View:
Download DOC
Download PDF
Download XLS
Document


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):
February 14, 2017
_________________________
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 February 14, 2017, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter and fiscal year ending December 31, 2016. Also on February 14, 2017, 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 and fiscal year ending December 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 and fiscal year ending December 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 February 14, 2017.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the year ended December 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
February 14, 2017
 
 

3



EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
Press release issued by American Assets Trust, Inc. on February 14, 2017.
99.2
 
American Assets Trust, Inc. Supplemental Information for the year ended December 31, 2016.


4
Exhibit


https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg

American Assets Trust, Inc. Reports Fourth Quarter and Year-End 2016 Financial Results

Net income available to common stockholders of $8.9 million and $32.6 million, respectively, for the three months and year ended December 31, 2016, or $0.19 and $0.72 per diluted share, respectively
FFO per share increases 7% and 5% year-over-year for the three months and year ended December 31, 2016, respectively
Same-Store Cash NOI increases 0.3% and 5% year-over-year for the three months and year ended December 31, 2016, respectively

SAN DIEGO, California - 2/14/17 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its fourth quarter and year ended December 31, 2016.

Financial Results and Recent Developments
•
Net income available to common stockholders of $8.9 million and $32.6 million, respectively, for the three months and year ended December 31, 2016, or $0.19 and $0.72 per diluted share, respectively
•
Funds From Operations increased 7% and 5% year-over-year to $0.48 and $1.85 per diluted share for the three months and year ended December 31, 2016 compared to the same periods in 2015, respectively
•
Same-store cash NOI increased 0.3% and 5%, respectively, for the three months and year ended December 31, 2016 compared to the same periods in 2015
•
Same-store GAAP NOI increased 1% and 3%, respectively, for the three months and year ended December 31, 2016 compared to the same periods in 2015
•
Leased approximately 103,400 comparable office square feet at an average cash-basis and GAAP-basis contractual rent increase of 15% and 32%, respectively, during the three months ended December 31, 2016
•
Leased approximately 28,600 comparable retail square feet at an average cash-basis and GAAP-basis contractual rent increase of 4% and 18%, respectively, during the three months ended December 31, 2016

Net income attributable to common stockholders was $8.9 million, or $0.19 per basic and diluted share for the three months ended December 31, 2016 compared to $8.2 million, or $0.18 per basic and diluted share for the three months ended December 31, 2015. The increase in net income attributable to common stockholders from the corresponding period in 2015 was primarily due to the the completion of Hassalo on Eighth - Multifamily, which was completed during the third and fourth quarters of 2015. For the year ended December 31, 2016, net income attributable to common stockholders was $32.6 million, or $0.72 per basic and diluted share, compared to net income attributable to common stockholders of $38.5 million, or $0.87 and $0.86 per basic and diluted share for the year ended December 31, 2015. The decrease in net income attributable to common stockholders from the corresponding periods in 2015 was primarily due to the gain on sale of Rancho Carmel Plaza during the third quarter of 2015 and an increase in depreciation and amortization expense and interest expense during the year ended December 31, 2016 attributed to the completion of Hassalo on Eighth - Multifamily, which was completed during the third and fourth quarters of 2015.

During the fourth quarter of 2016, the company generated funds from operations (“FFO”) for common stockholders of $30.5 million, or $0.48 per diluted share, compared to $28.4 million, or $0.45 per diluted share, for the quarter ended December 31, 2015. For the year ended December 31, 2016, the company generated FFO for common stockholders of $116.8 million, or $1.85 per diluted share, compared to $110.0 million, or $1.76 per diluted share, for the year ended December 31, 2015. The increase in FFO from the corresponding periods in 2015 was primarily

1


due to additional operating income from Hassalo on Eighth and growth in same-store net operating income from our office portfolio.

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

Portfolio Results
The portfolio leased status as of the end of the indicated quarter was as follows:
 
December 31, 2016
September 30, 2016
December 31, 2015
Total Portfolio
 
 
 
Retail (1)
96.6%
97.0%
98.6%
Office (2)
90.1%
89.9%
92.4%
Multifamily (3)
90.3%
91.7%
73.4%
Mixed-Use:
 
 
 
Retail
98.7%
98.8%
100.0%
Hotel
89.8%
90.3%
89.6%
 
 
 
 
Same-Store Portfolio
 
 
Retail (1)
96.9%
97.3%
98.6%
Office (2)
97.3%
97.8%
98.1%
Multifamily (3)
93.6%
94.9%
95.6%
Mixed-Use:
 
 
 
Retail
98.7%
98.8%
100.0%
Hotel
89.8%
90.3%
89.6%
(1) Total retail leased percentage at December 31, 2016 and September 30, 2016 includes the retail components of Hassalo on Eighth. The Elwood, Velomor and Aster Tower buildings were placed in operations in April 2016, July 2016 and October 2016, respectively. Same-store retail leased percentages exclude Hassalo on Eighth.
(2) Total office leased percentage includes Torrey Reserve Campus and Lloyd District Portfolio. Same-store office leased percentages exclude Torrey Reserve Campus and Lloyd District Portfolio due to significant redevelopment activity during the period.
(3) Total multifamily leased percentage 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 fourth quarter of 2016, the company signed 32 leases for approximately 156,900 square feet of retail and office space, as well as 320 multifamily apartment leases. Renewals accounted for 71.4% of the comparable retail leases, 54.5% of the comparable office leases and 56.6% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the fourth quarter of 2016 and trailing four quarters ending December 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
Q4 2016
14
28,600
4.3%
$44.50
$42.67
17.5%
Last 4 Quarters
66
259,100
6.6%
$36.09
$33.88
12.3%
 
 
 
 
 
 
 
 
Office
Q4 2016
11
103,400
14.9%
$38.81
$33.78
31.8%
Last 4 Quarters
50
216,800
12.0%
$39.96
$35.69
24.2%


2


Multifamily
As of December 31, 2016, Hassalo on Eighth was approximately 86% leased with average monthly base rent per leased unit of $1,655.

As of February 13, 2017, we have in-place leases for 168 of the Velomor building's 177 units, or approximately 95%; 310 of Aster Tower's 337 units, or approximately 92%; and 134 of the Elwood building's 143 units, or approximately 94%. In total, as of February 13, 2017, we have in-place leases for 612 units of 657 units at Hassalo on Eighth, or approximately 93%.

At December 31, 2016, the average monthly base rent per leased unit for same-store properties was $1,751 compared to an average monthly base rent per leased unit of $1,637 at December 31, 2015, an increase of approximately 7%.

Same-Store Property Operating Income
For the three months and year ended December 31, 2016, same-store property operating income increased 0.7% and 2.6%, respectively, on a GAAP basis compared to the corresponding periods in 2015. For the three months and year ended December 31, 2016, same-store property operating income increased 0.3% and 5.1%, respectively, on a cash basis compared to the corresponding periods in 2015. The same-store property operating income by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Year Ended (1)
 
 
 
 
December 31,
 
 
 
 
December 31,
 
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,756

 
$
18,864

 
(0.6
)
%
 
$
72,825

 
$
72,836

 
—

%
Office
13,473

 
12,916

 
4.3

 
 
52,485

 
50,924

 
3.1

 
Multifamily
3,089

 
2,993

 
3.2

 
 
12,683

 
11,549

 
9.8

 
Mixed-Use
6,139

 
6,407

 
(4.2
)
 
 
26,004

 
24,565

 
5.9

 
 
$
41,457

 
$
41,180

 
0.7

%
 
$
163,997

 
$
159,874

 
2.6

%
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,869

 
$
18,706

 
(4.5
)
%
 
$
72,094

 
$
71,764

 
0.5

%
Office
12,965

 
11,763

 
10.2

 
 
51,405

 
46,034

 
11.7

 
Multifamily
3,089

 
2,993

 
3.2

 
 
12,683

 
11,549

 
9.8

 
Mixed-Use
6,166

 
6,491

 
(5.0
)
 
 
25,949

 
24,981

 
3.9

 
 
$
40,089

 
$
39,953

 
0.3

%
 
$
162,131

 
$
154,328

 
5.1

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 - Multifamily, which became available for occupancy in July and October of 2015; (iv) Hassalo on Eighth - Retail, which was placed in operations in April, July and October of 2016; and (v) land held for development.

On a same-store cash basis, retail property operating income decreased for the three months ended December 31, 2016 compared to the same period in 2015 primarily due to a decrease in the percentage leased and annualized base rent at Waikele Center attributable to the Sports Authority bankruptcy.

On a same-store cash basis, office property operating income increased for the three months and year ended December 31, 2016 compared to the same periods in 2015 primarily due to higher annualized base rents, specifically at The Landmark at One Market.

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

On a same-store basis, mixed-use property operating income decreased for the three months ended December 31, 2016 compared to the corresponding period in 2015 due to a decrease in revenue per available room at the hotel portion of our mixed-use property during the period attributed to room renovations completed during the period. On a same-store basis, mixed-use property operating income increased for the year ended December 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.

3



Development
Our development efforts at Torrey Point are ongoing with plans including two Class A office buildings of approximately 88,000 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 remain approximately $56 million, of which approximately $32 million has been incurred to date. We expect to incur the remaining costs for development of Torrey Point in 2017. We expect the Torrey Point development to be stabilized in 2018 with an estimated stabilized cash yield of approximately 7% to 8%.

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

Balance Sheet and Liquidity
At December 31, 2016, the company had gross real estate assets of $2.3 billion and liquidity of $274.8 million, comprised of cash and cash equivalents of $44.8 million and $230.0 million of availability on its line of credit.

For the year ended December 31, 2016, we issued 219,480 shares of common stock through our at-the-market ("ATM") equity program at a weighted average price per share of $45.50, resulting in net proceeds of $9.6 million. We intend to use the net proceeds primarily to fund our development activities at Torrey Point and to repay existing indebtedness. As of December 31, 2016, we had the capacity to issue up to an additional $206.6 million in shares of common stock under our ATM equity program.

On January 13, 2017, we locked rates on a prospective $250 million private placement of senior unsecured notes (the “Series D Notes”).   The Series D Notes will be unsecured, will pay a fixed interest rate of 4.29% and will be due on or about March 1, 2027.  The Series D Notes are expected to be issued on or about March 1, 2017, subject to customary closing conditions conditions set forth in a Note Purchase Agreement that we expect to enter into on or about March 1, 2017. Net of the settlement of the forward-starting interest rate swaps entered into in 2016, the fixed interest rate in accordance with GAAP for the Series D Notes is expected to be approximately 3.73% per annum, through maturity.

Dividends
The company declared dividends on its shares of common stock of $0.26 per share for the fourth quarter of 2016. The dividends were paid on December 22, 2016.

In addition, the company has declared a dividend on its common stock of $0.26 per share for the quarter ending March 31, 2017. The dividend will be paid on March 30, 2017 to stockholders of record on March 16, 2017.

Guidance
The company reaffirms its guidance for full year 2017 FFO per diluted share range of $1.98 to $2.06 per share, an increase of approximately 9% from full year 2016 FFO per diluted share of $1.85 per share. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments. The company will discuss key assumptions regarding the guidance on tomorrow's conference call, as described below.

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, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates.


4


Conference Call
The company will hold a conference call to discuss the results for the fourth quarter of 2016 on Wednesday, February 15, 2017 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 52760444. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, February 15, 2017 through Saturday, February 18, 2017. To access the replay, dial 1-855-859-2056 and use the pass code 52760444. 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 fourth quarter and year end 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.

5


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

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,241,061

 
$
2,163,444

Construction in progress
 
50,498

 
 
73,121

Held for development
 
9,447

 
 
9,463

 
 
2,301,006

 
 
2,246,028

Accumulated depreciation
 
(469,460
)
 
 
(411,166
)
Net real estate
 
1,831,546

 
 
1,834,862

Cash and cash equivalents
 
44,801

 
 
39,925

Restricted cash
 
9,950

 
 
11,623

Accounts receivable, net
 
9,330

 
 
7,518

Deferred rent receivables, net
 
38,452

 
 
38,422

Other assets, net
 
52,854

 
 
41,939

Total assets
$
1,986,933

 
$
1,974,289

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
445,180

 
$
579,000

Unsecured notes payable, net
 
596,350

 
 
446,613

Unsecured line of credit
 
20,000

 
 
30,000

Accounts payable and accrued expenses
 
32,401

 
 
31,821

Security deposits payable
 
6,114

 
 
5,956

Other liabilities and deferred credits, net
 
48,337

 
 
51,972

Total liabilities
 
1,148,382

 
 
1,145,362

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 45,732,109 and 45,407,719 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively
 
457

 
 
454

Additional paid-in capital
 
874,597

 
 
863,432

Accumulated dividends in excess of net income
 
(77,296
)
 
 
(64,066
)
Accumulated other comprehensive income (loss)
 
11,798

 
 
(258
)
Total American Assets Trust, Inc. stockholders' equity
 
809,556

 
 
799,562

Noncontrolling interests
 
28,995

 
 
29,365

Total equity
 
838,551

 
 
828,927

Total liabilities and equity
$
1,986,933

 
$
1,974,289


6


American Assets Trust, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2016
 
2015
 
2016
 
2015
Revenue:
 
 
 
 
 
 
 
Rental income
$
72,180

 
$
68,111

 
$
279,498

 
$
261,887

Other property income
4,382

 
3,419

 
15,590

 
13,736

Total revenue
76,562

 
71,530

 
295,088

 
275,623

Expenses:
 
 
 
 
 
 
 
Rental expenses
20,919

 
20,377

 
79,553

 
73,187

Real estate taxes
7,932

 
6,109

 
28,378

 
24,819

General and administrative
4,441

 
3,913

 
17,897

 
20,074

Depreciation and amortization
18,160

 
17,238

 
71,319

 
63,392

Total operating expenses
51,452

 
47,637

 
197,147

 
181,472

Operating income
25,110

 
23,893

 
97,941

 
94,151

Interest expense
(12,788
)
 
(13,010
)
 
(51,936
)
 
(47,260
)
Gain on sale of real estate
—

 
—

 
—

 
7,121

Other income (expense), net
86

 
343

 
(368
)
 
(97
)
Net income
12,408

 
11,226

 
45,637

 
53,915

Net income attributable to restricted shares
(61
)
 
(53
)
 
(189
)
 
(168
)
Net income attributable to unitholders in the Operating Partnership
(3,486
)
 
(2,961
)
 
(12,863
)
 
(15,238
)
Net income attributable to American Assets Trust, Inc. stockholders
$
8,861

 
$
8,212

 
$
32,585

 
$
38,509

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.19

 
$
0.18

 
$
0.72

 
$
0.87

Weighted average shares of common stock outstanding - basic
45,480,870

 
45,219,849

 
45,332,471

 
44,439,112

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.19

 
$
0.18

 
$
0.72

 
$
0.86

Weighted average shares of common stock outstanding - diluted
63,369,692

 
63,119,365

 
63,228,159

 
62,339,163

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.26

 
$
0.25

 
$
1.01

 
$
0.9475

 
 
 
 
 
 
 
 


7


Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Year Ended
 
December 31, 2016
 
December 31, 2016
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
12,408

 
$
45,637

Depreciation and amortization of real estate assets
 
18,160

 
 
71,319

FFO, as defined by NAREIT
$
30,568

 
$
116,956

Less: Nonforfeitable dividends on incentive stock awards
 
(59
)
 
 
(183
)
FFO attributable to common stock and units
$
30,509

 
$
116,773

FFO per diluted share/unit
$
0.48

 
$
1.85

Weighted average number of common shares and units, diluted
 
63,372,367

 
 
63,230,829


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.

8


About American Assets Trust, Inc.
American Assets Trust, Inc. (the “company”) is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. The company has over 50 years of experience in acquiring, improving, developing and managing premier retail, office and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington and Hawaii.  The company's retail portfolio comprises approximately 3.1 million rentable square feet, and its office portfolio comprises approximately 2.7 million square feet. In addition, the company owns one mixed-use property (including approximately 97,000 rentable square feet of retail space and a 369-room all-suite hotel) and 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


9
Exhibit
 
 
 
FOURTH QUARTER 2016
 
Supplemental Information
 
 




https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-coverpic2016q4.jpg


 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 
Investor and Media Contact
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607

 
 
 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-map2016q4.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
Office
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,195,690

 
727,683

 
922

(1)
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,308

 
—

 
—

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
675,486

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
589,362

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Portland
 
44,153

 
942,311

 
657

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
—

 
494,658

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,089,155

 
2,681,637

 
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
 
3.1

million
 
53%
 
Office
 
2.7

million
 
47%
Data is as of December 31, 2016.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Fourth Quarter 2016 Supplemental Information
                               Page 2
 
 
INDEX
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

 
FOURTH 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.

Fourth Quarter 2016 Supplemental Information
                               Page 3
 
 
 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 






FINANCIAL HIGHLIGHTS





Fourth Quarter 2016 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands, except shares and per share data)
December 31, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,241,061

 
$
2,163,444

Construction in progress
50,498

 
73,121

Held for development
9,447

 
9,463

 
2,301,006

 
2,246,028

Accumulated depreciation
(469,460
)
 
(411,166
)
Net real estate
1,831,546

 
1,834,862

Cash and cash equivalents
44,801

 
39,925

Restricted cash
9,950

 
11,623

Accounts receivable, net
9,330

 
7,518

Deferred rent receivable, net
38,452

 
38,422

Other assets, net
52,854

 
41,939

TOTAL ASSETS
$
1,986,933

 
$
1,974,289

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
445,180

 
$
579,000

Unsecured notes payable, net
596,350

 
446,613

Unsecured line of credit
20,000

 
30,000

Accounts payable and accrued expenses
32,401

 
31,821

Security deposits payable
6,114

 
5,956

Other liabilities and deferred credits, net
48,337

 
51,972

Total liabilities
1,148,382

 
1,145,362

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 45,732,109 and 45,407,719 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively
457

 
454

Additional paid in capital
874,597

 
863,432

Accumulated dividends in excess of net income
(77,296
)
 
(64,066
)
Accumulated other comprehensive income (loss)
11,798

 
(258
)
Total American Assets Trust, Inc. stockholders' equity
809,556

 
799,562

Noncontrolling interests
28,995

 
29,365

Total equity
838,551

 
828,927

TOTAL LIABILITIES AND EQUITY
$
1,986,933

 
$
1,974,289


Fourth Quarter 2016 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF INCOME
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
REVENUE:
 
 
 
 
 
 
 
Rental income
$
72,180

 
$
68,111

 
$
279,498

 
$
261,887

Other property income
4,382

 
3,419

 
15,590

 
13,736

Total revenue
76,562

 
71,530

 
295,088

 
275,623

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
20,919

 
20,377

 
79,553

 
73,187

Real estate taxes
7,932

 
6,109

 
28,378

 
24,819

General and administrative
4,441

 
3,913

 
17,897

 
20,074

Depreciation and amortization
18,160

 
17,238

 
71,319

 
63,392

Total operating expenses
51,452

 
47,637

 
197,147

 
181,472

OPERATING INCOME
25,110

 
23,893

 
97,941

 
94,151

Interest expense
(12,788
)
 
(13,010
)
 
(51,936
)
 
(47,260
)
Gain on sale of real estate
—

 
—

 
—

 
7,121

Other income (expense), net
86

 
343

 
(368
)
 
(97
)
NET INCOME
12,408

 
11,226

 
45,637

 
53,915

Net income attributable to restricted shares
(61
)
 
(53
)
 
(189
)
 
(168
)
Net income attributable to unitholders in the Operating Partnership
(3,486
)
 
(2,961
)
 
(12,863
)
 
(15,238
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
8,861

 
$
8,212

 
$
32,585

 
$
38,509

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.19

 
$
0.18

 
$
0.72

 
$
0.87

Weighted average shares of common stock outstanding - basic
45,480,870

 
45,219,849

 
45,332,471

 
44,439,112

Diluted income attributable to common stockholders per share
$
0.19

 
$
0.18

 
$
0.72

 
$
0.86

Weighted average shares of common stock outstanding - diluted
63,369,692

 
63,119,365

 
63,228,159

 
62,339,163

 
 
 
 
 
 
 
 

Fourth Quarter 2016 Supplemental Information
                               Page 6
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
12,408

 
$
11,226

 
$
45,637

 
$
53,915

Depreciation and amortization of real estate assets
18,160

 
17,238

 
71,319

 
63,392

Gain on sale of real estate
—

 
—

 
—

 
(7,121
)
FFO, as defined by NAREIT
30,568

 
28,464

 
116,956

 
110,186

Less: Nonforfeitable dividends on incentive stock awards
(59
)
 
(51
)
 
(183
)
 
(159
)
FFO attributable to common stock and common units
$
30,509

 
$
28,413

 
$
116,773

 
$
110,027

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.48

 
$
0.45

 
$
1.85

 
$
1.76

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
63,372,367

 
63,123,114

 
63,230,829

 
62,342,953

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
20,421

 
$
21,665

 
$
86,269

 
$
80,469

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
16,541

 
$
15,827

 
$
64,077

 
$
59,412

Dividends declared and paid per share/unit
$
0.2600

 
$
0.2500

 
$
1.0100

 
$
0.9475


Fourth Quarter 2016 Supplemental Information
                               Page 7
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
30,568

 
$
28,464

 
$
116,956

 
$
110,186

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(10,494
)
 
(7,171
)
 
(35,057
)
 
(30,957
)
Net effect of straight-line rents (3)
(46
)
 
(724
)
 
552

 
(2,926
)
Amortization of net above (below) market rents (4)
(919
)
 
(745
)
 
(3,471
)
 
(2,919
)
Net effect of other lease assets (5)
(307
)
 
98

 
585

 
153

Amortization of debt issuance costs and debt fair value adjustment
1,119

 
1,054

 
4,473

 
4,214

Non-cash compensation expense
559

 
740

 
2,414

 
2,877

Nonforfeitable dividends on incentive stock awards
(59
)
 
(51
)
 
(183
)
 
(159
)
FAD
$
20,421

 
$
21,665

 
$
86,269

 
$
80,469

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
5,779

 
$
3,997

 
$
17,618

 
$
18,888

Maintenance capital expenditures
4,715

 
3,174

 
17,439

 
12,069

 
$
10,494

 
$
7,171

 
$
35,057

 
$
30,957


Notes:
(1)
See Glossary of Terms.
(2)
For the three months and year ended December 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, amortization of lease intangibles, lease termination fees at City Center Bellevue, 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.

Fourth Quarter 2016 Supplemental Information
                               Page 8
 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
Three Months Ended December 31, 2016
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
26,378

 
$
19,294

 
$
4,879

 
$
15,277

 
$
65,828

Non-same store portfolio (1)
288

 
7,544

 
2,902

 
—

 
10,734

Total
26,666

 
26,838

 
7,781

 
15,277

 
76,562

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
7,622

 
5,821

 
1,790

 
9,138

 
24,371

Non-same store portfolio (1)
109

 
2,623

 
1,748

 
—

 
4,480

Total
7,731

 
8,444

 
3,538

 
9,138

 
28,851

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
18,756

 
13,473

 
3,089

 
6,139

 
41,457

Non-same store portfolio (1)
179

 
4,921

 
1,154

 
—

 
6,254

Total
$
18,935

 
$
18,394

 
$
4,243

 
$
6,139

 
$
47,711

Same-store portfolio NOI, GAAP basis
$
18,756

 
$
13,473

 
$
3,089

 
$
6,139

 
$
41,457

Net effect of straight-line rents (2)
(599
)
 
519

 
—

 
37

 
(43
)
Amortization of net above (below) market rents (3)
(288
)
 
(660
)
 
—

 
27

 
(921
)
Net effect of other lease assets (4)
—

 
(367
)
 
—

 
(37
)
 
(404
)
Same-store portfolio NOI, cash basis
$
17,869

 
$
12,965

 
$
3,089

 
$
6,166

 
$
40,089


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on December 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, amortization of lease intangibles, lease termination fees at City Center Bellevue, 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.

Fourth Quarter 2016 Supplemental Information
                               Page 9
 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI) (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
Year Ended December 31, 2016
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
100,446

 
$
73,775

 
$
19,354

 
$
61,664

 
$
255,239

Non-same store portfolio (1)
536

 
29,479

 
9,834

 
—

 
39,849

Total
100,982

 
103,254

 
29,188

 
61,664

 
295,088

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
27,621

 
21,290

 
6,671

 
35,660

 
91,242

Non-same store portfolio (1)
313

 
10,549

 
5,827

 
—

 
16,689

Total
27,934

 
31,839

 
12,498

 
35,660

 
107,931

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
72,825

 
52,485

 
12,683

 
26,004

 
163,997

Non-same store portfolio (1)
223

 
18,930

 
4,007

 
—

 
23,160

Total
$
73,048

 
$
71,415

 
$
16,690

 
$
26,004

 
$
187,157

Same-store portfolio NOI, GAAP basis
$
72,825

 
$
52,485

 
$
12,683

 
$
26,004

 
$
163,997

Net effect of straight-line rents (2)
510

 
987

 
—

 
(38
)
 
1,459

Amortization of net above (below) market rents (3)
(1,241
)
 
(2,413
)
 
—

 
131

 
(3,523
)
Net effect of other lease assets (4)
—

 
346

 
—

 
(148
)
 
198

Same-store portfolio NOI, cash basis
$
72,094

 
$
51,405

 
$
12,683

 
$
25,949

 
$
162,131


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on December 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, amortization of lease intangibles, lease termination fees at City Center Bellevue, 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.

Fourth Quarter 2016 Supplemental Information
                               Page 10
 
 
SAME-STORE PORTFOLIO NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,869

 
$
18,706

 
(4.5
)%
 
$
72,094

 
$
71,764

 
0.5
 %
Office
12,965

 
11,763

 
10.2

 
51,405

 
46,034

 
11.7

Multifamily
3,089

 
2,993

 
3.2

 
12,683

 
11,549

 
9.8

Mixed-Use
6,166

 
6,491

 
(5.0
)
 
25,949

 
24,981

 
3.9

 
$
40,089

 
$
39,953

 
0.3
 %
 
$
162,131

 
$
154,328

 
5.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,756

 
$
18,864

 
(0.6
)%
 
$
72,825

 
$
72,836

 
—
 %
Office
13,473

 
12,916

 
4.3

 
52,485

 
50,924

 
3.1

Multifamily
3,089

 
2,993

 
3.2

 
12,683

 
11,549

 
9.8

Mixed-Use
6,139

 
6,407

 
(4.2
)
 
26,004

 
24,565

 
5.9

 
$
41,457

 
$
41,180

 
0.7
 %
 
$
163,997

 
$
159,874

 
2.6
 %


Fourth Quarter 2016 Supplemental Information
                               Page 11
 
 
SAME-STORE PORTFOLIO NOI COMPARISON WITH REDEVELOPMENT
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,869

 
$
18,706

 
(4.5
)%
 
$
72,094

 
$
71,764

 
0.5
 %
Office
17,925

 
16,016

 
11.9

 
70,228

 
64,008

 
9.7

Multifamily
3,089

 
2,993

 
3.2

 
12,683

 
11,549

 
9.8

Mixed-Use
6,166

 
6,491

 
(5.0
)
 
25,949

 
24,981

 
3.9

 
$
45,049

 
$
44,206

 
1.9
 %
 
$
180,954

 
$
172,302

 
5.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,756

 
$
18,864

 
(0.6
)%
 
$
72,825

 
$
72,836

 
—
 %
Office
18,397

 
17,198

 
7.0

 
71,427

 
68,816

 
3.8

Multifamily
3,089

 
2,993

 
3.2

 
12,683

 
11,549

 
9.8

Mixed-Use
6,139

 
6,407

 
(4.2
)
 
26,004

 
24,565

 
5.9

 
$
46,381

 
$
45,462

 
2.0
 %
 
$
182,939

 
$
177,766

 
2.9
 %

Fourth Quarter 2016 Supplemental Information
                               Page 12
 
 
NOI BY REGION
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
Three Months Ended December 31, 2016
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Southern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
$
7,607

 
$
4,381

 
$
3,089

 
$
—

 
$
15,077

Net effect of straight-line rents (2)
(229
)
 
(6
)
 
—

 
—

 
(235
)
Amortization of net above (below) market rents (3)
(198
)
 
—

 
—

 
—

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

 
92

 
—

 
—

 
92

NOI, cash basis
7,180

 
4,467

 
3,089

 
—

 
14,736

Northern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
2,857

 
4,839

 
—

 
—

 
7,696

Net effect of straight-line rents (2)
8

 
341

 
—

 
—

 
349

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

 
—

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

 
174

 
—

 
—

 
174

NOI, cash basis
2,768

 
5,160

 
—

 
—

 
7,928

Hawaii
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
4,715

 
—

 
—

 
6,139

 
10,854

Net effect of straight-line rents (2)
(351
)
 
—

 
—

 
37

 
(314
)
Amortization of net above (below) market rents (3)
83

 
—

 
—

 
27

 
110

Net effect of other lease assets (4)
—

 
—

 
—

 
(37
)
 
(37
)
NOI, cash basis
4,447

 
—

 
—

 
6,166

 
10,613

Oregon
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
203

 
4,522

 
1,154

 
—

 
5,879

Net effect of straight-line rents (2)
(97
)
 
(48
)
 
158

 
—

 
13

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

 
(93
)
 
—

 
—

 
(93
)
Net effect of other lease assets (4)
—

 
6

 
—

 
—

 
6

NOI, cash basis
106

 
4,387

 
1,312

 
—

 
5,805

Texas
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
3,553

 
—

 
—

 
—

 
3,553

Net effect of straight-line rents (2)
(27
)
 
—

 
—

 
—

 
(27
)
Amortization of net above (below) market rents (3)
(76
)
 
—

 
—

 
—

 
(76
)
NOI, cash basis
3,450

 
—

 
—

 
—

 
3,450

Washington
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
—

 
4,652

 
—

 
—

 
4,652

Net effect of straight-line rents (2)
—

 
168

 
—

 
—

 
168

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

 
(371
)
 
—

 
—

 
(371
)
Net effect of other lease assets (4)
—

 
(542
)
 
—

 
—

 
(542
)
NOI, cash basis
—

 
3,907

 
—

 
—

 
3,907

Total
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
18,935

 
18,394

 
4,243

 
6,139

 
47,711

Net effect of straight-line rents (2)
(696
)
 
455

 
158

 
37

 
(46
)
Amortization of net above (below) market rents (3)
(288
)
 
(658
)
 
—

 
27

 
(919
)
Net effect of other lease assets (4)
—

 
(270
)
 
—

 
(37
)
 
(307
)
NOI, cash basis
$
17,951

 
$
17,921

 
$
4,401

 
$
6,166

 
$
46,439

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, amortization of lease intangibles, lease termination fees at City Center Bellevue, 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.


Fourth Quarter 2016 Supplemental Information
                               Page 13
 
 
NOI BREAKDOWN
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

Three Months Ended December 31, 2016
Portfolio NOI, Cash Basis Breakdown
 
Portfolio Diversification by Geographic Region
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-cashbyregion2016q4.jpg
Portfolio NOI, GAAP Basis Breakdown
 
Portfolio Diversification by Geographic Region
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-gaapbyregion2016q4.jpg
 
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-cashbysegment2016q4.jpg
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-gaapbysegment2016q4.jpg


Fourth Quarter 2016 Supplemental Information
                               Page 14
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
 
Three Months Ended December 31, 2016
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Retail Portfolio
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
908

 
$
21

 
$
229

 
$
(215
)
Carmel Mountain Plaza
 
2,966

 
42

 
833

 
(941
)
South Bay Marketplace
 
575

 
73

 
211

 
(219
)
Lomas Santa Fe Plaza
 
1,352

 
21

 
351

 
(469
)
Solana Beach Towne Centre
 
1,498

 
15

 
527

 
(562
)
Del Monte Center
 
2,375

 
554

 
1,099

 
(1,554
)
Geary Marketplace
 
299

 
1

 
155

 
(161
)
The Shops at Kalakaua
 
480

 
25

 
43

 
(75
)
Waikele Center
 
4,028

 
366

 
1,219

 
(1,639
)
Alamo Quarry Market
 
3,474

 
267

 
2,026

 
(2,317
)
Hassalo on Eighth - Retail (5)
 
138

 
44

 
42

 
(80
)
Subtotal Retail Portfolio
 
$
18,093

 
$
1,429

 
$
6,735

 
$
(8,232
)
Office Portfolio
 
 
 
 
 
 
 
 
Torrey Reserve Campus (6)
 
$
4,555

 
$
51

 
$
242

 
$
(1,298
)
Solana Beach Corporate Centre
 
1,872

 
2

 
37

 
(507
)
The Landmark at One Market
 
6,003

 
29

 
439

 
(2,162
)
One Beach Street
 
1,003

 
1

 
337

 
(490
)
First & Main
 
2,908

 
224

 
348

 
(860
)
Lloyd District Portfolio (6)
 
2,596

 
492

 
45

 
(1,323
)
City Center Bellevue
 
4,350

 
695

(7) 
494

 
(1,628
)
Subtotal Office Portfolio
 
$
23,287

 
$
1,494

 
$
1,942

 
$
(8,268
)
Multifamily Portfolio
 
 
 
 
 
 
 
 
Loma Palisades
 
$
3,027

 
$
201

 
$
—

 
$
(1,199
)
Imperial Beach Gardens
 
851

 
68

 
—

 
(296
)
Mariner's Point
 
407

 
27

 
—

 
(126
)
Santa Fe Park RV Resort
 
273

 
24

 
—

 
(168
)
Hassalo on Eighth - Multifamily(5)
 
2,840

 
305

 
—

 
(1,749
)
Subtotal Multifamily Portfolio
 
$
7,398

 
$
625

 
$
—

 
$
(3,538
)

Fourth Quarter 2016 Supplemental Information
                               Page 15
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
 
Three Months Ended December 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
 
$
2,707

 
$
1,520

 
$
1,103

 
$
(1,780
)
Waikiki Beach Walk - Embassy Suites™
 
9,327

 
673

 
—

 
(7,384
)
Subtotal Mixed-Use Portfolio
 
$
12,034

 
$
2,193

 
$
1,103

 
$
(9,164
)
Total
 
$
60,812

 
$
5,741

 
$
9,780

 
$
(29,202
)

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 December 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 $50 and $529, respectively, for the three months ended December 31, 2016. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended December 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 $84 of abatements for our multifamily portfolio for the three months ended December 31, 2016. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended December 31, 2016.
(2)
Represents additional property-related income for the three months ended December 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 December 31, 2016.
(4)
Represents property operating expenses for the three months ended December 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)
The Hassalo on Eighth property is comprised of the following three multifamily buildings (each with a ground floor retail component): Velomor, Aster Tower and Elwood. The Aster Tower and Elwood multifamily buildings were placed into operations in October 2015 and the Velomor multifamily building was placed into operations in July 2015. The retail component of the Elwood building was placed into operations in April 2016, the retail component of the Velomor building was placed into operations in July 2016, and the retail component of the Aster Tower building was placed into operations in October 2016.
(6)
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 $251 for the three months ended December 31, 2016.
(7)
Excluded lease termination fees not yet received as of December 31, 2016.


Fourth Quarter 2016 Supplemental Information
                               Page 16
 
 
SEGMENT CAPITAL EXPENDITURES
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

 
(Amounts in thousands)
 
Three Months Ended December 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
 
$
271

 
$
1,134

 
$
1,405

 
$
—

 
$
99

 
$
1,504

 
Office Portfolio
 
5,504

 
2,475

 
7,979

 
—

 
5,221

 
13,200

 
Multifamily Portfolio
 
—

 
431

 
431

 
—

 
—

 
431

 
Mixed-Use Portfolio
 
4

 
675

 
679

 
—

 
—

 
679

 
Total
 
$
5,779

 
$
4,715

 
$
10,494

 
$
—

 
$
5,320

 
$
15,814

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 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
 
$
2,589

 
$
2,733

 
$
5,322

 
$
—

 
$
8,049

 
$
13,371

 
Office Portfolio
 
14,911

 
12,202

 
27,113

 
243

 
19,120

 
46,476

 
Multifamily Portfolio
 
—

 
1,727

 
1,727

 
—

 
736

 
2,463

 
Mixed-Use Portfolio
 
118

 
777

 
895

 
—

 
—

 
895

 
Total
 
$
17,618

 
$
17,439

 
$
35,057

 
$
243

 
$
27,905

 
$
63,205

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Fourth Quarter 2016 Supplemental Information
                               Page 17
 
 
SUMMARY OF OUTSTANDING DEBT
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
December 31, 2016
 
Interest Rate
 
Service (1)
 
Maturity Date
 
Maturity
Waikiki Beach Walk - Retail (2)
 
130,310

 
5.39
%
 
134,444

 
July 1, 2017
 
130,310

Solana Beach Corporate Centre III-IV (3)
 
35,440

 
6.39
%
 
36,962

 
August 1, 2017
 
35,136

Loma Palisades (2)
 
73,744

 
6.09
%
 
4,553

 
July 1, 2018
 
73,744

One Beach Street (2)
 
21,900

 
3.94
%
 
875

 
April 1, 2019
 
21,900

Torrey Reserve - North Court (3)
 
20,399

 
7.22
%
 
1,836

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII (3)
 
6,884

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II (3)
 
10,927

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre (3)
 
36,424

 
5.91
%
 
2,849

 
June 1, 2020
 
33,898

City Center Bellevue (2)
 
111,000

 
3.98
%
 
4,479

 
November 1, 2022
 
111,000

Secured Notes Payable / Weighted Average (4)
 
$
447,028

 
5.32
%
 
$
187,413

 
 
 
$
442,039

 
 
 
 
 
 
 
 
 
 
 
Series A Notes (5)
 
$
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 (6)
 
100,000

 
3.08
%
 
3,125

 
January 9, 2019
 
100,000

Term Loan B (7)
 
100,000

 
3.15
%
 
3,149

 
March 1, 2023
 
100,000

Term Loan C (8)
 
50,000

 
3.14
%
 
1,571

 
March 1, 2023
 
50,000

Unsecured Notes Payable / Weighted Average (9)
 
$
600,000

 
3.76
%
 
$
22,855

 
 
 
$
600,000

 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit (10)
 
$
20,000

 
2.10
%
 
 
 
 
 
 
Notes:
(1)
Includes principal balance of outstanding debt for Waikiki Beach Walk - Retail and Solana Beach Corporate Center III-IV, as such debt is due within the next twelve (12) months.
(2)
Interest only.
(3)
Principal payments based on a 30-year amortization schedule.
(4)
The Secured Notes Payable total does not include the unamortized fair value adjustment of $1.3 million and debt issuance costs, net of $0.5 million.
(5)
$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.
(6)
Term Loan A has a maturity date of January 9, 2018 and we have one 12-month option remaining to extend its maturity to 2019, which we intend to exercise. 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.
(7)
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.
(8)
Term Loan C matures on March 1, 2023. Term Loan C accrues interest at a variable rate, which we fixed as part of an interest rate swap for an all-in interest rate of 3.14%, subject to adjustments based on our consolidated leverage ratio.
(9)
The Unsecured Notes Payable total does not include debt issuance costs, net of $3.7 million.
(10)
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.

Fourth Quarter 2016 Supplemental Information
                               Page 18
 
 
MARKET CAPITALIZATION
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(Amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
December 31, 2016
Common shares outstanding
 
45,732

Common units outstanding
 
17,889

Common shares and common units outstanding
 
63,621

Market price per common share
 
$
43.08

Equity market capitalization
 
$
2,740,793

Total debt
 
$
1,067,028

Total market capitalization
 
$
3,807,821

Less: Cash on hand
 
$
(44,801
)
Total enterprise value
 
$
3,763,020

Total assets, gross
 
$
2,456,393

Total unencumbered assets, gross
 
$
1,709,775

 
 
 
Total debt/Total capitalization
 
28.0
%
Total debt/Total enterprise value
 
28.4
%
Net debt/Total enterprise value (1)
 
27.2
%
Total debt/Total assets, gross
 
43.4
%
Net debt/Total assets, gross (1)
 
41.6
%
Total unencumbered assets, gross/Unsecured debt
 
275.8
%
 
 
 
Total debt/EBITDA (2)(3)
 
6.2
x
Net debt/EBITDA (1)(2)(3)
 
5.9
x
Interest coverage ratio (4)
 
3.7
x
Fixed charge coverage ratio (4)
 
3.7
x
 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-debtgraph2016q4.jpg
Weighted Average Fixed Interest Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
5.6
%
6.1
%
3.8
%
6.0
%
3.9
%
4.0
%
3.1
%
—
%
4.5
%
Total Weighed Average Fixed Interest Rate:
4.4%
Weighted Average Term to Maturity:
4.4 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 December 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 one 12-month option remaining to extend the maturity of the unsecured term loan to January 2019.

Fourth Quarter 2016 Supplemental Information
                               Page 19
 
 
SUMMARY OF DEVELOPMENT OPPORTUNITIES
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

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
December 31, 2016
Office Property:
 
 
 
 
 
 
 
 
Torrey Point
San Diego, CA
2015
2017
2018
88,000
$5,592
$32,123
$55,800
7% - 8%
 
 
 
 
 
 
 
 
 
 
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. A third party has been granted an option to acquire this property exercisable on or prior to August 22, 2018 at a price ranging from $9.0 million to $9.45 million in consideration for a non-refundable $0.6 million option payment.
(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.


Fourth Quarter 2016 Supplemental Information
                               Page 20
 
 
 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 






PORTFOLIO DATA





Fourth Quarter 2016 Supplemental Information
                               Page 21
 
 
PROPERTY REPORT
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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

 
94.6%
 
$
3,603,752

 
$48.78
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
98.6
 
11,900,588

 
22.84
 
Sears
 
Dick's Sporting Goods, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
100.0
 
2,301,751

 
17.32
 
 
 
Ross Dress for Less, Grocery Outlet
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
209,569

 
93.7
 
5,314,489

 
27.06
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
98.2
 
6,079,732

 
25.09
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
675,486

 
98.1
 
10,104,639

 
15.25
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
100.0
 
1,197,344

 
34.06
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
1,917,969

 
164.34
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
537,637

 
90.7
 
16,098,715

 
33.01
 
Lowe's, Kmart(10)
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
589,362

 
99.9
 
13,964,184

 
23.72
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Hassalo on Eighth (8)
 
Portland, OR
 
2015

 
3

 
44,153

 
76.6
 
809,337

 
23.93
 
 
 
Providence Health & Services, Green Zebra Grocery
Subtotal/Weighted Average Retail Portfolio
 
 
 
104

 
3,089,155

 
96.6%
 
$
73,292,500

 
$24.56
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-2016

 
14

 
515,192

 
88.5%
 
$
18,752,967

 
$41.13
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,491

 
93.2
 
7,390,502

 
37.32
 
 
 
 
The Landmark at One Market (9)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
24,030,395

 
57.30
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
4,040,694

 
41.39
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
10,947,393

 
30.76
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2011/present

 
6

 
581,670

 
72.1
 
10,862,292

 
25.90
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
494,658

 
95.2
 
17,406,056

 
36.96
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
28

 
2,681,637

 
90.1%
 
$
93,430,299

 
$38.67
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
132

 
5,770,792

 
93.6%
 
$
166,722,799

 
$30.87
 
 
 
 

Fourth Quarter 2016 Supplemental Information
                               Page 22
 
 
PROPERTY REPORT (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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

 
95.1%
 
$
11,930,772

 
$
1,908

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
96.9
 
3,402,948

 
$
1,829

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
97.7
 
1,626,312

 
$
1,576

 
 
 
 
Santa Fe Park RV Resort (11)
 
San Diego, CA
 
1971/2007-2008
 
1

 
126

 
80.2
 
1,173,324

 
$
968

 
 
 
 
Hassalo on Eighth - Velomor (8)
 
Portland, OR
 
2015
 
1

 
177

 
88.1
 
3,130,644

 
$
1,673

 
 
 
 
Hassalo on Eighth - Aster Tower (8)
 
Portland, OR
 
2015
 
1

 
337

 
85.2
 
5,843,700

 
$
1,696

 
 
 
 
Hassalo on Eighth - Elwood (8)
 
Portland, OR
 
2015
 
1

 
143

 
83.9
 
2,208,456

 
$
1,534

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
118

 
1,579

 
90.3%
 
$
29,316,156

 
$
1,713

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
98.7
%
 
$
10,838,934

 
$
113.56

 
 
 
Yard House, Roy's
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
Year Built/
 
of
 
 
 
Average
 
Average
 
Revenue per
 
 
 
 
Hotel Portion
 
Location
 
Renovated
 
Buildings
 
Units
 
Occupancy (12)
 
Daily Rate(12)
 
 Available Room (12)
 
 
 
 
Waikiki Beach Walk - Embassy Suites™
 
Honolulu, HI
 
2008/2014
 
2

 
369

 
88.4
%
 
$
310.95

 
$
274.74

 
 
 
 

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 December 31, 2016, including leases which may not have commenced as of December 31, 2016. Percentage leased for our multifamily properties includes total units rented as of December 31, 2016.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 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 December 31, 2016. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of December 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)
The Hassalo on Eighth property is comprised of the following three multifamily buildings (each with a ground floor retail component): Velomor, Aster Tower and Elwood. The Aster Tower and Elwood multifamily buildings were placed into operations in October 2015 and the Velomor multifamily building was placed into operations in July 2015. The retail component of the Elwood building was placed into operations in April 2016, the retail component of the Velomor building was placed into operations in July 2016 and the retail component of the Aster Tower building was placed into operations in October 2016.
(9)
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.

Fourth Quarter 2016 Supplemental Information
                               Page 23
 
 
PROPERTY REPORT (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

(10)
In December 2016, the Kmart store at Waikele Center ceased its operations, but continues to remain fully liable for all of its lease obligations until the lease's scheduled expiration on June 30, 2018.
(11)
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 December 31, 2016, the highest average monthly occupancy rate for this property was 100%, occurring in August 2016. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.
(12)
Average occupancy represents the percentage of available units that were sold during the three months ended December 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 December 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 December 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.

Fourth Quarter 2016 Supplemental Information
                               Page 24
 
 
RETAIL LEASING SUMMARY
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
14

 
100%
 
28,604

 
$44.50
 
$42.67
 
$
52,501

 
4.3
%
 
17.5
 %
 
7.3
 
$
555,445

 
$19.42
3rd Quarter 2016
 
21

 
100%
 
98,723

 
$31.94
 
$28.20
 
$
370,189

 
13.3
%
 
18.2
 %
 
7.2
 
$
1,974,000

 
$20.00
2nd Quarter 2016
 
15

 
100%
 
50,733

 
$41.90
 
$40.05
 
$
94,165

 
4.6
%
 
5.5
 %
 
4.2
 
$
166,260

 
$3.28
1st Quarter 2016
 
16

 
100%
 
81,056

 
$34.54
 
$33.82
 
$
58,295

 
2.1
%
 
9.1
 %
 
4.9
 
$
7,000

 
$0.09
Total 12 months
 
66

 
100%
 
259,116

 
$36.09
 
$33.88
 
$
575,150

 
6.6
%
 
12.3
 %
 
5.9
 
$
2,702,705

 
$10.43
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
4

 
29%
 
3,246

 
$80.62
 
$77.70
 
$
9,477

 
3.8
%
 
12.4
 %
 
6.1
 
$
51,745

 
$15.94
3rd Quarter 2016
 
3

 
14%
 
47,066

 
$24.25
 
$19.01
 
$
246,521

 
27.6
%
 
30.4
 %
 
10.5
 
$
1,974,000

 
$41.94
2nd Quarter 2016
 
3

 
20%
 
5,974

 
$72.08
 
$70.79
 
$
7,706

 
1.8
%
 
(11.1
)%
 
7.3
 
$
163,260

 
$27.33
1st Quarter 2016
 
—

 
—%
 
—

 
$0.00
 
$0.00
 
$
—

 
—
%
 
—
 %
 
—
 
$
—

 
$0.00
Total 12 months
 
10

 
15%
 
56,286

 
$32.58
 
$27.89
 
$
263,704

 
16.8
%
 
15.9
 %
 
9.9
 
$
2,189,005

 
$38.89
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
10

 
71%
 
25,358

 
$39.88
 
$38.18
 
$
43,024

 
4.4
%
 
18.9
 %
 
7.5
 
$
503,700

 
$19.86
3rd Quarter 2016
 
18

 
86%
 
51,657

 
$38.96
 
$36.57
 
$
123,668

 
6.5
%
 
12.3
 %
 
4.1
 
$
—

 
$0.00
2nd Quarter 2016
 
12

 
80%
 
44,759

 
$37.87
 
$35.94
 
$
86,459

 
5.4
%
 
10.2
 %
 
3.8
 
$
3,000

 
$0.07
1st Quarter 2016
 
16

 
100%
 
81,056

 
$34.54
 
$33.82
 
$
58,295

 
2.1
%
 
9.1
 %
 
4.9
 
$
7,000

 
$0.09
Total 12 months
 
56

 
85%
 
202,830

 
$37.07
 
$35.53
 
$
311,446

 
4.3
%
 
11.5
 %
 
4.8
 
$
513,700

 
$2.53
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
16

 
31,064

 
$43.51
 
7.1
 
$
599,245

 
$19.29
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2016
 
24

 
103,348

 
$32.02
 
7.1
 
$
2,188,512

 
$21.18
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2016
 
17

 
55,405

 
$41.18
 
4.2
 
$
361,513

 
$6.52
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
19

 
99,198

 
$33.95
 
5.8
 
$
1,563,910

 
$15.77
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
76

 
289,015

 
$35.67
 
6.1
 
$
4,713,180

 
$16.31
 
 
 
 
 
 
 
 
 
 
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.

Fourth Quarter 2016 Supplemental Information
                               Page 25
 
 
OFFICE LEASING SUMMARY
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
11

 
100%
 
103,401

 
$38.81
 
$33.78
 
$
519,828

 
14.9
%
 
31.8
%
 
4.6
 
$
1,218,128

 
$11.78
3rd Quarter 2016
 
12

 
100%
 
38,822

 
$41.43
 
$37.79
 
$
141,420

 
9.6
%
 
16.8
%
 
4.2
 
$
729,389

 
$18.79
2nd Quarter 2016
 
8

 
100%
 
22,535

 
$39.42
 
$35.76
 
$
82,428

 
10.2
%
 
21.4
%
 
4.2
 
$
221,004

 
$9.81
1st Quarter 2016
 
19

 
100%
 
52,050

 
$41.38
 
$37.87
 
$
182,885

 
9.3
%
 
17.6
%
 
4.3
 
$
677,219

 
$13.01
Total 12 months
 
50

 
100%
 
216,808

 
$39.96
 
$35.69
 
$
926,561

 
12.0
%
 
24.2
%
 
4.4
 
$
2,845,740

 
$13.13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
5

 
45%
 
46,060

 
$40.17
 
$34.77
 
$
248,871

 
15.5
%
 
30.7
%
 
3.5
 
$
700,600

 
$15.21
3rd Quarter 2016
 
4

 
33%
 
10,953

 
$43.51
 
$38.64
 
$
53,277

 
12.6
%
 
13.5
%
 
4.1
 
$
73,700

 
$6.73
2nd Quarter 2016
 
2

 
25%
 
5,131

 
$34.34
 
$33.08
 
$
6,437

 
3.8
%
 
9.3
%
 
7.4
 
$
144,018

 
$28.07
1st Quarter 2016
 
5

 
26%
 
14,680

 
$40.22
 
$37.29
 
$
43,038

 
7.9
%
 
19.8
%
 
5.5
 
$
388,840

 
$26.49
Total 12 months
 
16

 
32%
 
76,824

 
$40.27
 
$35.69
 
$
351,623

 
12.8
%
 
24.3
%
 
4.2
 
$
1,307,158

 
$17.02
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
6

 
55%
 
57,341

 
$37.71
 
$32.98
 
$
270,957

 
14.3
%
 
32.8
%
 
5.5
 
$
517,528

 
$9.03
3rd Quarter 2016
 
8

 
67%
 
27,869

 
$40.61
 
$37.45
 
$
88,143

 
8.4
%
 
18.2
%
 
4.3
 
$
655,689

 
$23.53
2nd Quarter 2016
 
6

 
75%
 
17,404

 
$40.91
 
$36.55
 
$
75,991

 
11.9
%
 
24.9
%
 
3.2
 
$
76,986

 
$4.42
1st Quarter 2016
 
14

 
74%
 
37,370

 
$41.84
 
$38.10
 
$
139,847

 
9.8
%
 
16.8
%
 
3.8
 
$
288,379

 
$7.72
Total 12 months
 
34

 
68%
 
139,984

 
$39.79
 
$35.68
 
$
574,938

 
11.5
%
 
24.1
%
 
4.5
 
$
1,538,582

 
$10.99
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
16

 
125,836

 
$39.48
 
5.0
 
$
2,796,553

 
$22.22
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2016
 
15

 
47,637

 
$42.59
 
4.8
 
$
1,256,475

 
$26.38
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2016
 
12

 
35,320

 
$41.15
 
4.6
 
$
510,132

 
$14.44
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
25

 
72,802

 
$41.06
 
4.9
 
$
1,484,597

 
$20.39
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
68

 
281,595

 
$40.62
 
4.9
 
$
6,047,757

 
$21.47
 
 
 
 
 
 
 
 
 
 
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.

Fourth Quarter 2016 Supplemental Information
                               Page 26
 
 
MULTIFAMILY LEASING SUMMARY
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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
 
 
 
 
4th Quarter 2016
 
521
 
95.1%
 
$11,930,772
 
$1,908
3rd Quarter 2016
 
536
 
97.8%
 
$12,083,664
 
$1,879
2nd Quarter 2016
 
532
 
97.1%
 
$12,102,696
 
$1,895
1st Quarter 2016
 
538
 
98.2%
 
$12,025,824
 
$1,862
 
 
 
 
 
 
 
 
 
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
 
 
 
 
4th Quarter 2016
 
155
 
96.9%
 
$3,402,948
 
$1,829
3rd Quarter 2016
 
156
 
97.6%
 
$3,422,268
 
$1,826
2nd Quarter 2016
 
155
 
96.9%
 
$3,302,964
 
$1,775
1st Quarter 2016
 
154
 
96.3%
 
$3,247,692
 
$1,756
 
 
 
 
 
 
 
 
 
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
 
 
 
 
4th Quarter 2016
 
86
 
97.7%
 
$1,626,312
 
$1,576
3rd Quarter 2016
 
86
 
97.7%
 
$1,617,708
 
$1,568
2nd Quarter 2016
 
86
 
97.7%
 
$1,520,064
 
$1,473
1st Quarter 2016
 
85
 
96.6%
 
$1,505,940
 
$1,476
 
 
 
 
 
 
 
 
 
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
 
 
 
 
4th Quarter 2016
 
101
 
80.2%
 
$1,173,324
 
$968
3rd Quarter 2016
 
97
 
77.0%
 
$1,123,284
 
$965
2nd Quarter 2016
 
123
 
97.6%
 
$1,475,328
 
$1,000
1st Quarter 2016
 
112
 
89.0%
 
$1,300,452
 
$966














Fourth Quarter 2016 Supplemental Information
                               Page 27
 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 


As of December 31, 2016
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Velomor
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2016
 
156
 
88.1%
 
$3,130,644
 
$1,673
3rd Quarter 2016
 
163
 
92.1%
 
$3,211,500
 
$1,642
2nd Quarter 2016
 
167
 
94.3%
 
$3,202,296
 
$1,599
1st Quarter 2016
 
151
 
85.3%
 
$2,717,028
 
$1,500
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Aster Tower
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2016
 
287
 
85.2%
 
$5,843,700
 
$1,696
3rd Quarter 2016
 
288
 
85.5%
 
$6,294,240
 
$1,820
2nd Quarter 2016
 
286
 
84.8%
 
$4,928,244
 
$1,437
1st Quarter 2016
 
151
 
44.8%
 
$2,450,700
 
$1,353
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Elwood
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2016
 
120
 
83.9%
 
$2,208,456
 
$1,534
3rd Quarter 2016
 
122
 
85.3%
 
$2,424,792
 
$1,657
2nd Quarter 2016
 
111
 
77.6%
 
$1,936,200
 
$1,454
1st Quarter 2016
 
62
 
43.4%
 
$969,336
 
$1,302
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2016
 
1,426
 
90.3%
 
$29,316,156
 
$1,713
3rd Quarter 2016
 
1,448
 
91.7%
 
$30,177,456
 
$1,737
2nd Quarter 2016
 
1,460
 
92.5%
 
$28,467,792
 
$1,624
1st Quarter 2016
 
1,253
 
79.4%
 
$24,216,972
 
$1,610

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.



Fourth Quarter 2016 Supplemental Information
                               Page 28
 
 
MIXED-USE LEASING SUMMARY
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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
 
 
 
 
4th Quarter 2016
 
95,450
 
98.7%
 
$10,838,934
 
$114
3rd Quarter 2016
 
95,588
 
98.8%
 
$10,810,032
 
$113
2nd Quarter 2016
 
95,085
 
98.3%
 
$10,785,430
 
$113
1st Quarter 2016
 
94,601
 
97.8%
 
$10,709,209
 
$113
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
4th Quarter 2016
 
326
 
88.4%
 
$311
 
$275
3rd Quarter 2016
 
346
 
93.9%
 
$357
 
$335
2nd Quarter 2016
 
332
 
89.9%
 
$307
 
$276
1st Quarter 2016
 
321
 
87.0%
 
$322
 
$280
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of December 31, 2016, including leases which may not have commenced as of December 31, 2016.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 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 December 31, 2016.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended December 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.

Fourth Quarter 2016 Supplemental Information
                               Page 29
 
 
LEASE EXPIRATIONS
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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
 
16,925

 
0.6
%
 
0.3
%
 
$1.61
 
13,830

 
0.4
%
 
0.2
%
 
$38.98
 
1,782

 
1.8
%
 
—
%
 
—
 
32,537

 
0.6
%
 
$17.41
2017
 
337,560

 
12.6

 
5.8

 
$40.50
 
297,709

 
9.6

 
5.1

 
$26.17
 
15,861

 
16.4

 
0.3

 
$148.63
 
651,130

 
11.1

 
$36.58
2018
 
306,047

 
11.4

 
5.2

 
$48.96
 
891,342

 
28.9

 
15.2

 
$19.99
 
13,607

 
14.1

 
0.2

 
$105.22
 
1,210,996

 
20.6

 
$28.27
2019
 
333,721

(2) 
12.4

 
5.7

 
$42.32
 
350,581

 
11.3

 
6.0

 
$28.69
 
19,519

 
20.2

 
0.3

 
$92.65
 
703,821

 
12.0

 
$36.93
2020
 
362,737

(3) 
13.5

 
6.2

 
$40.71
 
292,718

 
9.5

 
5.0

 
$22.17
 
19,798

 
20.5

 
0.3

 
$65.20
 
675,253

 
11.5

 
$33.39
2021
 
309,204

 
11.5

 
5.3

 
$42.41
 
155,707

 
5.0

 
2.7

 
$42.98
 
12,383

 
12.8

 
0.2

 
$235.26
 
477,294

 
8.1

 
$47.60
2022
 
83,513


3.1

 
1.4

 
$33.55
 
237,600

 
7.7

 
4.0

 
$31.63
 
12,500

 
12.9

 
0.2

 
$82.97
 
333,613

 
5.7

 
$34.03
2023
 
154,621

 
5.8

 
2.6

 
$33.87
 
96,511

 
3.1

 
1.6

 
$20.75
 
—

 
—

 
—

 
—
 
251,132

 
4.3

 
$28.83
2024
 
142,201

 
5.3

 
2.4

 
$34.26
 
241,687

 
7.8

 
4.1

 
$24.22
 
—

 
—

 
—

 
—
 
383,888

 
6.5

 
$27.94
2025
 
210,320

 
7.8

 
3.6

 
$29.31
 
162,586

 
5.3

 
2.8

 
$22.96
 
—

 
—

 
—

 
—
 
372,906

 
6.4

 
$26.54
2026
 
22,750

 
0.8

 
0.4

 
$25.59
 
51,045

 
1.7

 
0.9

 
$36.13
 
—

 
—

 
—

 
—
 
73,795

 
1.3

 
$32.88
Thereafter
 
108,818

 
4.1

 
1.9

 
$28.39
 
136,407

 
4.4

 
2.3

 
$21.67
 
—

 
—

 
—

 
—
 
245,225

 
4.2

 
$24.65
Signed Leases Not Commenced
 
28,588

 
1.1

 
0.5

 
—
 
57,880

 
1.9

 
1.0

 
—
 
—

 
—

 
—

 
—
 
86,468

 
1.5

 
—
Available
 
264,632

 
9.9

 
4.5

 
—
 
103,552

 
3.4

 
1.8

 
—
 
1,257

 
1.3

 
—

 
—
 
369,441

 
6.3

 
—
Total (4)
 
2,681,637

 
100.0
%
 
45.7
%
 
$34.84
 
3,089,155

 
100.0
%
 
52.6
%
 
$23.73
 
96,707

 
100.0
%
 
1.6
%
 
$112.08
 
5,867,499

 
100.0
%
 
$30.26
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
16,925

 
0.6
%
 
0.3
%
 
$1.61
 
13,830

 
0.4
%
 
0.2
%
 
$38.98
 
1,782

 
1.8
%
 
—
%
 
—
 
32,537

 
0.6
%
 
$17.41
2017
 
214,579

 
8.0

 
3.7

 
$39.15
 
91,898

 
3.0

 
1.6

 
$33.91
 
14,821

 
15.3

 
0.3

 
$144.01
 
321,298

 
5.5

 
$42.49
2018
 
74,899

 
2.8

 
1.3

 
$38.94
 
51,249

 
1.7

 
0.9

 
$38.30
 
13,607

 
14.1

 
0.2

 
$105.22
 
139,755

 
2.4

 
$45.16
2019
 
129,027

 
4.8

 
2.2

 
$40.23
 
88,327

 
2.9

 
1.5

 
$36.32
 
7,829

 
8.1

 
0.1

 
$142.35
 
225,183

 
3.8

 
$42.25
2020
 
152,534

 
5.7

 
2.6

 
$37.76
 
80,776

 
2.6

 
1.4

 
$27.04
 
3,476

 
3.6

 
0.1

 
$196.75
 
236,786

 
4.0

 
$36.44
2021
 
127,183

 
4.7

 
2.2

 
$35.15
 
90,325

 
2.9

 
1.5

 
$45.39
 
12,383

 
12.8

 
0.2

 
$235.26
 
229,891

 
3.9

 
$49.95
2022
 
138,071

(2) 
5.1

 
2.4

 
$39.12
 
107,876

 
3.5

 
1.8

 
$35.37
 
12,930

 
13.4

 
0.2

 
$86.38
 
258,877

 
4.4

 
$39.92
2023
 
183,604

(3) 
6.8

 
3.1

 
$45.16
 
94,743

 
3.1

 
1.6

 
$34.07
 
—

 
—

 
—

 
—
 
278,347

 
4.7

 
$41.39
2024
 
119,869

 
4.5

 
2.0

 
$34.76
 
209,600

 
6.8

 
3.6

 
$28.79
 
—

 
—

 
—

 
—
 
329,469

 
5.6

 
$30.96
2025
 
150,846

 
5.6

 
2.6

 
$34.65
 
99,529

 
3.2

 
1.7

 
$30.10
 
—

 
—

 
—

 
—
 
250,375

 
4.3

 
$32.84
2026
 
162,574

 
6.1

 
2.8

 
$36.19
 
54,013

 
1.7

 
0.9

 
$39.83
 
—

 
—

 
—

 
—
 
216,587

 
3.7

 
$37.10
Thereafter
 
918,306


34.2

 
15.7

 
$41.05
 
1,945,557

 
63.0

 
33.2

 
$20.54
 
28,622

 
29.6

 
0.5

 
$50.46
 
2,892,485

 
49.3

 
$27.35
Signed Leases Not Commenced
 
28,588

 
1.1

 
0.5

 
—
 
57,880

 
1.9

 
1.0

 
—
 
—

 
—

 
—

 
—
 
86,468

 
1.5

 
—
Available
 
264,632

 
9.9

 
4.5

 
—
 
103,552

 
3.4

 
1.8

 
—
 
1,257

 
1.3

 
—

 
—
 
369,441

 
6.3

 
—
Total (4)
 
2,681,637

 
100.0
%
 
45.7
%
 
$34.84
 
3,089,155

 
100.0
%
 
52.6
%
 
$23.73
 
96,707

 
100.0
%
 
1.6
%
 
$112.08
 
5,867,499

 
100.0
%
 
$30.26

Fourth Quarter 2016 Supplemental Information
                               Page 30
 
 
LEASE EXPIRATIONS (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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 December 31, 2016 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 19,697 square feet currently leased by Caradigm USA LLC at City Center Bellevue through December 31, 2016, for which Wargaming (Seattle), Inc has signed an agreement to lease such space beginning January 16, 2017 through October 31, 2019 with option to extend the lease through October 31, 2022.
(3)
The expirations include 18,216 square feet currently leased by Caradigm USA LLC at City Center Bellevue through December 31, 2016, for which Nimbus Development, Inc has signed an agreement to lease such space beginning January 1, 2017 through October 31, 2020 with option to extend the lease through October 31, 2023.
(4)
Individual items may not add up to total due to rounding.


Fourth Quarter 2016 Supplemental Information
                               Page 31
 
 
PORTFOLIO LEASED STATISTICS
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 


 
 
At December 31, 2016
 
At December 31, 2015
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
Overall Portfolio (2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,089,155

 
2,985,603

 
96.6
%
 
3,045,194

 
3,003,532

 
98.6
%
Office Properties (square feet) 
 
2,681,637

 
2,417,005

 
90.1
%
 
2,658,574

 
2,457,475

 
92.4
%
Multifamily Properties (units)
 
1,579

 
1,426

 
90.3
%
 
1,579

 
1,159

 
73.4
%
Mixed-Use Properties (square feet)
 
96,707

 
95,450

 
98.7
%
 
96,707

 
96,707

 
100.0
%
Mixed-Use Properties (units)
 
369

 
331

(3) 
89.8
%
 
369

 
331

(3) 
89.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,045,002

(4) 
2,951,779

 
96.9
%
 
3,045,194

(4) 
3,003,532

 
98.6
%
Office Properties (square feet)
 
1,584,775

(5) 
1,541,932

 
97.3
%
 
1,584,594

(5) 
1,553,715

 
98.1
%
Multifamily Properties (units)
 
922

(6) 
863

 
93.6
%
 
922

(6) 
881

 
95.6
%
Mixed-Use Properties (square feet)
 
96,707

 
95,450

 
98.7
%
 
96,707

 
96,707

 
100.0
%
Mixed-Use Properties (units)
 
369

 
331

(3) 
89.8
%
 
369

 
331

(3) 
89.6
%

Notes:
(1)
Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
(2)
See Glossary of Terms.
(3)
Represents average occupancy for the year ended December 31, 2016 and 2015.
(4)
The same-store portfolio excludes Hassalo on Eighth - Retail; the retail component of the Elwood building was placed into operations in April 2016, the retail component of the Velomor building was placed into operations in July 2016 and the retail component of the Aster Tower building was placed into operations October 2016.
(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 multifamily; 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.

Fourth Quarter 2016 Supplemental Information
                               Page 32
 
 
TOP TENANTS - RETAIL
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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(1)
 
Waikele Center
 
6/30/2018
 
119,590

 
3.9
%
 
2.0
%
 
$
4,544,420

 
6.2
%
 
2.6
%
2

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

 
5.0

 
2.6

 
4,516,727

 
6.2

 
2.5

3

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

 
2.2

 
1.2

 
1,990,316

 
2.7

 
1.1

4

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

5

Old Navy
 
Alamo Quarry Market,
Waikele Center,
South Bay Marketplace
 
9/30/2017
7/31/2020
4/30/2021
 
59,780

 
1.9

 
1.0

 
*
 
*
 
*
6

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

 
2.2

 
1.2

 
1,335,447

 
1.8

 
0.8

7

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

 
1.6

 
0.9

 
1,216,700

 
1.7

 
0.7

8

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

 
2.3

 
1.2

 
1,122,929

 
1.5

 
0.6

9

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

10

Angelika Film Center
 
Carmel Mountain Plaza
 
1/31/2024
 
34,561

 
1.1

 
0.6

 
958,657

 
1.3

 
0.5

 
Top 10 Retail Tenants Total
 
 
 
736,420

 
23.7
%
 
12.5
%
 
$
18,586,671

 
25.3
%
 
10.5
%


*

Data withheld at tenant's request.
(1
)
In December 2016, the Kmart store at Waikele Center ceased its operations, but continues to remain fully liable for all of its lease obligations until the lease's scheduled expiration on June 30, 2018.

 
 
 
 

Fourth Quarter 2016 Supplemental Information
                               Page 33
 
 
TOP TENANTS - OFFICE
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

As of December 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

 
9.5
%
 
4.3
%
 
$
13,986,276

 
15.0
%
 
7.9
%
2

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

 
4.3

 
2.0

 
7,969,801

 
8.5

 
4.5

3

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

 
3.5

 
1.6

 
3,006,453

 
3.2

 
1.7

4

Insurance Company of the West
 
Torrey Reserve Campus
 
12/31/2016
12/31/2019
 
69,795

 
2.6

 
1.2

 
2,757,086

 
3.0

 
1.6

5

Clearesult Operating, LLC
 
First & Main
 
4/30/2025
 
101,848

 
3.8

 
1.7

 
2,578,353

 
2.8

 
1.5

6

State of Oregon: Department of Environmental Quality
 
Lloyd District Portfolio
 
10/31/2031
 
87,787

 
3.3

 
1.5

 
2,458,036

 
2.6

 
1.4

7

Caradigm USA LLC
 
City Center Bellevue
 
12/31/2016
12/31/2021
 
68,956

 
2.6

 
1.2

 
2,367,259

 
2.5

 
1.3

8

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

 
2.4

 
1.1

 
2,363,814

 
2.5

 
1.3

9

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

 
2.4

 
1.1

 
2,184,302

 
2.3

 
1.2

10

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

 
2.1

 
1.0

 
2,100,900

 
2.2

 
1.2

 
Top 10 Office Tenants Total
 
 
 
974,573

 
36.5
%
 
16.7
%
 
$
41,772,280

 
44.6
%
 
23.6
%




Fourth Quarter 2016 Supplemental Information
                               Page 34
 
 
 
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 






APPENDIX





Fourth Quarter 2016 Supplemental Information
                               Page 35
 
 
GLOSSARY OF TERMS
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 


Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three months and year ended December 31, 2016 and 2015 is as follows:
    
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Net income
$
12,408

 
$
11,226

 
$
45,637

 
$
53,915

Depreciation and amortization
18,160

 
17,238

 
71,319

 
63,392

Interest expense
12,788

 
13,010

 
51,936

 
47,260

Interest income
(9
)
 
(55
)
 
(72
)
 
(90
)
Income tax expense
(77
)
 
(180
)
 
566

 
295

Gain on sale of real estate
—

 
—

 
—

 
(7,121
)
EBITDA
$
43,270

 
$
41,239

 
$
169,386

 
$
157,651


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.



Fourth Quarter 2016 Supplemental Information
                               Page 36
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 


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
 
Year Ended
 
December 31,
 
December 31,
Reconciliation of NOI to net income
2016
 
2015
 
2016
 
2015
Total NOI
$
47,711

 
$
45,044

 
$
187,157

 
$
177,617

General and administrative
(4,441
)
 
(3,913
)
 
(17,897
)
 
(20,074
)
Depreciation and amortization
(18,160
)
 
(17,238
)
 
(71,319
)
 
(63,392
)
Interest expense
(12,788
)
 
(13,010
)
 
(51,936
)
 
(47,260
)
Gain on sale of real estate
—

 
—

 
—

 
7,121

Other income (expense), net
86

 
343

 
(368
)
 
(97
)
Net income
12,408

 
11,226

 
45,637

 
53,915

Net income attributable to restricted shares
(61
)
 
(53
)
 
(189
)
 
(168
)
Net loss attributable to unitholders in the Operating Partnership
(3,486
)
 
(2,961
)
 
(12,863
)
 
(15,238
)
Net income attributable to American Assets Trust, Inc. stockholders
$
8,861

 
$
8,212

 
$
32,585

 
$
38,509


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


Fourth Quarter 2016 Supplemental Information
                               Page 37
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/00135efa4713fbf3bae122c5174953fb-aat2015q4a04.jpg
 
 

Same-Store Portfolio, Non-Same Store Portfolio and Redevelopment Same-Store: Information provided on a same-store basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, properties under development, properties classified as held for development and properties classified as discontinued operations. Information provided on a redevelopment same-store basis includes the results of properties undergoing significant redevelopment for the entirety or portion of both periods being compared. The following table shows the properties included in the same-store, non-same store and redevelopment same-store portfolio for the comparative periods presented.
 
Comparison of Three Months Ended
 
Comparison of Year Ended
 
December 31, 2016 to 2015
 
December 31, 2016 to 2015
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
Retail Properties
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
X
 
 
 
X
 
X
 
 
 
X
Carmel Mountain Plaza
X
 
 
 
X
 
X
 
 
 
X
South Bay Marketplace
X
 
 
 
X
 
X
 
 
 
X
Lomas Santa Fe Plaza
X
 
 
 
X
 
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
 
X
 
 
 
X
Del Monte Center
X
 
 
 
X
 
X
 
 
 
X
Geary Marketplace
X
 
 
 
X
 
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
 
X
 
 
 
X
Waikele Center
X
 
 
 
X
 
X
 
 
 
X
Alamo Quarry Market
X
 
 
 
X
 
X
 
 
 
X
Hassalo on Eighth - Retail
 
 
X
 
 
 
 
 
X
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
 
X
 
X
 
 
 
X
 
X
Solana Beach Corporate Centre
X
 
 
 
X
 
X
 
 
 
X
The Landmark at One Market
X
 
 
 
X
 
X
 
 
 
X
One Beach Street
X
 
 
 
X
 
X
 
 
 
X
First & Main
X
 
 
 
X
 
X
 
 
 
X
Lloyd District Portfolio
 
 
X
 
X
 
 
 
X
 
X
City Center Bellevue
X
 
 
 
X
 
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
 
 
 
 
 
 
Loma Palisades
X
 
 
 
X
 
X
 
 
 
X
Imperial Beach Gardens
X
 
 
 
X
 
X
 
 
 
X
Mariner's Point
X
 
 
 
X
 
X
 
 
 
X
Santa Fe Park RV Resort
X
 
 
 
X
 
X
 
 
 
X
Hassalo on Eighth
 
 
X
 
 
 
 
 
X
 
 
Mixed-Use Properties
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
X
 
X
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
X
 
X
 
 
 
X
Development Properties
 
 
 
 
 
 
 
 
 
 
 
Sorrento Pointe - Construction in Progress
 
 
X
 
 
 
 
 
X
 
 
Solana Beach Corporate Centre - Land
 
 
X
 
 
 
 
 
X
 
 
Solana Beach - Highway 101 - Land
 
 
X
 
 
 
 
 
X
 
 
Lloyd District Portfolio - Land
 
 
X
 
 
 
 
 
X
 
 
Tenant Improvements and Incentives: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators, new entrances, etc.) which are required to make the space leasable. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

Fourth Quarter 2016 Supplemental Information
                               Page 38