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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):
February 12, 2019
_________________________
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 February 12, 2019, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter and fiscal year ending December 31, 2018. Also on February 12, 2019, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter and fiscal year ending December 31, 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 and fiscal year ending December 31, 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**
 
99.2**
 
_____________________
** Furnished herewith

2


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
American Assets Trust, Inc.
 
By:
/s/ Robert F. Barton
 
Robert F. Barton
Executive Vice President, CFO
February 12, 2019
 
 

3
Exhibit


https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg

American Assets Trust, Inc. Reports Fourth Quarter and Year-End 2018 Financial Results

Net income available to common stockholders of $6.7 million and $19.7 million for the three months and year ended December 31, 2018, respectively, or $0.14 and $0.42 per diluted share, respectively
Funds From Operations per diluted share increased 2% and 9% year-over-year for the three months and year ended December 31, 2018, respectively
Same-store cash NOI increased 5% and 4% year-over-year for the three months and year ended December 31, 2018, respectively

SAN DIEGO, California - 2/12/19 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its fourth quarter and year ended December 31, 2018.

Fourth Quarter Highlights and Recent Developments
•
Net income available to common stockholders of $6.7 million and $19.7 million for the three months and year ended December 31, 2018, respectively, or $0.14 and $0.42 per diluted share, respectively
•
Funds From Operations increased 2% and 9% year-over-year to $0.47 and $2.09 per diluted share for the three months and year ended December 31, 2018, respectively, compared to the same periods in 2017
•
Recognized approximately $4.5 million of lease termination fees in January 2019 in connection with the termination of ground lease for, and ground lessee’s surrender of, the former Sears building at Carmel Mountain Plaza in San Diego
•
Increased 2019 FFO annual guidance by $0.06 at the midpoint to a range of $2.18 to $2.26 per diluted share
•
Same-store cash NOI increased 5% and 4% year-over-year for the three months and year ended December 31, 2018, respectively, compared to the same periods in 2017
•
Leased approximately 298,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 96% and 64%, respectively, during the three months ended December 31, 2018
•
Entered into a lease with Google LLC for approximately 253,000 square feet at The Landmark at One Market in San Francisco on November 2, 2018
•
Leased approximately 65,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 7% and 3%, respectively, during the three months ended December 31, 2018
•
Credit agreement amended to extend maturity date and decrease credit spreads on $100 million term loan, effective January 9, 2019

Financial Results
Net income attributable to common stockholders was $6.7 million, or $0.14 per basic and diluted share for the three months ended December 31, 2018 compared to net income of $7.1 million, or $0.15 per basic and diluted share for the three months ended December 31, 2017. For the year ended December 31, 2018, net income attributable to common stockholders was $19.7 million, or $0.42 per basic and diluted share compared to $29.1 million, or $0.62 per basic and diluted share for the year ended December 31, 2017. The quarter-over-quarter and year-over-year decrease is primarily due to an increase in depreciation expense and demolition costs at Waikele Center attributed to the redevelopment of the Kmart space.

During the fourth quarter of 2018, the company generated funds from operations (“FFO”) for common stockholders of $30.2 million, or $0.47 per diluted share, compared to $29.6 million, or $0.46 per diluted share, for the fourth quarter of 2017. For the year ended December 31, 2018, the company generated FFO for common stockholders of

1


$134.0 million, or $2.09 per diluted share, compared to $123.2 million, or $1.92 per diluted share, for the year ended December 31, 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.

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:
 
December 31, 2018
September 30, 2018
December 31, 2017
Total Portfolio
 
 
 
Retail
93.9%
98.5%
96.8%
Office
90.9%
91.4%
88.4%
Multifamily
93.6%
92.3%
91.8%
Mixed-Use:
 
 
 
Retail
96.1%
95.9%
96.9%
Hotel
93.0%
93.6%
92.5%
 
 
 
 
Same-Store Portfolio
 
 
Retail (1)
92.9%
98.3%
98.1%
Office (2)
93.0%
93.5%
88.4%
Multifamily
93.6%
92.3%
91.8%
Mixed-Use:
 
 
 
Retail
96.1%
95.9%
96.9%
Hotel
93.0%
93.6%
92.5%
(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 Waikele Center, due to significant redevelopment activity.
(2) Same-store office leased percentages exclude Torrey Point, which was placed into operations and became available for occupancy in August 2018 and will therefore be included in same-store office leased percentages commencing in the fourth quarter of 2019.


During the fourth quarter of 2018, the company signed 36 leases for approximately 384,700 square feet of retail and office space, as well as 469 multifamily apartment leases. Renewals accounted for 84% of the comparable retail leases, 27% of the comparable office leases and 55% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the fourth quarter 2018 and trailing four quarters ended December 31, 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
Q4 2018
19
65,000
 
3.0%
 
$46.90
$45.52
 
7.3%
 
Last 4 Quarters
63
239,000
 
3.6%
 
$40.73
$39.31
 
11.8%
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
Q4 2018
11
298,000
 
63.5%
 
$88.41
$54.08
 
95.5%
 
Last 4 Quarters
51
714,000
 
35.7%
 
$67.55
$49.78
 
56.9%
 

Multifamily
The average monthly base rent per leased unit for same-store properties for the three months ended December 31, 2018 was $2,048 compared to an average monthly base rent per leased unit of $1,974 for the three months ended December 31, 2017, an increase of approximately 4.0%.


2


Same-Store Cash Net Operating Income
For the three months and year ended December 31, 2018, same-store cash NOI increased 4.7% and 3.9%, respectively, compared to the three months and year ended December 31, 2017. The same-store cash NOI by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Year Ended (2)
 
 
 
 
December 31,
 
 
 
 
December 31,
 
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
15,897

 
$
15,315

 
3.8

%
 
$
60,138

 
$
57,462

 
4.7

%
Office
17,636

 
16,810

 
4.9

 
 
73,707

 
70,474

 
4.6

 
Multifamily
7,388

 
6,773

 
9.1

 
 
19,828

 
19,405

 
2.2

 
Mixed-Use
6,149

 
6,039

 
1.8

 
 
24,787

 
24,366

 
1.7

 
Same-store Cash NOI (3)
$
47,070

 
$
44,937

 
4.7

%
 
$
178,460

 
$
171,707

 
3.9

%

(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) Waikele Center due to significant redevelopment activity; (ii) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (iii) land held for development.
(2)
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; (iv) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (v) land held for development.
(3)
Excluding lease termination fees for the three and twelve months ended December 31, 2018, same-store cash NOI would be 4.6% and 2.1%, 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 December 31, 2018, the company had gross real estate assets of $2.6 billion and liquidity of $334.0 million, comprised of cash and cash equivalents of $48.0 million and $286.0 million of availability on its line of credit.

Dividends
The company declared dividends on its shares of common stock of $0.28 per share for the fourth quarter of 2018. The dividends were paid on December 27, 2018.

In addition, the company has declared a dividend on its common stock of $0.28 per share for the first quarter of 2019. The dividend will be paid on March 28, 2019 to stockholders of record on March 14, 2019.

Guidance
The company increased its guidance range for full year 2019 FFO per diluted share of $2.18 to $2.26 per share from the prior guidance range of $2.12 to $2.20 per share. The company's guidance excludes
any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or
repayments, except that our guidance assumes the payoff of the mortgage debt on Torrey Reserve - North Court, without penalty or premium.

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 fourth quarter and year end of 2018 on Wednesday, February 13, 2019 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 6088626. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, February 13, 2019 through Wednesday, February 20, 2019. To access the replay, dial 1-855-859-2056 and use the pass code 6088626. 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.

3



Supplemental Information
Supplemental financial information regarding the company's fourth quarter and year end 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.

4


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

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,549,571

 
$
2,536,474

Construction in progress
 
71,228

 
 
68,272

Held for development
 
9,392

 
 
9,392

 
 
2,630,191

 
 
2,614,138

Accumulated depreciation
 
(590,338
)
 
 
(537,431
)
Net real estate
 
2,039,853

 
 
2,076,707

Cash and cash equivalents
 
47,956

 
 
82,610

Restricted cash
 
9,316

 
 
9,344

Accounts receivable, net
 
9,289

 
 
9,869

Deferred rent receivables, net
 
39,815

 
 
38,973

Other assets, net
 
52,021

 
 
42,361

Total assets
$
2,198,250

 
$
2,259,864

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
182,572

 
$
279,550

Unsecured notes payable, net
 
1,045,863

 
 
1,045,470

Unsecured line of credit, net
 
62,337

 
 
—

Accounts payable and accrued expenses
 
46,616

 
 
38,069

Security deposits payable
 
8,844

 
 
6,570

Other liabilities and deferred credits, net
 
49,547

 
 
46,061

Total liabilities
 
1,395,779

 
 
1,415,720

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,335,409 and 47,204,588 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively
 
474

 
 
473

Additional paid-in capital
 
920,661

 
 
919,066

Accumulated dividends in excess of net income
 
(128,778
)
 
 
(97,280
)
Accumulated other comprehensive income
 
10,620

 
 
11,451

Total American Assets Trust, Inc. stockholders' equity
 
802,977

 
 
833,710

Noncontrolling interests
 
(506
)
 
 
10,434

Total equity
 
802,471

 
 
844,144

Total liabilities and equity
$
2,198,250

 
$
2,259,864


5


American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
Rental income
$
78,365

 
$
77,703

 
$
309,537

 
$
298,803

Other property income
4,240

 
4,043

 
21,330

 
16,180

Total revenue
82,605

 
81,746

 
330,867

 
314,983

Expenses:
 
 
 
 
 
 
 
Rental expenses
23,797

 
23,129

 
86,482

 
84,006

Real estate taxes
9,012

 
8,696

 
34,973

 
32,671

General and administrative
6,645

 
6,211

 
22,784

 
21,382

Depreciation and amortization
21,060

 
19,918

 
107,093

 
83,278

Total operating expenses
60,514

 
57,954

 
251,332

 
221,337

Operating income
22,091

 
23,792

 
79,535

 
93,646

Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other income (expense), net
(21
)
 
(69
)
 
(85
)
 
334

Net income
9,209

 
9,731

 
27,202

 
40,132

Net income attributable to restricted shares
(96
)
 
(60
)
 
(311
)
 
(241
)
Net income attributable to unitholders in the Operating Partnership
(2,440
)
 
(2,594
)
 
(7,205
)
 
(10,814
)
Net income attributable to American Assets Trust, Inc. stockholders
$
6,673

 
$
7,077

 
$
19,686

 
$
29,077

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.14

 
$
0.15

 
$
0.42

 
$
0.62

Weighted average shares of common stock outstanding - basic
46,967,778

 
46,908,745

 
46,950,812

 
46,715,520

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.14

 
$
0.15

 
$
0.42

 
$
0.62

Weighted average shares of common stock outstanding - diluted
64,145,386

 
64,103,725

 
64,136,559

 
64,087,250

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.28

 
$
0.27

 
$
1.09

 
$
1.05

 
 
 
 
 
 
 
 


6


Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Year Ended
 
December 31, 2018
 
December 31, 2018
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
9,209

 
$
27,202

Depreciation and amortization of real estate assets
 
21,060

 
 
107,093

FFO, as defined by NAREIT
$
30,269

 
$
134,295

Less: Nonforfeitable dividends on restricted stock awards
 
(94
)
 
 
(305
)
FFO attributable to common stock and units
$
30,175

 
$
133,990

FFO per diluted share/unit
$
0.47

 
$
2.09

Weighted average number of common shares and units, diluted
 
64,148,261

 
 
64,139,437


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)
 
Year Ended (2)
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Same-store cash NOI
$
47,070

 
$
44,937

 
$
178,460

 
$
171,707

Non-same-store cash NOI
1,403

 
3,881

 
25,210

 
22,298

Tenant improvement reimbursements (3)
54

 
1,101

 
4,275

 
1,840

Cash NOI
$
48,527

 
$
49,919

 
$
207,945

 
$
195,845

Non-cash revenue and other operating expenses (4)
1,269

 
2

 
1,467

 
2,461

General and administrative
(6,645
)
 
(6,211
)
 
(22,784
)
 
(21,382
)
Depreciation and amortization
(21,060
)
 
(19,918
)
 
(107,093
)
 
(83,278
)
Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other income (expense), net
(21
)
 
(69
)
 
(85
)
 
334

Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

 
 
 
 
 
 
 
 
Number of properties included in same-store analysis
25
 
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) Waikele Center, due to significant redevelopment activity; (ii) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (iii) land held for development.
(2)
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; (iv) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (v) land held for development.
(3)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
(4)
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-K with the Securities and Exchange Commission and, therefore, remain subject to adjustment.


7


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.


8


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


9
Exhibit
 
 
 
FOURTH QUARTER 2018
 
Supplemental Information
 
 


https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-coverpicture2018q4.jpg


 
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.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/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-map2018q4.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
Office
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,322,012

 
821,785

 
1,455

(1)
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
429,718

 
—

 
—

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
673,572

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
588,970

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Portland
 
44,153

 
820,244

 
657

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
—

 
497,472

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,093,581

 
2,656,486

 
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
 
3.1

million
 
53%
 
Office
 
2.7

million
 
47%
Data is as of December 31, 2018.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Fourth Quarter 2018 Supplemental Information
                               Page 2
 
 
INDEX
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FOURTH 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.

Fourth Quarter 2018 Supplemental Information
                               Page 3
 
 
 
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FINANCIAL HIGHLIGHTS





Fourth Quarter 2018 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
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(Amounts in thousands, except shares and per share data)
December 31, 2018
 
December 31, 2017
 
 
 
 
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,549,571

 
$
2,536,474

Construction in progress
71,228

 
68,272

Held for development
9,392

 
9,392

 
2,630,191

 
2,614,138

Accumulated depreciation
(590,338
)
 
(537,431
)
Net real estate
2,039,853

 
2,076,707

Cash and cash equivalents
47,956

 
82,610

Restricted cash
9,316

 
9,344

Accounts receivable, net
9,289

 
9,869

Deferred rent receivable, net
39,815

 
38,973

Other assets, net
52,021

 
42,361

TOTAL ASSETS
$
2,198,250

 
$
2,259,864

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
182,572

 
$
279,550

Unsecured notes payable, net
1,045,863

 
1,045,470

Unsecured line of credit, net
62,337

 
—

Accounts payable and accrued expenses
46,616

 
38,069

Security deposits payable
8,844

 
6,570

Other liabilities and deferred credits, net
49,547

 
46,061

Total liabilities
1,395,779

 
1,415,720

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,335,409 and 47,204,588 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively
474

 
473

Additional paid in capital
920,661

 
919,066

Accumulated dividends in excess of net income
(128,778
)
 
(97,280
)
Accumulated other comprehensive income
10,620

 
11,451

Total American Assets Trust, Inc. stockholders' equity
802,977

 
833,710

Noncontrolling interests
(506
)
 
10,434

Total equity
802,471

 
844,144

TOTAL LIABILITIES AND EQUITY
$
2,198,250

 
$
2,259,864


Fourth Quarter 2018 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
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(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
REVENUE:
 
 
 
 
 
 
 
Rental income
$
78,365

 
$
77,703

 
$
309,537

 
$
298,803

Other property income
4,240

 
4,043

 
21,330

 
16,180

Total revenue
82,605

 
81,746

 
330,867

 
314,983

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
23,797

 
23,129

 
86,482

 
84,006

Real estate taxes
9,012

 
8,696

 
34,973

 
32,671

General and administrative
6,645

 
6,211

 
22,784

 
21,382

Depreciation and amortization
21,060

 
19,918

 
107,093

 
83,278

Total operating expenses
60,514

 
57,954

 
251,332

 
221,337

OPERATING INCOME
22,091

 
23,792

 
79,535

 
93,646

Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other (expense) income, net
(21
)
 
(69
)
 
(85
)
 
334

NET INCOME
9,209

 
9,731

 
27,202

 
40,132

Net income attributable to restricted shares
(96
)
 
(60
)
 
(311
)
 
(241
)
Net income attributable to unitholders in the Operating Partnership
(2,440
)
 
(2,594
)
 
(7,205
)
 
(10,814
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
6,673

 
$
7,077

 
$
19,686

 
$
29,077

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income from operations attributable to common stockholders per share
$
0.14

 
$
0.15

 
$
0.42

 
$
0.62

Weighted average shares of common stock outstanding - basic
46,967,778

 
46,908,745

 
46,950,812

 
46,715,520

Diluted income from continuing operations attributable to common stockholders per share
$
0.14

 
$
0.15

 
$
0.42

 
$
0.62

Weighted average shares of common stock outstanding - diluted
64,145,386

 
64,103,725

 
64,136,559

 
64,087,250


Fourth Quarter 2018 Supplemental Information
                               Page 6
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
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(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

Depreciation and amortization of real estate assets
21,060

 
19,918

 
107,093

 
83,278

FFO, as defined by NAREIT
30,269

 
29,649

 
134,295

 
123,410

Less: Nonforfeitable dividends on restricted stock awards
(94
)
 
(59
)
 
(305
)
 
(236
)
FFO attributable to common stock and common units
$
30,175

 
$
29,590

 
$
133,990

 
$
123,174

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.47

 
$
0.46

 
$
2.09

 
$
1.92

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
64,148,261

 
64,106,314

 
64,139,437

 
64,089,921

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
8,136

 
$
20,742

 
$
83,437

 
$
90,450

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
18,064

 
$
17,365

 
$
70,228

 
$
67,537

Dividends declared and paid per share/unit
$
0.28

 
$
0.27

 
$
1.09

 
$
1.05


Fourth Quarter 2018 Supplemental Information
                               Page 7
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
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(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
30,269

 
$
29,649

 
$
134,295

 
$
123,410

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(21,994
)
 
(12,097
)
 
(53,655
)
 
(39,054
)
Net effect of straight-line rents (3)
89

 
760

 
2,123

 
879

Amortization of net above (below) market rents (4)
(1,349
)
 
(760
)
 
(3,570
)
 
(3,305
)
Net effect of other lease assets (5)
(9
)
 
(2
)
 
(20
)
 
963

Amortization of debt issuance costs and debt fair value adjustment
365

 
433

 
1,530

 
3,058

Non-cash compensation expense
859

 
2,818

 
3,039

 
4,735

Nonforfeitable dividends on restricted stock awards
(94
)
 
(59
)
 
(305
)
 
(236
)
FAD
$
8,136

 
$
20,742

 
$
83,437

 
$
90,450

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
14,979

 
$
6,976

 
$
33,118

 
$
21,600

Maintenance capital expenditures
7,015

 
5,121

 
20,537

 
17,454

 
$
21,994

 
$
12,097

 
$
53,655

 
$
39,054


Notes:
(1)
See Glossary of Terms.
(2)
For the three months and year ended December 31, 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.

Fourth Quarter 2018 Supplemental Information
                               Page 8
 
 
CORPORATE GUIDANCE
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(Amounts in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior 2019 Guidance Range (1) (2)
 
Revised 2019 Guidance Range (2)
Funds from Operations (FFO):
 
 
 
 
 
 
 
 
Net income
 
$
52,474

 
$
57,620

 
$
52,151

 
$
57,287

Depreciation and amortization of real estate assets
 
84,191

 
84,191

 
88,191

 
88,191

FFO, as defined by NAREIT
 
136,665

 
141,811

 
140,342

 
145,478

Less: Nonforfeitable dividends on restricted stock awards
 
(286
)
 
(286
)
 
(377
)
 
(377
)
FFO attributable to common stock and units
 
$
136,379

 
$
141,525

 
$
139,965

 
$
145,101

Weighted average number of common shares and units, diluted
 
64,329,768

 
64,329,768

 
64,203,832

 
64,203,832

FFO per diluted share, updated
 
$
2.12

 
$
2.20

 
$
2.18

 
$
2.26


Notes:
(1)
Prior 2019 Guidance Range as reported in the company's Third Quarter 2018 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.


Fourth Quarter 2018 Supplemental Information
                               Page 9
 
 
SAME-STORE NET OPERATING INCOME (NOI)
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(Amounts in thousands)
Three Months Ended December 31, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
23,173

 
$
26,857

 
$
12,733

 
$
15,528

 
$
78,291

Non-same store (1)
3,882

 
432

 
—

 
—

 
4,314

Total
27,055

 
27,289

 
12,733

 
15,528

 
82,605

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
6,866

 
8,864

 
5,267

 
9,213

 
30,210

Non-same store (1)
2,201

 
398

 
—

 
—

 
2,599

Total
9,067

 
9,262

 
5,267

 
9,213

 
32,809

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
16,307

 
17,993

 
7,466

 
6,315

 
48,081

Non-same store (1)
1,681

 
34

 
—

 
—

 
1,715

Total
$
17,988

 
$
18,027

 
$
7,466

 
$
6,315

 
$
49,796

Same-store NOI
$
16,307

 
$
17,993

 
$
7,466

 
$
6,315

 
$
48,081

Net effect of straight-line rents (2)
(27
)
 
633

 
(78
)
 
(136
)
 
392

Amortization of net above (below) market rents (3)
(383
)
 
(920
)
 
—

 
(30
)
 
(1,333
)
Net effect of other lease intangibles (4)
—

 
(16
)
 
—

 
—

 
(16
)
Tenant improvement reimbursements (5)
—

 
(54
)
 
—

 
—

 
(54
)
Same-store cash NOI (5)
$
15,897

 
$
17,636

 
$
7,388

 
$
6,149

 
$
47,070


Notes:
(1)
Same-store and non-same store classifications are determined based on properties held on December 31, 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 measures 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.


Fourth Quarter 2018 Supplemental Information
                               Page 10
 
 
SAME-STORE NET OPERATING INCOME (NOI) (CONTINUED)
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

(Amounts in thousands)
Year Ended December 31, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
84,734

 
$
110,371

 
$
33,786

 
$
62,326

 
$
291,217

Non-same store (1)
20,818

 
1,991

 
16,841

 
—

 
39,650

Total
105,552

 
112,362

 
50,627

 
62,326

 
330,867

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
23,025

 
32,958

 
13,955

 
37,076

 
107,014

Non-same store (1)
7,053

 
902

 
6,486

 
—

 
14,441

Total
30,078

 
33,860

 
20,441

 
37,076

 
121,455

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
61,709

 
77,413

 
19,831

 
25,250

 
184,203

Non-same store (1)
13,765

 
1,089

 
10,355

 
—

 
25,209

Total
$
75,474

 
$
78,502

 
$
30,186

 
$
25,250

 
$
209,412

Same-store NOI
$
61,709

 
$
77,413

 
$
19,831

 
$
25,250

 
$
184,203

Net effect of straight-line rents (2)
(174
)
 
2,656

 
(3
)
 
(343
)
 
2,136

Amortization of net above (below) market rents (3)
(1,367
)
 
(2,070
)
 
—

 
(120
)
 
(3,557
)
Net effect of other lease assets (4)
—

 
(47
)
 
—

 
—

 
(47
)
Tenant improvement reimbursements (5)
(30
)
 
(4,245
)
 
—

 
—

 
(4,275
)
Same-store cash NOI (5) 
$
60,138

 
$
73,707

 
$
19,828

 
$
24,787

 
$
178,460


Notes:
(1)
Same-store and non-same store are determined based on properties held on December 31, 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 measures 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.




Fourth Quarter 2018 Supplemental Information
                               Page 11
 
 
SAME-STORE CASH NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
15,897

 
$
15,315

 
3.8
%
 
$
60,138

 
$
57,462

 
4.7
%
Office
17,636

 
16,810

 
4.9

 
73,707

 
70,474

 
4.6

Multifamily
7,388

 
6,773

 
9.1

 
19,828

 
19,405

 
2.2

Mixed-Use
6,149

 
6,039

 
1.8

 
24,787

 
24,366

 
1.7

Same-store Cash NOI (1)(2)
$
47,070

 
$
44,937

 
4.7
%
 
$
178,460

 
$
171,707

 
3.9
%

Notes:
(1)
Excluding lease termination fees, for the three months and year ended December 31, 2018, same-store cash NOI would be 4.6% and 2.1%, 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.


Fourth Quarter 2018 Supplemental Information
                               Page 12
 
 
SAME-STORE CASH NOI COMPARISON WITH REDEVELOPMENT(1)
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,551

 
$
19,405

 
(9.6
)%
 
$
71,782

 
$
73,345

 
(2.1
)%
Office
17,498

 
16,627

 
5.2

 
73,190

 
69,794

 
4.9

Multifamily
7,388

 
6,773

 
9.1

 
19,828

 
19,405

 
2.2

Mixed-Use
6,149

 
6,039

 
1.8

 
24,787

 
24,366

 
1.7

Same-store Cash NOI with Redevelopment (1)(2)
$
48,586

 
$
48,844

 
(0.5
)%
 
$
189,587

 
$
186,910

 
1.4
 %

Notes:
(1)
Excluding lease termination fees, for the three months and year ended December 31, 2018, same-store cash NOI with redevelopment would be (0.7)% and (0.2)%, 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.





Fourth Quarter 2018 Supplemental Information
                               Page 13
 
 
CASH NOI BY REGION
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

(Amounts in thousands)
Three Months Ended December 31, 2018
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Cash Basis:
 
 
 
 
 
 
 
 
 
Southern California
8,480

 
4,043

 
5,823

 
—

 
18,346

Northern California
3,112

 
5,683

 
—

 
—

 
8,795

Hawaii
2,141

 
—

 
—

 
6,149

 
8,290

Oregon
235

 
4,181

 
1,565

 
—

 
5,981

Texas
3,570

 
—

 
—

 
—

 
3,570

Washington
—

 
3,545

 
—

 
—

 
3,545

Total Cash NOI
$
17,538

 
$
17,452

 
$
7,388

 
$
6,149

 
$
48,527



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.



Fourth Quarter 2018 Supplemental Information
                               Page 14
 
 
CASH NOI BREAKDOWN
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

Three Months Ended December 31, 2018
Cash NOI Breakdown
 
Portfolio Diversification by Geographic Region
    
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-chart-9a9dd10f460d572c82d.jpg    https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-chart-ee49d5732f8b5916800.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.

Fourth Quarter 2018 Supplemental Information
                               Page 15
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 


(Amounts in thousands)
 
Three Months Ended December 31, 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
 
$
960

 
$
26

 
$
233

 
$
(212
)
 
$
—

 
$
1,007

Carmel Mountain Plaza
 
3,203

 
234

 
875

 
(1,027
)
 
—

 
3,285

South Bay Marketplace
 
605

 
80

 
208

 
(215
)
 
—

 
678

Gateway Marketplace
 
604

 
2

 
262

 
(229
)
 
(18
)
 
621

Lomas Santa Fe Plaza
 
1,498

 
27

 
341

 
(446
)
 
—

 
1,420

Solana Beach Towne Centre
 
1,497

 
21

 
546

 
(564
)
 
(18
)
 
1,482

Del Monte Center
 
2,695

 
585

 
972

 
(1,554
)
 
—

 
2,698

Geary Marketplace
 
302

 
106

 
176

 
(170
)
 
—

 
414

The Shops at Kalakaua
 
495

 
26

 
50

 
(85
)
 
—

 
486

Waikele Center
 
2,696

 
364

 
773

 
(2,179
)
 
—

 
1,654

Alamo Quarry Market
 
3,688

 
337

 
1,781

 
(2,235
)
 
—

 
3,571

Hassalo on Eighth - Retail
 
276

 
51

 
54

 
(146
)
 
—

 
235

Subtotal Retail Portfolio
 
$
18,519

 
$
1,859

 
$
6,271

 
$
(9,062
)
 
$
(36
)
 
$
17,551

Office Portfolio
 
 
 
 
 
 
 
 
 
 
 
—

Torrey Reserve Campus (7)
 
$
4,495

 
$
53

 
$
330

 
$
(1,630
)
 
$
(394
)
 
$
2,854

Torrey Point
 
246

 
69

 
—

 
(215
)
 
(245
)
 
(145
)
Solana Beach Corporate Centre
 
1,798

 
3

 
81

 
(518
)
 
(77
)
 
1,287

The Landmark at One Market
 
6,731

 
28

 
382

 
(2,352
)
 
—

 
4,789

One Beach Street
 
1,082

 
1

 
188

 
(377
)
 
—

 
894

First & Main
 
2,797

 
183

 
506

 
(969
)
 
—

 
2,517

Lloyd District Portfolio (7)
 
2,476

 
515

 
160

 
(1,272
)
 
(77
)
 
1,802

City Center Bellevue
 
4,400

 
718

 
403

 
(1,677
)
 
(299
)
 
3,545

Subtotal Office Portfolio
 
$
24,025

 
$
1,570

 
$
2,050

 
$
(9,010
)
 
$
(1,092
)
 
$
17,543


Fourth Quarter 2018 Supplemental Information
                               Page 16
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
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(Amounts in thousands)
 
Three Months Ended December 31, 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
 
$
3,277

 
$
217

 
$
—

 
$
(1,260
)
 
$
(103
)
 
$
2,131

Imperial Beach Gardens
 
878

 
67

 
—

 
(340
)
 
(2
)
 
603

Mariner's Point
 
431

 
27

 
—

 
(171
)
 
(1
)
 
286

Santa Fe Park RV Resort
 
290

 
22

 
—

 
(149
)
 
—

 
163

Pacific Ridge Apartments
 
4,184

 
211

 
—

 
(1,723
)
 
(32
)
 
2,640

Hassalo on Eighth - Multifamily
 
3,006

 
364

 
—

 
(1,623
)
 
(182
)
 
1,565

Subtotal Multifamily Portfolio
 
$
12,066

 
$
908

 
$
—

 
$
(5,266
)
 
$
(320
)
 
$
7,388

Mixed-Use Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,588

 
$
1,269

 
$
1,022

 
$
(1,849
)
 
$
—

 
$
3,030

Waikiki Beach Walk - Embassy Suites™
 
9,777

 
710

 
—

 
(7,368
)
 
—

 
3,119

Subtotal Mixed-Use Portfolio
 
$
12,365

 
$
1,979

 
$
1,022

 
$
(9,217
)
 
$
—

 
$
6,149

Subtotal Development Properties
 
$
1

 
$
108

 
$
—

 
$
(213
)
 
$
—

 
$
(104
)
Total
 
$
66,976

 
$
6,424

 
$
9,343

 
$
(32,768
)
 
$
(1,448
)
 
$
48,527

   
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 December 31, 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 $36 and $1,146, respectively, for the three months ended December 31, 2018. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended December 31, 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 $320 of abatements for our multifamily portfolio for the three months ended December 31, 2018. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended December 31, 2018. Total tenant improvement reimbursements for our retail and office portfolio were approximately $0 and $54, respectively, for the three months ended December 31, 2018. There were no tenant improvement reimbursements for the retail portion of our mixed-use portfolio for the three months ended December 31, 2018.
(2)
Represents additional property-related income for the three months ended December 31, 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 December 31, 2018.
(4)
Represents property operating expenses for the three months ended December 31, 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 $304 for the three months ended December 31, 2018.

Fourth Quarter 2018 Supplemental Information
                               Page 17
 
 
SEGMENT CAPITAL EXPENDITURES
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

 
(Amounts in thousands)
 
Three Months Ended December 31, 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
 
$
1,163

 
$
3,042

 
$
4,205

 
$
1,336

 
$
—

 
$
5,541

 
Office Portfolio
 
13,701

 
2,974

 
16,675

 
4,224

 
—

 
20,899

 
Multifamily Portfolio
 
—

 
639

 
639

 
—

 
—

 
639

 
Mixed-Use Portfolio
 
115

 
360

 
475

 
—

 
—

 
475

 
Total
 
$
14,979

 
$
7,015

 
$
21,994

 
$
5,560

 
$
—

 
$
27,554

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 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
 
$
4,137

 
$
7,498

 
$
11,635

 
$
2,584

 
$
—

 
$
14,219

 
Office Portfolio
 
28,645

 
8,439

 
37,084

 
6,730

 
1,378

 
45,192

 
Multifamily Portfolio
 
—

 
3,659

 
3,659

 
—

 
—

 
3,659

 
Mixed-Use Portfolio
 
336

 
941

 
1,277

 
—

 
—

 
1,277

 
Total
 
$
33,118

 
$
20,537

 
$
53,655

 
$
9,314

 
$
1,378

 
$
64,347

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Fourth Quarter 2018 Supplemental Information
                               Page 18
 
 
SUMMARY OF OUTSTANDING DEBT
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(Amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
December 31, 2018
 
Interest Rate
 
Service (1)
 
Maturity Date
 
Maturity
Torrey Reserve - North Court
 
19,620

 
7.22
%
 
20,325

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII
 
6,635

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II
 
10,502

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre
 
35,008

 
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)
 
$
182,765

 
4.89
%
 
$
29,068

 
 
 
$
180,949

Term Loan A (4)
 
$
100,000

 
3.08
%
 
$
100,334

 
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
%
 
$
138,209

 
 
 
$
1,050,000

Unsecured Line of Credit (12)
 
$
64,000

 
3.44
%
 
 
 
 
 
 
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 $0.2 million.
(4)
On January 9, 2019, the Term Loan A maturity was extended to January 9, 2021, subject to our option to extend Term Loan A up to three times with each such extension for a one-year period. Effective 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 4.13%, 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 $4.1 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 1.05%-1.50%, based on our consolidated leverage ratio. The Revolver Loan total does not include debt issuance costs, net of $1.7 million.

Fourth Quarter 2018 Supplemental Information
                               Page 19
 
 
MARKET CAPITALIZATION
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

(Amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
December 31, 2018
Common shares outstanding
 
47,335

Common units outstanding
 
17,178

Common shares and common units outstanding
 
64,513

Market price per common share
 
$
40.17

Equity market capitalization
 
$
2,591,487

Total debt
 
$
1,296,765

Total market capitalization
 
$
3,888,252

Less: Cash on hand
 
$
(47,956
)
Total enterprise value
 
$
3,840,296

Total unencumbered assets, gross
 
$
2,356,383

 
 
 
Total debt/Total capitalization
 
33.4
%
Total debt/Total enterprise value
 
33.8
%
Net debt/Total enterprise value (1)
 
32.5
%
Total unencumbered assets, gross/Unsecured debt
 
211.8
%
 
 
 
Total debt/Adjusted EBITDA (2)(3)
 
7.5
x
Net debt/Adjusted EBITDA (1)(2)(3)
 
7.2
x
Interest coverage ratio (4)
 
3.4
x
Fixed charge coverage ratio (4)
 
3.4
x
 
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-chart-ad841fe5401856e4b48.jpg
Weighted Average Fixed Interest Rate
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:
5.2 years
Credit Ratings
Rating Agency
Rating
Outlook
Fitch
BBB
Negative
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 December 31, 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.
(5)
On January 9, 2019, the maturity date of Term Loan A was extended to January 9, 2021, with three one-year extension options.

Fourth Quarter 2018 Supplemental Information
                               Page 20
 
 
SUMMARY OF DEVELOPMENT OPPORTUNITIES
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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) (4)
 
 
Start
Date
Completion Date
Estimated Stabilized
Yield (1)
Rentable Square Feet
Percent
Leased (2)
Estimated Stabilization Date (3)
Cost Incurred to Date
Total Estimated Investment
 
 
Property
Location
Office Property:
 
 
 
 
 
 
 
 
Torrey Point
San Diego, CA
2015
July 31, 2017
6.75% - 7.75%
90,000
40.1%
2019
$41,247
$55,800
 
 
 
 
 
 
 
 
 
 
Development/Redevelopment Pipeline
 
Property
Property Type
Location
Estimated Rentable
Square Feet
Multifamily Units
Opportunity
Solana Beach Corporate Centre (Building 5)
Retail
Solana Beach, CA
10,000
N/A
Development of 10,000 square foot retail building
Lomas Santa Fe Plaza
Retail
Solana Beach, CA
45,000
N/A
Development of 45,000 square foot retail building
Solana Beach - Highway 101 (5)
Mixed Use
Solana Beach, CA
48,000
36
Development of mixed-use project
Lloyd District Portfolio - multiple phases (6)
Mixed Use
Portland, OR
TBD
TBD
 
Phase 2A - Oregon Square
 
 
55,000
33,000
N/A
N/A
Remodel and repurpose of two 33,000 square feet office buildings into flexible creative office space that unlock 22,000 square feet of leasable space that was previously used for basement storage
 
 
 
 
 
 
Phase 2B - Oregon Square
 
 
TBD
TBD
Development of mixed-use residential tower and build-to-suit office tower

Notes:
(1)
The estimated stabilized yield is calculated based on total estimated project costs, as defined above, when the project has reached stabilized occupancy.
(2)
Percentage leased include square footage under leases as of January 31, 2019, including leases which may not have commenced as of January 31, 2019.
(3)
Based on management's estimation of stabilized occupancy (90%).
(4)
Project costs exclude capitalized interest cost which is calculated in accordance with Accounting Standards Codification 835-20-50-1.
(5)
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 $1.4 million option payment.
(6)
The Lloyd District Portfolio was acquired in 2011 consisting of approximately 600,000 rentable square feet on more than 16 acres located in the Lloyd District of Portland, Oregon. The portion of the property that has been designated for additional development to include a high density, transit oriented, mixed-use urban village, with the potential to be in excess of approximately three million square feet. The entitlement for such development opportunity allows a 12:1 Floor Area Ratio with a 250 foot height limit and provides for retail, office and/or multifamily development.  Additional development plans are in the early stages and will continue to progress as demand and economic conditions allow.


Fourth Quarter 2018 Supplemental Information
                               Page 21
 
 
 
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PORTFOLIO DATA





Fourth Quarter 2018 Supplemental Information
                               Page 22
 
 
PROPERTY REPORT
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As of December 31, 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

 
94.6%
 
$
3,841,618

 
$52.00
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
77.4
 
12,234,245

 
29.91
 
 
 
Dick's Sporting Goods, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
88.7
 
2,222,421

 
18.86
 
 
 
Ross Dress for Less, Grocery Outlet
Gateway Marketplace
 
San Diego, CA
 
1997/2016

 
3

 
127,861

 
98.7
 
2,403,614

 
19.05
 
Hobby Lobby
 
Smart & Final, Aldi
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
208,030

 
97.0
 
5,971,638

 
29.59
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
93.5
 
5,929,000

 
25.70
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
673,572

 
98.3
 
11,680,190

 
17.64
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
95.6
 
1,156,036

 
34.40
 
 
 
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

 
418,047

 
100.0
 
10,798,380

 
25.83
 
Lowe's
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
588,970

 
99.5
 
14,745,038

 
25.16
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Hassalo on Eighth
 
Portland, OR
 
2015

 
3

 
44,153

 
76.6
 
1,079,577

 
31.92
 
 
 
Providence Health & Services, Green Zebra Grocery
Subtotal/Weighted Average Retail Portfolio
 
 
 
107

 
3,093,581

 
93.9%
 
$
74,043,135

 
$25.49
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-2016

 
14

 
516,676

 
84.1%
 
$
18,162,561

 
$41.80
 
 
 
 
Torrey Point
 
San Diego, CA
 
2017

 
2

 
92,614

 
32.2
 
983,599

 
32.98
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,495

 
87.8
 
7,172,493

 
38.44
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
26,940,554

 
64.24
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
4,358,102

 
44.65
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
11,182,650

 
31.42
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2015

 
2

 
459,603

 
87.6
 
10,065,764

 
25.00
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
497,472

 
98.2
 
18,719,712

 
38.32
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
26

 
2,656,486

 
90.9%
 
$
97,585,435

 
$40.41
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
133

 
5,750,067

 
92.5%
 
$
171,628,570

 
$32.27
 
 
 
 

Fourth Quarter 2018 Supplemental Information
                               Page 23
 
 
PROPERTY REPORT (CONTINUED)
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As of December 31, 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

 
94.3%
 
$
13,393,860

 
$
2,160

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
90.6
 
3,507,960

 
$
2,017

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
90.9
 
1,707,156

 
$
1,778

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

 
126

 
88.1
 
1,230,864

 
$
924

 
 
 
 
Pacific Ridge Apartments
 
San Diego, CA
 
2013
 
3

 
533

 
96.1
 
16,747,488

 
$
2,725

 
 
 
 
Hassalo on Eighth - Velomor
 
Portland, OR
 
2015
 
1

 
177

 
93.2
 
3,202,927

 
$
1,618

 
 
 
 
Hassalo on Eighth - Aster Tower
 
Portland, OR
 
2015
 
1

 
337

 
94.7
 
6,295,668

 
$
1,644

 
 
 
 
Hassalo on Eighth - Elwood
 
Portland, OR
 
2015
 
1

 
143

 
89.5
 
2,443,752

 
$
1,591

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
121

 
2,112

 
93.6%
 
$
48,529,675

 
$
2,046

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
96.1
%
 
$
10,752,372

 
$
115.70

 
 
 
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

 
91.3
%
 
$
315.39

 
$
287.99

 
 
 
 
Notes:
(1)
The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
(2)
Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of December 31, 2018, including leases which may not have commenced as of December 31, 2018. Percentage leased for our multifamily properties includes total units rented as of December 31, 2018.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 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 December 31, 2018. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of December 31, 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
 
5
 
17,607

 
$
709,740

South Bay Marketplace
 
1
 
2,824

 
$
102,276

Del Monte Center
 
1
 
212,500

 
$
96,000

Alamo Quarry Market
 
4
 
31,994

 
$
509,880

(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 December 31, 2018, the highest average monthly occupancy rate for this property was 88%, occurring in December 2018. 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 December 31, 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 December 31, 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 December 31, 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.

Fourth Quarter 2018 Supplemental Information
                               Page 24
 
 
RETAIL LEASING SUMMARY
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As of December 31, 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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
19

 
100%
 
65,046

 
$46.90
 
$45.52
 
$
89,535

 
3.0
 %
 
7.3
 %
 
4.0
 
$
471,790

 
$7.25
3rd Quarter 2018
 
10

 
100%
 
64,585

 
$30.44
 
$25.63
 
$
310,549

 
18.8
 %
 
21.7
 %
 
4.8
 
$
166,077

 
$2.57
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
Total 12 months
 
63

 
100%
 
239,287

 
$40.73
 
$39.31
 
$
341,533

 
3.6
 %
 
11.8
 %
 
5.7
 
$
1,752,842

 
$7.33
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
3

 
16%
 
2,956

 
$139.03
 
$123.55
 
$
45,742

 
12.5
 %
 
18.3
 %
 
5.2
 
$
20,840

 
$7.05
3rd Quarter 2018
 
1

 
10%
 
959

 
$192.00
 
$144.00
 
$
46,032

 
33.3
 %
 
40.0
 %
 
3.0
 
$
—

 
$0.00
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
Total 12 months
 
11

 
17%
 
19,978

 
$78.18
 
$82.63
 
$
(88,892
)
 
(5.4
)%
 
1.2
 %
 
8.0
 
$
1,058,440

 
$52.98
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
16

 
84%
 
62,090

 
$42.51
 
$41.81
 
$
43,793

 
1.7
 %
 
5.8
 %
 
4.0
 
$
450,950

 
$7.26
3rd Quarter 2018
 
9

 
90%
 
63,626

 
$28.00
 
$23.84
 
$
264,517

 
17.4
 %
 
20.0
 %
 
4.8
 
$
166,077

 
$2.61
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
Total 12 months
 
52

 
83%
 
219,309

 
$37.32
 
$35.36
 
$
430,425

 
5.6
 %
 
14.1
 %
 
5.5
 
$
694,402

 
$3.17
Total Lease Summary - Comparable and Non-Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
21

 
72,031

 
$45.89
 
4.6
 
$
925,440

 
$12.85
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2018
 
16

 
122,381

 
$28.81
 
11.2
 
$
11,775,947

 
$96.22
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
78

 
316,530

 
$37.99
 
8.1
 
$
14,165,593

 
$44.75
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease, including leases signed for the retail portion of our mixed-use property.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Fourth Quarter 2018 Supplemental Information
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OFFICE LEASING SUMMARY
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As of December 31, 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
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
11

 
100%
 
298,303

 
$88.41
 
$54.08
 
$
10,241,129

 
63.5
%
 
95.5
%
 
9.8
 
$
29,601,802

 
$99.23
3rd Quarter 2018
 
9

 
100%
 
95,279

 
$38.40
 
$34.59
 
$
363,065

 
11.0
%
 
12.6
%
 
6.3
 
$
6,191,785

 
$64.99
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
Total 12 months
 
51

 
100%
 
713,820

 
$67.55
 
$49.78
 
$
12,683,550

 
35.7
%
 
56.9
%
 
8.2
 
$
51,799,181

 
$72.57
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
8

 
73%
 
284,679

 
$90.10
 
$54.66
 
$
10,089,839

 
64.8
%
 
97.8
%
 
10.0
 
$
28,993,536

 
$101.85
3rd Quarter 2018
 
4

 
44%
 
83,147

 
$37.88
 
$34.15
 
$
310,566

 
10.9
%
 
11.7
%
 
6.8
 
$
5,987,498

 
$72.01
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
Total 12 months
 
23

 
45%
 
527,238

 
$70.67
 
$48.28
 
$
11,800,528

 
46.4
%
 
71.9
%
 
9.4
 
$
47,721,758

 
$90.51
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
3

 
27%
 
13,624

 
$53.05
 
$41.94
 
$
151,290

 
26.5
%
 
39.6
%
 
5.6
 
$
608,266

 
$44.65
3rd Quarter 2018
 
5

 
56%
 
12,132

 
$41.96
 
$37.63
 
$
52,499

 
11.5
%
 
18.3
%
 
2.8
 
$
204,287

 
$16.84
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
Total 12 months
 
28

 
55%
 
186,582

 
$58.72
 
$54.00
 
$
883,022

 
8.8
%
 
20.6
%
 
5.0
 
$
4,077,423

 
$21.85
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
15

 
312,673

 
$86.55
 
9.5
 
$
30,333,733

 
$97.01
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2018
 
13

 
114,367

 
$40.84
 
6.4
 
$
7,584,960

 
$66.32
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
75

 
828,642

 
$64.33
 
7.9
 
$
58,829,170

 
$70.99
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Fourth Quarter 2018 Supplemental Information
                               Page 26
 
 
MULTIFAMILY LEASING SUMMARY
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

As of December 31, 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
 
 
 
 
4th Quarter 2018
 
517
 
94.3%
 
$13,393,860
 
$2,160
3rd Quarter 2018
 
511
 
93.3%
 
$13,313,736
 
$2,170
2nd Quarter 2018
 
544
 
99.3%
 
$13,423,164
 
$2,056
1st Quarter 2018
 
512
 
93.4%
 
$12,558,516
 
$2,045
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Gardens
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
145
 
90.6%
 
$3,507,960
 
$2,017
3rd Quarter 2018
 
151
 
94.4%
 
$3,625,728
 
$2,000
2nd Quarter 2018
 
157
 
98.1%
 
$3,663,048
 
$1,945
1st Quarter 2018
 
149
 
93.1%
 
$3,521,508
 
$1,970
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
80
 
90.9%
 
$1,707,156
 
$1,778
3rd Quarter 2018
 
82
 
93.2%
 
$1,711,752
 
$1,739
2nd Quarter 2018
 
86
 
97.7%
 
$1,773,576
 
$1,719
1st Quarter 2018
 
81
 
92.1%
 
$1,610,880
 
$1,656
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
111
 
88.1%
 
$1,230,864
 
$924
3rd Quarter 2018
 
98
 
77.8%
 
$1,399,620
 
$1,190
2nd Quarter 2018
 
104
 
82.8%
 
$1,825,680
 
$1,458
1st Quarter 2018
 
106
 
84.4%
 
$1,275,120
 
$999
 
 
 
 
 
 
 
 
 
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
 
 
 
 
4th Quarter 2018
 
512
 
96.1%
 
$16,747,488
 
$2,725
3rd Quarter 2018
 
513
 
96.2%
 
$16,928,340
 
$2,751
2nd Quarter 2018
 
470
 
88.2%
 
$15,842,244
 
$2,808
1st Quarter 2018
 
493
 
92.5%
 
$16,052,556
 
$2,713








Fourth Quarter 2018 Supplemental Information
                               Page 27
 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 


As of December 31, 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
 
 
 
 
4th Quarter 2018
 
165
 
93.2%
 
$3,202,927
 
$1,618
3rd Quarter 2018
 
157
 
88.7%
 
$3,090,732
 
$1,641
2nd Quarter 2018
 
168
 
94.9%
 
$3,268,236
 
$1,621
1st Quarter 2018
 
157
 
88.7%
 
$3,159,180
 
$1,677
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Aster Tower
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
319
 
94.7%
 
$6,295,668
 
$1,644
3rd Quarter 2018
 
312
 
92.6%
 
$6,185,088
 
$1,652
2nd Quarter 2018
 
322
 
95.6%
 
$6,449,628
 
$1,668
1st Quarter 2018
 
324
 
96.1%
 
$6,400,212
 
$1,647
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Elwood
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
128
 
89.5%
 
$2,443,752
 
$1,591
3rd Quarter 2018
 
126
 
88.1%
 
$2,435,748
 
$1,611
2nd Quarter 2018
 
133
 
93.0%
 
$2,500,788
 
$1,567
1st Quarter 2018
 
135
 
94.4%
 
$2,496,744
 
$1,541
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2018
 
1,977
 
93.6%
 
$48,529,675
 
$2,046
3rd Quarter 2018
 
1,950
 
92.3%
 
$48,690,744
 
$2,081
2nd Quarter 2018
 
1,984
 
93.9%
 
$48,746,364
 
$2,048
1st Quarter 2018
 
1,957
 
92.7%
 
$47,074,716
 
$2,004

Notes:
(1)
Percentage leased for our multifamily properties includes total units rented as of each respective quarter end date.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) as of each respective quarter end date.
(3)
Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of each respective quarter end date.


Fourth Quarter 2018 Supplemental Information
                               Page 28
 
 
MIXED-USE LEASING SUMMARY
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

As of December 31, 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
 
 
 
 
4th Quarter 2018
 
92,890
 
96.1%
 
$10,752,372
 
$116
3rd Quarter 2018
 
92,767
 
95.9%
 
$10,573,741
 
$114
2nd Quarter 2018
 
92,777
 
95.9%
 
$10,610,601
 
$114
1st Quarter 2018
 
93,709
 
96.9%
 
$11,099,045
 
$118
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
4th Quarter 2018
 
337
 
91.3%
 
$315
 
$288
3rd Quarter 2018
 
342
 
92.8%
 
$348
 
$323
2nd Quarter 2018
 
346
 
93.7%
 
$303
 
$284
1st Quarter 2018
 
348
 
94.3%
 
$312
 
$295
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of December 31, 2018, including leases which may not have commenced as of December 31, 2018.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 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 December 31, 2018.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended December 31, 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.

Fourth Quarter 2018 Supplemental Information
                               Page 29
 
 
LEASE EXPIRATIONS
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

As of December 31, 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
 
14,512

 
0.5
%
 
0.2
%
 
$1.88
 
26,323

 
0.9
%
 
0.5
%
 
$28.72
 
1,214

 
1.3
%
 
—
%
 
$—
 
42,049

 
0.7
%
 
$18.63
2019
 
167,814

 
6.3

 
2.9

 
$42.50
 
142,204

 
4.6

 
2.4

 
$37.75
 
15,984

 
16.5

 
0.3

 
$115.73
 
326,002

 
5.6

 
$44.02
2020
 
278,898

 
10.5

 
4.8

 
$37.14
 
293,117

 
9.5

 
5.0

 
$27.41
 
19,930

 
20.6

 
0.3

 
$58.94
 
591,945

 
10.1

 
$33.06
2021
 
239,099

 
9.0

 
4.1

 
$40.33
 
187,210

 
6.1

 
3.2

 
$44.03
 
19,712

 
20.4

 
0.3

 
$178.59
 
446,021

 
7.6

 
$47.99
2022
 
244,232

 
9.2

 
4.2

 
$48.08
 
447,386

 
14.5

 
7.7

 
$30.28
 
5,481

 
5.7

 
0.1

 
$210.95
 
697,099

 
11.9

 
$37.94
2023
 
361,694

(2) 
13.6

 
6.2

 
$47.31
 
302,362

 
9.8

 
5.2

 
$24.57
 
7,436

 
7.7

 
0.1

 
$92.20
 
671,492

 
11.5

 
$37.57
2024
 
108,804


4.1

 
1.9

 
$46.60
 
378,864

 
12.2

 
6.5

 
$25.18
 
2,091

 
2.2

 
—

 
$112.75
 
489,759

 
8.4

 
$30.31
2025
 
234,906

 
8.8

 
4.0

 
$33.14
 
185,620

 
6.0

 
3.2

 
$23.00
 
1,010

 
1.0

 
—

 
$251.61
 
421,536

 
7.2

 
$29.20
2026
 
127,359

(3)(4) 
4.8

 
2.2

 
$37.51
 
105,739

 
3.4

 
1.8

 
$26.15
 
—

 
—

 
—

 
$—
 
233,098

 
4.0

 
$32.36
2027
 
15,459

 
0.6

 
0.3

 
$51.18
 
120,100

 
3.9

 
2.1

 
$27.36
 
13,118

 
13.6

 
0.2

 
74.38
 
148,677

 
2.5

 
$33.99
2028
 
67,363

 
2.5

 
1.2

 
$38.69
 
481,296

 
15.6

 
8.2

 
$14.56
 
6,914

 
7.1

 
0.1

 
$130.17
 
555,573

 
9.5

 
$18.92
Thereafter
 
396,682

(5)(6) 
14.9

 
6.8

 
$51.78
 
174,575

 
5.6

 
3.0

 
$21.77
 
—

 
—

 
—

 
$—
 
571,257

 
9.8

 
$42.61
Signed Leases Not Commenced
 
158,071

 
6.0

 
2.7

 
—
 
59,535

 
1.9

 
1.0

 
—
 
—

 
—

 
—

 
—
 
217,606

 
3.7

 
—
Available
 
241,593

 
9.1

 
4.1

 
—
 
189,250

 
6.1

 
3.2

 
—
 
3,817

 
3.9

 
0.1

 
—
 
434,660

 
7.4

 
—
Total (7)
 
2,656,486

 
100.0
%
 
45.4
%
 
$36.73
 
3,093,581

 
100.0
%
 
52.9
%
 
$23.93
 
96,707

 
100.0
%
 
1.7
%
 
$111.19
 
5,846,774

 
100.0
%
 
$31.19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumes all lease options are exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Mixed-Use (Retail Portion Only)
 
Total
 
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
Annualized
 
 
Expiring
 
Office
 
Total
 
Base Rent
 
Expiring
 
Retail
 
Total
 
Base Rent
 
Expiring
 
Mixed-Use
 
Total
 
Base Rent
 
Expiring
 
Total
 
Base Rent
Year
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
Month to Month
 
14,512

 
0.5
%
 
0.2
%
 
$1.88
 
26,323

 
0.9
%
 
0.5
%
 
$28.72
 
1,214

 
1.3
%
 
—
%
 
$—
 
42,049

 
0.7
%
 
$18.63
2019
 
146,860

 
5.5

 
2.5

 
$41.30
 
74,495

 
2.4

 
1.3

 
$37.80
 
15,984

 
16.5

 
0.3

 
$115.73
 
237,339

 
4.1

 
$45.21
2020
 
132,095

 
5.0

 
2.3

 
$38.42
 
166,579

 
5.4

 
2.8

 
$23.30
 
2,998

 
3.1

 
0.1

 
$120.63
 
301,672

 
5.2

 
$30.89
2021
 
74,275

 
2.8

 
1.3

 
$41.52
 
106,127

 
3.4

 
1.8

 
$46.23
 
19,712

 
20.4

 
0.3

 
$178.59
 
200,114

 
3.4

 
$57.52
2022
 
53,128

 
2.0

 
0.9

 
$43.70
 
110,830

 
3.6

 
1.9

 
$36.60
 
5,481

 
5.7

 
0.1

 
$210.95
 
169,439

 
2.9

 
$44.47
2023
 
127,602

 
4.8

 
2.2

 
$38.80
 
56,896

 
1.8

 
1.0

 
$36.76
 
7,436

 
7.7

 
0.1

 
$92.20
 
191,934

 
3.3

 
$40.26
2024
 
52,254

 
2.0

 
0.9

 
$43.96
 
191,731

 
6.2

 
3.3

 
$31.57
 
2,091

 
2.2

 
—

 
$112.75
 
246,076

 
4.2

 
$34.89
2025
 
173,052

 
6.5

 
3.0

 
$36.16
 
110,591

 
3.6

 
1.9

 
$28.53
 
1,010

 
1.0

 
—

 
$251.61
 
284,653

 
4.9

 
$33.96
2026
 
158,392

 
6.0

 
2.7

 
$37.08
 
94,960

 
3.1

 
1.6

 
$29.07
 
—

 
—

 
—

 
$—
 
253,352

 
4.3

 
$34.08
2027
 
79,850

 
3.0

 
1.4

 
$38.86
 
174,035

 
5.6

 
3.0

 
$29.70
 
13,118

 
13.6

 
0.2

 
74.38
 
267,003

 
4.6

 
$34.63
2028
 
151,777

 
5.7

 
2.6

 
$39.86
 
219,874

 
7.1

 
3.8

 
$22.61
 
—

 
—

 
—

 
$—
 
371,651

 
6.4

 
$29.65
Thereafter
 
1,093,025

(2)(3)(4)(5)(6) 
41.1

 
18.7

 
$48.01
 
1,512,355

 
48.9

 
25.9

 
$22.10
 
23,846

 
24.7

 
0.4

 
$71.84
 
2,629,226

 
45.0

 
$33.32
Signed Leases Not Commenced
 
158,071

 
6.0

 
2.7

 
—
 
59,535

 
1.9

 
1.0

 
—
 
—

 
—

 
—

 
—
 
217,606

 
3.7

 
—
Available
 
241,593

 
9.1

 
4.1

 
—
 
189,250

 
6.1

 
3.2

 
—
 
3,817

 
3.9

 
0.1

 
—
 
434,660

 
7.4

 
—
Total (7)
 
2,656,486

 
100.0
%
 
45.4
%
 
$36.73
 
3,093,581

 
100.0
%
 
52.9
%
 
$23.93
 
96,707

 
100.0
%
 
1.7
%
 
$111.19
 
5,846,774

 
100.0
%
 
$31.19

Fourth Quarter 2018 Supplemental Information
                               Page 30
 
 
LEASE EXPIRATIONS (CONTINUED)
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As of December 31, 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 December 31, 2018 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 23,101 square feet leased by Salesforce.com at The Landmark at One Market through June 30, 2019, for which Autodesk, Inc. has signed an agreement to lease such space beginning July 1, 2019 through December 31, 2023 with options to extend the lease through December 31, 2033.
(3)
The expirations include 19,697 square feet leased by Wargaming (USA), Inc. at City Center Bellevue through May 31, 2019, for which Smartsheet, Inc. has signed an agreement to lease such space beginning June 1, 2019 through December 31, 2026 with options to extend the lease through December 31, 2031.
(4)
The expirations include 10,796 square feet leased by Information Tools, Inc. and Homestreet Bank at City Center Bellevue through February 28, 2019 and April 30, 2019, respectively, for which Wargaming (USA), Inc. has signed an agreement to lease such space beginning June 1, 2019 through May 31, 2026 with options to extend the lease through May 31, 2029.
(5)
The expirations include 47,988 square feet leased by Salesforce.com at The Landmark at One Market through December 31, 2018, for which Google LLC has signed an agreement to lease such space beginning January 1, 2019 through December 31, 2029 with options to extend the lease through December 31, 2039.
(6)
The expirations include 183,029 square feet leased by Salesforce.com at The Landmark at One Market through June 30, 2019, for which Google LLC has signed an agreement to lease such space beginning January 1, 2019 through December 31, 2029 with options to extend the lease through December 31, 2039.
(7)
Individual items may not add up to total due to rounding.



Fourth Quarter 2018 Supplemental Information
                               Page 31
 
 
PORTFOLIO LEASED STATISTICS
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At December 31, 2018
 
At December 31, 2017
 
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
 
Overall Portfolio(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,093,581

 
2,904,331

 
93.9
%
 
3,214,710

 
3,113,102

 
96.8
%
 
Office Properties (square feet) 
 
2,656,486

 
2,414,893

 
90.9
%
 
2,684,477

 
2,374,349

 
88.4
%
 
Multifamily Properties (units)
 
2,112

 
1,977

 
93.6
%
 
2,112

 
1,938

 
91.8
%
 
Mixed-Use Properties (square feet)
 
96,707

 
92,890

 
96.1
%
 
96,707

 
93,684

 
96.9
%
 
Mixed-Use Properties (units)
 
369

 
343

(3) 
93.0
%
 
369

 
341

(3) 
92.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)(4)
 
2,675,534

 
2,486,284

 
92.9
%
 
2,677,073

 
2,625,515

 
98.1
%
 
Office Properties (square feet)
 
2,563,872

 
2,385,040

 
93.0
%
 
2,684,477

 
2,374,349

 
88.4
%
 
Multifamily Properties (units)
 
2,112

 
1,977

 
93.6
%
 
2,112

 
1,938

 
91.8
%
 
Mixed-Use Properties (square feet)
 
96,707

 
92,890

 
96.1
%
 
96,707

 
93,684

 
96.9
%
 
Mixed-Use Properties (units)
 
369

 
343

(3) 
93.0
%
 
369

 
341

(3) 
92.5
%
 

Notes:
(1)
Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
(2)
See Glossary of Terms.
(3)
Represents average occupancy for the year ended December 31, 2018 and 2017.
(4)
The same-store portfolio excludes Waikele Center due to significant redevelopment activity.



Fourth Quarter 2018 Supplemental Information
                               Page 32
 
 
TOP TENANTS - RETAIL
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As of December 31, 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

 
5.0
%
 
2.7
%
 
$
3,720,000

 
5.0
%
 
2.0
%
2

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

 
2.2

 
1.2

 
2,189,648

 
3.0

 
1.2

3

Sprouts Farmers Market
 
Solana Beach Towne Centre,
Carmel Mountain Plaza,
Geary Marketplace
 
6/30/2024
3/31/2025
9/30/2032
 
71,431

 
2.3

 
1.2

 
1,919,436

 
2.6

 
1.1

4

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

 
1.6

 
0.9

 
1,399,205

 
1.9

 
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

 
2.2

 
1.2

 
1,335,447

 
1.8

 
0.7

7

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

 
2.3

 
1.2

 
1,231,599

 
1.7

 
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

 
1.4

 
0.6

9

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

 
1.1

 
0.6

 
1,006,589

 
1.3

 
0.6

10

Whole Foods Market
 
Alamo Quarry Market
Del Monte Center
 
10/31/2022
7/31/2023
 
63,471

 
2.1

 
1.1

 
956,412

 
1.3

 
0.5

 
Top 10 Retail Tenants Total
 
 
 
690,537

 
22.2
%
 
11.9
%
 
$
14,780,439

 
20.0
%
 
8.2
%


*
Data withheld at tenant's request.
 
 

Fourth Quarter 2018 Supplemental Information
                               Page 33
 
 
TOP TENANTS - OFFICE
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As of December 31, 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
 
12/31/2018
6/30/2019
 
254,118

 
9.6
%
 
4.3
%
 
$
15,002,748

 
15.4
%
 
8.2
%
2

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

 
4.3

 
2.0

 
9,547,099

 
9.8

 
5.2

3

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

 
3.5

 
1.6

 
3,006,453

 
3.1

 
1.6

4

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

 
3.8

 
1.7

 
2,735,895

 
2.8

 
1.5

5

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

 
3.3

 
1.5

 
2,607,730

 
2.7

 
1.4

6

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

 
2.4

 
1.1

 
2,510,982

 
2.6

 
1.4

7

VMWare, Inc.
 
City Center Bellevue
 
11/30/2022
3/31/2025
 
72,883

 
2.7

 
1.2

 
2,404,668

 
2.5

 
1.3

8

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

 
2.4

 
1.1

 
2,184,302

 
2.2

 
1.2

9

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

 
1.3

 
0.6

 
1,807,609

 
1.9

 
1.0

10

Industrious
 
City Center Bellevue
 
11/30/2033
 
37,166

 
1.4

 
0.6

 
1,728,219

 
1.8

 
0.9

 
Top 10 Office Tenants Total
 
 
 
924,578

 
34.7
%
 
15.7
%
 
$
43,535,705

 
44.8
%
 
23.7
%




Fourth Quarter 2018 Supplemental Information
                               Page 34
 
 
 
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APPENDIX





Fourth 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 months and year ended December 31, 2018 and 2017 is as follows:
    
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

Depreciation and amortization
21,060

 
19,918

 
107,093

 
83,278

Interest expense
12,861

 
13,992

 
52,248

 
53,848

Interest income
(29
)
 
(177
)
 
(238
)
 
(548
)
Income tax expense/(benefit)
50

 
246

 
327

 
214

EBITDA
$
43,151

 
$
43,710

 
$
186,632

 
$
176,924


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
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
EBITDA
$
43,151

 
$
43,710

 
$
186,632

 
$
176,924

Pro forma adjustments
—

 
—

 
—

 
3,026

Adjusted EBITDA
$
43,151

 
$
43,710

 
$
186,632

 
$
179,950


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 months and year ended December 31, 2018 and 2017 is as follows:
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

Depreciation and amortization
21,060

 
19,918

 
107,093

 
83,278

Interest expense
12,861

 
13,992

 
52,248

 
53,848

Interest income
(29
)
 
(177
)
 
(238
)
 
(548
)
Income tax expense/(benefit)
50

 
246

 
327

 
214

EBITDAre
$
43,151

 
$
43,710

 
$
186,632

 
$
176,924



Fourth 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
 
Year Ended
 
December 31,
 
December 31,
Reconciliation of NOI to net income
2018
 
2017
 
2018
 
2017
Total NOI
$
49,796

 
$
49,921

 
$
209,412

 
$
198,306

General and administrative
(6,645
)
 
(6,211
)
 
(22,784
)
 
(21,382
)
Depreciation and amortization
(21,060
)
 
(19,918
)
 
(107,093
)
 
(83,278
)
Operating Income
$
22,091

 
$
23,792

 
$
79,535

 
$
93,646

Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other income, net
(21
)
 
(69
)
 
(85
)
 
334

Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

Net income attributable to restricted shares
(96
)
 
(60
)
 
(311
)
 
(241
)
Net income attributable to unitholders in the Operating Partnership
(2,440
)
 
(2,594
)
 
(7,205
)
 
(10,814
)
Net income attributable to American Assets Trust, Inc. stockholders
$
6,673

 
$
7,077

 
$
19,686

 
$
29,077


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

Fourth 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
 
Year Ended
 
December 31,
 
December 31,
Reconciliation of Total Cash NOI to Net Income
2018
 
2017
 
2018
 
2017
Total Cash NOI
$
48,527

 
$
49,919

 
$
207,945

 
$
195,845

Non-cash revenue and other operating expenses (1)
1,269

 
2

 
1,467

 
2,461

General and administrative
(6,645
)
 
(6,211
)
 
(22,784
)
 
(21,382
)
Depreciation and amortization
(21,060
)
 
(19,918
)
 
(107,093
)
 
(83,278
)
Operating income
$
22,091

 
$
23,792

 
$
79,535

 
$
93,646

Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other income, net
(21
)
 
(69
)
 
(85
)
 
334

Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

(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 (1)
 
Year Ended (2)
 
December 31,
 
December 31,
Reconciliation of Same-Store Cash NOI Comparison with Redevelopment to Operating Income
2018
 
2017
 
2018
 
2017
Same-Store Cash NOI
$
47,070

 
$
44,937

 
$
178,460

 
$
171,707

Redevelopment Cash NOI (3)
1,516

 
3,907

 
11,127

 
15,203

Same-Store Cash NOI with Redevelopment
48,586

 
48,844

 
189,587

 
186,910

Tenant improvement reimbursements
54

 
1,101

 
4,275

 
1,840

Total Same-Store Cash NOI with Redevelopment
$
48,640

 
$
49,945

 
$
193,862

 
$
188,750

Non-Same Store Cash NOI
(113
)
 
(26
)
 
14,083

 
7,095

Total Cash NOI
$
48,527

 
$
49,919

 
$
207,945

 
$
195,845

Non-cash revenue and other operating expenses (4)
1,269

 
2

 
1,467

 
2,461

General and administrative
(6,645
)
 
(6,211
)
 
(22,784
)
 
(21,382
)
Depreciation and amortization
(21,060
)
 
(19,918
)
 
(107,093
)
 
(83,278
)
Operating income
$
22,091

 
$
23,792

 
$
79,535

 
$
93,646

Interest expense
(12,861
)
 
(13,992
)
 
(52,248
)
 
(53,848
)
Other income, net
(21
)
 
(69
)
 
(85
)
 
334

Net income
$
9,209

 
$
9,731

 
$
27,202

 
$
40,132

(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) Waikele Center, due to significant redevelopment activity; (ii) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (iii) land held for development.

Fourth Quarter 2018 Supplemental Information
                               Page 38
 
 
GLOSSARY OF TERMS (CONTINUED)
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(2)
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; (iv) Torrey Point, which was placed into operations and became available for occupancy in August 2018; and (v) land held for development.
(3)
Redevelopment property refers to Waikele Center and Lloyd District Portfolio - Land.
(4)
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.

Fourth Quarter 2018 Supplemental Information
                               Page 39
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.jpg
 
 

Same-Store Portfolio, Non-Same Store Portfolio and Redevelopment Same-Store: Information provided on a same-store basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, properties under development, properties classified as held for development and properties classified as discontinued operations. Information provided on a redevelopment same-store basis includes the results of properties undergoing significant redevelopment for the entirety or portion of both periods being compared. The following table shows the properties included in the same-store, non-same store and redevelopment same-store portfolio for the comparative periods presented.
 
Comparison of Three Months Ended
 
Comparison of Year Ended
 
December 31, 2018 to 2017
 
December 31, 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
 
 
 
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
Torrey Point
 
 
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
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
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.

Fourth Quarter 2018 Supplemental Information
                               Page 40
 
 
GLOSSARY OF TERMS (CONTINUED)
https://cdn.kscope.io/f3c5617b8cec0fad66c05f3a6ce7a8b4-aat2018q4a12.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.

Fourth Quarter 2018 Supplemental Information
                               Page 41