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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT

Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
July 31, 2018
_________________________
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))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02
Results of Operations and Financial Condition.

On July 31, 2018, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending June 30, 2018. Also on July 31, 2018, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter ending June 30, 2018. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

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


Item 7.01
Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ending June 30, 2018 and made available on its website certain supplement information relating thereto.

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


Item 9.01
Financial Statements and Exhibits.
(d)    Exhibits:
The following exhibits are filed herewith:
Exhibit Number
 
Exhibit Description
99.1**
 
Press release issued by American Assets Trust, Inc. on July 31, 2018.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2018.
_____________________
** Furnished herewith

2


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
American Assets Trust, Inc.
 
By:
/s/ Robert F. Barton
 
Robert F. Barton
Executive Vice President, CFO
July 31, 2018
 
 

3



EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
99.2
 


4
Exhibit


https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg

American Assets Trust, Inc. Reports Second Quarter 2018 Financial Results

Net income available to common stockholders of $3.1 million and $2.6 million for the three and six months ended June 30, 2018, respectively, or $0.07 and $0.06 per diluted share, respectively
Funds From Operations per diluted share increased 18% and 16% year-over-year for the three and six months ended June 30, 2018, respectively
Same-store cash NOI increased 7% and 6% year-over-year for the three and six months ended June 30, 2018, respectively

SAN DIEGO, California - 7/31/18 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its second quarter ended June 30, 2018.

Second Quarter Highlights
•
Net income available to common stockholders of $3.1 million and $2.6 million for the three and six months ended June 30, 2018, respectively, or $0.07 and $0.06 per diluted share, respectively
•
Funds From Operations increased 18% and 16% year-over-year to $0.58 and $1.09 for the three and six months ended June 30, 2018, respectively, compared to the same periods in 2017
•
Same-store cash NOI increased 7% and 6% year-over-year for the three and six months ended June 30, 2018, respectively, compared to the same periods in 2017
•
Increased 2018 annual guidance to a range of $2.05 to $2.10 of FFO per diluted share
•
Leased approximately 113,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 29% and 17%, respectively, during the three months ended June 30, 2018
•
Leased approximately 66,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 14% and 1%, respectively, during the three months ended June 30, 2018

Financial Results
Net income attributable to common stockholders was $3.1 million, or $0.07 per basic and diluted share for the three months ended June 30, 2018 compared to net income of $5.5 million, or $0.12 per basic and diluted share for the three months ended June 30, 2017. For the six months ended June 30, 2018, net income attributable to common stockholders was $2.6 million, or $0.06 per basic and diluted share compared to $12.9 million, or $0.28 per basic and diluted share for the six months ended June 30, 2017. The year-over-year decrease is due to an increase in depreciation expense at Waikele Center attributed to the redevelopment of the Kmart space.

During the second quarter of 2018, the company generated funds from operations (“FFO”) for common stockholders of $37.2 million, or $0.58 per diluted share, compared to $31.7 million, or $0.49 per diluted share, for the second quarter of 2017. For the six months ended June 30, 2018, the company generated FFO for common stockholders of $69.7 million, or $1.09 per diluted share, compared to $59.9 million, or $0.94 per diluted share, for the six months ended June 30, 2017. The increase in FFO from the corresponding periods in 2017 was primarily due to the acquisitions of the Pacific Ridge Apartments on April 28, 2017, the acquisition of Gateway Marketplace on July 6, 2017, and increase in lease termination fees at Lloyd District Portfolio and Torrey Point. The space related to the Lloyd District Portfolio lease termination fee has been subsequently re-leased at a higher rent which commences in the first quarter of 2019. For the three months ended June 30, 2018, FFO includes approximately $3.7 million of lease termination fees or approximately $0.06 of FFO per diluted share.

Additionally, subsequent to quarter end, the company signed a lease with Safeway, Inc., for approximately 50,000 square feet in the former Sports Authority space at Waikele Center.


1


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

Leasing
The portfolio leased status as of the end of the indicated quarter was as follows:
 
June 30, 2018
March 31, 2018
June 30, 2017
Total Portfolio
 
 
 
Retail
96.7%
96.6%
96.8%
Office
93.8%
94.6%
88.7%
Multifamily (2)
93.9%
92.7%
92.6%
Mixed-Use:
 
 
 
Retail
95.9%
96.9%
95.7%
Hotel
94.0%
94.3%
91.3%
 
 
 
 
Same-Store Portfolio
 
 
Retail (1)
97.9%
97.8%
98.1%
Office
93.8%
94.6%
92.9%
Multifamily (2)(3)
95.9%
92.7%
92.0%
Mixed-Use:
 
 
 
Retail
95.9%
96.9%
95.7%
Hotel
94.0%
94.3%
91.3%
(1) Same-store retail leased percentages includes the Forever 21 building at Del Monte Center which we acquired on September 1, 2017 after previously owning the underlying land. Same-store retail leased percentages exclude Gateway Marketplace, which was acquired on July 6, 2017, and Waikele Center, due to significant redevelopment activity.
(2) Excluding the 21 off-line units associated with the Loma Palisades repositioning, total multifamily leased percentage was 93.5% at June 30, 2017, and same-store multifamily leased percentage was 93.3% at June 30, 2017.
(3) Same-store multifamily leased percentages excludes the Pacific Ridge Apartments, which was acquired on April 28, 2017.

During the second quarter of 2018, the company signed 43 leases for approximately 231,200 square feet of retail and office space, as well as 500 multifamily apartment leases. Renewals accounted for 73% of the comparable retail leases, 87% of the comparable office leases and 42% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the second quarter 2018 and trailing four quarters ended June 30, 2018, 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.
Straight-Line Basis % Change Over Prior Rent
Retail
Q2 2018
15
66,000
 
1.3%
 
$39.54
$39.05
 
14.1%
 
Last 4 Quarters
59
179,000
 
6.3%
 
$45.65
$42.93
 
19.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
Q2 2018
15
113,000
 
16.5%
 
$43.18
$37.06
 
28.8%
 
Last 4 Quarters
49
409,000
 
12.4%
 
$55.01
$48.92
 
26.8%
 

Multifamily
The average monthly base rent per leased unit for same-store properties for the second quarter of 2018 was $1,784 compared to an average monthly base rent per leased unit of $1,749 for the second quarter of 2017, an increase of approximately 2%.






2


Same-Store Cash Net Operating Income
For the three and six months ended June 30, 2018, same-store cash NOI increased 6.8% and 5.9%, respectively, compared to the three and six months ended June 30, 2017. The same-store cash NOI by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Year Ended (1)
 
 
 
 
June 30,
 
 
 
 
June 30,
 
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
14,893

 
$
14,163

 
5.2

%
 
$
29,495

 
$
28,047

 
5.2

%
Office
20,461

 
18,114

 
13.0

 
 
38,688

 
35,745

 
8.2

 
Multifamily
5,037

 
5,090

 
(1.0
)
 
 
9,864

 
9,822

 
0.4

 
Mixed-Use
5,867

 
5,957

 
(1.5
)
 
 
11,942

 
11,330

 
5.4

 
Same-store Cash NOI (2)
$
46,258

 
$
43,324

 
6.8

%
 
$
89,989

 
$
84,944

 
5.9

%

(1)
Same-store portfolio includes the Forever 21 building at Del Monte Center which we acquired on September 1, 2017 after previously owning the underlying land.  Same-store portfolio excludes (i) the Pacific Ridge Apartments, which was acquired on April 28, 2017; (ii) Gateway Marketplace, which was acquired on July 6, 2017; (iii) Waikele Center due to significant redevelopment activity and (iv) land held for development.
(2)
Excluding lease termination fees, for the three and six months ended June 30, 2018, same-store cash NOI would be 1.1% and 2.7%, respectively.

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

Balance Sheet and Liquidity
At June 30, 2018, the company had gross real estate assets of $2.6 billion and liquidity of $379.3 million, comprised of cash and cash equivalents of $51.3 million and $328.0 million of availability on its line of credit.

Dividends
The company declared dividends on its shares of common stock of $0.27 per share for the second quarter of 2018. The dividends were paid on June 28, 2018.

In addition, the company has declared a dividend on its common stock of $0.27 per share for the third quarter of 2018. The dividend will be paid on September 27, 2018 to stockholders of record on September 13, 2018.

Guidance
The company increased its guidance range for full year 2018 FFO per diluted share of $2.05 to $2.10 per share from the prior guidance range of $2.01 to $2.09 per share.

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.

Conference Call
The company will hold a conference call to discuss the results for the second quarter of 2018 on Wednesday, August 1, 2018 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 7376169. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, August 1, 2018 through Wednesday, August 8, 2018. To access the replay, dial 1-855-859-2056 and use the pass code 7376169. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.

Supplemental Information
Supplemental financial information regarding the company's second quarter 2018 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.

3


Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
June 30, 2018
 
December 31, 2017
Assets
(unaudited)
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,543,142

 
$
2,536,474

Construction in progress
 
76,502

 
 
68,272

Held for development
 
9,392

 
 
9,392

 
 
2,629,036

 
 
2,614,138

Accumulated depreciation
 
(595,042
)
 
 
(537,431
)
Net real estate
 
2,033,994

 
 
2,076,707

Cash and cash equivalents
 
51,326

 
 
82,610

Restricted cash
 
9,385

 
 
9,344

Accounts receivable, net
 
7,118

 
 
9,869

Deferred rent receivables, net
 
39,283

 
 
38,973

Other assets, net
 
44,934

 
 
42,361

Total assets
$
2,186,040

 
$
2,259,864

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
205,155

 
$
279,550

Unsecured notes payable, net
 
1,045,406

 
 
1,045,470

Unsecured line of credit, net
 
20,133

 
 
—

Accounts payable and accrued expenses
 
39,666

 
 
38,069

Security deposits payable
 
8,712

 
 
6,570

Other liabilities and deferred credits, net
 
49,333

 
 
46,061

Total liabilities
 
1,368,405

 
 
1,415,720

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,223,809 and 47,204,588 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
 
473

 
 
473

Additional paid-in capital
 
919,598

 
 
919,066

Accumulated dividends in excess of net income
 
(120,008
)
 
 
(97,280
)
Accumulated other comprehensive income
 
13,734

 
 
11,451

Total American Assets Trust, Inc. stockholders' equity
 
813,797

 
 
833,710

Noncontrolling interests
 
3,838

 
 
10,434

Total equity
 
817,635

 
 
844,144

Total liabilities and equity
$
2,186,040

 
$
2,259,864


4


American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
Rental income
$
76,892

 
$
72,925

 
$
153,093

 
$
142,965

Other property income
8,131

 
4,181

 
12,662

 
7,933

Total revenue
85,023

 
77,106

 
165,755

 
150,898

Expenses:
 
 
 
 
 
 
 
Rental expenses
20,882

 
19,841

 
41,302

 
39,700

Real estate taxes
8,628

 
7,904

 
17,174

 
15,440

General and administrative
5,396

 
5,131

 
10,963

 
10,213

Depreciation and amortization
32,868

 
24,182

 
66,147

 
42,168

Total operating expenses
67,774

 
57,058

 
135,586

 
107,521

Operating income
17,249

 
20,048

 
30,169

 
43,377

Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other income (expense), net
(148
)
 
192

 
61

 
502

Net income
4,413

 
7,588

 
3,722

 
17,896

Net income attributable to restricted shares
(216
)
 
(61
)
 
(144
)
 
(121
)
Net income attributable to unitholders in the Operating Partnership
(1,125
)
 
(2,008
)
 
(959
)
 
(4,869
)
Net income attributable to American Assets Trust, Inc. stockholders
$
3,072

 
$
5,519

 
$
2,619

 
$
12,906

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.07

 
$
0.12

 
$
0.06

 
$
0.28

Weighted average shares of common stock outstanding - basic
46,939,449

 
46,871,377

 
46,937,645

 
46,524,510

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.07

 
$
0.12

 
$
0.06

 
$
0.28

Weighted average shares of common stock outstanding - diluted
64,132,520

 
64,089,081

 
64,131,665

 
64,075,919

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.27

 
$
0.26

 
$
0.54

 
$
0.52

 
 
 
 
 
 
 
 


5


Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2018
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
4,413

 
$
3,722

Depreciation and amortization of real estate assets
 
32,868

 
 
66,147

FFO, as defined by NAREIT
$
37,281

 
$
69,869

Less: Nonforfeitable dividends on incentive stock awards
 
(70
)
 
 
(141
)
FFO attributable to common stock and units
$
37,211

 
$
69,728

FFO per diluted share/unit
$
0.58

 
$
1.09

Weighted average number of common shares and units, diluted
 
64,132,485

 
 
64,131,519


Reconciliation of Same-Store Cash NOI to Net Income
The company's reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited):
 
Three Months Ended (1)
 
Six Months Ended (1)
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Same-store cash NOI
$
46,258

 
$
43,324

 
$
89,989

 
$
84,944

Non-same-store cash NOI
8,189

 
5,684

 
15,095

 
9,351

Tenant improvement reimbursements (2)
3,090

 
120

 
3,957

 
174

Cash NOI
$
57,537

 
$
49,128

 
$
109,041

 
$
94,469

Non-cash revenue and other operating expenses (3)
(2,024
)
 
233

 
(1,762
)
 
1,289

General and administrative
(5,396
)
 
(5,131
)
 
(10,963
)
 
(10,213
)
Depreciation and amortization
(32,868
)
 
(24,182
)
 
(66,147
)
 
(42,168
)
Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other income, net
(148
)
 
192

 
61

 
502

Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

 
 
 
 
 
 
 
 
Number of properties included in same-store analysis
23
 
22
 
23
 
21
(1)
Same-store portfolio includes the Forever 21 building at Del Monte Center which we acquired on September 1, 2017 after previously owning the underlying land. Same-store portfolio excludes (i) the Pacific Ridge Apartments, which was acquired on April 28, 2017; (ii) Gateway Marketplace, which was acquired on July 6 2017; (iii) Waikele Center, due to significant redevelopment activity; and (iv) land held for development.
(2)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
(3)
Represents adjustments related to 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; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other 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.
 
Reported results are preliminary and not final until the filing of the company's Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.


6


Use of Non-GAAP Information
Funds from Operations
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 (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.

Cash Net Operating Income
The company uses cash net operating income ("NOI") internally to evaluate and compare the operating performance of the company's properties. The company believes cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP.

Cash NOI, is a non-GAAP financial measure of performance. The company defines cash 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), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company's cash NOI may not be comparable to the cash NOIs of other REITs.


7


About American Assets Trust, Inc.
American Assets Trust, Inc. (the “company”) is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. The company 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, Texas and Hawaii.  The company's retail portfolio comprises approximately 3.2 million rentable square feet, and its office portfolio comprises approximately 2.6 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 2,112 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

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

Source: American Assets Trust, Inc.

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


8
Exhibit
 
 
 
SECOND QUARTER 2018
 
Supplemental Information
 
 


https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-coverpicture2018q2.jpg


 
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 
Investor and Media Contact
American Assets Trust, Inc.
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607

 
 
 
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-map2018q2.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
Office
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,323,551

 
729,310

 
1,455

(1)
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,308

 
—

 
—

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
673,572

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
588,970

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Portland
 
44,153

 
819,841

 
657

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
—

 
495,800

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,214,710

 
2,561,936

 
2,112

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Square Feet
 
%
Note: Circled areas represent all markets in which American Assets Trust, Inc. currently owns and operates its real estate properties. 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
 
3.2

million
 
55%
 
Office
 
2.6

million
 
45%
Data is as of June 30, 2018.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Second Quarter 2018 Supplemental Information
                               Page 2
 
 
INDEX
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

 
SECOND QUARTER 2018 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Operations
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
Corporate Guidance
 
Same-Store Net Operating Income (NOI)
 
Same-Store Cash NOI Comparison excluding Redevelopment
 
Same-Store Cash NOI Comparison with Redevelopment
 
Cash NOI By Region
 
Cash NOI Breakdown
 
Property Revenue and Operating Expenses
 
Segment Capital Expenditures
 
Summary of Outstanding Debt
 
Market Capitalization
 
Summary of Development Opportunities
2.
PORTFOLIO DATA
 
 
Property Report
 
Retail Leasing Summary
 
Office Leasing Summary
 
Multifamily Leasing Summary
 
Mixed-Use Leasing Summary
 
Lease Expirations
 
Portfolio Leased Statistics
 
Top Tenants - Retail
 
Top Tenants - Office
3.
APPENDIX
 
 
Glossary of Terms
This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

Second Quarter 2018 Supplemental Information
                               Page 3
 
 
 
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 






FINANCIAL HIGHLIGHTS





Second Quarter 2018 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Amounts in thousands, except shares and per share data)
June 30, 2018
 
December 31, 2017
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,543,142

 
$
2,536,474

Construction in progress
76,502

 
68,272

Held for development
9,392

 
9,392

 
2,629,036

 
2,614,138

Accumulated depreciation
(595,042
)
 
(537,431
)
Net real estate
2,033,994

 
2,076,707

Cash and cash equivalents
51,326

 
82,610

Restricted cash
9,385

 
9,344

Accounts receivable, net
7,118

 
9,869

Deferred rent receivable, net
39,283

 
38,973

Other assets, net
44,934

 
42,361

TOTAL ASSETS
$
2,186,040

 
$
2,259,864

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
205,155

 
$
279,550

Unsecured notes payable, net
1,045,406

 
1,045,470

Unsecured line of credit, net
20,133

 
—

Accounts payable and accrued expenses
39,666

 
38,069

Security deposits payable
8,712

 
6,570

Other liabilities and deferred credits, net
49,333

 
46,061

Total liabilities
1,368,405

 
1,415,720

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,223,809 and 47,204,588 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
473

 
473

Additional paid in capital
919,598

 
919,066

Accumulated dividends in excess of net loss/income
(120,008
)
 
(97,280
)
Accumulated other comprehensive income
13,734

 
11,451

Total American Assets Trust, Inc. stockholders' equity
813,797

 
833,710

Noncontrolling interests
3,838

 
10,434

Total equity
817,635

 
844,144

TOTAL LIABILITIES AND EQUITY
$
2,186,040

 
$
2,259,864


Second Quarter 2018 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
REVENUE:
 
 
 
 
 
 
 
Rental income
$
76,892

 
$
72,925

 
$
153,093

 
$
142,965

Other property income
8,131

 
4,181

 
12,662

 
7,933

Total revenue
85,023

 
77,106

 
165,755

 
150,898

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
20,882

 
19,841

 
41,302

 
39,700

Real estate taxes
8,628

 
7,904

 
17,174

 
15,440

General and administrative
5,396

 
5,131

 
10,963

 
10,213

Depreciation and amortization
32,868

 
24,182

 
66,147

 
42,168

Total operating expenses
67,774

 
57,058

 
135,586

 
107,521

OPERATING INCOME
17,249

 
20,048

 
30,169

 
43,377

Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other (expense) income, net
(148
)
 
192

 
61

 
502

NET INCOME
4,413

 
7,588

 
3,722

 
17,896

Net income attributable to restricted shares
(216
)
 
(61
)
 
(144
)
 
(121
)
Net income attributable to unitholders in the Operating Partnership
(1,125
)
 
(2,008
)
 
(959
)
 
(4,869
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
3,072

 
$
5,519

 
$
2,619

 
$
12,906

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income from operations attributable to common stockholders per share
$
0.07

 
$
0.12

 
$
0.06

 
$
0.28

Weighted average shares of common stock outstanding - basic
46,939,449

 
46,871,377

 
46,937,645

 
46,524,510

Diluted income from continuing operations attributable to common stockholders per share
$
0.07

 
$
0.12

 
$
0.06

 
$
0.28

Weighted average shares of common stock outstanding - diluted
64,132,520

 
64,089,081

 
64,131,665

 
64,075,919


Second Quarter 2018 Supplemental Information
                               Page 6
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

Depreciation and amortization of real estate assets
32,868

 
24,182

 
66,147

 
42,168

FFO, as defined by NAREIT
37,281

 
31,770

 
69,869

 
60,064

Less: Nonforfeitable dividends on incentive stock awards
(70
)
 
(59
)
 
(141
)
 
(118
)
FFO attributable to common stock and common units
$
37,211

 
$
31,711

 
$
69,728

 
$
59,946

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.58

 
$
0.49

 
$
1.09

 
$
0.94

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
64,132,485

 
64,089,324

 
64,131,519

 
64,076,262

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
29,697

 
$
23,070

 
$
52,452

 
$
48,695

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
17,388

 
$
16,725

 
$
34,776

 
$
33,448

Dividends declared and paid per share/unit
$
0.27

 
$
0.26

 
$
0.54

 
$
0.52


Second Quarter 2018 Supplemental Information
                               Page 7
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
37,281

 
$
31,770

 
$
69,869

 
$
60,064

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(10,625
)
 
(9,511
)
 
(21,298
)
 
(14,420
)
Net effect of straight-line rents (3)
2,749

 
628

 
3,203

 
446

Amortization of net above (below) market rents (4)
(725
)
 
(858
)
 
(1,439
)
 
(1,709
)
Net effect of other lease assets (5)
—

 
(3
)
 
(2
)
 
974

Amortization of debt issuance costs and debt fair value adjustment
360

 
464

 
806

 
2,180

Non-cash compensation expense
727

 
639

 
1,454

 
1,278

Nonforfeitable dividends on incentive stock awards
(70
)
 
(59
)
 
(141
)
 
(118
)
FAD
$
29,697

 
$
23,070

 
$
52,452

 
$
48,695

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
5,961

 
$
4,709

 
$
11,748

 
$
7,384

Maintenance capital expenditures
4,664

 
4,802

 
9,550

 
7,036

 
$
10,625

 
$
9,511

 
$
21,298

 
$
14,420


Notes:
(1)
See Glossary of Terms.
(2)
For the three and six months ended June 30, 2018 and 2017, 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 at the Annex at the Landmark at One Market and retail space at Waikiki Beach Walk - Retail.

Second Quarter 2018 Supplemental Information
                               Page 8
 
 
CORPORATE GUIDANCE
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior 2018 Guidance Range (1) (2)
 
Revised 2018 Guidance Range (2)
Funds from Operations (FFO):
 
 
 
 
 
 
 
 
Net income
 
$
42,497

 
$
47,669

 
$
9,923

 
$
13,156

Depreciation and amortization of real estate assets
 
87,703

 
87,703

 
122,883

 
122,883

FFO, as defined by NAREIT
 
130,200

 
135,372

 
132,806

 
136,039

Less: Nonforfeitable dividends on incentive stock awards
 
(250
)
 
(250
)
 
(270
)
 
(270
)
FFO attributable to common stock and units
 
$
129,950

 
$
135,122

 
$
132,536

 
$
135,769

Weighted average number of common shares and units, diluted
 
64,651,844

 
64,651,844

 
64,651,844

 
64,651,844

FFO per diluted share, updated
 
$
2.01

 
$
2.09

 
$
2.05

 
$
2.10

 
 
 
 
 
 
 
 
 

Notes:
(1)
Prior 2018 Guidance Range as reported in the Company's Third Quarter 2017 Supplemental Information.
(2)
The Company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments.

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


Second Quarter 2018 Supplemental Information
                               Page 9
 
 
SAME-STORE NET OPERATING INCOME (NOI)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
20,849

 
$
29,664

 
$
8,421

 
$
14,934

 
$
73,868

Non-same store (1)
5,566

 
1,388

 
4,201

 
—

 
11,155

Total
26,415

 
31,052

 
12,622

 
14,934

 
85,023

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
5,580

 
8,182

 
3,471

 
9,010

 
26,243

Non-same store (1)
1,558

 
160

 
1,549

 
—

 
3,267

Total
7,138

 
8,342

 
5,020

 
9,010

 
29,510

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
15,269

 
21,482

 
4,950

 
5,924

 
47,625

Non-same store (1)
4,008

 
1,228

 
2,652

 
—

 
7,888

Total
$
19,277

 
$
22,710

 
$
7,602

 
$
5,924

 
$
55,513

Same-store NOI
$
15,269

 
$
21,482

 
$
4,950

 
$
5,924

 
$
47,625

Net effect of straight-line rents (2)
(35
)
 
2,432

 
87

 
(27
)
 
2,457

Amortization of net above (below) market rents (3)
(323
)
 
(374
)
 
—

 
(30
)
 
(727
)
Net effect of other lease intangibles (4)
—

 
(7
)
 
—

 
—

 
(7
)
Tenant improvement reimbursements (5)
(18
)
 
(3,072
)
 
—

 
—

 
(3,090
)
Same-store cash NOI (5)
$
14,893

 
$
20,461

 
$
5,037

 
$
5,867

 
$
46,258


Notes:
(1)
Same-store and non-same store classifications are determined based on properties held on June 30, 2018 and 2017. 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 and straight-line rent expense for our leases at the Annex at the Landmark at One Market.
(5)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.

NOI and same-store cash NOI are non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.


Second Quarter 2018 Supplemental Information
                               Page 10
 
 
SAME-STORE NET OPERATING INCOME (NOI) (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Amounts in thousands)
Six Months Ended June 30, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
41,145

 
$
56,390

 
$
16,710

 
$
30,315

 
$
144,560

Non-same store (1)
11,427

 
1,432

 
8,336

 
—

 
21,195

Total
52,572

 
57,822

 
25,046

 
30,315

 
165,755

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
10,881

 
16,006

 
6,923

 
18,155

 
51,965

Non-same store (1)
3,068

 
349

 
3,094

 
—

 
6,511

Total
13,949

 
16,355

 
10,017

 
18,155

 
58,476

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
30,264

 
40,384

 
9,787

 
12,160

 
92,595

Non-same store (1)
8,359

 
1,083

 
5,242

 
—

 
14,684

Total
$
38,623

 
$
41,467

 
$
15,029

 
$
12,160

 
$
107,279

Same-store NOI
$
30,264

 
$
40,384

 
$
9,787

 
$
12,160

 
$
92,595

Net effect of straight-line rents (2)
(73
)
 
3,023

 
77

 
(158
)
 
2,869

Amortization of net above (below) market rents (3)
(668
)
 
(775
)
 
—

 
(60
)
 
(1,503
)
Net effect of other lease assets (4)
—

 
(15
)
 
—

 
—

 
(15
)
Tenant improvement reimbursements (5)
(28
)
 
(3,929
)
 
—

 
—

 
(3,957
)
Same-store cash NOI (5) 
$
29,495

 
$
38,688

 
$
9,864

 
$
11,942

 
$
89,989


Notes:
(1)
Same-store and non-same store are determined based on properties held on June 30, 2018 and 2017. 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 and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
(5)
Tenant improvement reimbursements are excluded from Same-Store Cash NOI to provide a more accurate measure of operating performance.

NOI and same-store cash NOI are non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.




Second Quarter 2018 Supplemental Information
                               Page 11
 
 
SAME-STORE CASH NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
14,893

 
$
14,163

 
5.2
 %
 
$
29,495

 
$
28,047

 
5.2
%
Office
20,461

 
18,114

 
13.0

 
38,688

 
35,745

 
8.2

Multifamily
5,037

 
5,090

 
(1.0
)
 
9,864

 
9,822

 
0.4

Mixed-Use
5,867

 
5,957

 
(1.5
)
 
11,942

 
11,330

 
5.4

Same-store Cash NOI (1)(2)
$
46,258

 
$
43,324

 
6.8
 %
 
$
89,989

 
$
84,944

 
5.9
%

Notes:
(1)
Excluding lease termination fees, for the three and six months ended June 30, 2018, same-store cash NOI would be 1.1% and 2.7%, respectively.
(2)
See Glossary of Terms.


Same-store cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI to net income is included in the Glossary of Terms.


Second Quarter 2018 Supplemental Information
                               Page 12
 
 
SAME-STORE CASH NOI COMPARISON WITH REDEVELOPMENT(1)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
18,692

 
$
18,143

 
3.0
 %
 
$
37,154

 
$
35,917

 
3.4
%
Office
20,345

 
17,962

 
13.3

 
38,430

 
35,388

 
8.6

Multifamily
5,037

 
5,090

 
(1.0
)
 
9,864

 
9,822

 
0.4

Mixed-Use
5,867

 
5,957

 
(1.5
)
 
11,942

 
11,330

 
5.4

Same-store Cash NOI with Redevelopment (1)(2)
$
49,941

 
$
47,152

 
5.9
 %
 
$
97,390

 
$
92,457

 
5.3
%

Notes:
(1)
Excluding lease termination fees, for the three and six months ended June 30, 2018, same-store cash NOI with redevelopment would be 0.7% and 2.4%, respectively.
(2)
See Glossary of Terms.

Same-store cash NOI with redevelopment is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI with redevelopment to net income is included in the Glossary of Terms.





Second Quarter 2018 Supplemental Information
                               Page 13
 
 
CASH NOI BY REGION
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Cash Basis:
 
 
 
 
 
 
 
 
 
Southern California
8,246

 
5,891

 
6,099

 
—

 
20,236

Northern California
2,932

 
5,667

 
—

 
—

 
8,599

Hawaii
4,279

 
—

 
—

 
5,867

 
10,146

Oregon
264

 
9,910

 
1,654

 
—

 
11,828

Texas
3,434

 
—

 
—

 
—

 
3,434

Washington
—

 
3,294

 
—

 
—

 
3,294

Total Cash NOI
$
19,155

 
$
24,762

 
$
7,753

 
$
5,867

 
$
57,537



Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.



Second Quarter 2018 Supplemental Information
                               Page 14
 
 
CASH NOI BREAKDOWN
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

Three Months Ended June 30, 2018
Cash NOI Breakdown
 
Portfolio Diversification by Geographic Region
    
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-chart-de9a71e1e0c15acd862.jpg    https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-chart-d2230d351b445d50906.jpg



 

Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.


Second Quarter 2018 Supplemental Information
                               Page 15
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
 
 
 
 
Property
 
Billed Expense
 
Operating
 
Rental
 
Cash
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
 
Adjustments (5)
 
NOI (6)
Retail Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
933

 
$
24

 
$
211

 
$
(195
)
 
$
—

 
$
973

Carmel Mountain Plaza
 
3,188

 
41

 
799

 
(869
)
 
(9
)
 
3,150

South Bay Marketplace
 
605

 
9

 
171

 
(189
)
 
11

 
607

Gateway Marketplace
 
610

 
2

 
95

 
(238
)
 
—

 
469

Lomas Santa Fe Plaza
 
1,495

 
9

 
308

 
(377
)
 
—

 
1,435

Solana Beach Towne Centre
 
1,507

 
150

 
498

 
(519
)
 
—

 
1,636

Del Monte Center
 
2,717

 
325

 
837

 
(1,248
)
 
2

 
2,633

Geary Marketplace
 
307

 
—

 
155

 
(163
)
 
—

 
299

The Shops at Kalakaua
 
491

 
25

 
45

 
(79
)
 
—

 
482

Waikele Center
 
3,986

 
296

 
1,091

 
(1,576
)
 
—

 
3,797

Alamo Quarry Market
 
3,606

 
36

 
1,647

 
(1,855
)
 
—

 
3,434

Hassalo on Eighth - Retail
 
261

 
44

 
48

 
(89
)
 
—

 
264

Subtotal Retail Portfolio
 
$
19,706

 
$
961

 
$
5,905

 
$
(7,397
)
 
$
4

 
$
19,179

Office Portfolio
 
 
 
 
 
 
 
 
 
 
 
—

Torrey Reserve Campus (7)
 
$
4,730

 
$
46

 
$
275

 
$
(1,404
)
 
$
(329
)
 
$
3,318

Solana Beach Corporate Centre
 
1,745

 
1

 
44

 
(528
)
 
(33
)
 
1,229

The Landmark at One Market
 
6,640

 
41

 
309

 
(2,226
)
 
—

 
4,764

One Beach Street
 
1,067

 
3

 
137

 
(304
)
 
—

 
903

First & Main
 
2,789

 
193

 
461

 
(917
)
 
—

 
2,526

Lloyd District Portfolio (7)
 
3,026

 
2,904

 
81

 
(1,093
)
 
2,581

 
7,499

City Center Bellevue
 
3,818

 
699

 
331

 
(1,440
)
 
(114
)
 
3,294

Subtotal Office Portfolio
 
$
23,815

 
$
3,887

 
$
1,638

 
$
(7,912
)
 
$
2,105

 
$
23,533


Second Quarter 2018 Supplemental Information
                               Page 16
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
 
 
 
 
Property
 
Billed Expense
 
Operating
 
Rental
 
Cash
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
 
Adjustments (5)
 
NOI (6)
Multifamily Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Loma Palisades
 
$
3,248

 
$
203

 
$
—

 
$
(1,226
)
 
$
(31
)
 
$
2,194

Imperial Beach Gardens
 
904

 
70

 
—

 
(324
)
 
(1
)
 
649

Mariner's Point
 
437

 
31

 
—

 
(151
)
 
(1
)
 
316

Santa Fe Park RV Resort
 
353

 
22

 
—

 
(152
)
 
—

 
223

Pacific Ridge Apartments
 
4,100

 
212

 
—

 
(1,548
)
 
(47
)
 
2,717

Hassalo on Eighth - Multifamily
 
3,018

 
363

 
—

 
(1,619
)
 
(108
)
 
1,654

Subtotal Multifamily Portfolio
 
$
12,060

 
$
901

 
$
—

 
$
(5,020
)
 
$
(188
)
 
$
7,753

Mixed-Use Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,686

 
$
1,009

 
$
949

 
$
(1,713
)
 
$
—

 
$
2,931

Waikiki Beach Walk - Embassy Suites™
 
9,530

 
706

 
—

 
(7,300
)
 
—

 
2,936

Subtotal Mixed-Use Portfolio
 
$
12,216

 
$
1,715

 
$
949

 
$
(9,013
)
 
$
—

 
$
5,867

Subtotal Development Properties
 
$
10

 
$
1,386

 
$
—

 
$
(191
)
 
$
—

 
$
1,205

Total
 
$
67,807

 
$
8,850

 
$
8,492

 
$
(29,533
)
 
$
1,921

 
$
57,537

   
Cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of total cash NOI to net income is included in the Glossary of Terms.
 
Notes:
(1)
Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended June 30, 2018 (before abatements and tenant improvement reimbursements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our retail and office portfolio were approximately $14 and $968, respectively, for the three months ended June 30, 2018. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended June 30, 2018. 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 $188 of abatements for our multifamily portfolio for the three months ended June 30, 2018. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended June 30, 2018. Total tenant improvement reimbursements for our retail and office portfolio were approximately $18 and $3,072, respectively, for the three months ended June 30, 2018. There were no tenant improvement reimbursements for the retail portion of our mixed-use portfolio for the three months ended June 30, 2018.
(2)
Represents additional property-related income for the three months ended June 30, 2018, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
(3)
Represents billed tenant expense reimbursements for the three months ended June 30, 2018.
(4)
Represents property operating expenses for the three months ended June 30, 2018. Property operating expenses includes all rental expenses, except non cash rent expense and the provision for bad debt recorded for deferred rent receivables.
(5)
Represents various rental adjustments related to base rent (abatements and tenant improvement reimbursements).
(6)
See Glossary of Terms.
(7)
Base rent shown includes amounts related to American Assets Trust, L.P.'s corporate 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 $300 for the three months ended June 30, 2018.

Second Quarter 2018 Supplemental Information
                               Page 17
 
 
SEGMENT CAPITAL EXPENDITURES
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

 
(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2018
 
Segment
 
Tenant Improvements and Leasing Commissions
 
Maintenance Capital Expenditures
 
Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures
 
Redevelopment and Expansions
 
New Development
 
Total Capital Expenditures
 
Retail Portfolio
 
$
1,017

 
$
2,063

 
$
3,080

 
$
148

 
$
—

 
$
3,228

 
Office Portfolio
 
4,814

 
1,427

 
6,241

 
687

 
585

 
7,513

 
Multifamily Portfolio
 
—

 
875

 
875

 
—

 
—

 
875

 
Mixed-Use Portfolio
 
130

 
299

 
429

 
—

 
—

 
429

 
Total
 
$
5,961

 
$
4,664

 
$
10,625

 
$
835

 
$
585

 
$
12,045

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
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
 
$
2,123

 
$
3,140

 
$
5,263

 
$
194

 
$
—

 
$
5,457

 
Office Portfolio
 
9,426

 
3,542

 
12,968

 
775

 
1,143

 
14,886

 
Multifamily Portfolio
 
—

 
2,484

 
2,484

 
—

 
—

 
2,484

 
Mixed-Use Portfolio
 
199

 
384

 
583

 
—

 
—

 
583

 
Total
 
$
11,748

 
$
9,550

 
$
21,298

 
$
969

 
$
1,143

 
$
23,410

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Second Quarter 2018 Supplemental Information
                               Page 18
 
 
SUMMARY OF OUTSTANDING DEBT
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
June 30, 2018
 
Interest Rate
 
Service (1)
 
Maturity Date
 
Maturity
One Beach Street (2)
 
21,900

 
3.94
%
 
22,629

 
April 1, 2019
 
21,900

Torrey Reserve - North Court
 
19,825

 
7.22
%
 
21,243

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII
 
6,700

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II
 
10,613

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre
 
35,375

 
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 (3)
 
$
205,413

 
4.80
%
 
$
52,615

 
 
 
$
202,849

Term Loan A (4)
 
$
100,000

 
3.08
%
 
$
101,901

 
January 9, 2019
 
$
100,000

Series A Notes (5)
 
150,000

 
3.88
%
 
6,060

 
October 31, 2021
 
150,000

Term Loan B (6)
 
100,000

 
2.75
%
 
2,749

 
March 1, 2023
 
100,000

Term Loan C (7)
 
50,000

 
2.74
%
 
1,371

 
March 1, 2023
 
50,000

Series F Notes (8)
 
100,000

 
3.85
%
 
3,780

 
July 19, 2024
 
100,000

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

Series D Notes (9)
 
250,000

 
3.87
%
 
10,725

 
March 1, 2027
 
250,000

Series E Notes (10)
 
100,000

 
4.18
%
 
4,240

 
May 23, 2029
 
100,000

Unsecured Notes Payable / Weighted Average (11)
 
$
1,050,000

 
3.78
%
 
$
139,776

 
 
 
$
1,050,000

Unsecured Line of Credit (12)
 
$
22,000

 
3.08
%
 
 
 
 
 
 
Notes:
(1)
Includes interest and principal payments due over the next twelve months.
(2)
Interest only.
(3)
The Secured Notes Payable total does not include debt issuance costs, net of $0.3 million.
(4)
Term Loan A has a maturity date of January 9, 2019. Term Loan A accrues interest at a variable rate, which we fixed as part of an interest rate swap for an effective interest rate of 3.08%, subject to adjustments based on our consolidated leverage ratio.
(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 effective interest rate for the Series A Notes is approximately 3.88% per annum, through maturity.
(6)
Term Loan B matures on March 1, 2023. Term Loan B accrues interest at a variable rate, which we fixed as part of an interest rate swap for an all-in interest rate of 2.75%, subject to adjustments based on our consolidated leverage ratio.
(7)
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 2.74%, subject to adjustments based on our consolidated leverage ratio.
(8)
$100 million of 3.78% Senior Guaranteed Notes, Series F, due July 19, 2024. Net of the settlement of the treasury lock contract, the effective interest rate for the Series F Notes is approximately 3.85%, through maturity.
(9)
$250 million of 4.29% Senior Guaranteed Notes, Series D, due March 1, 2027. Net of the settlement of the forward-starting interest rate swap, the effective interest rate for the Series D Notes is approximately 3.87% per annum, through maturity.
(10)
$100 million of 4.24% Senior Guaranteed Notes, Series E, due May 23, 2029. Net of the settlement of the treasury lock contract, the effective interest rate for the Series E Notes is approximately 4.18%, through maturity.
(11)
The Unsecured Notes Payable total does not include debt issuance costs, net of $4.6 million.
(12)
The unsecured revolving line of credit (the "Revolver Loan") has a capacity of $350 million plus an accordion feature that may allow us to increase the availability thereunder up to an additional $350 million, subject to meeting specified requirements and obtaining additional commitments from lenders. The Revolver Loan matures on January 9, 2022, subject to our option to extend the Revolver Loan up to two times, with each such extension for a six-month period. The Revolver Loan currently accrues interest at LIBOR, plus a spread which ranges from 1.20%-1.70%, based on our consolidated leverage ratio. The Revolver Loan total does not include debt issuance costs, net of $1.9 million.

Second Quarter 2018 Supplemental Information
                               Page 19
 
 
MARKET CAPITALIZATION
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
June 30, 2018
Common shares outstanding
 
47,224

Common units outstanding
 
17,177

Common shares and common units outstanding
 
64,401

Market price per common share
 
$
38.29

Equity market capitalization
 
$
2,465,914

Total debt
 
$
1,277,413

Total market capitalization
 
$
3,743,327

Less: Cash on hand
 
$
(51,326
)
Total enterprise value
 
$
3,692,001

Total unencumbered assets, gross
 
$
2,320,032

 
 
 
Total debt/Total capitalization
 
34.1
%
Total debt/Total enterprise value
 
34.6
%
Net debt/Total enterprise value (1)
 
33.2
%
Total unencumbered assets, gross/Unsecured debt
 
216.8
%
 
 
 
Total debt/Adjusted EBITDA (2)(3)
 
6.4
x
Net debt/Adjusted EBITDA (1)(2)(3)
 
6.1
x
Interest coverage ratio (4)
 
4.0
x
Fixed charge coverage ratio (4)
 
4.0
x
 
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-chart-249ff8bd42ee54a98ac.jpg
Weighted Average Fixed Interest Rate
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
—
%
3.8
%
6.0
%
3.9
%
4.0
%
2.7
%
3.8
%
4.5
%
—
%
3.9
%
—
%
4.2
%
Total Weighed Average Fixed Interest Rate:
3.9%
Weighted Average Term to Maturity:
5.6 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 and Adjusted EBITDA.
(3)
As used here, Adjusted EBITDA represents the actual for the three months ended June 30, 2018 annualized.
(4)
Calculated as Adjusted EBITDA divided by interest on borrowed funds, including capitalized interest and excluding debt fair value adjustments and loan fee amortization.


Second Quarter 2018 Supplemental Information
                               Page 20
 
 
SUMMARY OF DEVELOPMENT OPPORTUNITIES
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.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.
 
 
 
 
 
 
 
 
 
Development Projects
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Project Costs (in thousands) (2)
 
 
 
Start
Date
Completion Date
Estimated Stabilization Date (1)
Rentable Square Feet
Cost Incurred to Date
Total Estimated Investment
Estimated Stabilized
Yield (3)
 
 
Property
Location
Office Property:
 
 
 
 
 
 
 
Torrey Point
San Diego, CA
2015
July 31, 2017
2019
90,000
$38,795
$55,800
6.75% - 7.75%
 
 
 
 
 
 
 
 
 
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)
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 December 22, 2019 for $9.43 million in consideration for a non-refundable $0.9 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.


Second Quarter 2018 Supplemental Information
                               Page 21
 
 
 
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PORTFOLIO DATA





Second Quarter 2018 Supplemental Information
                               Page 22
 
 
PROPERTY REPORT
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As of June 30, 2018
 
 
 
 
 
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

 
93.4%
 
$
3,741,648

 
$51.30
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
98.2
 
12,774,419

 
24.62
 
Sears
 
Dick's Sporting Goods, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
100.0
 
2,420,211

 
18.21
 
 
 
Ross Dress for Less, Grocery Outlet
Gateway Marketplace
 
San Diego, CA
 
1997/2016

 
3

 
127,861

 
98.7
 
2,440,385

 
19.34
 
Hobby Lobby
 
Smart & Final, Aldi
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
209,569

 
97.3
 
5,966,273

 
29.26
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
97.2
 
6,032,913

 
25.16
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
673,572

 
98.6
 
11,515,257

 
17.34
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
100.0
 
1,226,982

 
34.90
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
1,981,378

 
169.77
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
537,637

 
90.7
 
15,598,934

 
31.99
 
Lowe's
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
588,970

 
98.8
 
14,428,799

 
24.80
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Hassalo on Eighth
 
Portland, OR
 
2015

 
3

 
44,153

 
76.6
 
1,070,462

 
31.65
 
 
 
Providence Health & Services, Green Zebra Grocery
Subtotal/Weighted Average Retail Portfolio
 
 
 
107

 
3,214,710

 
96.7%
 
$
79,197,661

 
$25.48
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-2016

 
14

 
516,677

 
84.0%
 
$
19,327,359

 
$44.53
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,633

 
84.9
 
6,970,194

 
38.61
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
26,733,174

 
63.75
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
4,266,762

 
43.71
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
11,171,750

 
31.39
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2015

 
2

 
459,200

 
97.1
 
11,586,854

 
25.99
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
495,800

 
94.8
 
15,545,873

 
33.08
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
24

 
2,561,936

 
93.8%
 
$
95,601,966

 
$39.78
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
131

 
5,776,646

 
95.4%
 
$
174,799,627

 
$31.72
 
 
 
 

Second Quarter 2018 Supplemental Information
                               Page 23
 
 
PROPERTY REPORT (CONTINUED)
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As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
99.3%
 
$
13,423,164

 
$
2,056

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
98.1
 
3,663,048

 
$
1,945

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
97.7
 
1,773,576

 
$
1,719

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

 
126

 
82.8
 
1,825,680

 
$
1,458

 
 
 
 
Pacific Ridge Apartments
 
San Diego, CA
 
2013
 
3

 
533

 
88.2
 
15,842,244

 
$
2,808

 
 
 
 
Hassalo on Eighth - Velomor
 
Portland, OR
 
2015
 
1

 
177

 
94.9
 
3,268,236

 
$
1,621

 
 
 
 
Hassalo on Eighth - Aster Tower
 
Portland, OR
 
2015
 
1

 
337

 
95.6
 
6,449,628

 
$
1,668

 
 
 
 
Hassalo on Eighth - Elwood
 
Portland, OR
 
2015
 
1

 
143

 
93.0
 
2,500,788

 
$
1,567

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
121

 
2,112

 
93.9%
 
$
48,746,364

 
$
2,048

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
95.9
%
 
$
10,610,601

 
$
114.41

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

 
369

 
93.7
%
 
$
302.74

 
$
283.80

 
 
 
 
Notes:
(1)
The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
(2)
Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of June 30, 2018, including leases which may not have commenced as of June 30, 2018. Percentage leased for our multifamily properties includes total units rented as of June 30, 2018.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2018 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2018. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of June 30, 2018.
(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

 
$
102,276

Del Monte Center
 
1
 
212,500

 
$
96,000

Alamo Quarry Market
 
4
 
31,994

 
$
497,776


(8)
This property contains 419,371 net rentable square feet consisting of the Landmark at One Market (375,151 net rentable square feet) as well as a separate long-term leasehold interest in approximately 44,220 net rentable square feet of space located in an adjacent six-story leasehold known as the Annex. We currently lease the Annex from an affiliate of the Paramount Group pursuant to a long-term master lease effective through June 30, 2021, which we have the option to extend until 2031 pursuant to two five-year extension options.
(9)
The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended June 30, 2018, the highest average monthly occupancy rate for this property was 93%, occurring in July 2017. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.
(10)
Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2018, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended June 30, 2018 by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended June 30, 2018 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

Second Quarter 2018 Supplemental Information
                               Page 24
 
 
RETAIL LEASING SUMMARY
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As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
15

 
100%
 
66,415

 
$39.54
 
$39.05
 
$
32,852

 
1.3
 %
 
14.1
 %
 
8.1
 
$
660,600

 
$9.95
1st Quarter 2018
 
19

 
100%
 
43,241

 
$48.67
 
$50.78
 
$
(91,403
)
 
(4.2
)%
 
7.7
 %
 
5.8
 
$
454,375

 
$10.51
4th Quarter 2017
 
14

 
100%
 
44,766

 
$48.33
 
$35.83
 
$
559,608

 
34.9
 %
 
51.8
 %
 
5.6
 
$
342,100

 
$7.64
3rd Quarter 2017
 
11

 
100%
 
24,190

 
$52.06
 
$52.70
 
$
(15,496
)
 
(1.2
)%
 
8.4
 %
 
5.4
 
$
335,000

 
$13.85
Total 12 months
 
59

 
100%
 
178,612

 
$45.65
 
$42.93
 
$
485,561

 
6.3
 %
 
19.5
 %
 
6.6
 
$
1,792,075

 
$10.03
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
4

 
27%
 
7,986

 
$67.30
 
$74.97
 
$
(61,197
)
 
(10.2
)%
 
(4.1
)%
 
8.4
 
$
660,600

 
$82.72
1st Quarter 2018
 
3

 
16%
 
8,077

 
$53.15
 
$67.94
 
$
(119,469
)
 
(21.8
)%
 
(14.8
)%
 
9.3
 
$
377,000

 
$46.68
4th Quarter 2017
 
3

 
21%
 
9,244

 
$37.51
 
$41.09
 
$
(33,096
)
 
(8.7
)%
 
2.5
 %
 
9.6
 
$
287,100

 
$31.06
3rd Quarter 2017
 
1

 
9%
 
4,785

 
$21.91
 
$25.00
 
$
(14,771
)
 
(12.3
)%
 
(2.5
)%
 
10.2
 
$
275,000

 
$57.47
Total 12 months
 
11

 
19%
 
30,092

 
$47.13
 
$54.73
 
$
(228,533
)
 
(13.9
)%
 
(5.9
)%
 
9.3
 
$
1,599,700

 
$53.16
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
11

 
73%
 
58,429

 
$35.75
 
$34.14
 
$
94,049

 
4.7
 %
 
19.9
 %
 
8.1
 
$
—

 
$0.00
1st Quarter 2018
 
16

 
84%
 
35,164

 
$47.64
 
$46.84
 
$
28,066

 
1.7
 %
 
15.5
 %
 
5.0
 
$
77,375

 
$2.20
4th Quarter 2017
 
11

 
79%
 
35,522

 
$51.14
 
$34.46
 
$
592,704

 
48.4
 %
 
67.6
 %
 
4.6
 
$
55,000

 
$1.55
3rd Quarter 2017
 
10

 
91%
 
19,405

 
$59.49
 
$59.53
 
$
(725
)
 
(0.1
)%
 
9.6
 %
 
4.3
 
$
60,000

 
$3.09
Total 12 months
 
48

 
81%
 
148,520

 
$45.35
 
$40.54
 
$
714,094

 
11.9
 %
 
26.7
 %
 
6.0
 
$
192,375

 
$1.30
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
19

 
74,650

 
$37.94
 
7.8
 
$
849,831

 
$11.38
 
 
 
 
 
 
 
 
 
 
1st Quarter 2018
 
22

 
47,468

 
$49.78
 
5.7
 
$
614,375

 
$12.94
 
 
 
 
 
 
 
 
 
 
4th Quarter 2017
 
17

 
53,660

 
$45.58
 
5.2
 
$
537,393

 
$10.01
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2017
 
12

 
24,711

 
$54.61
 
5.5
 
$
365,000

 
$14.77
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
70

 
200,489

 
$44.84
 
6.3
 
$
2,366,599

 
$11.80
 
 
 
 
 
 
 
 
 
 
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.

Second Quarter 2018 Supplemental Information
                               Page 25
 
 
OFFICE LEASING SUMMARY
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As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
15

 
100%
 
113,182

 
$43.18
 
$37.06
 
$
692,640

 
16.5
%
 
28.8
%
 
6.9
 
$
4,839,775

 
$42.76
1st Quarter 2018
 
16

 
100%
 
207,056

 
$64.22
 
$57.52
 
$
1,386,716

 
11.6
%
 
29.8
%
 
7.5
 
$
11,165,819

 
$53.93
4th Quarter 2017
 
5

 
100%
 
20,249

 
$55.87
 
$50.26
 
$
113,671

 
11.2
%
 
21.4
%
 
4.6
 
$
204,298

 
$10.09
3rd Quarter 2017
 
13

 
100%
 
68,920

 
$46.49
 
$42.17
 
$
297,954

 
10.3
%
 
14.5
%
 
5.2
 
$
1,519,653

 
$22.05
Total 12 months
 
49

 
100%
 
409,407

 
$55.01
 
$48.92
 
$
2,490,981

 
12.4
%
 
26.8
%
 
6.8
 
$
17,729,545

 
$43.31
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
2

 
13%
 
38,599

 
$47.58
 
$42.15
 
$
209,915

 
12.9
%
 
30.5
%
 
9.8
 
$
3,225,852

 
$83.57
1st Quarter 2018
 
9

 
56%
 
120,813

 
$54.81
 
$44.95
 
$
1,190,208

 
21.9
%
 
46.6
%
 
9.5
 
$
9,514,872

 
$78.76
4th Quarter 2017
 
2

 
40%
 
5,048

 
$45.00
 
$40.26
 
$
23,950

 
11.8
%
 
24.4
%
 
4.2
 
$
116,240

 
$23.03
3rd Quarter 2017
 
5

 
38%
 
20,253

 
$55.38
 
$47.81
 
$
153,135

 
15.8
%
 
26.0
%
 
7.4
 
$
877,719

 
$43.34
Total 12 months
 
18

 
37%
 
184,713

 
$53.09
 
$44.55
 
$
1,577,208

 
19.2
%
 
40.3
%
 
9.2
 
$
13,734,683

 
$74.36
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
13

 
87%
 
74,583

 
$40.89
 
$34.42
 
$
482,725

 
18.8
%
 
27.9
%
 
5.5
 
$
1,613,923

 
$21.64
1st Quarter 2018
 
7

 
44%
 
86,243

 
$77.40
 
$75.13
 
$
196,508

 
3.0
%
 
16.1
%
 
4.7
 
$
1,650,947

 
$19.14
4th Quarter 2017
 
3

 
60%
 
15,201

 
$59.49
 
$53.58
 
$
89,721

 
11.0
%
 
20.6
%
 
4.7
 
$
88,058

 
$5.79
3rd Quarter 2017
 
8

 
62%
 
48,667

 
$42.79
 
$39.81
 
$
144,819

 
7.5
%
 
8.7
%
 
4.3
 
$
641,934

 
$13.19
Total 12 months
 
31

 
63%
 
224,694

 
$56.57
 
$52.51
 
$
913,773

 
7.7
%
 
17.7
%
 
4.9
 
$
3,994,862

 
$17.78
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
24

 
156,521

 
$41.70
 
6.7
 
$
6,900,810

 
$44.09
 
 
 
 
 
 
 
 
 
 
1st Quarter 2018
 
23

 
245,081

 
$61.39
 
7.4
 
$
14,009,667

 
$57.16
 
 
 
 
 
 
 
 
 
 
4th Quarter 2017
 
7

 
27,858

 
$54.23
 
5.2
 
$
694,348

 
$24.92
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2017
 
22

 
123,140

 
$47.25
 
6.7
 
$
5,133,674

 
$41.69
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
76

 
552,600

 
$52.30
 
6.9
 
$
26,738,499

 
$48.39
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Second Quarter 2018 Supplemental Information
                               Page 26
 
 
MULTIFAMILY LEASING SUMMARY
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

As of June 30, 2018
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
544
 
99.3%
 
$13,423,164
 
$2,056
1st Quarter 2018
 
512
 
93.4%
 
$12,558,516
 
$2,045
4th Quarter 2017
 
519
 
94.7%
(4) 
$12,343,980
 
$1,982
3rd Quarter 2017
 
513
 
93.6%
(4) 
$12,155,772
 
$1,975
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Gardens
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
157
 
98.1%
 
$3,663,048
 
$1,945
1st Quarter 2018
 
149
 
93.1%
 
$3,521,508
 
$1,970
4th Quarter 2017
 
142
 
88.8%
 
$3,479,904
 
$2,041
3rd Quarter 2017
 
156
 
97.5%
 
$3,652,080
 
$1,951
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
86
 
97.7%
 
$1,773,576
 
$1,719
1st Quarter 2018
 
81
 
92.1%
 
$1,610,880
 
$1,656
4th Quarter 2017
 
86
 
97.7%
 
$1,617,300
 
$1,568
3rd Quarter 2017
 
85
 
96.6%
 
$1,737,624
 
$1,703
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
104
 
82.8%
 
$1,825,680
 
$1,458
1st Quarter 2018
 
106
 
84.4%
 
$1,275,120
 
$999
4th Quarter 2017
 
94
 
74.6%
 
$1,002,180
 
$888
3rd Quarter 2017
 
84
 
67.0%
 
$1,238,664
 
$1,223
 
 
 
 
 
 
 
 
 
Lease Summary - Pacific Ridge Apartments
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
470
 
88.2%
 
$15,842,244
 
$2,808
1st Quarter 2018
 
493
 
92.5%
 
$16,052,556
 
$2,713
4th Quarter 2017
 
483
 
90.6%
 
$15,566,364
 
$2,686
3rd Quarter 2017
 
482
 
90.4%
 
$16,170,384
 
$2,797








Second Quarter 2018 Supplemental Information
                               Page 27
 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 


As of June 30, 2018
 
 
 
 
 
 
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
 
 
 
 
2nd Quarter 2018
 
168
 
94.9%
 
$3,268,236
 
$1,621
1st Quarter 2018
 
157
 
88.7%
 
$3,159,180
 
$1,677
4th Quarter 2017
 
167
 
94.4%
 
$3,236,304
 
$1,614
3rd Quarter 2017
 
165
 
93.2%
 
$3,301,416
 
$1,668
 
 
 
 
 
 
 
 
 
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
 
 
 
 
2nd Quarter 2018
 
322
 
95.6%
 
$6,449,628
 
$1,668
1st Quarter 2018
 
324
 
96.1%
 
$6,400,212
 
$1,647
4th Quarter 2017
 
325
 
96.4%
 
$6,283,308
 
$1,612
3rd Quarter 2017
 
316
 
93.8%
 
$6,444,420
 
$1,699
 
 
 
 
 
 
 
 
 
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
 
 
 
 
2nd Quarter 2018
 
133
 
93.0%
 
$2,500,788
 
$1,567
1st Quarter 2018
 
135
 
94.4%
 
$2,496,744
 
$1,541
4th Quarter 2017
 
122
 
85.3%
 
$2,198,088
 
$1,502
3rd Quarter 2017
 
128
 
89.5%
 
$2,465,736
 
$1,605
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
1,984
 
93.9%
 
$48,746,364
 
$2,048
1st Quarter 2018
 
1,957
 
92.7%
 
$47,074,716
 
$2,004
4th Quarter 2017
 
1,938
 
91.8%
(5) 
$45,727,428
 
$1,965
3rd Quarter 2017
 
1,929
 
91.3%
(5) 
$47,166,096
 
$2,038

Notes:
(1)
Percentage leased for our multifamily properties includes total units rented as of each respective quarter end date.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) as of each respective quarter end date.
(3)
Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of each respective quarter end date.
(4)
Excluding the 21 units associated with the Loma Palisades repositioning, Loma Palisades was 98.5% and 97.3% leased at December 31, 2017 and September 30, 2017, respectively.
(5)
Excluding the 21 units associated with the Loma Palisades repositioning, Total Multifamily was 92.7% and 92.3% leased at December 31, 2017 and September 30, 2017, respectively.

Second Quarter 2018 Supplemental Information
                               Page 28
 
 
MIXED-USE LEASING SUMMARY
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Retail Portion
 
 
 
 
 
 
Number of Leased Square Feet
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Annualized base Rent per Leased Square Foot (3)
Quarter
 
 
 
 
2nd Quarter 2018
 
92,777
 
95.9%
 
$10,610,601
 
$114
1st Quarter 2018
 
93,709
 
96.9%
 
$11,099,045
 
$118
4th Quarter 2017
 
93,684
 
96.9%
 
$10,513,637
 
$112
3rd Quarter 2017
 
90,650
 
93.7%
 
$10,058,429
 
$111
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
2nd Quarter 2018
 
346
 
93.7%
 
$303
 
$284
1st Quarter 2018
 
348
 
94.3%
 
$312
 
$295
4th Quarter 2017
 
340
 
92.2%
 
$298
 
$275
3rd Quarter 2017
 
352
 
95.3%
 
$340
 
$324
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of June 30, 2018, including leases which may not have commenced as of June 30, 2018.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2018 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(3)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2018.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2018, 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.

Second Quarter 2018 Supplemental Information
                               Page 29
 
 
LEASE EXPIRATIONS
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
22,131

 
0.9
%
 
0.4
%
 
$10.18
 
21,587

 
0.7
%
 
0.4
%
 
$33.91
 
1,830

 
1.9
%
 
—
%
 
$28.28
 
45,548

 
0.8
%
 
$22.15
2018
 
115,988

 
4.5

 
2.0

 
$32.34
 
178,904

 
5.6

 
3.0

 
$38.81
 
6,673

 
6.9

 
0.1

 
$133.12
 
301,565

 
5.1

 
$38.41
2019
 
265,479

 
10.4

 
4.5

 
$46.02
 
337,326

 
10.5

 
5.7

 
$29.30
 
13,776

 
14.2

 
0.2

 
$116.24
 
616,581

 
10.5

 
$38.44
2020
 
375,647

 
14.7

 
6.4

 
$43.63
 
283,984

 
8.8

 
4.8

 
$26.91
 
19,930

 
20.6

 
0.3

 
$58.47
 
679,561

 
11.6

 
$37.08
2021
 
306,262

 
12.0

 
5.2

 
$45.51
 
183,695

 
5.7

 
3.1

 
$43.43
 
14,843

 
15.3

 
0.3

 
$216.69
 
504,800

 
8.6

 
$49.79
2022
 
245,511

 
9.6

 
4.2

 
$47.85
 
438,515

 
13.6

 
7.5

 
$29.35
 
5,481

 
5.7

 
0.1

 
$209.49
 
689,507

 
11.7

 
$37.37
2023
 
348,425

(2) 
13.6

 
5.9

 
$47.86
 
404,368

 
12.6

 
6.9

 
$18.42
 
4,330

 
4.5

 
0.1

 
$44.49
 
757,123

 
12.9

 
$32.12
2024
 
93,136

 
3.6

 
1.6

 
$47.23
 
207,885

 
6.5

 
3.5

 
$27.34
 
1,027

 
1.1

 
—

 
$229.56
 
302,048

 
5.1

 
$34.16
2025
 
235,004

 
9.2

 
4.0

 
$33.04
 
182,366

 
5.7

 
3.1

 
$22.62
 
1,010

 
1.0

 
—

 
$244.28
 
418,380

 
7.1

 
$29.01
2026
 
35,561

 
1.4

 
0.6

 
$32.73
 
101,045

 
3.1

 
1.7

 
$25.84
 
—

 
—

 
—

 
—
 
136,606

 
2.3

 
$27.63
2027
 
15,459

 
0.6

 
0.3

 
$50.66
 
120,100

 
3.7

 
2.0

 
$27.42
 
13,118

 
13.6

 
0.2

 
$73.51
 
148,677

 
2.5

 
$33.90
Thereafter
 
197,388

(3) 
7.7

 
3.4

 
$33.19
 
631,749

 
19.7

 
10.8

 
$15.81
 
6,914

 
7.1

 
0.1

 
$130.17
 
836,051

 
14.2

 
$20.86
Signed Leases Not Commenced
 
146,930

 
5.7

 
2.5

 
—
 
17,484

 
0.5

 
0.3

 
—
 
3,845

 
4.0

 
0.1

 
—
 
168,259

 
2.9

 
—
Available
 
159,015

 
6.2

 
2.7

 
—
 
105,702

 
3.3

 
1.8

 
—
 
3,930

 
4.1

 
0.1

 
—
 
268,647

 
4.6

 
—
Total (4)
 
2,561,936

 
100.0
%
 
43.6
%
 
$37.32
 
3,214,710

 
100.0
%
 
54.7
%
 
$24.64
 
96,707

 
100.0
%
 
1.6
%
 
$109.72
 
5,873,353

 
100.0
%
 
$31.57
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
22,131

 
0.9
%
 
0.4
%
 
$10.18
 
21,587

 
0.7
%
 
0.4
%
 
$33.91
 
1,830

 
1.9
%
 
—
%
 
$28.28
 
45,548

 
0.8
%
 
$22.15
2018
 
115,988

 
4.5

 
2.0

 
$32.34
 
174,542

 
5.4

 
3.0

 
$38.73
 
6,673

 
6.9

 
0.1

 
$133.12
 
297,203

 
5.1

 
$38.36
2019
 
120,946

 
4.7

 
2.1

 
$40.06
 
103,991

 
3.2

 
1.8

 
$36.46
 
8,374

 
8.7

 
0.1

 
$140.24
 
233,311

 
4.0

 
$42.05
2020
 
160,166

 
6.3

 
2.7

 
$43.22
 
157,446

 
4.9

 
2.7

 
$22.89
 
2,568

 
2.7

 
—

 
$107.45
 
320,180

 
5.5

 
$33.74
2021
 
59,033

 
2.3

 
1.0

 
$40.78
 
104,327

 
3.2

 
1.8

 
$46.16
 
14,843

 
15.3

 
0.3

 
$216.69
 
178,203

 
3.0

 
$58.58
2022
 
80,857

 
3.2

 
1.4

 
$44.99
 
98,913

 
3.1

 
1.7

 
$34.84
 
5,911

 
6.1

 
0.1

 
$208.56
 
185,681

 
3.2

 
$44.79
2023
 
123,131

 
4.8

 
2.1

 
$36.37
 
55,353

 
1.7

 
0.9

 
$34.56
 
4,330

 
4.5

 
0.1

 
$44.49
 
182,814

 
3.1

 
$36.01
2024
 
59,755

 
2.3

 
1.0

 
$42.96
 
212,993

 
6.6

 
3.6

 
$28.45
 
1,027

 
1.1

 
—

 
$229.56
 
273,775

 
4.7

 
$32.37
2025
 
173,150

 
6.8

 
2.9

 
$36.04
 
110,591

 
3.4

 
1.9

 
$28.39
 
1,010

 
1.0

 
—

 
$244.28
 
284,751

 
4.8

 
$33.81
2026
 
165,440

 
6.5

 
2.8

 
$36.81
 
40,266

 
1.3

 
0.7

 
$44.57
 
—

 
—

 
—

 
—
 
205,706

 
3.5

 
$38.33
2027
 
79,850

 
3.1

 
1.4

 
$37.46
 
154,233

 
4.8

 
2.6

 
$28.68
 
13,118

 
13.6

 
0.2

 
$73.51
 
247,201

 
4.2

 
$33.90
Thereafter
 
1,095,544

(2)(3) 
42.8

 
18.7

 
$46.96
 
1,857,282

 
57.8

 
31.6

 
$20.85
 
29,248

 
30.2

 
0.5

 
$72.88
 
2,982,074

 
50.8

 
$30.95
Signed Leases Not Commenced
 
146,930

 
5.7

 
2.5

 
—
 
17,484

 
0.5

 
0.3

 
—
 
3,845

 
4.0

 
0.1

 
—
 
168,259

 
2.9

 
—
Available
 
159,015

 
6.2

 
2.7

 
—
 
105,702

 
3.3

 
1.8

 
—
 
3,930

 
4.1

 
0.1

 
—
 
268,647

 
4.6

 
—
Total (4)
 
2,561,936

 
100.0
%
 
43.6
%
 
$37.32
 
3,214,710

 
100.0
%
 
54.7
%
 
$24.64
 
96,707

 
100.0
%
 
1.6
%
 
$109.72
 
5,873,353

 
100.0
%
 
$31.57

Second Quarter 2018 Supplemental Information
                               Page 30
 
 
LEASE EXPIRATIONS (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

As of June 30, 2018
 
Notes:
(1)
Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2018 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 19,126 square feet leased by EisnerAmper LLP at The Landmark at One Market through December 31, 2018, for which Autodesk, Inc. has signed an agreement to lease such space beginning January 1, 2019 through December 31, 2023 with options to extend the lease through December 31, 2033.
(3)
The expirations include 29,881 square feet leased by Vistage Worldwide, Inc at Torrey Reserve Campus through June 30, 2018, for which Perkins Coie, LLP has signed an agreement to lease such space beginning January 1, 2019 through December 31, 2028 with options to extend the lease through December 31, 2038.
(4)
Individual items may not add up to total due to rounding.



Second Quarter 2018 Supplemental Information
                               Page 31
 
 
PORTFOLIO LEASED STATISTICS
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At June 30, 2018
 
At June 30, 2017
 
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
 
Overall Portfolio(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,214,710

 
3,109,008

 
96.7
%
 
3,089,155

 
2,991,472

 
96.8
%
 
Office Properties (square feet) 
 
2,561,936

 
2,402,921

 
93.8
%
 
2,681,637

 
2,378,353

 
88.7
%
 
Multifamily Properties (units)
 
2,112

 
1,984

 
93.9
%
 
2,112

 
1,955

 
92.6
%
(3) 
Mixed-Use Properties (square feet)
 
96,707

 
92,777

 
95.9
%
 
96,707

 
92,564

 
95.7
%
 
Mixed-Use Properties (units)
 
369

 
347

(4) 
94.0
%
 
369

 
337

(4) 
91.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
2,549,212

(5) 
2,495,260

 
97.9
%
 
2,551,518

(5) 
2,503,885

 
98.1
%
 
Office Properties (square feet)
 
2,561,936

 
2,402,921

 
93.8
%
 
2,558,952

 
2,378,353

 
92.9
%
 
Multifamily Properties (units)
 
1,579

(6) 
1,514

 
95.9
%
 
1,579

(6) 
1,453

 
92.0
%
(3) 
Mixed-Use Properties (square feet)
 
96,707

 
92,777

 
95.9
%
 
96,707

 
92,564

 
95.7
%
 
Mixed-Use Properties (units)
 
369

 
347

(4) 
94.0
%
 
369

 
337

(4) 
91.3
%
 

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)
Excluding the 21 units associated with the Loma Palisades repositioning, total multifamily was 93.5% leased and same-store multifamily was 93.3% leased at June 30, 2017.
(4)
Represents average occupancy for the six months ended June 30, 2018 and 2017.
(5)
The same-store portfolio includes the Forever 21 building at Del Monte Center which we acquired on September 1, 2017 after previously owning the underlying land. The same-store portfolio excludes Gateway Marketplace (acquired on July 6, 2017) and Waikele Center (due to significant redevelopment activity).
(6)
The same-store portfolio excludes the Pacific Ridge Apartments, as it was acquired on April 28, 2017.


Second Quarter 2018 Supplemental Information
                               Page 32
 
 
TOP TENANTS - RETAIL
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As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property(ies)
 
Lease Expiration
 
Total Leased Square Feet
 
Rentable Square Feet as a Percentage of Total Retail
 
Rentable Square Feet as a Percentage of Total
 
Annualized Base Rent
 
Annualized Base Rent as a Percentage of Total Retail
 
Annualized Base Rent as a Percentage of Total
1

Lowe's
 
Waikele Center
 
5/31/2028
 
155,000

 
4.8
%
 
2.6
%
 
$
3,720,000

 
4.7
%
 
2.0
%
2

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

 
2.1

 
1.2

 
2,189,648

 
2.8

 
1.2

3

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

 
2.2

 
1.2

 
1,919,436

 
2.4

 
1.0

4

Vons
 
Lomas Santa Fe Plaza
 
12/31/2022
 
49,895

 
1.6

 
0.8

 
1,399,205

 
1.8

 
0.8

5

Old Navy
 
Waikele Center,
South Bay Marketplace,
Alamo Quarry Market
 
7/31/2020
4/30/2021
9/30/2022
 
59,780

 
1.9

 
1.0

 
*

 
*

 
*

6

Marshalls
 
Solana Beach Towne Centre,
Carmel Mountain Plaza,
 
1/31/2025
1/31/2029
 
68,055

 
2.1

 
1.2

 
1,335,447

 
1.7

 
0.7

7

Regal Cinemas
 
Alamo Quarry Market
 
3/31/2023
 
72,447

 
2.3

 
1.2

 
1,231,599

 
1.6

 
0.7

8

Michaels
 
Carmel Mountain Plaza,
Alamo Quarry Plaza
 
1/31/2024
2/29/2028
 
46,850

 
1.5

 
0.8

 
1,022,103

 
1.3

 
0.6

9

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

 
1.1

 
0.6

 
958,657

 
1.2

 
0.5

10

Saks Fifth Avenue Off 5th
 
Carmel Mountain Plaza
 
5/31/2024
 
40,594

 
1.3

 
0.7

 
939,345

 
1.2

 
0.5

 
Top 10 Retail Tenants Total
 
 
 
667,660

 
20.9
%
 
11.3
%
 
$
14,715,440

 
18.7
%
 
8.0
%


*
Data withheld at tenant's request.
 
 

Second Quarter 2018 Supplemental Information
                               Page 33
 
 
TOP TENANTS - OFFICE
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As of June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
9.9
%
 
4.3
%
 
$
14,798,884

 
15.5
%
 
8.0
%
2

Autodesk, Inc.
 
The Landmark at One Market
 
12/31/2022
12/31/2023
 
114,664

 
4.5

 
2.0

 
9,547,099

 
10.0

 
5.1

3

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

 
3.7

 
1.6

 
3,006,453

 
3.1

 
1.6

4

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

 
4.0

 
1.7

 
2,735,895

 
2.9

 
1.5

5

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

 
3.4

 
1.5

 
2,531,777

 
2.6

 
1.4

6

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

 
2.5

 
1.1

 
2,447,368

 
2.6

 
1.3

7

VMWare, Inc.
 
City Center Bellevue
 
11/30/2022
 
54,614

 
2.1

 
0.9

 
2,343,003

 
2.5

 
1.3

8

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

 
2.5

 
1.1

 
2,184,302

 
2.3

 
1.2

9

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

 
1.4

 
0.6

 
1,807,609

 
1.9

 
1.0

10

Troutman Sanders LLP
 
Torrey Reserve Campus
First & Main
 
11/30/2019
4/30/2025
 
33,812

 
1.3

 
0.6

 
1,576,654

 
1.6

 
0.9

 
Top 10 Office Tenants Total
 
 
 
902,955

 
35.3
%
 
15.4
%
 
$
42,979,044

 
45.0
%
 
23.3
%




Second Quarter 2018 Supplemental Information
                               Page 34
 
 
 
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APPENDIX





Second Quarter 2018 Supplemental Information
                               Page 35
 
 
GLOSSARY OF TERMS
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Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three and six months ended June 30, 2018 and 2017 is as follows:
    
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

Depreciation and amortization
32,868

 
24,182

 
66,147

 
42,168

Interest expense
12,688

 
12,652

 
26,508

 
25,983

Interest income
(23
)
 
(113
)
 
(163
)
 
(260
)
Income tax expense/(benefit)
171

 
(79
)
 
106

 
(242
)
EBITDA
$
50,117

 
$
44,230

 
$
96,320

 
$
85,545


Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that begins with EBITDA and includes adjustments for certain items that we believe are not representative of ongoing operating performance. Specifically, we include a pro forma adjustment to reflect a full period of NOI on the operating properties we acquire during the quarter, to assume all transactions occurred at the beginning of the quarter. We use Adjusted EBITDA as a supplemental performance measure because we believe these items create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential.

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
EBITDA
$
50,117

 
$
44,230

 
$
96,320

 
$
85,545

Pro forma adjustments
—

 
814

 
—

 
814

Adjusted EBITDA
$
50,117

 
$
45,044

 
$
96,320

 
$
86,359


Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (EBITDAre): EBITDAre is a supplemental non-GAAP measure of real estate companies' operating performances. The National Association of Real Estate Investment Trusts (NAREIT) defines EBITDAre as follows: net income or loss, computed in accordance with GAAP plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate including gain or loss on change of control, impairments of real estate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates, if any. EBITDAre 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 EBITDAre for the three and six months ended June 30, 2018 and 2017 is as follows:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

Depreciation and amortization
32,868

 
24,182

 
66,147

 
42,168

Interest expense
12,688

 
12,652

 
26,508

 
25,983

Interest income
(23
)
 
(113
)
 
(163
)
 
(260
)
Income tax expense/(benefit)
171

 
(79
)
 
106

 
(242
)
EBITDAre
$
50,117

 
$
44,230

 
$
96,320

 
$
85,545



Second Quarter 2018 Supplemental Information
                               Page 36
 
 
GLOSSARY OF TERMS (CONTINUED)
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Funds From Operations (FFO): FFO is a supplemental measure of real estate companies' operating performances. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as follows: net income, computed in accordance with GAAP plus depreciation and amortization of real estate assets and excluding extraordinary items, gains and losses on sale of real estate and impairment losses. NAREIT developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider FFO a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.

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

Net Operating Income (NOI): We define NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance). NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expense, other nonproperty income and losses, gains and losses from property dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Since NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. However, NOI should not be viewed as an alternative measure of our financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations.
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
Reconciliation of NOI to net income
2018
 
2017
 
2018
 
2017
Total NOI
$
55,513

 
$
49,361

 
$
107,279

 
$
95,758

General and administrative
(5,396
)
 
(5,131
)
 
(10,963
)
 
(10,213
)
Depreciation and amortization
(32,868
)
 
(24,182
)
 
(66,147
)
 
(42,168
)
Operating Income
$
17,249

 
$
20,048

 
$
30,169

 
$
43,377

Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other income, net
(148
)
 
192

 
61

 
502

Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

Net income attributable to restricted shares
(216
)
 
(61
)
 
(144
)
 
(121
)
Net income attributable to unitholders in the Operating Partnership
(1,125
)
 
(2,008
)
 
(959
)
 
(4,869
)
Net income attributable to American Assets Trust, Inc. stockholders
$
3,072

 
$
5,519

 
$
2,619

 
$
12,906


Overall Portfolio: Includes all operating properties owned by us as of June 30, 2018.

Cash NOI: We define cash 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), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, interest expense, other non-property income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, our cash NOI may not be comparable to the cash NOIs of other REITs. We believe cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. We believe the exclusion of these items from net (loss) income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is

Second Quarter 2018 Supplemental Information
                               Page 37
 
 
GLOSSARY OF TERMS (CONTINUED)
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a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP. A Reconciliation of Total Cash NOI to Operating Income is presented below:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
Reconciliation of Total Cash NOI to Net Income
2018
 
2017
 
2018
 
2017
Total Cash NOI
$
57,537

 
$
49,128

 
$
109,041

 
$
94,469

Non-cash revenue and other operating expenses (1)
(2,024
)
 
233

 
(1,762
)
 
1,289

General and administrative
(5,396
)
 
(5,131
)
 
(10,963
)
 
(10,213
)
Depreciation and amortization
(32,868
)
 
(24,182
)
 
(66,147
)
 
(42,168
)
Operating income
$
17,249

 
$
20,048

 
$
30,169

 
$
43,377

Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other income, net
(148
)
 
192

 
61

 
502

Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

(1)
Represents adjustments related to 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; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other 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.


Same-Store Cash NOI Comparison with Redevelopment: As noted below in the definition of Same-Store, Non-Same Store and Redevelopment Same-Store, 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. Redevelopment same-store is considered by management to be an important measure because it assists in eliminating disparities due to the redevelopment of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of the Company's stabilized and redevelopment properties, as applicable. Additionally, redevelopment same-store is considered by management to be an important measure because it assists in evaluating the timing of the start and stabilization of our redevelopment opportunities and the impact that these redevelopments have in enhancing our operating performance. We present Same-Store Cash NOI Comparison with Redevelopment using cash NOI to evaluate and compare the operating performance of the company's properties, as defined above. A reconciliation of Same-Store Cash NOI Comparison with Redevelopment on a cash basis to operating income is presented below:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
Reconciliation of Same-Store Cash NOI Comparison with Redevelopment to Operating Income
2018
 
2017
 
2018
 
2017
Same-Store Cash NOI (1)
$
46,258

 
$
43,324

 
$
89,989

 
$
84,944

Redevelopment Cash NOI (2)
3,683

 
3,828

 
7,401

 
7,513

Same-Store Cash NOI with Redevelopment
49,941

 
47,152

 
97,390

 
92,457

Tenant improvement reimbursements
3,090

 
120

 
3,957

 
174

Total Same-Store Cash NOI with Redevelopment
$
53,031

 
$
47,272

 
$
101,347

 
$
92,631

Non-Same Store Cash NOI
4,506

 
1,856

 
7,694

 
1,838

Total Cash NOI
$
57,537

 
$
49,128

 
$
109,041

 
$
94,469

Non-cash revenue and other operating expenses (3)
(2,024
)
 
233

 
(1,762
)
 
1,289

General and administrative
(5,396
)
 
(5,131
)
 
(10,963
)
 
(10,213
)
Depreciation and amortization
(32,868
)
 
(24,182
)
 
(66,147
)
 
(42,168
)
Operating income
$
17,249

 
$
20,048

 
$
30,169

 
$
43,377

Interest expense
(12,688
)
 
(12,652
)
 
(26,508
)
 
(25,983
)
Other income, net
(148
)
 
192

 
61

 
502

Net income
$
4,413

 
$
7,588

 
$
3,722

 
$
17,896

(1)
Same-store includes the Forever 21 building at Del Monte Center which we acquired on September 1, 2017 after previously owning the underlying land. Same-store excludes (i) the Pacific Ridge Apartments, which was acquired on April 28, 2017; (ii) Gateway Marketplace, which was acquired on July 6, 2017; (iii) Waikele Center, due to significant redevelopment activity; and (iv) land held for development.
(2)
Redevelopment property refers to Waikele Center and Lloyd District Portfolio - Land.

Second Quarter 2018 Supplemental Information
                               Page 38
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

(3)
Represents adjustments related to 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; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other 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.

Second Quarter 2018 Supplemental Information
                               Page 39
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.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 Six Months Ended
 
June 30, 2018 to 2017
 
June 30, 2018 to 2017
 
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
Gateway Marketplace
 
 
X
 
 
 
 
 
X
 
 
Lomas Santa Fe Plaza
X
 
 
 
X
 
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
 
X
 
 
 
X
Del Monte Center (1)
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
 
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
Pacific Ridge Apartments
 
 
X
 
 
 
 
 
X
 
 
Hassalo on Eighth
X
 
 
 
X
 
X
 
 
 
X
Mixed-Use Properties
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
X
 
X
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
X
 
X
 
 
 
X
Development Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Point - 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
 
 
 
X
 
X
(1) Del Monte Center includes the Forever 21 building which we acquired on September 1, 2017 after previously owning the underlying land.

Second Quarter 2018 Supplemental Information
                               Page 40
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/d094bb039f78dc57d5fa1fb75ab0e58a-aat2015q4a09.jpg
 
 

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

Second Quarter 2018 Supplemental Information
                               Page 41