 
(69
)
Waikele Center
 
4,181

 
329

 
1,180

 
(1,515
)
Alamo Quarry Market
 
3,374

 
45

 
1,424

 
(1,590
)
Subtotal Retail Portfolio
 
$
18,120

 
$
679

 
$
5,442

 
$
(6,217
)
Office Portfolio
 
 
 
 
 
 
 
 
Torrey Reserve Campus (5)
 
$
3,887

 
$
47

 
$
216

 
$
(1,189
)
Solana Beach Corporate Centre
 
1,648

 
(7
)
 
55

 
(443
)
The Landmark at One Market
 
5,261

 
27

 
246

 
(1,955
)
One Beach Street
 
802

 
1

 
62

 
(217
)
First & Main
 
2,434

 
175

 
257

 
(734
)
Lloyd District Portfolio (5)
 
2,721

 
348

 
25

 
(1,214
)
City Center Bellevue
 
4,257

 
711

 
333

 
(1,279
)
Subtotal Office Portfolio
 
$
21,010

 
$
1,302

 
$
1,194

 
$
(7,031
)
Multifamily Portfolio
 
 
 
 
 
 
 
 
Loma Palisades
 
$
2,793

 
$
203

 
$

 
$
(1,002
)
Imperial Beach Gardens
 
735

 
65

 

 
(339
)
Mariner's Point
 
340

 
23

 

 
(144
)
Santa Fe Park RV Resort
 
268

 
18

 

 
(157
)
Subtotal Multifamily Portfolio
 
$
4,136

 
$
309

 
$

 
$
(1,642
)

Second Quarter 2015 Supplemental Information
                               Page 16


 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2015
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Mixed-Use Portfolio
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,703

 
$
1,030

 
$
932

 
$
(1,654
)
Waikiki Beach Walk - Embassy Suites™
 
8,727

 
645

 

 
(6,683
)
Subtotal Mixed-Use Portfolio
 
$
11,430

 
$
1,675

 
$
932

 
$
(8,337
)
Total
 
$
54,696

 
$
3,965

 
$
7,568

 
$
(23,227
)

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, 2015 (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 $176 and $544, respectively, for the three months ended June 30, 2015. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended June 30, 2015. 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). There were no abatements for our multifamily portfolio for the three months ended June 30, 2015. For Waikiki Beach Walk - Embassy Suites TM, base rent is equal to the actual room revenue for the three months ended June 30, 2015.
(2)
Represents additional property-related income for the three months ended June 30, 2015, 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, 2015.
(4)
Represents property operating expenses for the three months ended June 30, 2015. 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 leases at Torrey Reserve Campus and Lloyd District Portfolio. This intercompany rent is eliminated in the consolidated statement of operations. The base rent and abatements were both $212 for the three months ended June 30, 2015.

Second Quarter 2015 Supplemental Information
                               Page 17


 
 
SEGMENT CAPITAL EXPENDITURES
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2015
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
 
$
1,274

 
$
400

 
$
1,674

 
$
77

 
$
5

 
$
1,756

Office Portfolio
 
3,844

 
3,241

 
7,085

 
3,432

 
4,355

 
14,872

Multifamily Portfolio
 

 
63

 
63

 
3

 
29,682

(1) 
29,748

Mixed-Use Portfolio
 
167

 
(1
)
 
166

 

 

 
166

Total
 
$
5,285

 
$
3,703

 
$
8,988

 
$
3,512

 
$
34,042

 
$
46,542

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2015
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
 
$
1,777

 
$
682

 
$
2,459

 
$
161

 
$
71

 
$
2,691

Office Portfolio
 
7,666

 
4,839

 
12,505

 
11,806

 
5,275

 
29,586

Multifamily Portfolio
 

 
209

 
209

 
3

 
58,484

(1) 
58,696

Mixed-Use Portfolio
 
278

 
259

 
537

 

 

 
537

Total
 
$
9,721

 
$
5,989

 
$
15,710

 
$
11,970

 
$
63,830

 
$
91,510

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) New Development capital expenditures include capital expenditures incurred for the Lloyd District Portfolio - Phase I project which consists of 657 multifamily units and 47,000 square feet of retail space. All capital expenditures incurred for the Lloyd District Portfolio - Phase I are included in the Multifamily Portfolio segment.
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Second Quarter 2015 Supplemental Information
                               Page 18


 
 
SUMMARY OF OUTSTANDING DEBT
 
 

(Amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
June 30, 2015
 
Interest Rate
 
Service
 
Maturity Date
 
Maturity
First & Main (1)
 
84,500

 
3.97
%
 
87,618

 
July 1, 2016
 
84,500

Imperial Beach Gardens (1)
 
20,000

 
6.16
%
 
1,253

 
September 1, 2016
 
20,000

Mariner's Point (1)
 
7,700

 
6.09
%
 
477

 
September 1, 2016
 
7,700

South Bay Marketplace (1)
 
23,000

 
5.48
%
 
1,281

 
February 10, 2017
 
23,000

Waikiki Beach Walk - Retail (1)
 
130,310

 
5.39
%
 
7,137

 
July 1, 2017
 
130,310

Solana Beach Corporate Centre III-IV (2)
 
36,149

 
6.39
%
 
2,798

 
August 1, 2017
 
35,136

Loma Palisades (1)
 
73,744

 
6.09
%
 
4,566

 
July 1, 2018
 
73,744

One Beach Street (1)
 
21,900

 
3.94
%
 
877

 
April 1, 2019
 
21,900

Torrey Reserve - North Court (2)
 
20,915

 
7.22
%
 
1,836

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII (2)
 
7,049

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II (2)
 
11,211

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre (2)
 
37,371

 
5.91
%
 
2,849

 
June 1, 2020
 
33,898

City Center Bellevue (1)
 
111,000

 
3.98
%
 
4,491

 
November 1, 2022
 
111,000

Total / Weighted Average
 
$
584,849

 
5.17
%
 
$
116,598

 
 
 
$
577,239

Unamortized fair value adjustment
 
(5,716
)
 
 
 
 
 
 
 
 
Secured Notes Payable
 
$
579,133

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series A Notes (3)
 
$
150,000

 
3.88
%
 
$
6,060

 
October 31, 2021
 
$
150,000

Series B Notes (4)
 
100,000

 
4.45
%
 
4,450

 
February 2, 2025
 
100,000

Series C Notes (5)
 
100,000

 
4.50
%
 
4,500

 
April 1, 2025
 
100,000

Term Loan (6)
 
100,000

 
3.08
%
 
3,134

 
January 9, 2019
 
100,000

Unsecured Notes Payable
 
$
450,000

 
 
 
$
18,144

 
 
 
$
450,000

 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit (7)
 
$
30,000

 
 
 
 
 
 
 
 
Notes:
(1)
Interest only.
(2)
Principal payments based on a 30-year amortization schedule.
(3)
$150 million of 4.04% Senior Guaranteed Notes, Series A, due October 31, 2021. Net of the settlement of the forward-starting interest rate swap, the fixed interest rate in accordance with GAAP for the Series A Notes is approximately 3.88% per annum, through maturity.
(4)
$100 million of 4.45% Senior Guaranteed Notes, Series B, due February 2, 2025.
(5)
$100 million of 4.50% Senior Guaranteed Notes, Series C, due April 1, 2025.
(6)
The term loan matures in January 2016 and we have three 12-month options to extend its maturity to 2019. The term loan accrues interest at a variable rate, which we fixed as part of an interest rate swap for an all-in interest rate of 3.08%.
(7)
The unsecured revolving line of credit (the "Revolver Loan") has a capacity of $250 million plus an accordion feature that may allow us to increase the availability thereunder up to an additional $250 million , subject to meeting specified requirements and obtaining additional commitments from lenders. The Revolver Loan initially matures on January 9, 2018 and we have two six-month options to extend its maturity to January 9, 2019. The Revolver Loan currently accrues interest at LIBOR, plus a spread which ranges from 1.35%-1.95%, based on our consolidated leverage ratio.

Second Quarter 2015 Supplemental Information
                               Page 19


 
 
MARKET CAPITALIZATION
 
 

(Amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
Market data
 
June 30, 2015
 
 
Common shares outstanding
 
44,909

 
 
Common units outstanding
 
17,900

 
 
Common shares and common units outstanding
 
62,809


Market price per common share
 
$
39.21

 
Equity market capitalization
 
$
2,462,741


Total debt
 
$
1,064,849

 
Total market capitalization
 
$
3,527,590


Less: Cash on hand
 
$
(34,949
)
 
Total enterprise value
 
$
3,492,641


Total assets, gross
 
$
2,360,935

 
Total unencumbered assets, gross
 
$
1,256,195

 
 
 
 
 
Total debt/Total capitalization
 
30.2
%

Total debt/Total enterprise value
 
30.5
%

Net debt/Total enterprise value (1)
 
29.5
%

Total debt/Total assets, gross
 
45.1
%

Net debt/Total assets, gross (1)
 
43.6
%
 
Total unencumbered assets, gross/Unsecured debt
 
261.7
%
 
 
 
 
 
Total debt/EBITDA (2)(3)
 
6.9
x
 
Net debt/EBITDA (1)(2)(3)
 
6.6
x
 
Interest coverage ratio (4)
 
3.1
x
 
Fixed charge coverage ratio (4)
 
3.1
x
 

Notes:
(1)
Net debt is equal to total debt less cash on hand.
(2)
See Glossary of Terms for discussion of EBITDA.
(3)
As used here, EBITDA represents the actual for the three months ended June 30, 2015 annualized.
(4)
Calculated as EBITDA divided by interest on borrowed funds, including capitalized interest and excluding debt fair value adjustments and loan fee amortization.
(5)
Assumes the exercise of the three 12-month options to extend the maturity of the unsecured term loan.

Second Quarter 2015 Supplemental Information
                               Page 20


 
 
SUMMARY OF DEVELOPMENT OPPORTUNITIES
 
 

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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Project Costs (in thousands) (2)
 
 
 
Start
Date
Estimated Completion Date
Estimated Stabilization Date (1)
Estimated Rentable Square Feet
Multifamily Units
Three Months
Six Months
Cost Incurred to Date
Total Estimated Investment
Estimated Stabilized
Yield (3)
 
 
Ended
Ended
Property
Location
June 30, 2015
June 30, 2015
Office Property:
 
 
 
 
 
 
 
 
 
 
 
Torrey Point
(previously Sorrento Pointe)
San Diego, CA
2015
2016
2017
88,000
N/A
$1,073
$1,133
$8,326
$50,137
8.25% - 9.25%
 
 
 
 
 
 
 
 
 
 
 
 
Mixed Use Property:
 
 
 
 
 
 
 
 
 
 
 
Lloyd District Portfolio - Phase I (5)
Portland, OR
2013
2015
2017
47,000
657
$22,165
$48,638
$184,137
$191,828
6.25% - 7.25%
 
 
 
 
 
 
 
 
 
 
 
 
Development/Redevelopment Pipeline
 
Property
Property Type
Location
Estimated Rentable
Square Feet
Multifamily Units
 
Solana Beach Corporate Centre (Building 5)
Retail
Solana Beach, CA
10,000
N/A
 
Lomas Santa Fe Plaza
Retail
Solana Beach, CA
45,000
N/A
 
Solana Beach - Highway 101 (4)
Mixed Use
Solana Beach, CA
48,000
36
 
Lloyd District Portfolio - multiple phases (5)
Mixed Use
Portland, OR
TBD
TBD
 

Notes:
(1)
Based on management's estimation of stabilized occupancy (90%).
(2)
For all properties, project costs exclude capitalized interest cost which is calculated in accordance with Accounting Standards Codification 835-20-50-1. In addition, for the Lloyd District Portfolio, project costs exclude allocated land costs.
(3)
The estimated stabilized yield is calculated based on total estimated project costs, as defined above, when the project has reached stabilized occupancy.
(4)
Represents commercial portion of development opportunity for Solana Beach - Highway 101.
(5)
The Lloyd District Portfolio was acquired in 2011 consisting of approximately 600,000 rentable square feet on more than 16 acres located in the Lloyd District of Portland, Oregon. The portion of the property that has been designated for additional development to include a high density, transit oriented, mixed-use urban village, with the potential to be in excess of approximately 3 million square feet. The entitlement for such development opportunity allows a 12:1 Floor Area Ratio with a 250 foot height limit and provides for retail, office and/or multifamily development.  Phase 1 of our development, known as Hassalo on Eighth, comprises approximately 1 million square feet, and is on time and on budget as described in the table above.  Additional development plans are in the early stages and will continue to progress as demand and economic conditions allow.


Second Quarter 2015 Supplemental Information
                               Page 21


 
 
 
 
 






PORTFOLIO DATA





Second Quarter 2015 Supplemental Information
                               Page 22


 
 
PROPERTY REPORT
 
 

As of June 30, 2015
 
 
 
 
 
Retail and Office Portfolios
 
 
 
 
 
 
 
 
 
 
 
 
Net
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
Rentable
 
 
 
 
 
Base Rent
 
 
 
 
 
 
 
 
Year Built/
 
of
 
Square
 
Percentage
 
Annualized
 
per Leased
 
 
 
 
Property
 
Location
 
Renovated
 
Buildings
 
Feet (1)
 
Leased (2)
 
Base Rent (3)
 
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

 
96.2%
 
$
3,597,235

 
$47.88
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
98.6
 
11,953,411

 
22.94
 
Sears
 
Sports Authority, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
100.0
 
2,260,482

 
17.01
 
 
 
Ross Dress for Less, Grocery Outlet
Rancho Carmel Plaza
 
San Diego, CA
 
1993

 
3

 
30,421

 
92.0
 
769,084

 
27.48
 
 
 
Oggi's Pizza & Brewing Co., Eagle Estates, Inc
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
209,569

 
93.2
 
5,148,108

 
26.36
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
98.5
 
5,875,350

 
24.18
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
675,678

 
99.2
 
10,198,488

 
15.22
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
100.0
 
1,194,531

 
33.98
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
1,850,604

 
158.56
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
537,637

 
99.8
 
16,747,838

 
31.21
 
Lowe's, Kmart, Sports Authority
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
589,501

 
98.5
 
13,497,507

 
23.25
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Subtotal/Weighted Average Retail Portfolio
 
 
 
104

 
3,075,754

 
98.5%
 
$
73,092,638

 
$24.13
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-present

 
12

 
493,435

 
90.0%
 
$
16,293,931

 
$36.69
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,215

 
91.9
 
6,574,358

 
33.71
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
21,213,418

 
50.58
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
3,837,405

 
39.31
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
92.9
 
10,199,430

 
30.44
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2011/present

 
6

 
582,203

 
84.7
 
11,024,095

 
22.36
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
494,781

 
98.6
 
17,062,422

 
34.97
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
26

 
2,660,260

 
92.9%
 
$
86,205,059

 
$34.88
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
130

 
5,736,014

 
95.9%
 
$
159,297,697

 
$28.96
 
 
 
 

Second Quarter 2015 Supplemental Information
                               Page 23


 
 
PROPERTY REPORT (CONTINUED)
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Monthly
 
 
 
 
 
 
 
 
Year Built/
 
of
 
 
 
Percentage
 
Annualized
 
Base Rent per
 
 
 
 
Property
 
Location
 
Renovated
 
Buildings
 
Units
 
Leased (2)
 
Base Rent (3)
 
Leased Unit (4)
 
 
 
 
Loma Palisades
 
San Diego, CA
 
1958/2001-2008
 
80

 
548

 
96.7%
 
$
11,236,224

 
$
1,767

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008-present
 
26

 
160

 
95.0
 
2,957,808

 
$
1,622

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
96.6
 
1,403,760

 
$
1,376

 
 
 
 
Santa Fe Park RV Resort (9)
 
San Diego, CA
 
1971/2007-2008
 
1

 
126

 
91.0
 
1,312,308

 
$
954

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
115

 
922

 
95.7%
 
$
16,910,100

 
$
1,597

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mixed-Use Portfolio
 
 
 
 
 
 
 
 
Net
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
Rentable
 
 
 
 
 
Base Rent
 
 
 
 
 
 
 
 
Year Built/
 
of
 
Square
 
Percentage
 
Annualized
 
per Leased
 
Retail
 
 
Retail Portion
 
Location
 
Renovated
 
Buildings
 
Feet (1)
 
Leased (2)
 
Base Rent (3)
 
Square Foot (4)
 
Anchor Tenant(s) (5)
 
Other Principal Retail Tenants (6)
Waikiki Beach Walk - Retail
 
Honolulu, HI
 
2006
 
3

 
96,707

 
100.0
%
 
$
10,837,220

 
$
112.06

 
 
 
Yard House, Roy's
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Revenue per
 
 
 
 
 
 
 
 
Year Built/
 
of
 
 
 
Average
 
Average
 
Available
 
 
 
 
Hotel Portion
 
Location
 
Renovated
 
Buildings
 
Units
 
Occupancy (10)
 
Daily Rate(10)
 
Room (10)
 
 
 
 
Waikiki Beach Walk - Embassy Suites™
 
Honolulu, HI
 
2008/2014
 
2

 
369

 
87.8
%
 
$
295.94

 
$
259.90

 
 
 
 
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. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
(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, 2015, including leases which may not have commenced as of June 30, 2015. Percentage leased for our multifamily properties includes total units rented as of June 30, 2015.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2015 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, 2015. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of June 30, 2015.
(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
 
125,477

 
$
1,193,816

South Bay Marketplace
 
1
 
2,824

 
$
91,320

Del Monte Center
 
2
 
295,100

 
$
201,291

Alamo Quarry Market
 
4
 
31,994

 
$
470,075

(8)
This property contains 419,371 net rentable square feet consisting of The Landmark at One Market (375,151 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 2031 pursuant to three 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, 2015, the highest average monthly occupancy rate for this property was 98%, occurring in July 2014. 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, 2015, 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, 2015 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, 2015 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 2015 Supplemental Information
                               Page 24


 
 
RETAIL LEASING SUMMARY
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
17

 
100%
 
67,570

 
$33.59
 
$28.23
 
$
362,247

 
19.0
%
 
16.3
%
 
4.3
 
$
154,612

 
$2.29
1st Quarter 2015
 
11

 
100%
 
25,868

 
$38.85
 
$37.31
 
$
39,807

 
4.1
%
 
7.4
%
 
3.9
 
$
242,280

 
$9.37
4th Quarter 2014
 
11

 
100%
 
36,693

 
$36.26
 
$35.52
 
$
26,917

 
2.1
%
 
8.4
%
 
4.2
 
$
51,235

 
$1.40
3rd Quarter 2014
 
11

 
100%
 
48,420

 
$31.59
 
$27.22
 
$
211,283

 
16.0
%
 
16.8
%
 
4.8
 
$
106,580

 
$2.20
Total 12 months
 
50

 
100%
 
178,551

 
$34.36
 
$30.77
 
$
640,254

 
11.7
%
 
13.0
%
 
4.4
 
$
554,707

 
$3.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
5

 
29%
 
5,742

 
$46.02
 
$39.28
 
$
38,679

 
17.1
%
 
26.6
%
 
4.8
 
$
90,612

 
$15.78
1st Quarter 2015
 
3

 
27%
 
9,052

 
$37.62
 
$36.57
 
$
9,482

 
2.9
%
 
8.6
%
 
4.9
 
$
242,280

 
$26.77
4th Quarter 2014
 

 
—%
 

 
$0.00
 
$0.00
 
$

 
%
 
%
 
 
$

 
$0.00
3rd Quarter 2014
 
1

 
9%
 
3,650

 
$35.00
 
$27.00
 
$
29,201

 
29.6
%
 
62.3
%
 
10.7
 
$
106,580

 
$29.20
Total 12 months
 
9

 
18%
 
18,444

 
$39.72
 
$35.52
 
$
77,362

 
11.8
%
 
22.4
%
 
6.0
 
$
439,472

 
$23.83
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
12

 
71%
 
61,828

 
$32.44
 
$27.21
 
$
323,568

 
19.2
%
 
14.9
%
 
4.3
 
$
64,000

 
$1.04
1st Quarter 2015
 
8

 
73%
 
16,816

 
$39.51
 
$37.71
 
$
30,325

 
4.8
%
 
6.7
%
 
3.3
 
$

 
$0.00
4th Quarter 2014
 
11

 
100%
 
36,693

 
$36.26
 
$35.52
 
$
26,917

 
2.1
%
 
8.4
%
 
4.2
 
$
51,235

 
$1.40
3rd Quarter 2014
 
10

 
91%
 
44,770

 
$31.31
 
$27.24
 
$
182,082

 
14.9
%
 
13.5
%
 
4.3
 
$

 
$0.00
Total 12 months
 
41

 
82%
 
160,107

 
$33.74
 
$30.23
 
$
562,892

 
11.6
%
 
11.7
%
 
4.2
 
$
115,235

 
$0.72
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
19

 
71,656

 
$32.93
 
4.4
 
$
156,612

 
$2.19
 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
14

 
39,670

 
$35.10
 
5.5
 
$
1,089,032

 
$27.45
 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
14

 
41,696

 
$35.70
 
4.2
 
$
70,030

 
$1.68
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
12

 
49,920

 
$33.09
 
4.9
 
$
129,080

 
$2.59
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
59

 
202,942

 
$33.96
 
4.7
 
$
1,444,754

 
$7.12
 
 
 
 
 
 
 
 
 
 
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 2015 Supplemental Information
                               Page 25


 
 
OFFICE LEASING SUMMARY
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
16

 
100%
 
129,173

 
$60.13
 
$42.93
 
$
2,222,587

 
40.1
 %
 
50.0
 %
 
3.7
 
$
1,263,855

 
$9.78
1st Quarter 2015
 
12

 
100%
 
50,794

 
$24.84
 
$23.97
 
$
44,486

 
3.7
 %
 
7.9
 %
 
2.1
 
$
51,510

 
$1.01
4th Quarter 2014
 
6

 
100%
 
139,496

 
$30.02
 
$25.10
 
$
686,304

 
19.6
 %
 
31.6
 %
 
8.9
 
$
4,855,903

 
$34.81
3rd Quarter 2014
 
8

 
100%
 
25,358

 
$35.37
 
$34.24
 
$
28,455

 
3.3
 %
 
11.0
 %
 
3.2
 
$
175,132

 
$6.91
Total 12 months
 
42

 
100%
 
344,821

 
$40.93
 
$32.28
 
$
2,981,832

 
26.8
 %
 
36.2
 %
 
5.5
 
$
6,346,400

 
$18.40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
6

 
38%
 
35,716

 
$40.87
 
$39.87
 
$
35,791

 
2.5
 %
 
21.1
 %
 
6.0
 
$
636,997

 
$17.84
1st Quarter 2015
 
2

 
17%
 
2,701

 
$33.60
 
$32.12
 
$
3,996

 
4.6
 %
 
18.7
 %
 
7.5
 
$
51,510

 
$19.07
4th Quarter 2014
 
2

 
33%
 
62,687

 
$27.45
 
$22.18
 
$
330,817

 
23.8
 %
 
58.9
 %
 
15.1
 
$
4,855,903

 
$77.46
3rd Quarter 2014
 
2

 
25%
 
4,737

 
$32.40
 
$35.63
 
$
(15,310
)
 
(9.1
)%
 
(2.6
)%
 
3.0
 
$
65,767

 
$13.88
Total 12 months
 
12

 
29%
 
105,841

 
$32.36
 
$29.01
 
$
355,294

 
11.6
 %
 
37.7
 %
 
11.3
 
$
5,610,177

 
$53.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
10

 
63%
 
93,457

 
$67.49
 
$44.09
 
$
2,186,796

 
53.1
 %
 
59.5
 %
 
2.8
 
$
626,858

 
$6.71
1st Quarter 2015
 
10

 
83%
 
48,093

 
$24.35
 
$23.51
 
$
40,490

 
3.6
 %
 
7.1
 %
 
1.8
 
$

 
$0.00
4th Quarter 2014
 
4

 
67%
 
76,809

 
$32.12
 
$27.49
 
$
355,487

 
16.8
 %
 
12.3
 %
 
3.9
 
$

 
$0.00
3rd Quarter 2014
 
6

 
75%
 
20,621

 
$36.05
 
$33.93
 
$
43,765

 
6.3
 %
 
14.3
 %
 
3.2
 
$
109,365

 
$5.30
Total 12 months
 
30

 
71%
 
238,980

 
$44.73
 
$33.74
 
$
2,626,538

 
32.6
 %
 
35.7
 %
 
3.0
 
$
736,223

 
$3.08
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
22

 
153,839

 
$55.93
 
4.0
 
$
2,321,713

 
$15.09
 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
20

 
90,134

 
$32.78
 
2.9
 
$
853,731

 
$9.47
 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
11

 
214,118

 
$30.39
 
9.9
 
$
9,451,166

 
$44.14
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
14

 
71,751

 
$31.64
 
6.9
 
$
2,344,232

 
$32.67
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
67

 
529,842

 
$38.38
 
6.6
 
$
14,970,842

 
$28.25
 
 
 
 
 
 
 
 
 
 
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 2015 Supplemental Information
                               Page 26


 
 
MULTIFAMILY LEASING SUMMARY
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
530
 
96.7%
 
$11,236,224
 
$1,767
1st Quarter 2015
 
540
 
98.5%
 
$11,178,576
 
$1,726
4th Quarter 2014
 
547
 
99.8%
 
$11,098,908
 
$1,691
3rd Quarter 2014
 
548
 
100.0%
 
$10,826,460
 
$1,646
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Gardens
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
152
 
95.0%
 
$2,957,808
 
$1,622
1st Quarter 2015
 
160
 
100.0%
 
$2,851,668
 
$1,485
4th Quarter 2014
 
160
 
100.0%
 
$2,816,928
 
$1,467
3rd Quarter 2014
 
160
 
100.0%
 
$2,812,800
 
$1,465
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
85
 
96.6%
 
$1,403,760
 
$1,376
1st Quarter 2015
 
87
 
98.9%
 
$1,285,236
 
$1,231
4th Quarter 2014
 
87
 
98.9%
 
$1,308,828
 
$1,253
3rd Quarter 2014
 
88
 
100.0%
 
$1,276,440
 
$1,209
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
115
 
91.0%
 
$1,312,308
 
$954
1st Quarter 2015
 
102
 
81.0%
 
$838,920
 
$685
4th Quarter 2014
 
101
 
80.0%
 
$918,696
 
$760
3rd Quarter 2014
 
93
 
74.0%
 
$831,780
 
$743
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
882
 
95.7%
 
$16,910,100
 
$1,597
1st Quarter 2015
 
889
 
96.4%
 
$16,154,400
 
$1,515
4th Quarter 2014
 
895
 
97.1%
 
$16,143,360
 
$1,503
3rd Quarter 2014
 
889
 
96.4%
 
$15,747,480
 
$1,476
Notes:
(1)
Percentage leased for our multifamily properties includes total units rented as of each respective quarter end date.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) as of each respective quarter end date.
(3)
Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of each respective quarter end date.

Second Quarter 2015 Supplemental Information
                               Page 27


 
 
MIXED-USE LEASING SUMMARY
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Retail Portion
 
 
 
 
 
 
Number of Leased Square Feet
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Annualized base Rent per Leased Square Foot (3)
Quarter
 
 
 
 
2nd Quarter 2015
 
96,707
 
100.0%
 
$10,837,220
 
$112
1st Quarter 2015
 
96,707
 
100.0%
 
$10,799,806
 
$112
4th Quarter 2014
 
96,334
 
99.6%
 
$10,591,167
 
$110
3rd Quarter 2014
 
96,179
 
99.5%
 
$10,453,280
 
$109
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
2nd Quarter 2015
 
324
 
87.8%
 
$296
 
$260
1st Quarter 2015
 
328
 
89.0%
 
$305
 
$271
4th Quarter 2014
 
264
 
71.6%
 
$318
 
$280
3rd Quarter 2014
 
318
 
86.3%
 
$346
 
$309
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of June 30, 2015, including leases which may not have commenced as of June 30, 2015.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2015 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.
(3)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2015.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2015, 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 each respective quarter period by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for each respective quarter period 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. Offline rooms in connection with the 2014 room refresh at Embassy Suites Hotel is adjusted for in calculating annualized revenue per available room for the third and fourth quarters of 2014.

Second Quarter 2015 Supplemental Information
                               Page 28


 
 
LEASE EXPIRATIONS
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumes no exercise of lease options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Mixed-Use (Retail Portion Only)
 
Total
 
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
Annualized
 
 
Expiring
 
Office
 
Total
 
Base Rent
 
Expiring
 
Retail
 
Total
 
Base Rent
 
Expiring
 
Mixed-Use
 
Total
 
Base Rent
 
Expiring
 
Total
 
Base Rent
Year
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
Month to Month
 
15,780

 
0.6
%
 
0.3
%
 
$2.82
 
14,116

 
0.5
%
 
0.2
%
 
$26.76
 
1,925

 
2.0
%
 
%
 
 
31,821

 
0.5
%
 
$13.27
2015
 
112,598

 
4.2

 
1.9

 
$28.61
 
55,837

 
1.8

 
1.0

 
$24.17
 
1,839

 
1.9

 

 
$189.24
 
170,274

 
2.9

 
$28.89
2016
 
312,313

 
11.7

 
5.4

 
$31.81
 
185,877

 
6.0

 
3.2

 
$33.18
 
11,238

 
11.6

 
0.2

 
$156.37
 
509,428

 
8.7

 
$35.06
2017
 
376,984

 
14.2

 
6.5

 
$36.84
 
380,299

 
12.4

 
6.5

 
$25.22
 
9,967

 
10.3

 
0.2

 
$139.21
 
767,250

 
13.2

 
$32.41
2018
 
288,404

 
10.8

 
4.9

 
$40.34
 
1,056,637

 
34.4

 
18.1

 
$19.93
 
12,416

 
12.8

 
0.2

 
$123.53
 
1,357,457

 
23.3

 
$25.21
2019
 
303,732

 
11.4

 
5.2

 
$40.38
 
365,599

 
11.9

 
6.3

 
$27.19
 
18,896

 
19.5

 
0.3

 
$83.40
 
688,227

 
11.8

 
$34.55
2020
 
317,456

(2) 
11.9

 
5.4

 
$40.88
 
247,527

 
8.0

 
4.2

 
$18.59
 
19,337

 
20.0

 
0.3

 
$58.44
 
584,320

 
10.0

 
$32.02
2021
 
160,405

 
6.0

 
2.8

 
$45.47
 
58,653

 
1.9

 
1.0

 
$53.73
 
8,365

 
8.6

 
0.1

 
242.73
 
227,423

 
3.9

 
$54.86
2022
 
20,138

 
0.8

 
0.3

 
$33.77
 
168,071

 
5.5

 
2.9

 
$31.85
 
11,464

 
11.9

 
0.2

 
$74.01
 
199,673

 
3.4

 
$34.46
2023
 
103,970

 
3.9

 
1.8

 
$29.68
 
55,613

 
1.8

 
1.0

 
$24.08
 

 

 

 
 
159,583

 
2.7

 
$27.73
2024
 
136,841

 
5.1

 
2.3

 
$32.16
 
220,996

 
7.2

 
3.8

 
$24.08
 
1,260

 
1.3

 

 
$179.28
 
359,097

 
6.2

 
$27.70
Thereafter
 
265,265

(3) 
10.0

 
4.5

 
$25.55
 
199,889

 
6.5

 
3.4

 
$24.18
 

 

 

 
 
465,154

 
8.0

 
$24.96
Signed Leases Not Commenced
 
58,648

 
2.2

 
1.0

 
 
20,731

 
0.7

 
0.4

 
 

 

 

 
 
79,379

 
1.4

 
Available
 
187,726

 
7.1

 
3.2

 
 
45,909

 
1.5

 
0.8

 
 

 

 

 
 
233,635

 
4.0

 
Total (4)
 
2,660,260

 
100.0
%
 
45.6
%
 
$32.40
 
3,075,754

 
100.0
%
 
52.7
%
 
$23.76
 
96,707

 
100.0
%
 
1.7
%
 
$112.06
 
5,832,721

 
100.0
%
 
$29.16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumes all lease options are exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Mixed-Use (Retail Portion Only)
 
Total
 
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
Annualized
 
 
Expiring
 
Office
 
Total
 
Base Rent
 
Expiring
 
Retail
 
Total
 
Base Rent
 
Expiring
 
Mixed-Use
 
Total
 
Base Rent
 
Expiring
 
Total
 
Base Rent
Year
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
Month to Month
 
15,780

 
0.6
%
 
0.3
%
 
$2.82
 
14,116

 
0.5
%
 
0.2
%
 
$26.76
 
1,925

 
2.0
%
 
%
 
 
31,821

 
0.5
%
 
$13.27
2015
 
110,878

 
4.2

 
1.9

 
$28.56
 
54,637

 
1.8

 
0.9

 
$23.49
 
1,839

 
1.9

 

 
$189.24
 
167,354

 
2.9

 
$28.67
2016
 
226,106

 
8.5

 
3.9

 
$31.56
 
74,484

 
2.4

 
1.3

 
$30.95
 
7,210

 
7.5

 
0.1

 
$170.75
 
307,800

 
5.3

 
$34.67
2017
 
64,538

 
2.4

 
1.1

 
$38.00
 
130,734

 
4.3

 
2.2

 
$28.73
 
8,927

 
9.2

 
0.2

 
$132.77
 
204,199

 
3.5

 
$36.21
2018
 
69,446

 
2.6

 
1.2

 
$37.35
 
87,744

 
2.9

 
1.5

 
$30.24
 
12,416

 
12.8

 
0.2

 
$123.53
 
169,606

 
2.9

 
$39.98
2019
 
66,931

 
2.5

 
1.1

 
$40.32
 
105,830

 
3.4

 
1.8

 
$31.39
 
7,206

 
7.5

 
0.1

 
$125.01
 
179,967

 
3.1

 
$38.46
2020
 
152,724

 
5.7

 
2.6

 
$35.88
 
96,320

 
3.1

 
1.7

 
$25.44
 
3,015

 
3.1

 
0.1

 
$172.77
 
252,059

 
4.3

 
$33.53
2021
 
98,204

 
3.7

 
1.7

 
$33.31
 
66,072

 
2.1

 
1.1

 
$53.82
 
12,393

 
12.8

 
0.2

 
$206.29
 
176,669

 
3.0

 
$53.11
2022
 
301,142

 
11.3

 
5.2

 
$35.40
 
92,564

 
3.0

 
1.6

 
$36.24
 
11,894

 
12.3

 
0.2

 
$77.84
 
405,600

 
7.0

 
$36.84
2023
 
159,861

 
6.0

 
2.7

 
$44.02
 
144,194

 
4.7

 
2.5

 
$32.24
 

 

 

 
 
304,055

 
5.2

 
$38.43
2024
 
117,379

 
4.4

 
2.0

 
$33.10
 
189,242

 
6.2

 
3.2

 
$30.27
 

 

 

 
 
306,621

 
5.3

 
$31.35
Thereafter
 
1,030,897

(2)(3) 
38.8

 
17.7

 
$36.65
 
1,953,177

 
63.5

 
33.5

 
$20.30
 
29,882

 
30.9

 
0.5

 
$54.72
 
3,013,956

 
51.7

 
$26.23
Signed Leases Not Commenced
 
58,648

 
2.2

 
1.0

 
 
20,731

 
0.7

 
0.4

 
 

 

 

 
 
79,379

 
1.4

 
Available
 
187,726

 
7.1

 
3.2

 
 
45,909

 
1.5

 
0.8

 
 

 

 

 
 
233,635

 
4.0

 
Total (4)
 
2,660,260

 
100.0
%
 
45.6
%
 
$32.40
 
3,075,754

 
100.0
%
 
52.7
%
 
$23.76
 
96,707

 
100.0
%
 
1.7
%
 
$112.06
 
5,832,721

 
100.0
%
 
$29.16

Second Quarter 2015 Supplemental Information
                               Page 29


 
 
LEASE EXPIRATIONS (CONTINUED)
 
 

As of June 30, 2015
 
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, 2015 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 11,917 square feet currently leased by Wells Fargo Bank at Torrey Reserve Campus through September 30, 2015, which ECG Management Consultants Inc. has signed an agreement to lease beginning on January 1, 2016 through January 31, 2020, with an option to extend lease through December 31, 2025.
(3)
The expirations include 35,187 square feet currently leased by multiple tenants at Lloyd District Portfolio through various expiration dates, for which The State of Oregon, by and through its Department of Environmental Quality has signed an agreement to lease such space beginning November 1, 2016 through October 31, 2031 with options to extend the lease through October 31, 2041.
(4)
Individual items may not add up to total due to rounding.

Second Quarter 2015 Supplemental Information
                               Page 30


 
 
PORTFOLIO LEASED STATISTICS
 
 


 
 
At June 30, 2015
 
At June 30, 2014
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
Overall Portfolio (2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,075,754

 
3,029,845

 
98.5
%
 
3,067,657

 
3,032,342

 
98.8
%
Office Properties (square feet) 
 
2,660,260

 
2,472,534

 
92.9
%
 
2,644,792

 
2,339,508

 
88.5
%
Multifamily Properties (units)
 
922

 
882

 
95.7
%
 
922

 
911

 
98.8
%
Mixed-Use Properties (square feet)
 
96,707

 
96,707

 
100.0
%
 
96,707

 
96,179

 
99.5
%
Mixed-Use Properties (units)
 
369

 
326

(3) 
88.4
%
 
369

 
298

(3) 
80.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,075,754

 
3,029,845

 
98.5
%
 
3,067,657

 
3,032,342

 
98.8
%
Office Properties (square feet)
 
1,584,622

(4) 
1,535,038

 
96.9
%
 
1,587,564

(4) 
1,468,814

 
92.5
%
Multifamily Properties (units)
 
922

 
882

 
95.7
%
 
922

 
911

 
98.8
%
Mixed-Use Properties (square feet)
 
96,707

 
96,707

 
100.0
%
 
96,707

 
96,179

 
99.5
%
Mixed-Use Properties (units)
 
369

 
326

(3) 
88.4
%
 
369

 
298

(3) 
80.7
%

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, 2015 and 2014.
(4)
The same-store portfolio excludes Torrey Reserve Campus and Lloyd District Portfolio due to significant redevelopment activity.

Second Quarter 2015 Supplemental Information
                               Page 31


 
 
TOP TENANTS - RETAIL
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

Kmart
 
Waikele Center
 
6/30/2018
 
119,590

 
3.9
%
 
2.1
%
 
$
4,544,420

 
6.2
%
 
2.7
%
2

Lowe's
 
Waikele Center
 
5/31/2018
 
155,000

 
5.0

 
2.7

 
4,460,079

 
6.1

 
2.6

3

Sports Authority
 
Waikele Center,
Carmel Mountain Plaza
 
7/18/2018
11/30/2018
 
90,722

 
2.9

 
1.6

 
2,133,950

 
2.9

 
1.3

4

Nordstrom Rack
 
Carmel Mountain Plaza,
Alamo Quarry Market
 
9/30/2022
10/31/2022
 
69,047

 
2.2

 
1.2

 
1,990,316

 
2.7

 
1.2

5

Sprouts Farmers Market
 
Solana Beach Towne Centre,
Carmel Mountain Plaza,
Geary Marketplace
 
6/30/2019
3/31/2025
9/30/2032
 
71,431

 
2.3

 
1.2

 
1,919,436

 
2.6

 
1.1

6

Marshalls
 
Carmel Mountain Plaza,
Solana Beach Towne Centre
 
1/31/2019
1/31/2025
 
68,055

 
2.2

 
1.2

 
1,258,083

 
1.7

 
0.7

7

Old Navy
 
South Bay Marketplace,
Waikele Center,
Alamo Quarry Market
 
4/30/2016
7/31/2016
9/30/2017
 
59,780

 
1.9

 
1.0

 
*

 
*

 
*

8

Vons
 
Lomas Santa Fe Plaza
 
12/31/2017
 
49,895

 
1.6

 
0.9

 
1,216,700

 
1.7

 
0.7

9

Regal Cinemas
 
Alamo Quarry Market
 
3/31/2018
 
72,447

 
2.4

 
1.2

 
1,122,929

 
1.5

 
0.7

10

Gap
 
Del Monte Center,
Waikele Center,
Alamo Quarry Market
 
9/20/2020
2/28/2022
4/30/2024
 
36,614

 
1.2

 
0.6

 
982,039

 
1.3

 
0.6

 
Top 10 Retail Tenants Total
 
 
 
792,581

 
25.6
%
 
13.7
%
 
$
19,627,952

 
26.7
%
 
11.6
%


*
Data withheld at tenant's request.

Second Quarter 2015 Supplemental Information
                               Page 32


 
 
TOP TENANTS - OFFICE
 
 

As of June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property
 
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
4/30/2020
5/31/2021
 
254,118

 
9.6
%
 
4.4
%
 
$
13,274,276

 
15.4
%
 
7.8
%
2

Autodesk, Inc.
 
The Landmark at One Market
 
12/31/2017
12/31/2018
 
114,664

 
4.3

 
2.0

 
5,733,597

 
6.7

 
3.4

3

Veterans Benefits Administration
 
First & Main
 
8/31/2020
 
93,572

 
3.5

 
1.6

 
3,006,453

 
3.5

 
1.8

4

Insurance Company of the West
 
Torrey Reserve Campus
 
12/31/2016
 
81,040

 
3.0

 
1.4

 
2,676,783

 
3.1

 
1.6

5

Clearesult Operating, LLC (as successor to Portland Energy Conservation)
 
First & Main
 
4/30/2025
 
101,848

 
3.8

 
1.7

 
2,503,140

 
2.9

 
1.5

6

Alliant International University
 
One Beach Street
 
10/31/2019
 
64,161

 
2.4

 
1.1

 
2,234,739

 
2.6

 
1.3

7

Caradigm USA LLC
 
City Center Bellevue
 
8/14/2017
 
68,956

 
2.6

 
1.2

 
2,231,416

 
2.6

 
1.3

8

Treasury Call Center
 
First & Main
 
8/31/2020
 
63,648

 
2.4

 
1.1

 
2,184,302

 
2.5

 
1.3

9

HDR Engineering, Inc.
 
City Center Bellevue
 
12/31/2017
 
57,238

 
2.2

 
1.0

 
2,044,876

 
2.4

 
1.2

10

California Bank & Trust
 
Torrey Reserve Campus
 
2/29/2024
 
34,731

 
1.3

 
0.6

 
1,654,219

 
1.9

 
1.0

 
Top 10 Office Tenants Total
 
 
 
933,976

 
35.1
%
 
16.1
%
 
$
37,543,801

 
43.6
%
 
22.2
%



Second Quarter 2015 Supplemental Information
                               Page 33


 
 
 
 
 






APPENDIX





Second Quarter 2015 Supplemental Information
                               Page 34


 
 
GLOSSARY OF TERMS
 
 


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 and six months ended June 30, 2015 and 2014 is as follows:
    
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
12,284

 
$
5,351

 
$
23,663

 
$
12,009

Depreciation and amortization
15,286

 
18,209

 
30,393

 
34,550

Interest expense
11,197

 
13,439

 
22,992

 
27,071

Interest income
(12
)
 
(36
)
 
(26
)
 
(57
)
Income tax expense
35

 
(283
)
 
119

 
(171
)
EBITDA
$
38,790

 
$
36,680

 
$
77,141

 
$
73,402


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.



Second Quarter 2015 Supplemental Information
                               Page 35


 
 
GLOSSARY OF TERMS (CONTINUED)
 
 


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
 
Six Months Ended
 
June 30,
 
June 30,
Reconciliation of NOI to net income
2015
 
2014
 
2015
 
2014
Total NOI
$
43,578

 
$
40,570

 
$
86,945

 
$
81,904

General and administrative
(4,788
)
 
(4,635
)
 
(9,804
)
 
(9,247
)
Depreciation and amortization
(15,286
)
 
(18,209
)
 
(30,393
)
 
(34,550
)
Interest expense
(11,197
)
 
(13,439
)
 
(22,992
)
 
(27,071
)
Other income (expense), net
(23
)
 
1,064

 
(93
)
 
973

Net income
12,284

 
5,351

 
23,663

 
12,009

Net income attributable to restricted shares
(40
)
 
(94
)
 
(83
)
 
(164
)
Net loss attributable to unitholders in the Operating Partnership
(3,536
)
 
(1,544
)
 
(6,845
)
 
(3,530
)
Net income attributable to American Assets Trust, Inc. stockholders
$
8,708

 
$
3,713

 
$
16,735

 
$
8,315


Overall Portfolio: Includes all operating properties owned by us as of June 30, 2015.


Second Quarter 2015 Supplemental Information
                               Page 36


 
 
GLOSSARY OF TERMS (CONTINUED)
 
 


Same-Store Portfolio, Non-Same Store Portfolio and Redevelopment Same-Store: Information provided on a same-store basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, properties under development, properties classified as held for development and properties classified as discontinued operations. Information provided on a redevelopment same-store basis includes the results of properties undergoing significant redevelopment for the entirety or portion of both periods being compared. The following table shows the properties included in the same-store, non-same store and redevelopment same-store portfolio for the comparative periods presented.
    
 
Comparison of Three Months Ended
 
Comparison of Six Months Ended
 
June 30, 2015 to 2014
 
June 30, 2015 to 2014
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
Retail Properties
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
X
 
 
 
X
 
X
 
 
 
X
Carmel Mountain Plaza
X
 
 
 
X
 
X
 
 
 
X
South Bay Marketplace
X
 
 
 
X
 
X
 
 
 
X
Rancho Carmel Plaza
X
 
 
 
X
 
X
 
 
 
X
Lomas Santa Fe Plaza
X
 
 
 
X
 
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
 
X
 
 
 
X
Del Monte Center
X
 
 
 
X
 
X
 
 
 
X
Geary Marketplace
X
 
 
 
X
 
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
 
X
 
 
 
X
Waikele Center
X
 
 
 
X
 
X
 
 
 
X
Alamo Quarry Market
X
 
 
 
X
 
X
 
 
 
X
Office Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
 
X
 
X
 
 
 
X
 
X
Solana Beach Corporate Centre
X
 
 
 
X
 
X
 
 
 
X
The Landmark at One Market
X
 
 
 
X
 
X
 
 
 
X
One Beach Street
X
 
 
 
X
 
X
 
 
 
X
First & Main
X
 
 
 
X
 
X
 
 
 
X
Lloyd District Portfolio
 
 
X
 
X
 
 
 
X
 
X
City Center Bellevue
X
 
 
 
X
 
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
 
 
 
 
 
 
Loma Palisades
X
 
 
 
X
 
X
 
 
 
X
Imperial Beach Gardens
X
 
 
 
X
 
X
 
 
 
X
Mariner's Point
X
 
 
 
X
 
X
 
 
 
X
Santa Fe Park RV Resort
X
 
 
 
X
 
X
 
 
 
X
Mixed-Use Properties
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
X
 
X
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
X
 
X
 
 
 
X
Development Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Point (formerly 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 2015 Supplemental Information
                               Page 37