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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):
April 30, 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 April 30, 2019, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending March 31, 2019. Also on April 30, 2019, the Company made available on the "Investors" page of its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter ending March 31, 2019. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

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


Item 7.01
Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ending March 31, 2019 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
April 30, 2019
 
 

3
Exhibit


https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg

American Assets Trust, Inc. Reports First Quarter 2019 Financial Results

Net income available to common stockholders of $11.1 million for the first quarter, or $0.24 per diluted share
Funds From Operations per diluted share increased 10% year-over-year for the first quarter
Leased approximately 48,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 6%, respectively, for the first quarter
Leased approximately 38,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 4%, respectively, for the first quarter

SAN DIEGO, California - 4/30/2019 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its first quarter ended March 31, 2019.

First Quarter Highlights
•
Net income available to common stockholders of $11.1 million for the first quarter, or $0.24 per diluted share
•
Funds From Operations increased 10% year-over-year to $0.56 per diluted share for the first quarter
•
Same-store cash NOI increased 1% year-over-year for the first quarter
•
Leased approximately 38,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 4%, respectively, for the first quarter
•
Leased approximately 48,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 6%, respectively, for the first quarter
•
Credit agreement amended to extend maturity date and decrease credit spreads on $100 million term loan, effective January 9, 2019
•
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; and subsequently leased entirety of such building (approximately 108,000 square feet) to a national home decor retailer.

Financial Results
Net income attributable to common stockholders was $11.1 million, or $0.24 per basic and diluted share for the first quarter of 2019 compared to net loss of $(0.5) million, or $(0.01) per basic and diluted share for the first quarter of 2018. The year-over-year increase is primarily due to an increase in lease termination fees at Carmel Mountain Plaza attributed to the termination of our former ground lease and a decrease in depreciation expense at Waikele Center attributed to the redevelopment of the Kmart space.

During the first quarter of 2019, the company generated funds from operations (“FFO”) for common stockholders of $35.7 million, or $0.56 per diluted share, compared to $32.5 million, or $0.51 per diluted share, for the first quarter of 2018.

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


1


Leasing
The portfolio leased status as of the end of the indicated quarter was as follows:
 
March 31, 2019
December 31, 2018
March 31, 2018
Total Portfolio
 
 
 
Retail
97.1%
93.9%
96.6%
Office
92.3%
90.9%
94.6%
Multifamily
93.9%
93.6%
92.7%
Mixed-Use:
 
 
 
Retail
98.2%
96.1%
96.9%
Hotel
91.8%
93.0%
94.3%
 
 
 
 
Same-Store Portfolio
 
 
Retail (1)
96.7%
92.9%
97.8%
Office (2)
94.1%
93.0%
94.6%
Multifamily
93.9%
93.6%
92.7%
(1) 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 first quarter of 2019, the company signed 29 leases for approximately 229,900 square feet of retail and office space, as well as 345 multifamily apartment leases. Renewals accounted for 92% of the comparable retail leases, 83% of the comparable office leases and 48% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the first quarter 2019 and trailing four quarters ended March 31, 2019, 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
Q1 2019
13
48,000
 
5.7%
 
$49.14
$46.49
 
15.2%
 
Last 4 Quarters
57
244,000
 
5.9%
 
$40.99
$38.70
 
13.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
Q1 2019
6
38,000
 
4.2%
 
$49.46
$47.48
 
14.6%
 
Last 4 Quarters
41
544,000
 
44.8%
 
$67.56
$46.67
 
66.6%
 

Multifamily
The average monthly base rent per leased unit for same-store properties for the first quarter of 2019 was $2,057 compared to an average monthly base rent per leased unit of $1,988 for the first quarter of 2018, an increase of approximately 3%.


2


Same-Store Cash Net Operating Income
For the first quarter of 2019, same-store cash NOI increased 0.7%, compared to the first quarter of 2018. The same-store cash NOI by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
March 31,
 
 
 
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
 
Retail
$
14,795

 
$
15,288

 
(3.2
)
%
Office
18,479

 
18,225

 
1.4

 
Multifamily
7,892

 
7,353

 
7.3

 
Mixed-Use
—

 
—

 
—

 
Same-store Cash NOI (2)
$
41,166

 
$
40,866

 
0.7

%

(1)
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; (iii) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity; and (iv) land held for development.
(2)
Excluding lease termination fees for the three months ended March 31, 2019, same-store cash NOI would be 1.4%.

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 March 31, 2019, the company had gross real estate assets of $2.7 billion and liquidity of $316.5 million, comprised of cash and cash equivalents of $54.5 million and $262.0 million of availability on its line of credit.

For the quarter ended March 31, 2019, we issued 162,531 shares of common stock through our at-the-market equity program at a weighted average price per share of $45.53, resulting in net proceeds of $7.0 million. Additionally, we issued 519,382 shares of common stock through our at-the-market equity program that settled after March 31, 2019 at a weighted average price per share of $45.57, resulting in additional net proceeds of $23.4 million. We intend to use the proceeds primarily to fund development activities at Lloyd District Portfolio and Waikele Center.

Dividends
The company declared dividends on its shares of common stock of $0.28 per share for the first quarter of 2019. The dividends were paid on March 28, 2019.

In addition, the company has declared a dividend on its common stock of $0.28 per share for the second quarter of 2019. The dividend will be paid on June 27, 2019 to stockholders of record on June 13, 2019.

Guidance
The company affirms its guidance range for full year 2019 FFO per diluted share of $2.18 to $2.26 per share, a midpoint increase of 6% from 2018 FFO per diluted share of $2.09 per share. The company's guidance excludes
any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or
repayments.

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

3



Conference Call
The company will hold a conference call to discuss the results for the first quarter of 2019 on Wednesday, May 1, 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 8599255. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, May 1, 2019 through Wednesday, May 8, 2019. To access the replay, dial 1-855-859-2056 and use the pass code 8599255. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.

Supplemental Information
Supplemental financial information regarding the company's first quarter 2019 results may be found on the “Investors” page of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

4


Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
March 31, 2019
 
December 31, 2018
Assets
(unaudited)
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,569,407

 
$
2,549,571

Construction in progress
 
77,094

 
 
71,228

Held for development
 
9,392

 
 
9,392

 
 
2,655,893

 
 
2,630,191

Accumulated depreciation
 
(609,020
)
 
 
(590,338
)
Net real estate
 
2,046,873

 
 
2,039,853

Cash and cash equivalents
 
54,538

 
 
47,956

Restricted cash
 
9,777

 
 
9,316

Accounts receivable, net
 
9,137

 
 
9,289

Deferred rent receivables, net
 
40,554

 
 
39,815

Other assets, net
 
56,169

 
 
52,021

Total assets
$
2,217,048

 
$
2,198,250

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
162,688

 
$
182,572

Unsecured notes payable, net
 
1,045,709

 
 
1,045,863

Unsecured line of credit, net
 
86,438

 
 
62,337

Accounts payable and accrued expenses
 
53,683

 
 
46,616

Security deposits payable
 
7,579

 
 
8,844

Other liabilities and deferred credits, net
 
55,618

 
 
49,547

Total liabilities
 
1,411,715

 
 
1,395,779

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,486,894 and 47,335,409 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
 
475

 
 
474

Additional paid-in capital
 
928,792

 
 
920,661

Accumulated dividends in excess of net income
 
(130,841
)
 
 
(128,778
)
Accumulated other comprehensive income
 
8,825

 
 
10,620

Total American Assets Trust, Inc. stockholders' equity
 
807,251

 
 
802,977

Noncontrolling interests
 
(1,918
)
 
 
(506
)
Total equity
 
805,333

 
 
802,471

Total liabilities and equity
$
2,217,048

 
$
2,198,250


5


American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended March 31,
 
2019
 
2018
Revenue:
 
 
 
Rental income
$
76,831

 
$
76,201

Other property income
8,488

 
4,531

Total revenue
85,319

 
80,732

Expenses:
 
 
 
Rental expenses
20,796

 
20,420

Real estate taxes
9,046

 
8,546

General and administrative
6,073

 
5,567

Depreciation and amortization
20,583

 
33,279

Total operating expenses
56,498

 
67,812

Operating income
28,821

 
12,920

Interest expense
(13,349
)
 
(13,820
)
Other income (expense), net
(229
)
 
209

Net income (loss)
15,243

 
(691
)
Net (income) loss attributable to restricted shares
(93
)
 
72

Net (income) loss attributable to unitholders in the Operating Partnership
(4,055
)
 
166

Net income (loss) attributable to American Assets Trust, Inc. stockholders
$
11,095

 
$
(453
)
 
 
 
 
Net income (loss) per share
 
 
 
Basic income (loss) attributable to common stockholders per share
$
0.24

 
$
(0.01
)
Weighted average shares of common stock outstanding - basic
47,004,465

 
46,935,820

 
 
 
 
Diluted income (loss) attributable to common stockholders per share
$
0.24

 
$
(0.01
)
Weighted average shares of common stock outstanding - diluted
64,182,073

 
46,935,820

 
 
 
 
Dividends declared per common share
$
0.28

 
$
0.27

 
 
 
 


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
 
March 31, 2019
Funds From Operations (FFO)
 
 
Net income
$
15,243

Depreciation and amortization of real estate assets
 
20,583

FFO, as defined by NAREIT
$
35,826

Less: Nonforfeitable dividends on restricted stock awards
 
(91
)
FFO attributable to common stock and units
$
35,735

FFO per diluted share/unit
$
0.56

Weighted average number of common shares and units, diluted
 
64,185,323


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)
 
March 31,
 
2019
 
2018
Same-store cash NOI
$
41,166

 
$
40,866

Non-same-store cash NOI
7,871

 
9,770

Tenant improvement reimbursements (2)
991

 
868

Cash NOI
$
50,028

 
$
51,504

Non-cash revenue and other operating expenses (3)
5,449

 
262

General and administrative
(6,073
)
 
(5,567
)
Depreciation and amortization
(20,583
)
 
(33,279
)
Interest expense
(13,349
)
 
(13,820
)
Other income (expense), net
(229
)
 
209

Net income (loss)
$
15,243

 
$
(691
)
 
 
 
 
Number of properties included in same-store analysis
24
 
23
(1)
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; (iii) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity and (iv) land held for development.
(2)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
(3)
Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, lease termination fees at Carmel Mountain Plaza, and straight-line rent expense for our leases of the Annex at The Landmark at One Market.
 
Reported results are preliminary and not final until the filing of the company's Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.


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
 
 
 
FIRST QUARTER 2019
 
Supplemental Information
 
 


https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-coverpicture2019q1a02.jpg


 
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.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/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-map2019q1a02.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 March 31, 2019.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

First Quarter 2019 Supplemental Information
                               Page 2
 
 
INDEX
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

 
FIRST QUARTER 2019 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Operations
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
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.

First Quarter 2019 Supplemental Information
                               Page 3
 
 
 
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 






FINANCIAL HIGHLIGHTS





First Quarter 2019 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Amounts in thousands, except shares and per share data)
March 31, 2019
 
December 31, 2018
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,569,407

 
$
2,549,571

Construction in progress
77,094

 
71,228

Held for development
9,392

 
9,392

 
2,655,893

 
2,630,191

Accumulated depreciation
(609,020
)
 
(590,338
)
Net real estate
2,046,873

 
2,039,853

Cash and cash equivalents
54,538

 
47,956

Restricted cash
9,777

 
9,316

Accounts receivable, net
9,137

 
9,289

Deferred rent receivable, net
40,554

 
39,815

Other assets, net
56,169

 
52,021

TOTAL ASSETS
$
2,217,048

 
$
2,198,250

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
162,688

 
$
182,572

Unsecured notes payable, net
1,045,709

 
1,045,863

Unsecured line of credit, net
86,438

 
62,337

Accounts payable and accrued expenses
53,683

 
46,616

Security deposits payable
7,579

 
8,844

Other liabilities and deferred credits, net
55,618

 
49,547

Total liabilities
1,411,715

 
1,395,779

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,486,894 and 47,335,409 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
475

 
474

Additional paid in capital
928,792

 
920,661

Accumulated dividends in excess of net income
(130,841
)
 
(128,778
)
Accumulated other comprehensive income
8,825

 
10,620

Total American Assets Trust, Inc. stockholders' equity
807,251

 
802,977

Noncontrolling interests
(1,918
)
 
(506
)
Total equity
805,333

 
802,471

TOTAL LIABILITIES AND EQUITY
$
2,217,048

 
$
2,198,250


First Quarter 2019 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
March 31,
 
2019
 
2018
REVENUE:
 
 
 
Rental income
$
76,831

 
$
76,201

Other property income
8,488

 
4,531

Total revenue
85,319

 
80,732

EXPENSES:
 
 
 
Rental expenses
20,796

 
20,420

Real estate taxes
9,046

 
8,546

General and administrative
6,073

 
5,567

Depreciation and amortization
20,583

 
33,279

Total operating expenses
56,498

 
67,812

OPERATING INCOME
28,821

 
12,920

Interest expense
(13,349
)
 
(13,820
)
Other (expense) income, net
(229
)
 
209

NET INCOME (LOSS)
15,243

 
(691
)
Net (income) loss attributable to restricted shares
(93
)
 
72

Net (income) loss attributable to unitholders in the Operating Partnership
(4,055
)
 
166

NET INCOME (LOSS) ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
11,095

 
$
(453
)
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
Basic income (loss) from operations attributable to common stockholders per share
$
0.24

 
$
(0.01
)
Weighted average shares of common stock outstanding - basic
47,004,465

 
46,935,820

Diluted income (loss) from continuing operations attributable to common stockholders per share
$
0.24

 
$
(0.01
)
Weighted average shares of common stock outstanding - diluted
64,182,073

 
46,935,820


First Quarter 2019 Supplemental Information
                               Page 6
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
March 31,
 
2019
 
2018
Funds from Operations (FFO) (1)
 
 
 
Net income (loss)
$
15,243

 
$
(691
)
Depreciation and amortization of real estate assets
20,583

 
33,279

FFO, as defined by NAREIT
35,826

 
32,588

Less: Nonforfeitable dividends on restricted stock awards
(91
)
 
(71
)
FFO attributable to common stock and common units
$
35,735

 
$
32,517

 
 
 
 
FFO per diluted share/unit
$
0.56

 
$
0.51

 
 
 
 
Weighted average number of common shares and common units, diluted (2)
64,185,323

 
64,134,497

 
 
 
 
Funds Available for Distribution (FAD) (1)
$
13,873

 
$
22,755

 
 
 
 
Dividends
 
 
 
Dividends declared and paid
$
18,061

 
$
17,388

Dividends declared and paid per share/unit
$
0.28

 
$
0.27


First Quarter 2019 Supplemental Information
                               Page 7
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
March 31,
 
2019
 
2018
Funds Available for Distribution (FAD) (1)
 
 
 
FFO
$
35,826

 
$
32,588

Adjustments:
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(17,879
)
 
(10,673
)
Net effect of straight-line rents (3)
(203
)
 
454

Amortization of net above (below) market rents (4)
(925
)
 
(714
)
Net effect of other lease assets (5)
(4,321
)
 
(2
)
Amortization of debt issuance costs and debt fair value adjustment
368

 
446

Non-cash compensation expense
1,098

 
727

Nonforfeitable dividends on restricted stock awards
(91
)
 
(71
)
FAD
$
13,873

 
$
22,755

 
 
 
 
Summary of Capital Expenditures
 
 
 
Tenant improvements and leasing commissions
$
10,993

 
$
5,787

Maintenance capital expenditures
6,886

 
4,886

 
$
17,879

 
$
10,673


Notes:
(1)
See Glossary of Terms.
(2)
For the three months ended March 31, 2019 and 2018, 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 Carmel Mountain Plaza and straight-line rent expense for our leases at the Annex at the Landmark at One Market.

First Quarter 2019 Supplemental Information
                               Page 8
 
 
SAME-STORE NET OPERATING INCOME (NOI)
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended March 31, 2019
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
25,718

 
$
27,430

 
$
12,899

 
$
—

 
$
66,047

Non-same store (1)
3,719

 
376

 
—

 
15,177

 
19,272

Total
29,437

 
27,806

 
12,899

 
15,177

 
85,319

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
5,738

 
8,062

 
5,073

 
—

 
18,873

Non-same store (1)
1,416

 
427

 
—

 
9,126

 
10,969

Total
7,154

 
8,489

 
5,073

 
9,126

 
29,842

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
19,980

 
19,368

 
7,826

 
—

 
47,174

Non-same store (1)
2,303

 
(51
)
 
—

 
6,051

 
8,303

Total
$
22,283

 
$
19,317

 
$
7,826

 
$
6,051

 
$
55,477

Same-store NOI
$
19,980

 
$
19,368

 
$
7,826

 
$
—

 
$
47,174

Net effect of straight-line rents (2)
(284
)
 
394

 
66

 
—

 
176

Amortization of net above (below) market rents (3)
(478
)
 
(388
)
 
—

 
—

 
(866
)
Net effect of other lease intangibles (4)
(4,406
)
 
79

 
—

 
—

 
(4,327
)
Tenant improvement reimbursements (5)
(17
)
 
(974
)
 
—

 
—

 
(991
)
Same-store cash NOI (5)
$
14,795

 
$
18,479

 
$
7,892

 
$
—

 
$
41,166


Notes:
(1)
Same-store and non-same store classifications are determined based on properties held on March 31, 2019 and 2018. See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, lease termination fees at Carmel Mountain Plaza 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.


First Quarter 2019 Supplemental Information
                               Page 9
 
 
SAME-STORE CASH NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
Retail
$
14,795

 
$
15,288

 
(3.2
)%
Office
18,479

 
18,225

 
1.4

Multifamily
7,892

 
7,353

 
7.3

Mixed-Use
—

 
—

 
—

Same-store Cash NOI (1)(2)
$
41,166

 
$
40,866

 
0.7
 %

Notes:
(1)
Excluding lease termination fees, for the three months ended March 31, 2019 and 2018, same-store cash NOI would be 1.4%.
(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.


First Quarter 2019 Supplemental Information
                               Page 10
 
 
SAME-STORE CASH NOI COMPARISON WITH REDEVELOPMENT
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
Retail
$
17,081

 
$
19,149

 
(10.8
)%
Office
18,323

 
18,084

 
1.3

Multifamily
7,892

 
7,353

 
7.3

Mixed-Use
—

 
—

 
—

Same-store Cash NOI with Redevelopment (1)(2)
$
43,296

 
$
44,586

 
(2.9
)%

Notes:
(1)
Excluding lease termination fees, for the three months ended March 31, 2019 and 2018, same-store cash NOI with redevelopment would be (2.3)%.
(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.





First Quarter 2019 Supplemental Information
                               Page 11
 
 
CASH NOI BY REGION
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended March 31, 2019
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Cash Basis:
 
 
 
 
 
 
 
 
 
Southern California
7,854

 
4,488

 
6,085

 
—

 
18,427

Northern California
2,812

 
5,633

 
—

 
—

 
8,445

Hawaii
2,778

 
—

 
—

 
5,921

 
8,699

Oregon
237

 
4,529

 
1,807

 
—

 
6,573

Texas
3,402

 
—

 
—

 
—

 
3,402

Washington
—

 
4,482

 
—

 
—

 
4,482

Total Cash NOI
$
17,083

 
$
19,132

 
$
7,892

 
$
5,921

 
$
50,028



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.



First Quarter 2019 Supplemental Information
                               Page 12
 
 
CASH NOI BREAKDOWN
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

Three Months Ended March 31, 2019
Cash NOI Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
    
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-chart-e2d4924010a25976b86.jpg    https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-chart-b813900f8e5255c0ad1a03.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.

First Quarter 2019 Supplemental Information
                               Page 13
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
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
 
$
966

 
$
25

 
$
223

 
$
(198
)
 
$
—

 
$
1,016

Carmel Mountain Plaza
 
3,089

 
9

 
645

 
(837
)
 
—

 
2,906

South Bay Marketplace
 
556

 
35

 
180

 
(188
)
 
—

 
583

Gateway Marketplace
 
601

 
2

 
126

 
(205
)
 
(14
)
 
510

Lomas Santa Fe Plaza
 
1,496

 
10

 
293

 
(355
)
 
—

 
1,444

Solana Beach Towne Centre
 
1,469

 
18

 
415

 
(487
)
 
—

 
1,415

Del Monte Center
 
2,741

 
118

 
883

 
(1,182
)
 
(33
)
 
2,527

Geary Marketplace
 
289

 
—

 
138

 
(140
)
 
—

 
287

The Shops at Kalakaua
 
500

 
26

 
47

 
(83
)
 
—

 
490

Waikele Center
 
2,727

 
240

 
703

 
(1,385
)
 
—

 
2,285

Alamo Quarry Market
 
3,574

 
36

 
1,730

 
(1,956
)
 
17

 
3,401

Hassalo on Eighth - Retail
 
240

 
49

 
51

 
(104
)
 
—

 
236

Subtotal Retail Portfolio
 
$
18,248

 
$
568

 
$
5,434

 
$
(7,120
)
 
$
(30
)
 
$
17,100

Office Portfolio
 
 
 
 
 
 
 
 
 
 
 
—

Torrey Reserve Campus (7)
 
$
4,928

 
$
59

 
$
252

 
$
(1,424
)
 
$
(642
)
 
$
3,173

Torrey Point
 
246

 
66

 
—

 
(226
)
 
(246
)
 
(160
)
Solana Crossing
 
1,841

 
5

 
30

 
(471
)
 
74

 
1,479

The Landmark at One Market
 
6,896

 
28

 
151

 
(2,330
)
 
—

 
4,745

One Beach Street
 
1,098

 
1

 
108

 
(319
)
 
—

 
888

First & Main
 
2,805

 
192

 
478

 
(911
)
 
—

 
2,564

Lloyd District Portfolio (7)
 
2,528

 
543

 
108

 
(1,168
)
 
110

 
2,121

City Center Bellevue
 
4,802

 
725

 
232

 
(1,439
)
 
163

 
4,483

Subtotal Office Portfolio
 
$
25,144

 
$
1,619

 
$
1,359

 
$
(8,288
)
 
$
(541
)
 
$
19,293


First Quarter 2019 Supplemental Information
                               Page 14
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
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
 
$
3,313

 
$
208

 
$
—

 
$
(1,225
)
 
$
(46
)
 
$
2,250

Imperial Beach Gardens
 
884

 
59

 
—

 
(333
)
 
(4
)
 
606

Mariner's Point
 
417

 
30

 
—

 
(166
)
 
—

 
281

Santa Fe Park RV Resort
 
357

 
12

 
—

 
(217
)
 
—

 
152

Pacific Ridge Apartments
 
4,250

 
196

 
—

 
(1,619
)
 
(31
)
 
2,796

Hassalo on Eighth - Multifamily
 
3,008

 
396

 
—

 
(1,513
)
 
(84
)
 
1,807

Subtotal Multifamily Portfolio
 
$
12,229

 
$
901

 
$
—

 
$
(5,073
)
 
$
(165
)
 
$
7,892

Mixed-Use Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,744

 
$
988

 
$
1,004

 
$
(1,787
)
 
$
—

 
$
2,949

Waikiki Beach Walk - Embassy Suites™
 
9,642

 
670

 
—

 
(7,340
)
 
—

 
2,972

Subtotal Mixed-Use Portfolio
 
$
12,386

 
$
1,658

 
$
1,004

 
$
(9,127
)
 
$
—

 
$
5,921

Subtotal Development Properties
 
$
1

 
$
55

 
$
—

 
$
(234
)
 
$
—

 
$
(178
)
Total
 
$
68,008

 
$
4,801

 
$
7,797

 
$
(29,842
)
 
$
(736
)
 
$
50,028

   
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 March 31, 2019 (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 $48 and $1,514, respectively, for the three months ended March 31, 2019. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended March 31, 2019. 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 $166 of abatements for our multifamily portfolio for the three months ended March 31, 2019. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended March 31, 2019. Total tenant improvement reimbursements for our retail and office portfolio were approximately $17 and $974, respectively, for the three months ended March 31, 2019. There were no tenant improvement reimbursements for the retail portion of our mixed-use portfolio for the three months ended March 31, 2019.
(2)
Represents additional property-related income for the three months ended March 31, 2019, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
(3)
Represents billed tenant expense reimbursements for the three months ended March 31, 2019.
(4)
Represents property operating expenses for the three months ended March 31, 2019. 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) and additional property income (lease termination fees).
(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, Solana Crossing and Lloyd District Portfolio. This intercompany rent is eliminated in the consolidated statement of operations. The base rent and abatements were both $311 for the three months ended March 31, 2019.

First Quarter 2019 Supplemental Information
                               Page 15
 
 
SEGMENT CAPITAL EXPENDITURES
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(Unaudited, amounts in thousands)
 
Three Months Ended March 31, 2019
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
 
$
944

 
$
3,793

 
$
4,737

 
$
54

 
$
—

 
$
4,791

Office Portfolio
 
9,937

 
2,042

 
11,979

 
4,504

 
—

 
16,483

Multifamily Portfolio
 
—

 
771

 
771

 
—

 
—

 
771

Mixed-Use Portfolio
 
112

 
280

 
392

 
—

 
—

 
392

Total
 
$
10,993

 
$
6,886

 
$
17,879

 
$
4,558

 
$
—

 
$
22,437



First Quarter 2019 Supplemental Information
                               Page 16
 
 
SUMMARY OF OUTSTANDING DEBT
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(Unaudited, amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
Debt
 
March 31, 2019
 
Interest Rate
 
Service (1)
 
Maturity Date
Torrey Reserve - VCI, VCII, VCIII
 
6,600

 
6.36
%
 
560

 
June 1, 2020
Solana Crossing I-II
 
10,444

 
5.91
%
 
855

 
June 1, 2020
Solana Beach Towne Centre
 
34,812

 
5.91
%
 
2,849

 
June 1, 2020
City Center Bellevue (2)
 
111,000

 
3.98
%
 
4,491

 
November 1, 2022
Secured Notes Payable / Weighted Average (3)
 
$
162,856

 
4.61
%
 
$
8,755

 
 
Term Loan A (4)
 
$
100,000

 
4.13
%
 
$
4,199

 
January 9, 2021
Series A Notes (5)
 
150,000

 
3.88
%
 
6,060

 
October 31, 2021
Term Loan B (6)
 
100,000

 
2.75
%
 
2,756

 
March 1, 2023
Term Loan C (7)
 
50,000

 
2.74
%
 
1,374

 
March 1, 2023
Series F Notes (8)
 
100,000

 
3.85
%
 
3,780

 
July 19, 2024
Series B Notes
 
100,000

 
4.45
%
 
4,450

 
February 2, 2025
Series C Notes
 
100,000

 
4.50
%
 
4,500

 
April 1, 2025
Series D Notes (9)
 
250,000

 
3.87
%
 
10,725

 
March 1, 2027
Series E Notes (10)
 
100,000

 
4.18
%
 
4,240

 
May 23, 2029
Unsecured Notes Payable / Weighted Average (11)
 
$
1,050,000

 
3.88
%
 
$
42,084

 
 
Unsecured Line of Credit (12)
 
$
88,000

 
3.60
%
 
 
 
 
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)
Term Loan A has a stated maturity of 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. 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 $4.3 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 $1.6 million.

First Quarter 2019 Supplemental Information
                               Page 17
 
 
MARKET CAPITALIZATION
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(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
March 31, 2019
Common shares outstanding
 
47,487

Common units outstanding
 
17,178

Common shares and common units outstanding
 
64,665

Market price per common share
 
$
45.86

Equity market capitalization
 
$
2,965,537

Total debt
 
$
1,300,856

Total market capitalization
 
$
4,266,393

Less: Cash on hand
 
$
(54,538
)
Total enterprise value
 
$
4,211,855

Total unencumbered assets, gross
 
$
2,417,339

 
 
 
Total debt/Total capitalization
 
30.5
%
Total debt/Total enterprise value
 
30.9
%
Net debt/Total enterprise value (1)
 
29.6
%
Total unencumbered assets, gross/Unsecured debt
 
212.7
%
 
 
 
Total debt/Adjusted EBITDA (2)(3)
 
6.6
x
Net debt/Adjusted EBITDA (1)(2)(3)
 
6.3
x
Interest coverage ratio (4)
 
3.8
x
Fixed charge coverage ratio (4)
 
3.8
x
 
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-chart-60041fa71748588c97ba03.jpg
Weighted Average Fixed Interest Rate
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
—
%
6.0
%
4.0
%
4.0
%
2.7
%
3.8
%
4.5
%
—
%
3.9
%
—
%
4.2
%
Total Weighed Average Fixed Interest Rate:
4.0%
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 March 31, 2019 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.


First Quarter 2019 Supplemental Information
                               Page 18
 
 
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) (3)
 
 
Start
Date
Completion Date
Estimated Stabilized
Yield (1)
Rentable Square Feet
Percent
Leased
Estimated Stabilization Date (2)
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
42.1%
2019
$42,224
$55,800
 
 
 
 
 
 
 
 
 
 
Development/Redevelopment Pipeline
 
Property
Property Type
Location
Estimated Rentable
Square Feet
Multifamily Units
Opportunity
Solana Crossing (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 (4)
Mixed Use
Solana Beach, CA
48,000
36
Development of mixed-use project
Lloyd District Portfolio - multiple phases (5)
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)
Based on management's estimation of stabilized occupancy (90%).
(3)
Project costs exclude capitalized interest cost which is calculated in accordance with Accounting Standards Codification 835-20-50-1.
(4)
Represents commercial portion of development opportunity for Solana Beach - Highway 101. A third party has exercised its option to acquire this property from us for $9.43 million which we anticipate to close on or before June 1, 2019. The third party had previously been granted an option to acquire this property in consideration for a non-refundable $1.4 million option payment.
(5)
The Lloyd District Portfolio was acquired in 2011 consisting of approximately 600,000 rentable square feet on more than 16 acres located in the Lloyd District of Portland, Oregon. The portion of the property that has been designated for additional development to include a high density, transit oriented, mixed-use urban village, with the potential to be in excess of approximately three million square feet. The entitlement for such development opportunity allows a 12:1 Floor Area Ratio with a 250 foot height limit and provides for retail, office and/or multifamily development.  Additional development plans are in the early stages and will continue to progress as demand and economic conditions allow.


First Quarter 2019 Supplemental Information
                               Page 19
 
 
 
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PORTFOLIO DATA





First Quarter 2019 Supplemental Information
                               Page 20
 
 
PROPERTY REPORT
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As of March 31, 2019
 
 
 
 
 
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%
 
$
3,866,821

 
$52.34
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
98.3
 
12,641,031

 
24.34
 
 
 
Dick's Sporting Goods, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
88.7
 
2,224,284

 
18.87
 
 
 
Ross Dress for Less, Grocery Outlet
Gateway Marketplace
 
San Diego, CA
 
1997/2016

 
3

 
127,861

 
98.7
 
2,405,283

 
19.06
 
Hobby Lobby
 
Smart & Final, Aldi
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
208,030

 
97.0
 
5,986,986

 
29.67
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
93.5
 
5,950,827

 
25.80
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
673,572

 
98.5
 
11,720,501

 
17.67
 
Macy's, KLA Monterrey
 
Forever 21, Century Theatres
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
95.6
 
1,156,909

 
34.42
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
2,012,161

 
172.41
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
418,047

 
100.0
 
10,969,961

 
26.24
 
Lowe's
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
588,970

 
97.7
 
14,658,551

 
25.47
 
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

 
97.1%
 
$
74,672,892

 
$24.86
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-2016

 
14

 
516,676

 
86.3%
 
$
20,135,415

 
$45.16
 
 
 
 
Torrey Point
 
San Diego, CA
 
2017

 
2

 
92,614

 
42.1
 
983,599

 
25.23
 
 
 
 
Solana Crossing
 
Solana Beach, CA
 
1982/2005

 
4

 
212,495

 
88.1
 
7,703,155

 
41.15
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
99.8
 
27,605,930

 
65.96
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
100.0
 
4,396,596

 
45.04
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
11,239,919

 
31.58
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2015

 
2

 
459,603

 
92.1
 
10,215,827

 
24.13
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
497,472

 
97.4
 
19,726,041

 
40.71
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
26

 
2,656,486

 
92.3%
 
$
102,006,482

 
$41.60
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
133

 
5,750,067

 
94.9%
 
$
176,679,374

 
$32.38
 
 
 
 

First Quarter 2019 Supplemental Information
                               Page 21
 
 
PROPERTY REPORT (CONTINUED)
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As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
96.0%
 
$
13,277,760

 
$
2,103

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
93.1
 
3,594,420

 
$
2,011

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
95.5
 
1,720,920

 
$
1,706

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

 
126

 
78.6
 
1,398,636

 
$
1,177

 
 
 
 
Pacific Ridge Apartments
 
San Diego, CA
 
2013
 
3

 
533

 
96.6
 
17,057,604

 
$
2,761

 
 
 
 
Hassalo on Eighth - Velomor
 
Portland, OR
 
2015
 
1

 
177

 
92.1
 
3,161,508

 
$
1,616

 
 
 
 
Hassalo on Eighth - Aster Tower
 
Portland, OR
 
2015
 
1

 
337

 
95.6
 
6,355,236

 
$
1,644

 
 
 
 
Hassalo on Eighth - Elwood
 
Portland, OR
 
2015
 
1

 
143

 
87.4
 
2,438,592

 
$
1,626

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
121

 
2,112

 
93.9%
 
$
49,004,676

 
$
2,059

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

 
96,707

 
98.2
%
 
$
11,073,053

 
$
116.60

 
 
 
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

 
91.8
%
 
$
316.34

 
$
290.34

 
 
 
 
Notes:
(1)
The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
(2)
Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of March 31, 2019, including leases which may not have commenced as of March 31, 2019. Percentage leased for our multifamily properties includes total units rented as of March 31, 2019.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2019 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of March 31, 2019. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of March 31, 2019.
(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

 
$
713,032

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 March 31, 2019, 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 March 31, 2019, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended March 31, 2019 by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended March 31, 2019 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

First Quarter 2019 Supplemental Information
                               Page 22
 
 
RETAIL LEASING SUMMARY
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
13

 
100%
 
48,376

 
$49.14
 
$46.49
 
$
127,861

 
5.7
 %
 
15.2
 %
 
5.4
 
$
617,060

 
$12.76
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
Total 12 months
 
57

 
100%
 
244,422

 
$40.99
 
$38.70
 
$
560,797

 
5.9
 %
 
13.5
 %
 
5.6
 
$
1,915,527

 
$7.84
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
1

 
8%
 
2,441

 
$52.00
 
$54.97
 
$
(7,247
)
 
(5.4
)%
 
15.0
 %
 
10.1
 
$
294,100

 
$120.48
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
Total 12 months
 
9

 
16%
 
14,342

 
$87.82
 
$86.19
 
$
23,330

 
1.9
 %
 
9.6
 %
 
7.7
 
$
975,540

 
$68.02
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
12

 
92%
 
45,935

 
$48.98
 
$46.04
 
$
135,108

 
6.4
 %
 
15.2
 %
 
5.2
 
$
322,960

 
$7.03
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
Total 12 months
 
48

 
84%
 
230,080

 
$38.07
 
$35.74
 
$
537,467

 
6.5
 %
 
14.1
 %
 
5.5
 
$
939,987

 
$4.08
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
17

 
159,746

 
$26.17
 
8.6
 
$
3,252,580

 
$20.36
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
73

 
428,808

 
$32.29
 
8.5
 
$
16,803,798

 
$39.19
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease, including leases signed for the retail portion of our mixed-use property.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

First Quarter 2019 Supplemental Information
                               Page 23
 
 
OFFICE LEASING SUMMARY
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
6

 
100%
 
37,541

 
$49.46
 
$47.48
 
$
74,466

 
4.2
%
 
14.6
%
 
6.5
 
$
1,457,995

 
$38.84
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
Total 12 months
 
41

 
100%
 
544,305

 
$67.56
 
$46.67
 
$
11,371,300

 
44.8
%
 
66.6
%
 
8.4
 
$
42,091,357

 
$77.33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
1

 
17%
 
7,506

 
$48.60
 
$45.61
 
$
22,479

 
6.6
%
 
23.2
%
 
7.4
 
$
562,950

 
$75.00
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
Total 12 months
 
15

 
37%
 
413,931

 
$74.89
 
$49.21
 
$
10,632,799

 
52.2
%
 
77.9
%
 
9.3
 
$
38,769,836

 
$93.66
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
5

 
83%
 
30,035

 
$49.68
 
$47.95
 
$
51,987

 
3.6
%
 
12.7
%
 
6.2
 
$
895,045

 
$29.80
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
Total 12 months
 
26

 
63%
 
130,374

 
$44.29
 
$38.62
 
$
738,501

 
14.7
%
 
24.0
%
 
5.4
 
$
3,321,521

 
$25.48
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
12

 
70,228

 
$47.06
 
6.3
 
$
3,549,809

 
$50.55
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
64

 
653,789

 
$63.57
 
7.9
 
$
48,369,312

 
$73.98
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

First Quarter 2019 Supplemental Information
                               Page 24
 
 
MULTIFAMILY LEASING SUMMARY
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

As of March 31, 2019
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2019
 
526
 
96.0%
 
$13,277,760
 
$2,103
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
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Gardens
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2019
 
149
 
93.1%
 
$3,594,420
 
$2,011
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
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2019
 
84
 
95.5%
 
$1,720,920
 
$1,706
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
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2019
 
99
 
78.6%
 
$1,398,636
 
$1,177
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
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2019
 
515
 
96.6%
 
$17,057,604
 
$2,761
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








First Quarter 2019 Supplemental Information
                               Page 25
 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 


As of March 31, 2019
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2019
 
163
 
92.1%
 
$3,161,508
 
$1,616
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
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2019
 
322
 
95.6%
 
$6,355,236
 
$1,644
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
 
 
 
 
 
 
 
 
 
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
 
 
 
 
1st Quarter 2019
 
125
 
87.4%
 
$2,438,592
 
$1,626
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
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
1st Quarter 2019
 
1,983
 
93.9%
 
$49,004,676
 
$2,059
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

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.


First Quarter 2019 Supplemental Information
                               Page 26
 
 
MIXED-USE LEASING SUMMARY
https://cdn.kscope.io/e8c27c9b1eaab916f78746e298543ccb-aat2019q1a14.jpg
 
 

As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Retail Portion
 
 
 
 
 
 
Number of Leased Square Feet
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Annualized Base Rent per Leased Square Foot (3)
Quarter
 
 
 
 
1st Quarter 2019
 
94,934
 
98.2%
 
$11,073,053
 
$117
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
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
1st Quarter 2019
 
339
 
91.8%
 
$316
 
$290
4th Quarter 2018
 
337
 
91.3%
 
$315
 
$288
3rd Quarter 2018
 
342
 
92.8%
 
$348
 
$323
2nd Quarter 2018
 
346
 
93.7%
 
$303
 
$284
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of March 31, 2019, including leases which may not have commenced as of March 31, 2019.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2019 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(3)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of March 31, 2019.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended March 31, 2019, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for each respective quarter period by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for each respective quarter period and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

First Quarter 2019 Supplemental Information
                               Page 27
 
 
LEASE EXPIRATIONS
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As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
20,835

 
0.8
%
 
0.4
%
 
$3.73
 
37,109

 
1.2
%
 
0.6
%
 
$30.45
 
1,214

 
1.3
%
 
—
%
 
$—
 
59,158

 
1.0
%
 
$20.41
2019
 
156,907

 
5.9

 
2.7

 
$42.48
 
64,011

 
2.1

 
1.1

 
$41.49
 
9,322

 
9.6

 
0.2

 
$127.77
 
230,240

 
3.9

 
$45.66
2020
 
272,447

 
10.3

 
4.7

 
$37.06
 
297,107

 
9.6

 
5.1

 
$27.71
 
19,930

 
20.6

 
0.3

 
$59.30
 
589,484

 
10.1

 
$33.10
2021
 
237,145

 
8.9

 
4.1

 
$40.82
 
187,210

 
6.1

 
3.2

 
$44.11
 
20,972

 
21.7

 
0.4

 
$181.05
 
445,327

 
7.6

 
$48.81
2022
 
252,671

 
9.5

 
4.3

 
$48.09
 
447,386

 
14.5

 
7.7

 
$30.44
 
5,481

 
5.7

 
0.1

 
$216.15
 
705,538

 
12.1

 
$38.20
2023
 
338,712

(2) 
12.8

 
5.8

 
$48.15
 
302,899

 
9.8

 
5.2

 
$24.78
 
6,432

 
6.7

 
0.1

 
$75.75
 
648,043

 
11.1

 
$37.50
2024
 
121,703


4.6

 
2.1

 
$45.96
 
424,164

 
13.7

 
7.3

 
$27.09
 
8,635

 
8.9

 
0.1

 
$100.27
 
554,502

 
9.5

 
$32.37
2025
 
259,207

 
9.8

 
4.4

 
$35.22
 
184,420

 
6.0

 
3.2

 
$22.81
 
1,010

 
1.0

 
—

 
$251.61
 
444,637

 
7.6

 
$30.56
2026
 
131,760

(3) 
5.0

 
2.3

 
$39.77
 
106,939

 
3.5

 
1.8

 
$26.68
 
—

 
—

 
—

 
$—
 
238,699

 
4.1

 
$33.91
2027
 
15,459

 
0.6

 
0.3

 
$51.18
 
120,100

 
3.9

 
2.1

 
$27.35
 
13,118

 
13.6

 
0.2

 
75.15
 
148,677

 
2.5

 
$34.05
2028
 
104,343

 
3.9

 
1.8

 
$41.78
 
481,296

 
15.6

 
8.2

 
$14.58
 
8,820

 
9.1

 
0.2

 
$127.60
 
594,459

 
10.2

 
$21.03
Thereafter
 
391,985

(4) 
14.8

 
6.7

 
$55.90
 
188,014

 
6.1

 
3.2

 
$23.52
 
—

 
—

 
—

 
$—
 
579,999

 
9.9

 
$45.40
Signed Leases Not Commenced
 
148,620

 
5.6

 
2.5

 
—
 
164,302

 
5.3

 
2.8

 
—
 
—

 
—

 
—

 
—
 
312,922

 
5.4

 
—
Available
 
204,692

 
7.7

 
3.5

 
—
 
88,624

 
2.9

 
1.5

 
—
 
1,773

 
1.8

 
—

 
—
 
295,089

 
5.0

 
—
Total (5)
 
2,656,486

 
100.0
%
 
45.4
%
 
$38.40
 
3,093,581

 
100.0
%
 
52.9
%
 
$24.14
 
96,707

 
100.0
%
 
1.7
%
 
$114.5
 
5,846,774

 
100.0
%
 
$32.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
20,835

 
0.8
%
 
0.4
%
 
$3.73
 
37,109

 
1.2
%
 
0.6
%
 
$30.45
 
1,214

 
1.3
%
 
—
%
 
$—
 
59,158

 
1.0
%
 
$20.41
2019
 
155,454

 
5.9

 
2.7

 
$42.57
 
40,898

 
1.3

 
0.7

 
$38.29
 
9,322

 
9.6

 
0.2

 
$127.77
 
205,674

 
3.5

 
$45.58
2020
 
133,305

 
5.0

 
2.3

 
$38.52
 
167,934

 
5.4

 
2.9

 
$23.77
 
2,568

 
2.7

 
—

 
$110.68
 
303,807

 
5.2

 
$30.98
2021
 
70,182

 
2.6

 
1.2

 
$41.96
 
105,423

 
3.4

 
1.8

 
$46.21
 
20,972

 
21.7

 
0.4

 
$181.05
 
196,577

 
3.4

 
$59.08
2022
 
61,567

 
2.3

 
1.1

 
$42.64
 
108,323

 
3.5

 
1.9

 
$36.99
 
5,911

 
6.1

 
0.1

 
$214.74
 
175,801

 
3.0

 
$44.95
2023
 
127,602

 
4.8

 
2.2

 
$39.41
 
56,182

 
1.8

 
1.0

 
$36.87
 
6,432

 
6.7

 
0.1

 
$75.75
 
190,216

 
3.3

 
$39.89
2024
 
38,650

 
1.5

 
0.7

 
$39.83
 
190,721

 
6.2

 
3.3

 
$31.64
 
3,233

 
3.3

 
0.1

 
$135.75
 
232,604

 
4.0

 
$34.45
2025
 
161,881

 
6.1

 
2.8

 
$35.69
 
108,537

 
3.5

 
1.9

 
$28.46
 
1,010

 
1.0

 
—

 
$251.61
 
271,428

 
4.6

 
$33.60
2026
 
162,463

 
6.1

 
2.8

 
$39.08
 
44,960

 
1.5

 
0.8

 
$43.66
 
—

 
—

 
—

 
$—
 
207,423

 
3.5

 
$40.07
2027
 
79,850

 
3.0

 
1.4

 
$39.29
 
154,179

 
5.0

 
2.6

 
$30.30
 
13,118

 
13.6

 
0.2

 
75.15
 
247,147

 
4.2

 
$35.59
2028
 
142,234

 
5.4

 
2.4

 
$40.64
 
219,874

 
7.1

 
3.8

 
$22.76
 
1,906

 
2.0

 
—

 
$104.11
 
364,014

 
6.2

 
$30.17
Thereafter
 
1,149,151

(2)(3)(4) 
43.3

 
19.7

 
$49.60
 
1,606,515

 
51.9

 
27.5

 
$22.58
 
29,248

 
30.2

 
0.5

 
$74.09
 
2,784,914

 
47.6

 
$34.27
Signed Leases Not Commenced
 
148,620

 
5.6

 
2.5

 
—
 
164,302

 
5.3

 
2.8

 
—
 
—

 
—

 
—

 
—
 
312,922

 
5.4

 
—
Available
 
204,692

 
7.7

 
3.5

 
—
 
88,624

 
2.9

 
1.5

 
—
 
1,773

 
1.8

 
—

 
—
 
295,089

 
5.0

 
—
Total (5)
 
2,656,486

 
100.0
%
 
45.4
%
 
$38.40
 
3,093,581

 
100.0
%
 
52.9
%
 
$24.14
 
96,707

 
100.0
%
 
1.7
%
 
$114.5
 
5,846,774

 
100.0
%
 
$32.11

First Quarter 2019 Supplemental Information
                               Page 28
 
 
LEASE EXPIRATIONS (CONTINUED)
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As of March 31, 2019
 
Notes:
(1)
Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2019 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 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 July 1, 2019 through December 31, 2029 with options to extend the lease through December 31, 2039.
(5)
Individual items may not add up to total due to rounding.



First Quarter 2019 Supplemental Information
                               Page 29
 
 
PORTFOLIO LEASED STATISTICS
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At March 31, 2019
 
At March 31, 2018
 
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
 
Overall Portfolio(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,093,581

 
3,004,957

 
97.1
%
 
3,214,710

 
3,106,270

 
96.6
%
 
Office Properties (square feet) 
 
2,656,486

 
2,451,794

 
92.3
%
 
2,561,936

 
2,424,698

 
94.6
%
 
Multifamily Properties (units)
 
2,112

 
1,983

 
93.9
%
 
2,112

 
1,957

 
92.7
%
 
Mixed-Use Properties (square feet)
 
96,707

 
94,934

 
98.2
%
 
96,707

 
93,709

 
96.9
%
 
Mixed-Use Properties (units)
 
369

 
339

(3) 
91.8
%
 
369

 
348

(3) 
94.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)(4)
 
2,675,534

 
2,586,910

 
96.7
%
 
2,677,073

 
2,618,683

 
97.8
%
 
Office Properties (square feet)(5)
 
2,563,872

 
2,412,817

 
94.1
%
 
2,561,936

 
2,424,698

 
94.6
%
 
Multifamily Properties (units)
 
2,112

 
1,983

 
93.9
%
 
2,112

 
1,957

 
92.7
%
 

Notes:
(1)
Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
(2)
See Glossary of Terms.
(3)
Represents average occupancy for the three months ended March 31, 2019 and 2018.
(4)
The same-store portfolio excludes Waikele Center due to significant redevelopment activity.
(5)
The same-store portfolio excludes Torrey Point, as it was placed into operations in August 2018.



First Quarter 2019 Supplemental Information
                               Page 30
 
 
TOP TENANTS - RETAIL
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As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
2.9

 
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

 
1.0

4

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

 
1.6

 
0.9

 
1,399,205

 
1.9

 
0.7

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

 
1.6

 
0.7

8

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

 
1.5

 
0.8

 
1,072,635

 
1.4

 
0.6

9

Ross
 
South Bay Marketplace
Carmel Mountain Plaza
 
1/31/2023 1/31/2024
 
51,125

 
1.7

 
0.9

 
1,013,981

 
1.4

 
0.5

10

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

 
1.1

 
0.6

 
1,006,589

 
1.3

 
0.5

 
Top 10 Retail Tenants Total
 
 
 
678,191

 
21.8
%
 
11.7
%
 
$
14,888,540

 
19.9
%
 
7.9
%


*
Data withheld at tenant's request.
 
 

First Quarter 2019 Supplemental Information
                               Page 31
 
 
TOP TENANTS - OFFICE
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As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (1)
 
The Landmark at One Market
 
6/30/2019
 
206,130

 
7.8
%
 
3.5
%
 
$
12,076,756

 
11.8
%
 
6.4
%
2

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

 
4.3

 
2.0

 
9,827,617

 
9.6

 
5.2

3

Google LLC
 
The Landmark at One Market
 
12/31/2029
 
47,988

 
1.8

 
0.8

 
4,841,400

 
4.7

 
2.6

4

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

 
3.5

 
1.6

 
3,006,453

 
2.9

 
1.6

5

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

 
3.8

 
1.7

 
2,793,164

 
2.7

 
1.5

6

State of Oregon: Department of Environmental Quality
 
Lloyd 700
 
10/31/2031
 
87,787

 
3.3

 
1.5

 
2,607,730

 
2.6

 
1.4

7

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

 
2.4

 
1.1

 
2,521,879

 
2.5

 
1.3

8

Smartsheet, Inc.
 
City Center Bellevue
 
12/31/2026
 
53,972

 
2.0

 
0.9

 
2,509,698

 
2.5

 
1.3

9

VMWare, Inc.
 
City Center Bellevue
 
11/30/2022 5/31/2025
 
72,883

 
2.7

 
1.2

 
2,404,668

 
2.4

 
1.3

10

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

 
2.4

 
1.1

 
2,184,302

 
2.1

 
1.2

 
Top 10 Office Tenants Total
 
 
 
906,653

 
34.0
%
 
15.4
%
 
$
44,773,667

 
43.8
%
 
23.8
%


Notes:
(1)
The total leased square feet currently leased by salesforce.com includes (i) 23,101 square feet for which Autodesk, Inc. has signed an agreement to lease beginning July 1, 2019 through December 31, 2023 and (ii) 183,029 square feet for which Google LLC has signed an agreement to lease beginning July 1, 2019 through December 31, 2029.    

First Quarter 2019 Supplemental Information
                               Page 32
 
 
 
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APPENDIX





First Quarter 2019 Supplemental Information
                               Page 33
 
 
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 ended March 31, 2019 and 2018 is as follows:
    
 
Three Months Ended
 
March 31,
 
2019
 
2018
Net income (loss)
$
15,243

 
$
(691
)
Depreciation and amortization
20,583

 
33,279

Interest expense
13,349

 
13,820

Interest income
(7
)
 
(140
)
Income tax expense/(benefit)
236

 
(65
)
EBITDA
$
49,404

 
$
46,203


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
 
March 31,
 
2019
 
2018
EBITDA
$
49,404

 
$
46,203

Pro forma adjustments
—

 
—

Adjusted EBITDA
$
49,404

 
$
46,203


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 ended March 31, 2019 and 2018 is as follows:
 
Three Months Ended
 
March 31,
 
2019
 
2018
Net income (loss)
$
15,243

 
$
(691
)
Depreciation and amortization
20,583

 
33,279

Interest expense
13,349

 
13,820

Interest income
(7
)
 
(140
)
Income tax expense/(benefit)
236

 
(65
)
EBITDAre
$
49,404

 
$
46,203



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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
 
March 31,
Reconciliation of NOI to net income
2019
 
2018
Total NOI
$
55,477

 
$
51,766

General and administrative
(6,073
)
 
(5,567
)
Depreciation and amortization
(20,583
)
 
(33,279
)
Operating Income
$
28,821

 
$
12,920

Interest expense
(13,349
)
 
(13,820
)
Other income, net
(229
)
 
209

Net income (loss)
$
15,243

 
$
(691
)
Net (income) loss attributable to restricted shares
(93
)
 
72

Net (income) loss attributable to unitholders in the Operating Partnership
(4,055
)
 
166

Net income (loss) attributable to American Assets Trust, Inc. stockholders
$
11,095

 
$
(453
)

Overall Portfolio: Includes all operating properties owned by us as of March 31, 2019.

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

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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
 
March 31,
Reconciliation of Total Cash NOI to Net Income
2019
 
2018
Total Cash NOI
$
50,028

 
$
51,504

Non-cash revenue and other operating expenses (1)
5,449

 
262

General and administrative
(6,073
)
 
(5,567
)
Depreciation and amortization
(20,583
)
 
(33,279
)
Operating income
$
28,821

 
$
12,920

Interest expense
(13,349
)
 
(13,820
)
Other income, net
(229
)
 
209

Net income (loss)
$
15,243

 
$
(691
)
(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 Carmel Mountain Plaza, and straight-line rent expense for our leases of the Annex at The Landmark at One Market.


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)
 
March 31,
Reconciliation of Same-Store Cash NOI Comparison with Redevelopment to Operating Income
2019
 
2018
Same-Store Cash NOI
$
41,166

 
$
40,866

Redevelopment Cash NOI (2)
2,130

 
3,720

Same-Store Cash NOI with Redevelopment
43,296

 
44,586

Tenant improvement reimbursements
991

 
868

Total Same-Store Cash NOI with Redevelopment
$
44,287

 
$
45,454

Non-Same Store Cash NOI
5,741

 
6,050

Total Cash NOI
$
50,028

 
$
51,504

Non-cash revenue and other operating expenses (3)
5,449

 
262

General and administrative
(6,073
)
 
(5,567
)
Depreciation and amortization
(20,583
)
 
(33,279
)
Operating income
$
28,821

 
$
12,920

Interest expense
(13,349
)
 
(13,820
)
Other income, net
(229
)
 
209

Net income (loss)
$
15,243

 
$
(691
)
(1)
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; (iii) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity, and (iv) land held for development.
(2)
Redevelopment property refers to Waikele Center and Lloyd District Portfolio - Land.

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(3)
Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, lease termination fees at Carmel Mountain Plaza, and straight-line rent expense for our leases of the Annex at The Landmark at One Market.

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Same-Store Portfolio, Non-Same Store Portfolio and Redevelopment Same-Store: Information provided on a same-store basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, properties under development, properties classified as held for development and properties classified as discontinued operations. Information provided on a redevelopment same-store basis includes the results of properties undergoing significant redevelopment for the entirety or portion of both periods being compared. The following table shows the properties included in the same-store, non-same store and redevelopment same-store portfolio for the comparative periods presented.
 
Comparison of Three Months Ended
 
March 31, 2019 to 2018
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
Retail Properties
 
 
 
 
 
Carmel Country Plaza
X
 
 
 
X
Carmel Mountain Plaza
X
 
 
 
X
South Bay Marketplace
X
 
 
 
X
Gateway Marketplace
X
 
 
 
X
Lomas Santa Fe Plaza
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
Del Monte Center
X
 
 
 
X
Geary Marketplace
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
Waikele Center
 
 
X
 
X
Alamo Quarry Market
X
 
 
 
X
Hassalo on Eighth - Retail
X
 
 
 
X
Office Properties
 
 
 
 
 
Torrey Reserve Campus
X
 
 
 
X
Torrey Point
 
 
X
 
 
Solana Crossing (formerly Solana Beach Corporate Centre)
X
 
 
 
X
The Landmark at One Market
X
 
 
 
X
One Beach Street
X
 
 
 
X
First & Main
X
 
 
 
X
Lloyd District Portfolio
X
 
 
 
X
City Center Bellevue
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
Loma Palisades
X
 
 
 
X
Imperial Beach Gardens
X
 
 
 
X
Mariner's Point
X
 
 
 
X
Santa Fe Park RV Resort
X
 
 
 
X
Pacific Ridge Apartments
X
 
 
 
X
Hassalo on Eighth
X
 
 
 
X
Mixed-Use Properties
 
 
 
 
 
Waikiki Beach Walk - Retail
 
 
X
 
 
Waikiki Beach Walk - Embassy Suites™
 
 
X
 
 
Development Properties
 
 
 
 
 
Solana Crossing - Land
 
 
X
 
 
Solana Beach - Highway 101 - Land
 
 
X
 
 
Lloyd District Portfolio - Land
 
 
X
 
X


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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.

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