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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):
April 26, 2016
_________________________
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 April 26, 2016, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending March 31, 2016. Also on April 26, 2016, 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 March 31, 2016. 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 March 31, 2016 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 April 26, 2016.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the quarter ended March 31, 2016.
_____________________
** 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
April 26, 2016
 
 

3



EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
Press release issued by American Assets Trust, Inc. on April 26, 2016.
99.2
 
American Assets Trust, Inc. Supplemental Information for the quarter ended March 31, 2016.


4
8-K



American Assets Trust, Inc. Reports First Quarter 2016 Financial Results

FFO per share increases 5% year-over-year for the three months ended March 31, 2016
Same-Store Cash NOI increases 7% year-over-year for the three months ended March 31, 2016

SAN DIEGO, California - 4/26/2016 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its first quarter ended March 31, 2016.

Financial Results and Recent Developments
•
Funds From Operations increased 5% year-over-year to $0.45 per diluted share for the three months ended March 31, 2016 compared to the same period in 2015
•
Net income available to common stockholders of $7.7 million for the three months ended March 31, 2016, or $0.17 per diluted share
•
Same-store cash and GAAP NOI increased 7% and 5%, respectively, for the three months ended March 31, 2016 compared to the same period in 2015
•
Entered into a new $100 million seven-year unsecured term loan with an interest rate fixed at approximately 3.15% (subject to adjustments based on our consolidated leverage ratio) as a result of an interest rate swap
•
Leased approximately 52,100 comparable office square feet at an average cash-basis and GAAP-basis contractual rent increase of 9% and 18%, respectively, during the three months ended March 31, 2016
•
Leased approximately 81,100 comparable retail square feet at an average cash-basis and GAAP-basis contractual rent increase of 2% and 9%, respectively, during the three months ended March 31, 2016

During the first quarter of 2016, the company generated funds from operations (“FFO”) for common stockholders of $28.1 million, or $0.45 per diluted share, compared to $26.4 million, or $0.43 per diluted share, for the quarter ended March 31, 2015. The increase in FFO from the corresponding period in 2015 was primarily due to additional operating income from Hassalo on Eighth and growth in same-store net operating income from our existing portfolio.

Net income attributable to common stockholders was $7.7 million, or $0.17 per basic and diluted share for the three months ended March 31, 2016 compared to $8.0 million, or $0.18 per basic and diluted share for the three months ended March 31, 2015. The decrease in net income attributable to common stockholders from the corresponding period in 2015 was primarily due to an increase in depreciation and amortization expense and interest expense during the three months ended March 31, 2016 attributed to the completion of Hassalo on Eighth, which was completed during the third and fourth quarters of 2015.

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.



1


Portfolio Results
The portfolio leased status as of the end of the indicated quarter was as follows:
 
March 31, 2016
December 31, 2015
March 31, 2015
Total Portfolio
 
 
 
Retail
98.6%
98.6%
98.5%
Office
91.3%
92.4%
92.7%
Multifamily (1)
79.4%
73.4%
96.4%
Mixed-Use:
 
 
 
Retail
97.8%
100.0%
100.0%
Hotel
87.0%
89.6%
89.0%
 
 
 
 
Same-Store Portfolio
 
 
Retail
98.6%
98.6%
98.5%
Office
98.1%
98.1%
96.0%
Multifamily (1)
96.4%
95.6%
96.4%
Mixed-Use:
 
 
 
Retail
97.8%
100.0%
100.0%
Hotel
87.0%
89.6%
89.0%
(1) Total multifamily leased percentage at March 31, 2016 and December 31, 2015 includes Hassalo on Eighth, which became available for occupancy in July and October of 2015. Same-store multifamily leased percentages exclude Hassalo on Eighth.

During the first quarter of 2016, the company signed 44 leases for approximately 172,000 square feet of retail and office space, as well as 305 multifamily apartment leases. Renewals accounted for 100.0% of the comparable retail leases, 73.7% of the comparable office leases and 24.3% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the first quarter of 2016 and trailing four quarters ending March 31, 2016, 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
Q1 2016
16
81,100
2.1%
$34.54
$33.82
9.1%
Last 4 Quarters
65
286,200
10.7%
$31.01
$28.02
17.5%
 
 
 
 
 
 
 
 
Office
Q1 2016
19
52,100
9.3%
$41.38
$37.87
17.6%
Last 4 Quarters
65
328,500
21.2%
$46.44
$38.33
29.7%

Multifamily
As of March 31, 2016, Hassalo on Eighth was approximately 55% leased with average monthly base rent per leased unit of $1,405.

To date, we have leased 163 of the Velomor building's 177 units, or approximately 92%; 201 of Aster Tower's 337 units, or approximately 60%; and 90 of the Elwood building's 143 units, or approximately 63%. In total, to date, we have leased 454 units of 657 units at Hassalo on Eighth, or approximately 69%. We expect stabilization of all three multifamily buildings to be achieved during the second half of 2016.

At March 31, 2016, the average monthly base rent per leased unit for same-store properties was $1,695 compared to an average monthly base rent per leased unit of $1,515 at March 31, 2015, an increase of approximately 12%.





2


Same-Store Operating Income
For the three months ended March 31, 2016, same-store property operating income increased 7.1% on a cash basis compared to the corresponding period in 2015. For the three months ended March 31, 2016, same-store property operating income increased 5.0% on a GAAP basis compared to the corresponding period in 2015. The same-store property operating income by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
March 31,
 
 
 
 
2016
 
2015
 
Change
Cash Basis:
 
 
 
 
 
 
Retail
$
18,183

 
$
17,595

 
3.3

%
Office
12,573

 
11,247

 
11.8

 
Multifamily
3,119

 
2,826

 
10.4

 
Mixed-Use
6,242

 
5,797

 
7.7

 
 
$
40,117

 
$
37,465

 
7.1

%
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
Retail
$
18,344

 
$
17,876

 
2.6

%
Office
13,020

 
12,371

 
5.2

 
Multifamily
3,119

 
2,826

 
10.4

 
Mixed-Use
6,262

 
5,747

 
9.0

 
 
$
40,745

 
$
38,820

 
5.0

%
(1)
Same-store portfolio excludes (i) Torrey Reserve Campus and Lloyd District Portfolio due to significant redevelopment activity during the period; (ii) Rancho Carmel Plaza as it was sold on August 6, 2015; (iii) Hassalo on Eighth, which became available for occupancy in July and October of 2015; and (iv) land held for development.

On a same-store basis, retail property operating income increased for the three months ended March 31, 2016 compared to the same period in 2015 primarily due to higher annualized base rents, specifically at Waikele Center and Alamo Quarry Market.

On a same-store basis, office property operating income increased for the three months ended March 31, 2016 compared to the same period in 2015 primarily due to higher annualized base rents, specifically at The Landmark at One Market and First & Main, partially offset by an increase in rental expenses and real estate taxes during the period.

On a same-store basis, multifamily property operating income increased for the three months ended March 31, 2016 compared to the corresponding period in 2015 primarily due to an increase in average monthly base rent during 2016.

On a same-store basis, mixed-use property operating income increased for the three months ended March 31, 2016 compared to the corresponding period in 2015 primarily due to higher revenue per available room at the hotel portion of our mixed-use property and higher annualized base rents at the retail portion of our mixed-use property.

Development
Our development efforts at Torrey Point are ongoing with plans including two Class A office buildings of approximately 90,000 square feet in the aggregate, with panoramic unobstructed views of the Torrey Pines State Park Beach, Torrey Reserve and the Pacific Ocean. Projected costs of the development at Torrey Point are approximately $53 million, of which approximately $17 million has been incurred to date. We expect to incur the remaining costs for development of Torrey Point in 2016 and 2017. We expect the Torrey Point development to be stabilized in 2018 with an estimated stabilized cash yield of approximately 7.5% to 8.6%.

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


3


Term Loan
On March 1, 2016, we entered into a Term Loan Agreement which provides for a new seven-year unsecured term loan of $100 million that matures March 1, 2023.

Prior to entry into the Term Loan Agreement, the company entered into an interest rate swap agreement that is intended to fix the interest rate associated with the Term Loan at approximately 3.15% through its maturity date, subject to adjustments based on the company’s consolidated leverage ratio.

Balance Sheet and Liquidity
At March 31, 2016, the company had gross real estate assets of $2.3 billion and liquidity of $274.0 million, comprised of cash and cash equivalents of $44.0 million and $230.0 million of availability on its line of credit.

Dividends
The company declared dividends on its shares of common stock of $0.25 per share for the first quarter of 2016. The dividends were paid on March 25, 2016.

In addition, the company has declared a dividend on its common stock of $0.25 per share for the quarter ending June 30, 2016. The dividend will be paid on June 24, 2016 to stockholders of record on June 10, 2016.

Guidance
The company reaffirms its guidance for full year 2016 FFO per diluted share of a range of $1.82 to $1.88 per share. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments.

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 first quarter of 2016 on Wednesday, April 27, 2016 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-877-868-5513 and use the pass code 85931744. A telephonic replay of the conference call will be available beginning at 12:00 p.m. PT on Wednesday, April 27, 2016 through Wednesday, May 4, 2016. To access the replay, dial 1-800-585-8367 and use the pass code 85931744. 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 first quarter 2016 results may be found in the “Investor Relations” section of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

4


Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
March 31, 2016
 
December 31, 2015
Assets
 
(unaudited)
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,167,426

 
$
2,163,444

Construction in progress
 
86,189

 
 
73,121

Held for development
 
9,461

 
 
9,463

 
 
2,263,076

 
 
2,246,028

Accumulated depreciation
 
(426,076
)
 
 
(411,166
)
Net real estate
 
1,837,000

 
 
1,834,862

Cash and cash equivalents
 
44,007

 
 
39,925

Restricted cash
 
9,295

 
 
11,623

Accounts receivable, net
 
7,586

 
 
7,518

Deferred rent receivables, net
 
38,633

 
 
38,422

Other assets, net
 
41,305

 
 
41,939

Total assets
$
1,977,826

 
$
1,974,289

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
494,883

 
$
579,000

Unsecured notes payable, net
 
545,883

 
 
446,613

Unsecured line of credit
 
20,000

 
 
30,000

Accounts payable and accrued expenses
 
37,014

 
 
31,821

Security deposits payable
 
6,065

 
 
5,956

Other liabilities and deferred credits, net
 
53,580

 
 
51,972

Total liabilities
 
1,157,425

 
 
1,145,362

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 45,407,402 and 45,407,719 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively
 
454

 
 
454

Additional paid-in capital
 
864,038

 
 
863,432

Accumulated dividends in excess of net income
 
(67,724
)
 
 
(64,066
)
Accumulated other comprehensive (loss) income
 
(3,143
)
 
 
(258
)
Total American Assets Trust, Inc. stockholders' equity
 
793,625

 
 
799,562

Noncontrolling interests
 
26,776

 
 
29,365

Total equity
 
820,401

 
 
828,927

Total liabilities and equity
$
1,977,826

 
$
1,974,289


5


American Assets Trust, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended March 31,
 
2016
 
2015
Revenue:
 
 
 
Rental income
$
67,245

 
$
62,753

Other property income
3,486

 
3,282

Total revenue
70,731

 
66,035

Expenses:
 
 
 
Rental expenses
18,453

 
16,620

Real estate taxes
6,633

 
6,048

General and administrative
4,549

 
5,016

Depreciation and amortization
17,453

 
15,107

Total operating expenses
47,088

 
42,791

Operating income
23,643

 
23,244

Interest expense
(12,946
)
 
(11,795
)
Other income (expense), net
24

 
(70
)
Net income
10,721

 
11,379

Net income attributable to restricted shares
(43
)
 
(43
)
Net income attributable to unitholders in the Operating Partnership
(3,027
)
 
(3,309
)
Net income attributable to American Assets Trust, Inc. stockholders
$
7,651

 
$
8,027

 
 
 
 
Net income per share
 
 
 
Basic income attributable to common stockholders per share
$
0.17

 
$
0.18

Weighted average shares of common stock outstanding - basic
45,233,873

 
43,419,762

 
 
 
 
Diluted income attributable to common stockholders per share
$
0.17

 
$
0.18

Weighted average shares of common stock outstanding - diluted
63,133,389

 
61,321,447

 
 
 
 
Dividends declared per common share
$
0.25

 
$
0.2325

 
 
 
 


6


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):
 
Three Months Ended
 
March 31, 2016
Funds From Operations (FFO)
 
 
Net income
$
10,721

Depreciation and amortization of real estate assets
 
17,453

FFO, as defined by NAREIT
$
28,174

Less: Nonforfeitable dividends on incentive stock awards
 
(42
)
FFO attributable to common stock and units
$
28,132

FFO per diluted share/unit
$
0.45

Weighted average number of common shares and units, diluted
 
63,136,341


Reported results are preliminary and not final until the filing of the company's Form 10-K 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.

7


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. The company is celebrating its 50th year of 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 3.0 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 1,579 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


8
Exhibit
 
 
 
FIRST QUARTER 2016
 
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
 
1,195,690

 
705,650

 
922

(1)
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,308

 
—

 
—

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
675,678

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
589,362

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Portland
 
—

 
941,186

 
657

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
—

 
494,753

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,045,194

 
2,658,574

 
1,579

 
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
 
3.0

million
 
53%
 
Office
 
2.7

million
 
47%
Data is as of March 31, 2016.
 
Totals
 
5.7

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

First Quarter 2016 Supplemental Information
                               Page 2
 
 
INDEX
 
 

 
FIRST QUARTER 2016 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Income
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
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.

First Quarter 2016 Supplemental Information
                               Page 3
 
 
 
 
 






FINANCIAL HIGHLIGHTS





First Quarter 2016 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
 
 

(Amounts in thousands, except shares and per share data)
March 31, 2016
 
December 31, 2015
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,167,426

 
$
2,163,444

Construction in progress
86,189

 
73,121

Held for development
9,461

 
9,463

 
2,263,076

 
2,246,028

Accumulated depreciation
(426,076
)
 
(411,166
)
Net real estate
1,837,000

 
1,834,862

Cash and cash equivalents
44,007

 
39,925

Restricted cash
9,295

 
11,623

Accounts receivable, net
7,586

 
7,518

Deferred rent receivable, net
38,633

 
38,422

Other assets, net
41,305

 
41,939

TOTAL ASSETS
$
1,977,826

 
$
1,974,289

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
494,883

 
$
579,000

Unsecured notes payable, net
545,883

 
446,613

Unsecured line of credit
20,000

 
30,000

Accounts payable and accrued expenses
37,014

 
31,821

Security deposits payable
6,065

 
5,956

Other liabilities and deferred credits, net
53,580

 
51,972

Total liabilities
1,157,425

 
1,145,362

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 45,407,402 and 45,407,719 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively
454

 
454

Additional paid in capital
864,038

 
863,432

Accumulated dividends in excess of net income
(67,724
)
 
(64,066
)
Accumulated other comprehensive income
(3,143
)
 
(258
)
Total American Assets Trust, Inc. stockholders' equity
793,625

 
799,562

Noncontrolling interests
26,776

 
29,365

Total equity
820,401

 
828,927

TOTAL LIABILITIES AND EQUITY
$
1,977,826

 
$
1,974,289


First Quarter 2016 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
March 31,
 
2016
 
2015
REVENUE:
 
 
 
Rental income
$
67,245

 
$
62,753

Other property income
3,486

 
3,282

Total revenue
70,731

 
66,035

EXPENSES:
 
 
 
Rental expenses
18,453

 
16,620

Real estate taxes
6,633

 
6,048

General and administrative
4,549

 
5,016

Depreciation and amortization
17,453

 
15,107

Total operating expenses
47,088

 
42,791

OPERATING INCOME
23,643

 
23,244

Interest expense
(12,946
)
 
(11,795
)
Other income (expense), net
24

 
(70
)
NET INCOME
10,721

 
11,379

Net income attributable to restricted shares
(43
)
 
(43
)
Net income attributable to unitholders in the Operating Partnership
(3,027
)
 
(3,309
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
7,651

 
$
8,027

 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
Basic income attributable to common stockholders per share
$
0.17

 
$
0.18

Weighted average shares of common stock outstanding - basic
45,233,873

 
43,419,762

Diluted income attributable to common stockholders per share
$
0.17

 
$
0.18

Weighted average shares of common stock outstanding - diluted
63,133,389

 
61,321,447

 
 
 
 

First Quarter 2016 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
 
March 31,
 
2016
 
2015
Funds from Operations (FFO) (1)
 
 
 
Net income
$
10,721

 
$
11,379

Depreciation and amortization of real estate assets
17,453

 
15,107

FFO, as defined by NAREIT
28,174

 
26,486

Less: Nonforfeitable dividends on incentive stock awards
(42
)
 
(40
)
FFO attributable to common stock and common units
$
28,132

 
$
26,446

 
 
 
 
FFO per diluted share/unit
$
0.45

 
$
0.43

 
 
 
 
Weighted average number of common shares and common units, diluted (2)
63,136,341

 
61,329,952

 
 
 
 
Funds Available for Distribution (FAD) (1)
$
21,381

 
$
20,244

 
 
 
 
Dividends
 
 
 
Dividends declared and paid
$
15,827

 
$
14,350

Dividends declared and paid per share/unit
$
0.2500

 
$
0.2325


First Quarter 2016 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
 
March 31,
 
2016
 
2015
Funds Available for Distribution (FAD) (1)
 
 
 
FFO
$
28,174

 
$
26,486

Adjustments:
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(7,549
)
 
(6,722
)
Net effect of straight-line rents (3)
(250
)
 
(707
)
Amortization of net above (below) market rents (4)
(830
)
 
(728
)
Net effect of other lease intangibles (5)
135

 
20

Amortization of debt issuance costs and debt fair value adjustment
1,125

 
1,045

Non-cash compensation expense
618

 
890

Nonforfeitable dividends on incentive stock awards
(42
)
 
(40
)
FAD
$
21,381

 
$
20,244

 
 
 
 
Summary of Capital Expenditures
 
 
 
Tenant improvements and leasing commissions
$
2,716

 
$
4,436

Maintenance capital expenditures
4,833

 
2,286

 
$
7,549

 
$
6,722


Notes:
(1)
See Glossary of Terms.
(2)
For the three months ended March 31, 2016 and 2015, 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.


First Quarter 2016 Supplemental Information
                               Page 8
 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
 
 

(Unaudited, amounts in thousands)
Three Months Ended March 31, 2016
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
24,364

 
$
18,133

 
$
4,706

 
$
14,746

 
$
61,949

Non-same store portfolio (1)
7

 
7,187

 
1,588

 
—

 
8,782

Total
24,371

 
25,320

 
6,294

 
14,746

 
70,731

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
6,020

 
5,113

 
1,587

 
8,484

 
21,204

Non-same store portfolio (1)
60

 
2,589

 
1,233

 
—

 
3,882

Total
6,080

 
7,702

 
2,820

 
8,484

 
25,086

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
18,344

 
13,020

 
3,119

 
6,262

 
40,745

Non-same store portfolio (1)
(53
)
 
4,598

 
355

 
—

 
4,900

Total
$
18,291

 
$
17,618

 
$
3,474

 
$
6,262

 
$
45,645

Same-store portfolio NOI, GAAP basis
$
18,344

 
$
13,020

 
$
3,119

 
$
6,262

 
$
40,745

Net effect of straight-line rents (2)
157

 
65

 
—

 
(33
)
 
189

Amortization of net above (below) market rents (3)
(318
)
 
(588
)
 
—

 
50

 
(856
)
Net effect of other lease intangibles (4)
—

 
76

 
—

 
(37
)
 
39

Same-store portfolio NOI, cash basis
$
18,183

 
$
12,573

 
$
3,119

 
$
6,242

 
$
40,117


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on March 31, 2016 and 2015. 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.

First Quarter 2016 Supplemental Information
                               Page 9
 
 
SAME-STORE PORTFOLIO NOI COMPARISON EXCLUDING REDEVELOPMENT
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Change
Cash Basis:
 
 
 
 
 
Retail
$
18,183

 
$
17,595

 
3.3
%
Office
12,573

 
11,247

 
11.8

Multifamily
3,119

 
2,826

 
10.4

Mixed-Use
6,242

 
5,797

 
7.7

 
$
40,117

 
$
37,465

 
7.1
%
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
Retail
$
18,344

 
$
17,876

 
2.6
%
Office
13,020

 
12,371

 
5.2

Multifamily
3,119

 
2,826

 
10.4

Mixed-Use
6,262

 
5,747

 
9.0

 
$
40,745

 
$
38,820

 
5.0
%


First Quarter 2016 Supplemental Information
                               Page 10
 
 
SAME-STORE PORTFOLIO NOI COMPARISON WITH REDEVELOPMENT
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Change
Cash Basis:
 
 
 
 
 
Retail
$
18,183

 
$
17,595

 
3.3
%
Office
16,917

 
15,573

 
8.6

Multifamily
3,119

 
2,826

 
10.4

Mixed-Use
6,242

 
5,797

 
7.7

 
$
44,461

 
$
41,791

 
6.4
%
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
Retail
$
18,344

 
$
17,876

 
2.6
%
Office
17,616

 
16,758

 
5.1

Multifamily
3,119

 
2,826

 
10.4

Mixed-Use
6,262

 
5,747

 
9.0

 
$
45,341

 
$
43,207

 
4.9
%

First Quarter 2016 Supplemental Information
                               Page 11
 
 
NOI BY REGION
 
 

(Unaudited, amounts in thousands)
Three Months Ended March 31, 2016
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Southern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
$
7,623

 
$
4,277

 
$
3,118

 
$
—

 
$
15,018

Net effect of straight-line rents (2)
25

 
(310
)
 
—

 
—

 
(285
)
Amortization of net above (below) market rents (3)
(198
)
 
—

 
—

 
—

 
(198
)
Net effect of other lease intangibles (4)
—

 
93

 
—

 
—

 
93

NOI, cash basis
7,450

 
4,060

 
3,118

 
—

 
14,628

Northern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
2,700

 
4,925

 
—

 
—

 
7,625

Net effect of straight-line rents (2)
27

 
224

 
—

 
—

 
251

Amortization of net above (below) market rents (3)
(97
)
 
(194
)
 
—

 
—

 
(291
)
Net effect of other lease intangibles (4)
—

 
74

 
—

 
—

 
74

NOI, cash basis
2,630

 
5,029

 
—

 
—

 
7,659

Hawaii
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
4,559

 
—

 
—

 
6,262

 
10,821

Net effect of straight-line rents (2)
144

 
—

 
—

 
(33
)
 
111

Amortization of net above (below) market rents (3)
53

 
—

 
—

 
50

 
103

Net effect of other lease intangibles (4)
—

 
—

 
—

 
(37
)
 
(37
)
NOI, cash basis
4,756

 
—

 
—

 
6,242

 
10,998

Oregon
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
—

 
4,142

 
356

 
—

 
4,498

Net effect of straight-line rents (2)
—

 
(240
)
 
(67
)
 
—

 
(307
)
Amortization of net above (below) market rents (3)
—

 
(70
)
 
—

 
—

 
(70
)
Net effect of other lease intangibles (4)
—

 
5

 
—

 
—

 
5

NOI, cash basis
—

 
3,837

 
289

 
—

 
4,126

Texas
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
3,409

 
—

 
—

 
—

 
3,409

Net effect of straight-line rents (2)
(39
)
 
—

 
—

 
—

 
(39
)
Amortization of net above (below) market rents (3)
(76
)
 
—

 
—

 
—

 
(76
)
NOI, cash basis
3,294

 
—

 
—

 
—

 
3,294

Washington
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
—

 
4,274

 
—

 
—

 
4,274

Net effect of straight-line rents (2)
—

 
19

 
—

 
—

 
19

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

 
(298
)
 
—

 
—

 
(298
)
NOI, cash basis
—

 
3,995

 
—

 
—

 
3,995

Total
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
18,291

 
17,618

 
3,474

 
6,262

 
45,645

Net effect of straight-line rents (2)
157

 
(307
)
 
(67
)
 
(33
)
 
(250
)
Amortization of net above (below) market rents (3)
(318
)
 
(562
)
 
—

 
50

 
(830
)
Net effect of other lease intangibles (4)
—

 
172

 
—

 
(37
)
 
135

NOI, cash basis
$
18,130

 
$
16,921

 
$
3,407

 
$
6,242

 
$
44,700

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.


First Quarter 2016 Supplemental Information
                               Page 12
 
 
NOI BREAKDOWN
 
 

Three Months Ended March 31, 2016
Portfolio NOI, Cash Basis Breakdown
 
Portfolio Diversification by Geographic Region
Portfolio NOI, GAAP Basis Breakdown
 
Portfolio Diversification by Geographic Region
 
 
 
Portfolio Diversification by Segment
 
 
Portfolio Diversification by Segment


First Quarter 2016 Supplemental Information
                               Page 13
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2016
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Retail Portfolio
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
911

 
$
18

 
$
201

 
$
(172
)
Carmel Mountain Plaza
 
3,077

 
41

 
733

 
(749
)
South Bay Marketplace
 
566

 
31

 
163

 
(153
)
Lomas Santa Fe Plaza
 
1,318

 
12

 
298

 
(327
)
Solana Beach Towne Centre
 
1,508

 
15

 
468

 
(442
)
Del Monte Center
 
2,399

 
188

 
833

 
(1,088
)
Geary Marketplace
 
299

 
1

 
145

 
(147
)
The Shops at Kalakaua
 
469

 
24

 
35

 
(65
)
Waikele Center
 
4,295

 
339

 
994

 
(1,335
)
Alamo Quarry Market
 
3,403

 
39

 
1,397

 
(1,545
)
Subtotal Retail Portfolio
 
$
18,245

 
$
708

 
$
5,267

 
$
(6,023
)
Office Portfolio
 
 
 
 
 
 
 
 
Torrey Reserve Campus (5)
 
$
4,214

 
$
39

 
$
161

 
$
(1,209
)
Solana Beach Corporate Centre
 
1,886

 
3

 
68

 
(511
)
The Landmark at One Market
 
5,923

 
26

 
118

 
(1,919
)
One Beach Street
 
982

 
—

 
70

 
(171
)
First & Main
 
2,561

 
165

 
602

 
(1,067
)
Lloyd District Portfolio (5)
 
2,545

 
460

 
35

 
(1,383
)
City Center Bellevue
 
4,259

 
706

 
399

 
(1,369
)
Subtotal Office Portfolio
 
$
22,370

 
$
1,399

 
$
1,453

 
$
(7,629
)
Multifamily Portfolio
 
 
 
 
 
 
 
 
Loma Palisades
 
$
2,961

 
$
179

 
$
—

 
$
(1,019
)
Imperial Beach Gardens
 
783

 
66

 
—

 
(291
)
Mariner's Point
 
370

 
29

 
—

 
(129
)
Santa Fe Park RV Resort
 
292

 
25

 
—

 
(148
)
Hassalo on Eighth (6)
 
1,537

 
155

 
—

 
(1,232
)
Subtotal Multifamily Portfolio
 
$
5,943

 
$
454

 
$
—

 
$
(2,819
)

First Quarter 2016 Supplemental Information
                               Page 14
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2016
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Mixed-Use Portfolio
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,689

 
$
1,079

 
$
921

 
$
(1,530
)
Waikiki Beach Walk - Embassy Suites™
 
9,419

 
673

 
—

 
(7,009
)
Subtotal Mixed-Use Portfolio
 
$
12,108

 
$
1,752

 
$
921

 
$
(8,539
)
Total
 
$
58,666

 
$
4,313

 
$
7,641

 
$
(25,009
)

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 March 31, 2016 (before abatements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our retail and office portfolio were approximately $14 and $674, respectively, for the three months ended March 31, 2016. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended March 31, 2016. 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 $171 of abatements for our multifamily portfolio for the three months ended March 31, 2016. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended March 31, 2016.
(2)
Represents additional property-related income for the three months ended March 31, 2016, 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 March 31, 2016.
(4)
Represents property operating expenses for the three months ended March 31, 2016. 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 $238 for the three months ended March 31, 2016.
(6)
The Hassalo on Eighth property is comprised of three multifamily buildings: Velomor, Aster Tower and Elwood.

First Quarter 2016 Supplemental Information
                               Page 15
 
 
SEGMENT CAPITAL EXPENDITURES
 
 

(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2016
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
 
$
902

 
$
570

 
$
1,472

 
$
—

 
$
3,942

 
$
5,414

Office Portfolio
 
1,756

 
3,624

 
5,380

 
211

 
5,338

 
10,929

Multifamily Portfolio
 
—

 
632

 
632

 
—

 
712

 
1,344

Mixed-Use Portfolio
 
58

 
7

 
65

 
—

 
—

 
65

Total
 
$
2,716

 
$
4,833

 
$
7,549

 
$
211

 
$
9,992

 
$
17,752



First Quarter 2016 Supplemental Information
                               Page 16
 
 
SUMMARY OF OUTSTANDING DEBT
 
 

(Unaudited, amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
March 31, 2016
 
Interest Rate
 
Service
 
Maturity Date
 
Maturity
Imperial Beach Gardens (1)
 
20,000

 
6.16
%
 
20,630

 
September 1, 2016
 
20,000

Mariner's Point (1)
 
7,700

 
6.09
%
 
7,940

 
September 1, 2016
 
7,700

South Bay Marketplace (1)
 
23,000

 
5.48
%
 
24,176

 
February 10, 2017
 
23,000

Waikiki Beach Walk - Retail (1)
 
130,310

 
5.39
%
 
7,117

 
July 1, 2017
 
130,310

Solana Beach Corporate Centre III-IV (2)
 
35,800

 
6.39
%
 
2,798

 
August 1, 2017
 
35,136

Loma Palisades (1)
 
73,744

 
6.09
%
 
4,553

 
July 1, 2018
 
73,744

One Beach Street (1)
 
21,900

 
3.94
%
 
875

 
April 1, 2019
 
21,900

Torrey Reserve - North Court (2)
 
20,664

 
7.22
%
 
1,836

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII (2)
 
6,968

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II (2)
 
11,072

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre (2)
 
36,905

 
5.91
%
 
2,849

 
June 1, 2020
 
33,898

City Center Bellevue (1)
 
111,000

 
3.98
%
 
4,479

 
November 1, 2022
 
111,000

Secured Notes Payable / Weighted Average (3)
 
$
499,063

 
5.37
%
 
$
78,668

 
 
 
$
492,739

 
 
 
 
 
 
 
 
 
 
 
Series A Notes (4)
 
$
150,000

 
3.88
%
 
$
6,060

 
October 31, 2021
 
$
150,000

Series B Notes
 
100,000

 
4.45
%
 
4,450

 
February 2, 2025
 
100,000

Series C Notes
 
100,000

 
4.50
%
 
4,500

 
April 1, 2025
 
100,000

Term Loan A (5)
 
100,000

 
3.08
%
 
3,125

 
January 9, 2019
 
100,000

Term Loan B (6)
 
100,000

 
3.15
%
 
2,641

 
March 1, 2023
 
100,000

Unsecured Notes Payable / Weighted Average (7)
 
$
550,000

 
3.82
%
 
$
20,776

 
 
 
$
550,000

 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit (8)
 
$
20,000

 
1.75
%
 
 
 
 
 
 
Notes:
(1)
Interest only.
(2)
Principal payments based on a 30-year amortization schedule.
(3)
The Secured Notes Payable total does not include the unamortized fair value adjustment of $3.5 million and debt issuance costs, net of $0.7 million.
(4)
$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.
(5)
Term Loan A matures on January 9, 2017 and we have two 12-month options remaining to extend its maturity to 2019. Term Loan A 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%, subject to adjustments based on our consolidated leverage ratio.
(6)
Term Loan B matures on March 1, 2023. Term Loan B accrues interest at a variable rate, which we fixed as part of an interest rate swap for an all-in interest rate of 3.15%, subject to adjustments based on our consolidated leverage ratio.
(7)
The Unsecured Notes Payable total does not include debt issuance costs, net of $4.1 million.
(8)
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.


First Quarter 2016 Supplemental Information
                               Page 17
 
 
MARKET CAPITALIZATION
 
 

(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
March 31, 2016
Common shares outstanding
 
45,407

Common units outstanding
 
17,900

Common shares and common units outstanding
 
63,307

Market price per common share
 
$
39.92

Equity market capitalization
 
$
2,527,215

Total debt
 
$
1,069,063

Total market capitalization
 
$
3,596,278

Less: Cash on hand
 
$
(44,007
)
Total enterprise value
 
$
3,552,271

Total assets, gross
 
$
2,403,902

Total unencumbered assets, gross
 
$
1,621,339

 
 
 
Total debt/Total capitalization
 
29.7
%
Total debt/Total enterprise value
 
30.1
%
Net debt/Total enterprise value (1)
 
28.9
%
Total debt/Total assets, gross
 
44.5
%
Net debt/Total assets, gross (1)
 
42.6
%
Total unencumbered assets, gross/Unsecured debt
 
284.4
%
 
 
 
Total debt/EBITDA (2)(3)
 
6.5
x
Net debt/EBITDA (1)(2)(3)
 
6.2
x
Interest coverage ratio (4)
 
3.4
x
Fixed charge coverage ratio (4)
 
3.4
x
 
Weighted Average Fixed Interest Rate
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
6.1
%
5.6
%
6.1
%
3.8
%
6.0
%
3.9
%
4.0
%
3.2
%
—
%
4.5
%
Total Weighed Average Fixed Interest Rate:
4.6%
Weighted Average Term to Maturity:
4.9 years
Credit Ratings
Rating Agency
Rating
Outlook
Fitch
BBB
Stable
Moody's
Baa3
Stable
Standard & Poors
BBB-
Stable


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 March 31, 2016 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 two 12-month options remaining to extend the maturity of the unsecured term loan.

First Quarter 2016 Supplemental Information
                               Page 18
 
 
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
Three Months
Cost Incurred to Date
Total Estimated Investment
Estimated Stabilized
Yield (3)
 
 
Ended
Property
Location
March 31, 2016
Office Property:
 
 
 
 
 
 
 
 
Torrey Point
(previously Sorrento Pointe)
San Diego, CA
2015
2017
2018
88,000
$4,888
$16,947
$52,500
7.5% - 8.6%
 
 
 
 
 
 
 
 
 
 
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.
(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 three 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.  Additional development plans are in the early stages and will continue to progress as demand and economic conditions allow.


First Quarter 2016 Supplemental Information
                               Page 19
 
 
 
 
 






PORTFOLIO DATA





First Quarter 2016 Supplemental Information
                               Page 20
 
 
PROPERTY REPORT
 
 

As of March 31, 2016
 
 
 
 
 
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%
 
$
3,643,622

 
$48.50
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
98.6
 
12,376,567

 
23.75
 
Sears
 
Sports Authority, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
100.0
 
2,265,539

 
17.05
 
 
 
Ross Dress for Less, Grocery Outlet
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
209,569

 
94.1
 
5,287,219

 
26.81
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
97.5
 
6,033,489

 
25.08
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
675,678

 
98.1
 
10,170,658

 
15.34
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
100.0
 
1,196,322

 
34.03
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
1,886,844

 
161.67
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
537,637

 
100.0
 
17,209,804

 
32.01
 
Lowe's, Kmart, Sports Authority
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
589,362

 
99.9
 
13,782,314

 
23.41
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Subtotal/Weighted Average Retail Portfolio
 
 
 
101

 
3,045,194

 
98.6%
 
$
73,852,378

 
$24.60
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-present

 
12

 
493,435

 
89.5%
 
$
16,931,969

 
$38.34
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,215

 
96.4
 
7,192,663

 
35.16
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
23,691,934

 
56.49
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
3,931,890

 
40.28
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
10,260,109

 
28.82
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2011/present

 
6

 
580,545

 
74.5
 
9,926,294

 
22.95
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
494,753

 
96.3
 
17,137,461

 
35.97
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
26

 
2,658,574

 
91.3%
 
$
89,072,320

 
$36.70
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
127

 
5,703,768

 
95.2%
 
$
162,924,698

 
$30.00
 
 
 
 

First Quarter 2016 Supplemental Information
                               Page 21
 
 
PROPERTY REPORT (CONTINUED)
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Average 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

 
98.2%
 
$
12,025,824

 
$
1,862

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
96.3
 
3,247,692

 
$
1,756

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
96.6
 
1,505,940

 
$
1,476

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

 
126

 
89.0
 
1,300,452

 
$
966

 
 
 
 
Hassalo on Eighth - Velomor
 
Portland, OR
 
2015
 
1

 
177

 
85.3
 
2,717,028

 
$
1,500

 
 
 
 
Hassalo on Eighth - Aster Tower
 
Portland, OR
 
2015
 
1

 
337

 
44.8
 
2,450,700

 
$
1,353

 
 
 
 
Hassalo on Eighth - Elwood
 
Portland, OR
 
2015
 
1

 
143

 
43.4
 
969,336

 
$
1,302

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
118

 
1,579

 
79.4%
 
$
24,216,972

 
$
1,610

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mixed-Use Portfolio
 
 
 
 
 
 
Number
 
Net Rentable
 
 
 
 
 
Annualized Base
 
 
 
 
 
 
 
 
Year Built/
 
of
 
Square
 
Percentage
 
Annualized
 
Rent 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

 
97.8
%
 
$
12,255,562

 
$
129.58

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

 
369

 
87.0
%
 
$
322.49

 
$
280.49

 
 
 
 
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 March 31, 2016, including leases which may not have commenced as of March 31, 2016. Percentage leased for our multifamily properties includes total units rented as of March 31, 2016.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2016 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 March 31, 2016. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of March 31, 2016.
(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, 2021, which we have the option to extend until 2031 pursuant to two five-year extension options.
(9)
The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended March 31, 2016, the highest average monthly occupancy rate for this property was 98%, occurring in July 2015. 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 March 31, 2016, 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 March 31, 2016 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 March 31, 2016 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.

First Quarter 2016 Supplemental Information
                               Page 22
 
 
RETAIL LEASING SUMMARY
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
16

 
100%
 
81,056

 
$34.54
 
$33.82
 
$
58,295

 
2.1
%
 
9.1
%
 
4.9
 
$
7,000

 
$0.09
4th Quarter 2015
 
13

 
100%
 
78,994

 
$23.57
 
$22.69
 
$
69,119

 
3.9
%
 
20.2
%
 
7.9
 
$
370,000

 
$4.68
3rd Quarter 2015
 
18

 
100%
 
57,546

 
$32.46
 
$26.55
 
$
340,390

 
22.3
%
 
29.2
%
 
6.8
 
$
143,000

 
$2.48
2nd Quarter 2015
 
18

 
100%
 
68,629

 
$34.19
 
$28.55
 
$
387,154

 
19.8
%
 
17.5
%
 
4.3
 
$
154,612

 
$2.25
Total 12 months
 
65

 
100%
 
286,225

 
$31.01
 
$28.02
 
$
854,958

 
10.7
%
 
17.5
%
 
6.0
 
$
674,612

 
$2.36
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
—

 
—%
 
—

 
$0.00
 
$0.00
 
$
—

 
—
%
 
—
%
 
—
 
$
—

 
$0.00
4th Quarter 2015
 
1

 
8%
 
12,256

 
$14.25
 
$11.75
 
$
30,666

 
21.3
%
 
57.7
%
 
10.4
 
$
85,792

 
$7.00
3rd Quarter 2015
 
2

 
11%
 
2,400

 
$48.00
 
$43.56
 
$
10,660

 
10.2
%
 
29.1
%
 
3.7
 
$
122,000

 
$50.83
2nd Quarter 2015
 
6

 
33%
 
6,801

 
$50.06
 
$40.71
 
$
63,586

 
23.0
%
 
33.6
%
 
4.4
 
$
90,612

 
$13.32
Total 12 months
 
9

 
14%
 
21,457

 
$29.38
 
$24.49
 
$
104,912

 
20.0
%
 
39.6
%
 
7.7
 
$
298,404

 
$13.91
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
16

 
100%
 
81,056

 
$34.54
 
$33.82
 
$
58,295

 
2.1
%
 
9.1
%
 
4.9
 
$
7,000

 
$0.09
4th Quarter 2015
 
12

 
92%
 
66,738

 
$25.28
 
$24.70
 
$
38,453

 
2.3
%
 
16.8
%
 
7.4
 
$
284,208

 
$4.26
3rd Quarter 2015
 
16

 
89%
 
55,146

 
$31.78
 
$25.81
 
$
329,730

 
23.2
%
 
29.2
%
 
7.0
 
$
21,000

 
$0.38
2nd Quarter 2015
 
12

 
67%
 
61,828

 
$32.44
 
$27.21
 
$
323,568

 
19.2
%
 
14.9
%
 
4.3
 
$
64,000

 
$1.04
Total 12 months
 
56

 
86%
 
264,768

 
$31.14
 
$28.31
 
$
750,046

 
10.0
%
 
16.0
%
 
5.8
 
$
376,208

 
$1.42
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
19

 
99,198

 
$33.95
 
5.8
 
$
1,563,910

 
$15.77
 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
21

 
90,943

 
$24.65
 
7.7
 
$
2,078,755

 
$22.86
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
22

 
69,835

 
$29.89
 
6.1
 
$
2,518,200

 
$36.06
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
20

 
72,715

 
$33.50
 
4.3
 
$
156,612

 
$2.15
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
82

 
332,691

 
$30.46
 
6.1
 
$
6,317,477

 
$18.99
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease, including leases signed for the retail portion of our mixed-use property.
(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.

First Quarter 2016 Supplemental Information
                               Page 23
 
 
OFFICE LEASING SUMMARY
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
19

 
100%
 
52,050

 
$41.38
 
$37.87
 
$
182,885

 
9.3
%
 
17.6
%
 
4.3
 
$
677,219

 
$13.01
4th Quarter 2015
 
15

 
100%
 
92,002

 
$36.91
 
$35.37
 
$
141,780

 
4.4
%
 
10.6
%
 
3.7
 
$
974,621

 
$10.59
3rd Quarter 2015
 
15

 
100%
 
55,312

 
$35.10
 
$32.97
 
$
117,556

 
6.4
%
 
16.2
%
 
3.8
 
$
917,808

 
$16.59
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
Total 12 months
 
65

 
100%
 
328,537

 
$46.44
 
$38.33
 
$
2,664,808

 
21.2
%
 
29.7
%
 
3.8
 
$
3,833,503

 
$11.67
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
5

 
26%
 
14,680

 
$40.22
 
$37.29
 
$
43,038

 
7.9
%
 
19.8
%
 
5.5
 
$
388,840

 
$26.49
4th Quarter 2015
 
5

 
33%
 
15,647

 
$40.09
 
$32.27
 
$
122,337

 
24.2
%
 
31.0
%
 
4.1
 
$
345,044

 
$22.05
3rd Quarter 2015
 
4

 
27%
 
16,491

 
$32.70
 
$29.47
 
$
53,271

 
11.0
%
 
34.4
%
 
4.5
 
$
735,133

 
$44.58
2nd Quarter 2015
 
6

 
38%
 
35,716

 
$40.87
 
$39.87
 
$
35,791

 
2.5
%
 
21.1
%
 
6.0
 
$
636,997

 
$17.84
Total 12 months
 
20

 
31%
 
82,534

 
$38.97
 
$35.89
 
$
254,437

 
8.6
%
 
24.8
%
 
5.3
 
$
2,106,014

 
$25.52
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
14

 
74%
 
37,370

 
$41.84
 
$38.10
 
$
139,847

 
9.8
%
 
16.8
%
 
3.8
 
$
288,379

 
$7.72
4th Quarter 2015
 
10

 
67%
 
76,355

 
$36.26
 
$36.01
 
$
19,443

 
0.7
%
 
6.6
%
 
3.6
 
$
629,577

 
$8.25
3rd Quarter 2015
 
11

 
73%
 
38,821

 
$36.11
 
$34.46
 
$
64,285

 
4.8
%
 
10.1
%
 
3.5
 
$
182,675

 
$4.71
2nd Quarter 2015
 
10

 
63%
 
93,457

 
$67.49
 
$44.09
 
$
2,186,796

 
53.1
%
 
59.5
%
 
2.8
 
$
626,858

 
$6.71
Total 12 months
 
45

 
69%
 
246,003

 
$48.95
 
$39.15
 
$
2,410,371

 
25.0
%
 
31.2
%
 
3.3
 
$
1,727,489

 
$7.03
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
25

 
72,802

 
$41.06
 
4.9
 
$
1,484,597

 
$20.39
 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
19

 
103,220

 
$36.83
 
3.8
 
$
1,265,802

 
$12.26
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
23

 
84,573

 
$34.65
 
5.5
 
$
2,126,512

 
$25.14
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
22

 
153,839

 
$55.93
 
4.0
 
$
2,321,713

 
$15.09
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
89

 
414,434

 
$44.22
 
4.4
 
$
7,198,624

 
$17.37
 
 
 
 
 
 
 
 
 
 
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.

First Quarter 2016 Supplemental Information
                               Page 24
 
 
MULTIFAMILY LEASING SUMMARY
 
 

As of March 31, 2016
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2016
 
538
 
98.2%
 
$12,025,824
 
$1,862
4th Quarter 2015
 
523
 
95.4%
 
$11,778,588
 
$1,878
3rd Quarter 2015
 
526
 
96.0%
 
$11,654,256
 
$1,846
2nd Quarter 2015
 
530
 
96.7%
 
$11,236,224
 
$1,767
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2016
 
154
 
96.3%
 
$3,247,692
 
$1,756
4th Quarter 2015
 
151
 
94.4%
 
$2,994,060
 
$1,652
3rd Quarter 2015
 
157
 
98.1%
 
$3,050,376
 
$1,620
2nd Quarter 2015
 
152
 
95.0%
 
$2,957,808
 
$1,622
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2016
 
85
 
96.6%
 
$1,505,940
 
$1,476
4th Quarter 2015
 
86
 
97.7%
 
$1,426,332
 
$1,382
3rd Quarter 2015
 
87
 
98.9%
 
$1,420,908
 
$1,361
2nd Quarter 2015
 
85
 
96.6%
 
$1,403,760
 
$1,376
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2016
 
112
 
89.0%
 
$1,300,452
 
$966
4th Quarter 2015
 
121
 
96.0%
 
$1,111,080
 
$765
3rd Quarter 2015
 
93
 
74.0%
 
$966,720
 
$864
2nd Quarter 2015
 
115
 
91.0%
 
$1,312,308
 
$954














First Quarter 2016 Supplemental Information
                               Page 25
 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
 
 


As of March 31, 2016
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Velomor (4)
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2016
 
151
 
85.3%
 
$2,717,028
 
$1,500
4th Quarter 2015
 
145
 
81.9%
 
$2,755,404
 
$1,584
3rd Quarter 2015
 
141
 
79.7%
 
$2,427,804
 
$1,434
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Aster Tower (5)
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2016
 
151
 
44.8%
 
$2,450,700
 
$1,353
4th Quarter 2015
 
98
 
29.1%
 
$1,702,260
 
$1,447
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Elwood (5)
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2016
 
62
 
43.4%
 
$969,336
 
$1,302
4th Quarter 2015
 
35
 
24.5%
 
$550,452
 
$1,309
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2016
 
1,253
 
79.4%
 
$24,216,972
 
$1,610
4th Quarter 2015
 
1,159
 
73.4%
 
$22,318,176
 
$1,605
3rd Quarter 2015
 
1,004
 
91.4%
 
$19,520,064
 
$1,619
2nd Quarter 2015
 
882
 
95.7%
 
$16,910,100
 
$1,597

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.
(4)
The Velomor building at Hassalo on Eighth was placed into operations and available for occupancy in July 2015.
(5)
The Aster Tower and Elwood buildings were placed into operations and available for occupancy in October 2015.


First Quarter 2016 Supplemental Information
                               Page 26
 
 
MIXED-USE LEASING SUMMARY
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2016
 
94,601
 
97.8%
 
$12,255,562
 
$130
4th Quarter 2015
 
96,707
 
100.0%
 
$10,902,402
 
$113
3rd Quarter 2015
 
96,707
 
100.0%
 
$10,877,523
 
$112
2nd Quarter 2015
 
96,707
 
100.0%
 
$10,837,220
 
$112
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
1st Quarter 2016
 
321
 
87.0%
 
$322
 
$280
4th Quarter 2015
 
330
 
89.5%
 
$318
 
$285
3rd Quarter 2015
 
339
 
91.8%
 
$346
 
$318
2nd Quarter 2015
 
324
 
87.8%
 
$296
 
$260
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of March 31, 2016, including leases which may not have commenced as of March 31, 2016.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2016 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 March 31, 2016.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended March 31, 2016, 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.

First Quarter 2016 Supplemental Information
                               Page 27
 
 
LEASE EXPIRATIONS
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
14,180

 
0.5
%
 
0.2
%
 
$3.06
 
11,401

 
0.4
%
 
0.2
%
 
$31.38
 
1,690

 
1.7
%
 
—
%
 
—
 
27,271

 
0.5
%
 
$14.71
2016
 
190,170

 
7.2

 
3.3

 
$31.66
 
89,902

 
3.0

 
1.5

 
$34.67
 
9,237

 
9.6

 
0.2

 
$136.10
 
289,309

 
5.0

 
$35.93
2017
 
379,290

 
14.3

 
6.5

 
$38.01
 
339,466

 
11.1

 
5.9

 
$26.35
 
9,967

 
10.3

 
0.2

 
$167.07
 
728,723

 
12.6

 
$34.34
2018
 
292,423

 
11.0

 
5.0

 
$48.70
 
1,029,244

 
33.8

 
17.7

 
$20.26
 
12,739

 
13.2

 
0.2

 
$133.37
 
1,334,406

 
23.0

 
$27.57
2019
 
300,504

 
11.3

 
5.2

 
$41.67
 
348,461

 
11.4

 
6.0

 
$28.29
 
19,801

 
20.5

 
0.3

 
$113.72
 
668,766

 
11.5

 
$36.83
2020
 
348,500

 
13.1

 
6.0

 
$40.26
 
265,687

 
8.7

 
4.6

 
$21.21
 
19,337

 
20.0

 
0.3

 
$75.81
 
633,524

 
10.9

 
$33.36
2021
 
250,912


9.4

 
4.3

 
$41.79
 
126,565

 
4.2

 
2.2

 
$42.00
 
10,366

 
10.7

 
0.2

 
$292.98
 
387,843

 
6.7

 
$48.57
2022
 
26,231

 
1.0

 
0.5

 
$31.69
 
174,454

 
5.7

 
3.0

 
$32.45
 
11,464

 
11.9

 
0.2

 
$76.72
 
212,149

 
3.7

 
$34.75
2023
 
131,684

 
5.0

 
2.3

 
$31.38
 
63,827

 
2.1

 
1.1

 
$23.77
 
—

 
—

 
—

 
—
 
195,511

 
3.4

 
$28.90
2024
 
136,841

 
5.1

 
2.4

 
$32.88
 
241,687

 
7.9

 
4.2

 
$24.20
 
—

 
—

 
—

 
—
 
378,528

 
6.5

 
$27.34
2025
 
210,280

 
7.9

 
3.6

 
$29.09
 
162,586

 
5.3

 
2.8

 
$22.94
 
—

 
—

 
—

 
—
 
372,866

 
6.4

 
$26.41
Thereafter
 
67,009

(2) 
2.5

 
1.2

 
$25.84
 
137,376

 
4.5

 
2.4

 
$21.94
 
—

 
—

 
—

 
—
 
204,385

 
3.5

 
$23.22
Signed Leases Not Commenced
 
80,156

 
3.0

 
1.4

 
—
 
11,747

 
0.4

 
0.2

 
—
 
—

 
—

 
—

 
—
 
91,903

 
1.6

 
—
Available
 
230,394

 
8.7

 
4.0

 
—
 
42,791

 
1.4

 
0.7

 
—
 
2,106

 
2.2

 
—

 
—
 
275,291

 
4.7

 
—
Total (3)
 
2,658,574

 
100.0
%
 
45.8
%
 
$33.50
 
3,045,194

 
100.0
%
 
52.5
%
 
$24.25
 
96,707

 
100.0
%
 
1.7
%
 
$126.73
 
5,800,475

 
100.0
%
 
$30.20
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
14,180

 
0.5
%
 
0.2
%
 
$3.06
 
11,401

 
0.4
%
 
0.2
%
 
$31.38
 
1,690

 
1.7
%
 
—
%
 
—
 
27,271

 
0.5
%
 
$14.71
2016
 
166,599

 
6.3

 
2.9

 
$31.75
 
66,900

 
2.2

 
1.2

 
$34.38
 
5,209

 
5.4

 
0.1

 
$137.26
 
238,708

 
4.1

 
$34.79
2017
 
112,505

 
4.2

 
1.9

 
$39.22
 
92,181

 
3.0

 
1.6

 
$34.35
 
8,927

 
9.2

 
0.2

 
$162.74
 
213,613

 
3.7

 
$42.28
2018
 
68,058

 
2.6

 
1.2

 
$38.00
 
68,424

 
2.2

 
1.2

 
$36.55
 
12,739

 
13.2

 
0.2

 
$133.37
 
149,221

 
2.6

 
$45.48
2019
 
49,877

 
1.9

 
0.9

 
$43.28
 
86,207

 
2.8

 
1.5

 
$36.51
 
8,111

 
8.4

 
0.1

 
$156.99
 
144,195

 
2.5

 
$45.63
2020
 
152,805

 
5.7

 
2.6

 
$36.57
 
83,259

 
2.7

 
1.4

 
$28.15
 
3,015

 
3.1

 
0.1

 
$284.95
 
239,079

 
4.1

 
$36.77
2021
 
137,541

 
5.2

 
2.4

 
$34.19
 
83,953

 
2.8

 
1.4

 
$44.06
 
14,394

 
14.9

 
0.2

 
$248.65
 
235,888

 
4.1

 
$50.79
2022
 
244,062

 
9.2

 
4.2

 
$35.79
 
92,980

 
3.1

 
1.6

 
$36.81
 
11,894

 
12.3

 
0.2

 
$80.46
 
348,936

 
6.0

 
$37.58
2023
 
169,682

 
6.4

 
2.9

 
$44.58
 
143,410

 
4.7

 
2.5

 
$32.92
 
—

 
—

 
—

 
—
 
313,092

 
5.4

 
$39.24
2024
 
120,228

 
4.5

 
2.1

 
$34.03
 
212,539

 
7.0

 
3.7

 
$28.62
 
—

 
—

 
—

 
—
 
332,767

 
5.7

 
$30.57
2025
 
154,827

 
5.8

 
2.7

 
$34.96
 
99,529

 
3.3

 
1.7

 
$29.74
 
—

 
—

 
—

 
—
 
254,356

 
4.4

 
$32.92
Thereafter
 
957,660

(2) 
36.0

 
16.5

 
$40.19
 
1,949,873

 
64.0

 
33.6

 
$20.08
 
28,622

 
29.6

 
0.5

 
$60.10
 
2,936,155

 
50.6

 
$27.03
Signed Leases Not Commenced
 
80,156

 
3.0

 
1.4

 
—
 
11,747

 
0.4

 
0.2

 
—
 
—

 
—

 
—

 
—
 
91,903

 
1.6

 
—
Available
 
230,394

 
8.7

 
4.0

 
—
 
42,791

 
1.4

 
0.7

 
—
 
2,106

 
2.2

 
—

 
—
 
275,291

 
4.7

 
—
Total (3)
 
2,658,574

 
100.0
%
 
45.8
%
 
$33.50
 
3,045,194

 
100.0
%
 
52.5
%
 
$24.25
 
96,707

 
100.0
%
 
1.7
%
 
$126.73
 
5,800,475

 
100.0
%
 
$30.20

First Quarter 2016 Supplemental Information
                               Page 28
 
 
LEASE EXPIRATIONS (CONTINUED)
 
 

As of March 31, 2016
 
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 March 31, 2016 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 35,638 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.
(3)
Individual items may not add up to total due to rounding.

First Quarter 2016 Supplemental Information
                               Page 29
 
 
PORTFOLIO LEASED STATISTICS
 
 


 
 
At March 31, 2016
 
At March 31, 2015
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
Overall Portfolio (2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,045,194

(3) 
3,002,403

 
98.6
%
 
3,075,754

 
3,030,735

 
98.5
%
Office Properties (square feet) 
 
2,658,574

 
2,428,180

 
91.3
%
 
2,660,260

 
2,465,299

 
92.7
%
Multifamily Properties (units)
 
1,579

 
1,253

 
79.4
%
 
922

 
889

 
96.4
%
Mixed-Use Properties (square feet)
 
96,707

 
94,601

 
97.8
%
 
96,707

 
96,707

 
100.0
%
Mixed-Use Properties (units)
 
369

 
321

(4) 
87.0
%
 
369

 
328

(4) 
89.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,045,194

 
3,002,403

 
98.6
%
 
3,075,754

 
3,030,735

 
98.5
%
Office Properties (square feet)
 
1,584,594

(5) 
1,553,991

 
98.1
%
 
1,584,622

(5) 
1,521,288

 
96.0
%
Multifamily Properties (units)
 
922

(6) 
889

 
96.4
%
 
922

(6) 
889

 
96.4
%
Mixed-Use Properties (square feet)
 
96,707

 
94,601

 
97.8
%
 
96,707

 
96,707

 
100.0
%
Mixed-Use Properties (units)
 
369

 
321

(4) 
87.0
%
 
369

 
328

(4) 
89.0
%

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)
Excludes Rancho Carmel Plaza, which was sold on August 6, 2015.
(4)
Represents average occupancy for the three months ended March 31, 2016 and 2015.
(5)
The same-store portfolio excludes Torrey Reserve Campus and Lloyd District Portfolio due to significant redevelopment activity.
(6)
The same-store portfolio excludes Hassalo on Eighth; the Velomor building was placed into operations and available for occupancy in July 2015 and the Aster Tower and Elwood buildings were placed into operations and available for occupancy in October 2015.

First Quarter 2016 Supplemental Information
                               Page 30
 
 
TOP TENANTS - RETAIL
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
%
 
2.6
%
2

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

 
5.1

 
2.7

 
4,460,079

 
6.0

 
2.5

3

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

 
3.0

 
1.6

 
2,133,950

 
2.9

 
1.2

4

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

 
2.3

 
1.2

 
1,990,316

 
2.7

 
1.1

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
 
Waikele Center,
Alamo Quarry Market,
South Bay Marketplace
 
7/31/2016
9/30/2017
4/30/2021
 
59,780

 
2.0

 
1.0

 
*

 
*

 
*

8

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

 
1.6

 
0.9

 
1,216,700

 
1.6

 
0.7

9

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

 
2.4

 
1.2

 
1,122,929

 
1.5

 
0.6

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

 
26.0
%
 
13.7
%
 
$
19,627,952

 
26.5
%
 
11.1
%


*
Data withheld at tenant's request.

First Quarter 2016 Supplemental Information
                               Page 31
 
 
TOP TENANTS - OFFICE
 
 

As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
%
 
$
13,478,140

 
15.1
%
 
7.7
%
2

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

 
4.3

 
2.0

 
7,969,801

 
8.9

 
4.5

3

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

 
3.5

 
1.6

 
3,006,453

 
3.4

 
1.7

4

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

 
3.0

 
1.4

 
2,757,086

 
3.1

 
1.6

5

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

 
3.8

 
1.8

 
2,555,328

 
2.9

 
1.5

6

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

 
2.4

 
1.1

 
2,303,851

 
2.6

 
1.3

7

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

 
2.6

 
1.2

 
2,298,303

 
2.6

 
1.3

8

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

 
2.4

 
1.1

 
2,184,302

 
2.5

 
1.2

9

HDR Engineering, Inc.
 
City Center Bellevue
 
12/31/2017
 
56,024

 
2.1

 
1.0

 
2,100,900

 
2.4

 
1.2

10

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

 
1.3

 
0.6

 
1,672,878

 
1.9

 
1.0

 
Top 10 Office Tenants Total
 
 
 
932,762

 
35.0
%
 
16.2
%
 
$
40,327,042

 
45.4
%
 
23.0
%



First Quarter 2016 Supplemental Information
                               Page 32
 
 
 
 
 






APPENDIX





First Quarter 2016 Supplemental Information
                               Page 33
 
 
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 months ended March 31, 2016 and 2015 is as follows:
    
 
Three Months Ended
 
March 31,
 
2016
 
2015
Net income
$
10,721

 
$
11,379

Depreciation and amortization
17,453

 
15,107

Interest expense
12,946

 
11,795

Interest income
(15
)
 
(14
)
Income tax expense
87

 
84

EBITDA
$
41,192

 
$
38,351


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.



First Quarter 2016 Supplemental Information
                               Page 34
 
 
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
 
March 31,
Reconciliation of NOI to net income
2016
 
2015
Total NOI
$
45,645

 
$
43,367

General and administrative
(4,549
)
 
(5,016
)
Depreciation and amortization
(17,453
)
 
(15,107
)
Interest expense
(12,946
)
 
(11,795
)
Other income (expense), net
24

 
(70
)
Net income
10,721

 
11,379

Net income attributable to restricted shares
(43
)
 
(43
)
Net loss attributable to unitholders in the Operating Partnership
(3,027
)
 
(3,309
)
Net income attributable to American Assets Trust, Inc. stockholders
$
7,651

 
$
8,027


Overall Portfolio: Includes all operating properties owned by us as of March 31, 2016.


First Quarter 2016 Supplemental Information
                               Page 35
 
 
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
 
March 31, 2016 to 2015
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
Retail Properties
 
 
 
 
 
Carmel Country Plaza
X
 
 
 
X
Carmel Mountain Plaza
X
 
 
 
X
South Bay Marketplace
X
 
 
 
X
Lomas Santa Fe Plaza
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
Del Monte Center
X
 
 
 
X
Geary Marketplace
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
Waikele Center
X
 
 
 
X
Alamo Quarry Market
X
 
 
 
X
Office Properties
 
 
 
 
 
Torrey Reserve Campus
 
 
X
 
X
Solana Beach Corporate Centre
X
 
 
 
X
The Landmark at One Market
X
 
 
 
X
One Beach Street
X
 
 
 
X
First & Main
X
 
 
 
X
Lloyd District Portfolio
 
 
X
 
X
City Center Bellevue
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
Loma Palisades
X
 
 
 
X
Imperial Beach Gardens
X
 
 
 
X
Mariner's Point
X
 
 
 
X
Santa Fe Park RV Resort
X
 
 
 
X
Hassalo on Eighth
 
 
X
 
 
Mixed-Use Properties
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
X
Development Properties
 
 
 
 
 
Torrey Point (formerly Sorrento Pointe) - Land
 
 
X
 
 
Torrey Reserve - Land
 
 
X
 
 
Solana Beach Corporate Centre - Land
 
 
X
 
 
Solana Beach - Highway 101 - Land
 
 
X
 
 
Lloyd District Portfolio - Land
 
 
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.

First Quarter 2016 Supplemental Information
                               Page 36