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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):
August 1, 2017
_________________________
American Assets Trust, Inc.
(Exact name of registrant as specified in its charter)

_________________________

Maryland
(State or other jurisdiction
of incorporation)
001-35030
(Commission
File No.)
27-3338708
(I.R.S. Employer
Identification No.)
11455 El Camino Real, Suite 200
San Diego, California 92130
(Address of principal executive offices)
 
92130  
 (Zip Code)
 
(858) 350-2600  
Registrant’s telephone number, including area code: 
Not Applicable  
(Former name or former address, if changed since last report.)
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
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 August 1, 2017, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending June 30, 2017. Also on August 1, 2017, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter ending June 30, 2017. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

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


Item 7.01
Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ending June 30, 2017 and made available on its website certain supplement information relating thereto.

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


Item 9.01
Financial Statements and Exhibits.
(d)    Exhibits:
The following exhibits are filed herewith:
Exhibit Number
 
Exhibit Description
99.1**
 
Press release issued by American Assets Trust, Inc. on August 1, 2017.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2017.
_____________________
** 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
August 1, 2017
 
 

3




EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
Press release issued by American Assets Trust, Inc. on August 1, 2017.
99.2
 
American Assets Trust, Inc. Supplemental Information for the quarter ended June 30, 2017.


4
Exhibit


https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg

American Assets Trust, Inc. Reports Second Quarter 2017 Financial Results

Net income available to common stockholders of $5.5 million and $12.9 million for the three and six months ended June 30, 2017, respectively, or $0.12 and $0.28 per diluted share, respectively
Funds From Operations per diluted share increases 9% and 6% year-over-year for the three and six months ended June 30, 2017, respectively
Same-store cash NOI increases 3% and 1% year-over-year for the three and six months ended June 30, 2017, respectively
Acquisition of the Pacific Ridge Apartments in San Diego, California
Acquisition of Gateway Marketplace in Chula Vista, California subsequent to quarter end

SAN DIEGO, California - 8/1/17 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its second quarter ended June 30, 2017.

Financial Results and Recent Developments
Net income available to common stockholders of $5.5 million and $12.9 million for the three and six months ended June 30, 2017, respectively, or $0.12 and $0.28 per diluted share, respectively
Funds From Operations increased 9% and 6% year-over-year to $0.49 and $0.94 per diluted share for the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016
Same-store GAAP NOI increased 2% and 1% for the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016
Same-store cash NOI increased 3% and 1% for the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016
Leased approximately 88,700 comparable office square feet at an average GAAP-basis and cash-basis contractual rent increase of 47% and 33%, respectively, during the three months ended June 30, 2017
Leased approximately 207,000 comparable retail square feet at an average GAAP-basis contractual rent increase of 5% and cash-basis contractual rent decrease of 13% during the three months ended June 30, 2017
Entered into first office lease at Torrey Point for approximately 32,000 square feet, or 36% of the new development’s rentable square footage
Acquisition of the Pacific Ridge Apartments in San Diego, California
Acquisition of Gateway Marketplace in Chula Vista, California subsequent to quarter end

Net income attributable to common stockholders was $5.5 million, or $0.12 per basic and diluted share for the three months ended June 30, 2017 compared to $7.6 million, or $0.17 per basic and diluted share for the three months ended June 30, 2016. For the six months ended June 30, 2017, net income attributable to common stockholders was $12.9 million, or $0.28 per basic and diluted share compared to $15.3 million, or $0.34 per basic and diluted share for the six months ended June 30, 2016. The decrease in net income attributable to common stockholders from the corresponding periods in 2016 was primarily due to an increase in depreciation and amortization expense attributed to the acquisition of the Pacific Ridge Apartments on April 28, 2017.

During the second quarter of 2017, the company generated funds from operations (“FFO”) for common stockholders of $31.7 million, or $0.49 per diluted share, compared to $28.3 million, or $0.45 per diluted share, for the quarter ended June 30, 2016. For the six months ended June 30, 2017, the company generated FFO for common stockholders of $59.9 million, or $0.94 per diluted share, compared to $56.5 million, or $0.89 per diluted share, for the six months ended June 30, 2016.  The increase in FFO from the corresponding periods in 2016 was primarily due to additional operating income from Hassalo on Eighth due to an increase in the percentage leased,

1



the acquisition of the Pacific Ridge Apartments on April 28, 2017 and growth in same-store net operating income from our existing portfolio.

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

Portfolio Results
The portfolio leased status as of the end of the indicated quarter was as follows:
 
June 30, 2017
March 31, 2017
June 30, 2016
Total Portfolio
 
 
 
Retail (1)
96.8%
96.9%
98.2%
Office
88.7%
89.3%
90.4%
Multifamily (2)(3)
92.6%
93.4%
92.5%
Mixed-Use:
 
 
 
Retail
95.7%
94.1%
98.3%
Hotel
91.3%
91.5%
88.4%
 
 
 
 
Same-Store Portfolio
 
 
Retail (1)
97.1%
97.2%
98.6%
Office
88.7%
89.3%
90.4%
Multifamily (2)(3)
93.3%
94.0%
97.2%
Mixed-Use:
 
 
 
Retail
95.7%
94.1%
98.3%
Hotel
91.3%
91.5%
88.4%
(1) Total retail leased percentage includes the retail components of Hassalo on Eighth. The Elwood, Velomor and Aster Tower buildings were placed in operations in April 2016, July 2016 and October 2016, respectively. Same-store retail leased percentages exclude Hassalo on Eighth.
(2) Total multifamily leased percentage includes Hassalo on Eighth, which became available for occupancy in July and October of 2015. Same-store multifamily leased percentages exclude Hassalo on Eighth and the Pacific Ridge Apartments, which was acquired on April 28, 2017.
(3) Excluding the 21 off-line units associated with the Loma Palisades repositioning, total multifamily leased percentage was 93.5% and 94.6% at June 30, 2017 and March 31, 2017, respectively, and same-store multifamily leased percentage was 95.4% and 96.2% at June 30, 2017 and March 31, 2017, respectively.

During the second quarter of 2017, the company signed 41 leases for approximately 304,300 square feet of retail and office space, as well as 493 multifamily apartment leases. Renewals accounted for 80.0% of the comparable retail leases, 72.7% of the comparable office leases and 52.9% of the residential leases.

Retail and Office
On a comparable space basis (i.e. leases for which there was a former tenant) during the second quarter of 2017 and trailing four quarters ending June 30, 2017, our retail and office leasing spreads are shown below:
 
 
Number of Leases Signed
Comparable Leased Sq. Ft.
Average Cash Basis % Change Over Prior Rent
Average Cash Contractual Rent Per Sq. Ft.
Prior Average Cash Contractual Rent Per Sq. Ft.
GAAP Straight-Line Basis % Change Over Prior Rent
Retail
Q2 2017
25
207,000
(12.8)% (1)
$30.31
$34.77
5.2% (1)
Last 4 Quarters
72
367,500
(3.7)% (1)
$33.21
$34.49
10.1% (1)
 
 
 
 
 
 
 
 
Office
Q2 2017
11
88,700
32.5%
$62.62
$47.24
47.4%
Last 4 Quarters
46
322,900
17.0%
$46.51
$39.75
27.4%
(1) Retail leasing spreads were significantly impacted by the Lowe's renewal at Waikele Center. Excluding the Lowe's renewal at Waikele Center, we leased approximately 52,000 comparable retail square feet at an average GAAP-basis contractual rent increase of 8.4% and cash-basis contractual rent decrease of 2.2% during the three months ended June 30, 2017. Excluding the Lowe's renewal at Waikele Center, we leased approximately 212,500 comparable retail square feet at an average GAAP-basis and cash-basis contractual rent increase of 13.5% and 4.9% during the twelve month period ended June 30, 2017.

2



Multifamily
As of June 30, 2017, Hassalo on Eighth was approximately 90% leased with average monthly base rent per leased unit of $1,665 compared to 86% at June 30, 2016 with average monthly base rent per leased unit of $1,488, an increase of approximately 12%.

At June 30, 2017, the average monthly base rent per leased unit for same-store properties was $1,876 compared to an average monthly base rent per leased unit of $1,711 at June 30, 2016, an increase of approximately 10%.

Same-Store Property Operating Income
For the three and six months ended June 30, 2017, same-store property GAAP basis operating income increased 1.7% and 0.4%, respectively, and same-store property cash basis operating income increased 2.6% and 0.7%, respectively, compared to the corresponding periods in 2016.The same-store property operating income by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Six Months Ended (2)
 
 
 
 
June 30,
 
 
 
 
June 30,
 
 
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,896

 
$
17,893

 

%
 
$
35,720

 
$
36,237

 
(1.4
)
%
Office
18,318

 
17,735

 
3.3

 
 
30,939

 
29,469

 
5.0

 
Multifamily
3,407

 
3,240

 
5.2

 
 
6,604

 
6,359

 
3.9

 
Mixed-Use
5,946

 
5,956

 
(0.2
)
 
 
11,374

 
12,218

 
(6.9
)
 
 
$
45,567

 
$
44,824

 
1.7

%
 
$
84,637

 
$
84,283

 
0.4

%
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,907

 
$
17,723

 
1.0

%
 
$
35,455

 
$
35,906

 
(1.3
)
%
Office
18,079

 
17,297

 
4.5

 
 
30,120

 
28,512

 
5.6

 
Multifamily
3,407

 
3,240

 
5.2

 
 
6,604

 
6,359

 
3.9

 
Mixed-Use
5,957

 
5,926

 
0.5

 
 
11,329

 
12,168

 
(6.9
)
 
 
$
45,350

 
$
44,186

 
2.6

%
 
$
83,508

 
$
82,945

 
0.7

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Same-store portfolio excludes (i) Hassalo on Eighth - Multifamily, which became available for occupancy in July and October of 2015; (ii) Hassalo on Eighth - Retail, which was placed in operations in April, July and October of 2016; (iii) the Pacific Ridge Apartments, which was acquired on April 28, 2017; and (iv) land held for development.
(2)
Same-store portfolio excludes (i) Torrey Reserve Campus due to significant redevelopment activity during the period; (ii) Hassalo on Eighth - Multifamily, which became available for occupancy in July and October of 2015; (iii) Hassalo on Eighth - Retail, which was placed in operations in April, July and October of 2016; (iv) the Pacific Ridge Apartments, which was acquired on April 28, 2017; and (v) land held for development.

On a same-store cash basis, retail property operating income increased for the three months ended June 30, 2017 compared to the same period in 2016 primarily due to rent commencement for new tenants at Carmel Mountain Plaza during the period. On a same-store basis, retail property operating income decreased for the six months ended June 30, 2017 compared to the same period in 2016 primarily due to a decrease in the percentage leased at Waikele Center attributed to the Sports Authority bankruptcy.

On a same-store basis, office property operating income increased for the six months ended June 30, 2017 compared to the same period in 2016 primarily due to higher annualized base rents, specifically at The Lloyd District Portfolio, First & Main and One Beach Street.

On a same-store basis, multifamily property operating income increased for the three and six months ended June 30, 2017 compared to the corresponding periods in 2016 primarily due to an increase in average monthly base rent during 2017. This increase was achieved notwithstanding the current repositioning of 21 off-line units at Loma Palisades, which is expected to be complete by the fourth quarter of 2017.

On a same-store basis, mixed-use property operating income decreased for the six months ended June 30, 2017 compared to the corresponding period in 2016 due to an increase in bad debt expense at the hotel portion of our mixed-use property.

3



Development
Our development efforts at Torrey Point are nearing completion with plans including two Class A office buildings of approximately 88,000 square feet in the aggregate, with panoramic unobstructed views of the Torrey Pines State Park Beach, Torrey Reserve and the Pacific Ocean. Projected costs of the development at Torrey Point remain approximately $56 million, of which approximately $37 million has been incurred to date. We expect to incur the remaining costs for development of Torrey Point in 2017. We expect the Torrey Point development to be stabilized in 2018 with an estimated stabilized cash yield of approximately 7% to 8%.

On July 1, 2017, we signed a ten-year triple net lease for approximately 32,000 square feet at Torrey Point.  Rent is expected to commence during the first quarter of 2018.

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

Acquisitions

On April 28, 2017, we acquired the Pacific Ridge Apartments, a 533 unit luxury apartment community located in San Diego, California that was completed in 2013 and is approximately 92% leased as of July 31, 2017. The purchase price was approximately $232 million, funded with a combination of cash on hand and funds drawn against the Company’s existing credit facility. The property is perched atop a bluff offering unobstructed panoramic views of the Pacific Ocean with an unparalleled amenities package and designed with a large focus on environmental sustainability.  The property’s central location in San Diego provides residents with convenient access to the light rail systems, extending residents reach to downtown, the San Diego International Airport, the San Diego Zoo, sporting venues, numerous malls and retail centers, culinary destinations and the freeway and public transportation. Additionally, the property is adjacent to the University of San Diego and in close proximity to two other universities.

Private Placement of Notes

On May 23, 2017, we entered into a Note Purchase Agreement for the private placement of $100 million of 4.24% Senior Guaranteed Notes, Series E, due May 23, 2029 (the "Series E Notes"). The Series E Notes were issued on May 23, 2017 and will pay interest semi-annually on the 23rd of May and November until their respective maturities.
Net of the settlement of a treasury lock, the fixed economic interest rate for the Series E Notes is approximately 4.18% per annum, through maturity.

Balance Sheet and Liquidity
At June 30, 2017, the company had gross real estate assets of $2.5 billion and liquidity of $281.4 million, comprised of cash and cash equivalents of $31.4 million and $250.0 million of availability on its line of credit.

Dividends
The company declared dividends on its shares of common stock of $0.26 per share for the second quarter of 2017. The dividends were paid on June 29, 2017.

In addition, the company has declared a dividend on its common stock of $0.26 per share for the quarter ending September 30, 2017. The dividend will be paid on September 28, 2017 to stockholders of record on September 14, 2017.

Subsequent Events
On July 6, 2017, we acquired Gateway Marketplace, a 128,000 square feet dual-grocery anchored shopping center located in Chula Vista, California. The purchase price was approximately $42 million, excluding closing costs and prorations. The property was acquired with cash on hand and borrowings under our credit facility.

On July 19, 2017, we entered into a Note Purchase Agreement for the private placement of $100 million of 3.78% Senior Guaranteed Notes, Series F, due July 19, 2024 (the "Series F Notes"). The Series F Notes were issued on July 19, 2017 and will pay interest semi-annually on the 31st of January and July until their respective maturities. Net of the settlement of a treasury lock, the fixed economic interest rate for the Series F Notes is approximately 3.85% per annum, through maturity.


4



Guidance

The company reaffirms its guidance for full year 2017 FFO per diluted share range of a range of $2.00 to $2.06 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.

Conference Call
The company will hold a conference call to discuss the results for the second quarter of 2017 on Wednesday, August 2, 2017 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-877-868-5513 and use the pass code 50389572. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, August 2, 2017 through Wednesday, August 9, 2017. To access the replay, dial 1-855-859-2056 and use the pass code 50389572. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.

Supplemental Information
Supplemental financial information regarding the company's second quarter 2017 results may be found in the “Investor Relations” section of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

5



Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
June 30, 2017
 
December 31, 2016
Assets
(unaudited)
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
2,477,653

 
$
2,241,061

Construction in progress
 
61,415

 
 
50,498

Held for development
 
9,447

 
 
9,447

 
 
2,548,515

 
 
2,301,006

Accumulated depreciation
 
(502,551
)
 
 
(469,460
)
Net real estate
 
2,045,964

 
 
1,831,546

Cash and cash equivalents
 
31,380

 
 
44,801

Restricted cash
 
9,211

 
 
9,950

Accounts receivable, net
 
6,483

 
 
9,330

Deferred rent receivables, net
 
37,924

 
 
38,452

Other assets, net
 
40,214

 
 
52,854

Total assets
$
2,171,176

 
$
1,986,933

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
280,170

 
$
445,180

Unsecured notes payable, net
 
944,816

 
 
596,350

Unsecured line of credit
 

 
 
20,000

Accounts payable and accrued expenses
 
40,884

 
 
32,401

Security deposits payable
 
6,779

 
 
6,114

Other liabilities and deferred credits, net
 
46,164

 
 
48,337

Total liabilities
 
1,318,813

 
 
1,148,382

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,130,063 and 45,732,109 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
 
471

 
 
457

Additional paid-in capital
 
916,695

 
 
874,597

Accumulated dividends in excess of net income
 
(88,595
)
 
 
(77,296
)
Accumulated other comprehensive income
 
10,494

 
 
11,798

Total American Assets Trust, Inc. stockholders' equity
 
839,065

 
 
809,556

Noncontrolling interests
 
13,298

 
 
28,995

Total equity
 
852,363

 
 
838,551

Total liabilities and equity
$
2,171,176

 
$
1,986,933


6



American Assets Trust, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenue:
 
 
 
 
 
 
 
Rental income
$
72,925

 
$
68,221

 
$
142,965

 
$
135,466

Other property income
4,181

 
3,598

 
7,933

 
7,084

Total revenue
77,106

 
71,819

 
150,898

 
142,550

Expenses:
 
 
 
 
 
 
 
Rental expenses
19,841

 
19,590

 
39,700

 
38,043

Real estate taxes
7,904

 
6,417

 
15,440

 
13,050

General and administrative
5,131

 
4,394

 
10,213

 
8,943

Depreciation and amortization
24,182

 
17,714

 
42,168

 
35,167

Total operating expenses
57,058

 
48,115

 
107,521

 
95,203

Operating income
20,048

 
23,704

 
43,377

 
47,347

Interest expense
(12,652
)
 
(13,153
)
 
(25,983
)
 
(26,099
)
Other income, net
192

 
99

 
502

 
123

Net income
7,588

 
10,650

 
17,896

 
21,371

Net income attributable to restricted shares
(61
)
 
(43
)
 
(121
)
 
(86
)
Net income attributable to unitholders in the Operating Partnership
(2,008
)
 
(3,008
)
 
(4,869
)
 
(6,035
)
Net income attributable to American Assets Trust, Inc. stockholders
$
5,519

 
$
7,599

 
$
12,906

 
$
15,250

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.12

 
$
0.17

 
$
0.28

 
$
0.34

Weighted average shares of common stock outstanding - basic
46,871,377

 
45,235,292

 
46,524,510

 
45,234,583

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.12

 
$
0.17

 
$
0.28

 
$
0.34

Weighted average shares of common stock outstanding - diluted
64,089,081

 
63,134,808

 
64,075,919

 
63,134,099

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.26

 
$
0.25

 
$
0.52

 
$
0.50

 
 
 
 
 
 
 
 


7



Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2017
 
June 30, 2017
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
7,588

 
$
17,896

Depreciation and amortization of real estate assets
 
24,182

 
 
42,168

FFO, as defined by NAREIT
$
31,770

 
$
60,064

Less: Nonforfeitable dividends on incentive stock awards
 
(59
)
 
 
(118
)
FFO attributable to common stock and units
$
31,711

 
$
59,946

FFO per diluted share/unit
$
0.49

 
$
0.94

Weighted average number of common shares and units, diluted
 
64,089,324

 
 
64,076,262


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.

Use of Non-GAAP Information
The company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company's operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company's properties, all of which have real economic effects and could materially impact the company's results from operations, the utility of FFO as a measure of the company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including the company's ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

8



About American Assets Trust, Inc.
American Assets Trust, Inc. (the “company”) is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. The company has over 50 years of experience in acquiring, improving, developing and managing premier retail, office and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington and Hawaii.  The company's retail portfolio comprises approximately 3.2 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
 
 
 
SECOND QUARTER 2017
 
Supplemental Information
 
 


https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-coverpicture2017q2.jpg


 
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 
Investor and Media Contact
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607


 
 
 
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-map2017q2.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
Office
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,195,690

 
727,683

 
1,455

(1)

 

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
516,985

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,308

 

 

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
675,486

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
589,362

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Portland
 
44,153

 
942,311

 
657

 

 

 
 
 
 
 
 
 
 
 
 
 
Seattle
 

 
494,658

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,089,155

 
2,681,637

 
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 assets. Size of circle denotes approximation of square feet / units. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
 
Retail
 
3.1

million
 
53%
 
Office
 
2.7

million
 
47%
Data is as of June 30, 2017.
 
Totals
 
5.8

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Second Quarter 2017 Supplemental Information
                               Page 2

 
 
INDEX
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

 
SECOND QUARTER 2017 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Income
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
Same-Store Portfolio Net Operating Income (NOI)
 
Same-Store Portfolio NOI Comparison excluding Redevelopment
 
Same-Store Portfolio NOI Comparison with Redevelopment
 
NOI By Region
 
NOI Breakdown
 
Property Revenue and Operating Expenses
 
Segment Capital Expenditures
 
Summary of Outstanding Debt
 
Market Capitalization
 
Summary of Development Opportunities
2.
PORTFOLIO DATA
 
 
Property Report
 
Retail Leasing Summary
 
Office Leasing Summary
 
Multifamily Leasing Summary
 
Mixed-Use Leasing Summary
 
Lease Expirations
 
Portfolio Leased Statistics
 
Top Tenants - Retail
 
Top Tenants - Office
3.
APPENDIX
 
 
Glossary of Terms
This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

Second Quarter 2017 Supplemental Information
                               Page 3

 
 
 
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 






FINANCIAL HIGHLIGHTS





Second Quarter 2017 Supplemental Information
                               Page 4

 
 
CONSOLIDATED BALANCE SHEETS
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Amounts in thousands, except shares and per share data)
June 30, 2017
 
December 31, 2016
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
2,477,653

 
$
2,241,061

Construction in progress
61,415

 
50,498

Held for development
9,447

 
9,447

 
2,548,515

 
2,301,006

Accumulated depreciation
(502,551
)
 
(469,460
)
Net real estate
2,045,964

 
1,831,546

Cash and cash equivalents
31,380

 
44,801

Restricted cash
9,211

 
9,950

Accounts receivable, net
6,483

 
9,330

Deferred rent receivable, net
37,924

 
38,452

Other assets, net
40,214

 
52,854

TOTAL ASSETS
$
2,171,176

 
$
1,986,933

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
280,170

 
$
445,180

Unsecured notes payable, net
944,816

 
596,350

Unsecured line of credit

 
20,000

Accounts payable and accrued expenses
40,884

 
32,401

Security deposits payable
6,779

 
6,114

Other liabilities and deferred credits, net
46,164

 
48,337

Total liabilities
1,318,813

 
1,148,382

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 47,130,063 and 45,732,109 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
471

 
457

Additional paid in capital
916,695

 
874,597

Accumulated dividends in excess of net income
(88,595
)
 
(77,296
)
Accumulated other comprehensive income
10,494

 
11,798

Total American Assets Trust, Inc. stockholders' equity
839,065

 
809,556

Noncontrolling interests
13,298

 
28,995

Total equity
852,363

 
838,551

TOTAL LIABILITIES AND EQUITY
$
2,171,176

 
$
1,986,933


Second Quarter 2017 Supplemental Information
                               Page 5

 
 
CONSOLIDATED STATEMENTS OF INCOME
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
REVENUE:
 
 
 
 
 
 
 
Rental income
$
72,925

 
$
68,221

 
$
142,965

 
$
135,466

Other property income
4,181

 
3,598

 
7,933

 
7,084

Total revenue
77,106

 
71,819

 
150,898

 
142,550

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
19,841

 
19,590

 
39,700

 
38,043

Real estate taxes
7,904

 
6,417

 
15,440

 
13,050

General and administrative
5,131

 
4,394

 
10,213

 
8,943

Depreciation and amortization
24,182

 
17,714

 
42,168

 
35,167

Total operating expenses
57,058

 
48,115

 
107,521

 
95,203

OPERATING INCOME
20,048

 
23,704

 
43,377

 
47,347

Interest expense
(12,652
)
 
(13,153
)
 
(25,983
)
 
(26,099
)
Other income, net
192

 
99

 
502

 
123

NET INCOME
7,588

 
10,650

 
17,896

 
21,371

Net income attributable to restricted shares
(61
)
 
(43
)
 
(121
)
 
(86
)
Net income attributable to unitholders in the Operating Partnership
(2,008
)
 
(3,008
)
 
(4,869
)
 
(6,035
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
5,519

 
$
7,599

 
$
12,906

 
$
15,250

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.12

 
$
0.17

 
$
0.28

 
$
0.34

Weighted average shares of common stock outstanding - basic
46,871,377

 
45,235,292

 
46,524,510

 
45,234,583

Diluted income attributable to common stockholders per share
$
0.12

 
$
0.17

 
$
0.28

 
$
0.34

Weighted average shares of common stock outstanding - diluted
64,089,081

 
63,134,808

 
64,075,919

 
63,134,099


Second Quarter 2017 Supplemental Information
                               Page 6

 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
7,588

 
$
10,650

 
$
17,896

 
$
21,371

Depreciation and amortization of real estate assets
24,182

 
17,714

 
42,168

 
35,167

FFO, as defined by NAREIT
31,770

 
28,364

 
60,064

 
56,538

Less: Nonforfeitable dividends on incentive stock awards
(59
)
 
(41
)
 
(118
)
 
(83
)
FFO attributable to common stock and common units
$
31,711

 
$
28,323

 
$
59,946

 
$
56,455

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.49

 
$
0.45

 
$
0.94

 
$
0.89

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
64,089,324

 
63,134,939

 
64,076,262

 
63,134,044

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
23,070

 
$
20,177

 
$
48,695

 
$
41,558

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
16,725

 
$
15,826

 
$
33,448

 
$
31,653

Dividends declared and paid per share/unit
$
0.26

 
$
0.25

 
$
0.52

 
$
0.50


Second Quarter 2017 Supplemental Information
                               Page 7

 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands, except shares and per share data)
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
31,770

 
$
28,364

 
$
60,064

 
$
56,538

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(9,511
)
 
(9,132
)
 
(14,420
)
 
(16,681
)
Net effect of straight-line rents (3)
628

 
(34
)
 
446

 
(284
)
Amortization of net above (below) market rents (4)
(858
)
 
(865
)
 
(1,709
)
 
(1,695
)
Net effect of other lease assets (5)
(3
)
 
135

 
974

 
270

Amortization of debt issuance costs and debt fair value adjustment
464

 
1,113

 
2,180

 
2,238

Non-cash compensation expense
639

 
637

 
1,278

 
1,255

Nonforfeitable dividends on incentive stock awards
(59
)
 
(41
)
 
(118
)
 
(83
)
FAD
$
23,070

 
$
20,177

 
$
48,695

 
$
41,558

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
4,709

 
$
4,190

 
$
7,384

 
$
6,906

Maintenance capital expenditures
4,802

 
4,942

 
7,036

 
9,775

 
$
9,511

 
$
9,132

 
$
14,420

 
$
16,681


Notes:
(1)
See Glossary of Terms.
(2)
For the three and six months ended June 30, 2017 and 2016, the weighted average common shares and common units used to compute FFO per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO per diluted share/unit include additional shares/units which were excluded from the computation of diluted EPS, as they were anti-dilutive for the periods presented.
(3)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(4)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(5)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, lease termination fees at City Center Bellevue and straight-line rent expense for our leases of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk - Retail.

Second Quarter 2017 Supplemental Information
                               Page 8

 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2017
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
24,584

 
$
26,359

 
$
5,012

 
$
14,770

 
$
70,725

Non-same store portfolio (1)
370

 

 
6,011

 

 
6,381

Total
24,954

 
26,359

 
11,023

 
14,770

 
77,106

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
6,688

 
8,041

 
1,605

 
8,824

 
25,158

Non-same store portfolio (1)
106

 
4

 
2,477

 

 
2,587

Total
6,794

 
8,045

 
4,082

 
8,824

 
27,745

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
17,896

 
18,318

 
3,407

 
5,946

 
45,567

Non-same store portfolio (1)
264

 
(4
)
 
3,534

 

 
3,794

Total
$
18,160

 
$
18,314

 
$
6,941

 
$
5,946

 
$
49,361

Same-store portfolio NOI, GAAP basis
$
17,896

 
$
18,318

 
$
3,407

 
$
5,946

 
$
45,567

Net effect of straight-line rents (2)
307

 
299

 

 
38

 
644

Amortization of net above (below) market rents (3)
(299
)
 
(532
)
 

 
(27
)
 
(858
)
Net effect of other lease intangibles (4)
3

 
(6
)
 

 

 
(3
)
Same-store portfolio NOI, cash basis
$
17,907

 
$
18,079

 
$
3,407

 
$
5,957

 
$
45,350


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2017 and 2016. See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles and straight-line rent expense for our leases of the Annex at The Landmark at One Market.

Second Quarter 2017 Supplemental Information
                               Page 9

 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI) (CONTINUED)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 


(Unaudited, amounts in thousands)
Six Months Ended June 30, 2017
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
48,994

 
$
44,003

 
$
9,895

 
$
29,890

 
$
132,782

Non-same store portfolio (1)
751

 
8,346

 
9,019

 

 
18,116

Total
49,745

 
52,349

 
18,914

 
29,890

 
150,898

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
13,274

 
13,064

 
3,291

 
18,516

 
48,145

Non-same store portfolio (1)
211

 
2,782

 
4,002

 

 
6,995

Total
13,485

 
15,846

 
7,293

 
18,516

 
55,140

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
35,720

 
30,939

 
6,604

 
11,374

 
84,637

Non-same store portfolio (1)
540

 
5,564

 
5,017

 

 
11,121

Total
$
36,260

 
$
36,503

 
$
11,621

 
$
11,374

 
$
95,758

Same-store portfolio NOI, GAAP basis
$
35,720

 
$
30,939

 
$
6,604

 
$
11,374

 
$
84,637

Net effect of straight-line rents (2)
320

 
263

 

 
23

 
606

Amortization of net above (below) market rents (3)
(588
)
 
(1,071
)
 

 
(50
)
 
(1,709
)
Net effect of other lease assets (4)
3

 
(11
)
 

 
(18
)
 
(26
)
Same-store portfolio NOI, cash basis
$
35,455

 
$
30,120

 
$
6,604

 
$
11,329

 
$
83,508


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on June 30, 2017 and 2016. See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, lease termination fees at City Center Bellevue, and straight-line rent expense for our leases of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk - Retail.

Second Quarter 2017 Supplemental Information
                               Page 10

 
 
SAME-STORE PORTFOLIO NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,907

 
$
17,723

 
1.0
 %
 
$
35,455

 
$
35,906

 
(1.3
)%
Office
18,079

 
17,297

 
4.5

 
30,120

 
28,512

 
5.6

Multifamily
3,407

 
3,240

 
5.2

 
6,604

 
6,359

 
3.9

Mixed-Use
5,957

 
5,926

 
0.5

 
11,329

 
12,168

 
(6.9
)
 
$
45,350

 
$
44,186

 
2.6
 %
 
$
83,508

 
$
82,945

 
0.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,896

 
$
17,893

 
 %
 
$
35,720

 
$
36,237

 
(1.4
)%
Office
18,318

 
17,735

 
3.3

 
30,939

 
29,469

 
5.0

Multifamily
3,407

 
3,240

 
5.2

 
6,604

 
6,359

 
3.9

Mixed-Use
5,946

 
5,956

 
(0.2
)
 
11,374

 
12,218

 
(6.9
)
 
$
45,567

 
$
44,824

 
1.7
 %
 
$
84,637

 
$
84,283

 
0.4
 %


Second Quarter 2017 Supplemental Information
                               Page 11

 
 
SAME-STORE PORTFOLIO NOI COMPARISON WITH REDEVELOPMENT
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,907

 
$
17,723

 
1.0
 %
 
$
35,455

 
$
35,906

 
(1.3
)%
Office
18,079

 
17,297

 
4.5

 
35,562

 
34,217

 
3.9

Multifamily
3,407

 
3,240

 
5.2

 
6,604

 
6,359

 
3.9

Mixed-Use
5,957

 
5,926

 
0.5

 
11,329

 
12,168

 
(6.9
)
 
$
45,350

 
$
44,186

 
2.6
 %
 
$
88,950

 
$
88,650

 
0.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,896

 
$
17,893

 
 %
 
$
35,720

 
$
36,237

 
(1.4
)%
Office
18,318

 
17,735

 
3.3

 
36,509

 
35,354

 
3.3

Multifamily
3,407

 
3,240

 
5.2

 
6,604

 
6,359

 
3.9

Mixed-Use
5,946

 
5,956

 
(0.2
)
 
11,374

 
12,218

 
(6.9
)
 
$
45,567

 
$
44,824

 
1.7
 %
 
$
90,207

 
$
90,168

 
 %

Second Quarter 2017 Supplemental Information
                               Page 12

 
 
NOI BY REGION
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands)
Three Months Ended June 30, 2017
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Southern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
$
7,790

 
$
4,250

 
$
5,296

 
$

 
$
17,336

Net effect of straight-line rents (2)
(46
)
 
36

 

 

 
(10
)
Amortization of net above (below) market rents (3)
(198
)
 

 

 

 
(198
)
NOI, cash basis
7,546

 
4,286

 
5,296

 

 
17,128

Northern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
2,628

 
4,738

 

 

 
7,366

Net effect of straight-line rents (2)
27

 
606

 

 

 
633

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

 

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

 
(20
)
 

 

 
(20
)
NOI, cash basis
2,558

 
5,130

 

 

 
7,688

Hawaii
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
4,030

 

 

 
5,946

 
9,976

Net effect of straight-line rents (2)
338

 

 

 
38

 
376

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

 

 

 
(27
)
 
56

Net effect of other lease intangibles (4)
3

 

 

 

 
3

NOI, cash basis
4,454

 

 

 
5,957

 
10,411

Oregon
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
290

 
4,943

 
1,645

 

 
6,878

Net effect of straight-line rents (2)
(54
)
 
(358
)
 
37

 

 
(375
)
Amortization of net above (below) market rents (3)

 
(94
)
 

 

 
(94
)
Net effect of other lease intangibles (4)

 
5

 

 

 
5

NOI, cash basis
236

 
4,496

 
1,682

 

 
6,414

Texas
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
3,422

 

 

 

 
3,422

Net effect of straight-line rents (2)
(11
)
 

 

 

 
(11
)
Amortization of net above (below) market rents (3)
(87
)
 

 

 

 
(87
)
NOI, cash basis
3,324

 

 

 

 
3,324

Washington
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)

 
4,383

 

 

 
4,383

Net effect of straight-line rents (2)

 
15

 

 

 
15

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

 
(244
)
 

 

 
(244
)
Net effect of other lease intangibles (4)

 
9

 

 

 
9

NOI, cash basis

 
4,163

 

 

 
4,163

Total
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
18,160

 
18,314

 
6,941

 
5,946

 
49,361

Net effect of straight-line rents (2)
254

 
299

 
37

 
38

 
628

Amortization of net above (below) market rents (3)
(299
)
 
(532
)
 

 
(27
)
 
(858
)
Net effect of other lease intangibles (4)
3

 
(6
)
 

 

 
(3
)
NOI, cash basis
$
18,118

 
$
18,075

 
$
6,978

 
$
5,957

 
$
49,128

Notes:
(1)
See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles and straight-line rent expense for our leases of the Annex at The Landmark at One Market.


Second Quarter 2017 Supplemental Information
                               Page 13

 
 
NOI BREAKDOWN
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

Three Months Ended June 30, 2017
Portfolio NOI, Cash Basis Breakdown
 
Portfolio Diversification by Geographic Region
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-cashbyregion2017q2.jpg
Portfolio NOI, GAAP Basis Breakdown
 
Portfolio Diversification by Geographic Region
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-gaapbyregion2017q2.jpg
 
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-cashbysegment2017q2.jpg
 
 
Portfolio Diversification by Segment
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-gaapbysegment2017q2.jpg

Second Quarter 2017 Supplemental Information
                               Page 14

 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2017
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Retail Portfolio
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
912

 
$
22

 
$
210

 
$
(205
)
Carmel Mountain Plaza
 
3,208

 
42

 
778

 
(799
)
South Bay Marketplace
 
531

 
15

 
173

 
(168
)
Lomas Santa Fe Plaza
 
1,370

 
8

 
299

 
(343
)
Solana Beach Towne Centre
 
1,508

 
18

 
488

 
(489
)
Del Monte Center
 
2,383

 
252

 
798

 
(1,182
)
Geary Marketplace
 
300

 

 
141

 
(134
)
The Shops at Kalakaua
 
483

 
25

 
41

 
(74
)
Waikele Center
 
4,098

 
285

 
1,030

 
(1,434
)
Alamo Quarry Market
 
3,494

 
81

 
1,618

 
(1,869
)
Hassalo on Eighth - Retail
 
226

 
41

 
46

 
(70
)
Subtotal Retail Portfolio
 
$
18,513

 
$
789

 
$
5,622

 
$
(6,767
)
Office Portfolio
 
 
 
 
 
 
 
 
Torrey Reserve Campus (5)
 
$
4,319

 
$
45

 
$
246

 
$
(1,358
)
Solana Beach Corporate Centre
 
1,860

 
6

 
52

 
(504
)
The Landmark at One Market
 
6,127

 
14

 
262

 
(2,173
)
One Beach Street
 
948

 
142

 
129

 
(319
)
First & Main
 
2,757

 
171

 
407

 
(881
)
Lloyd District Portfolio (5)
 
2,769

 
515

 
40

 
(1,238
)
City Center Bellevue
 
4,469

 
709

 
406

 
(1,410
)
Subtotal Office Portfolio
 
$
23,249

 
$
1,602

 
$
1,542

 
$
(7,883
)

Second Quarter 2017 Supplemental Information
                               Page 15

 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 


(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2017
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Multifamily Portfolio
 
 
 
 
 
 
 
 
Loma Palisades
 
$
3,046

 
$
193

 
$

 
$
(1,020
)
Imperial Beach Gardens
 
879

 
65

 

 
(309
)
Mariner's Point
 
427

 
27

 

 
(133
)
Santa Fe Park RV Resort
 
352

 
24

 

 
(143
)
Pacific Ridge Apartments (6)
 
2,769

 
140

 

 
(1,020
)
Hassalo on Eighth - Multifamily
 
2,962

 
326

 

 
(1,456
)
Subtotal Multifamily Portfolio
 
$
10,435

 
$
775

 
$

 
$
(4,081
)
Mixed-Use Portfolio
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,583

 
$
1,176

 
$
962

 
$
(1,825
)
Waikiki Beach Walk - Embassy Suites™
 
9,345

 
705

 

 
(6,989
)
Subtotal Mixed-Use Portfolio
 
$
11,928

 
$
1,881

 
$
962

 
$
(8,814
)
Total
 
$
64,125

 
$
5,047

 
$
8,126

 
$
(27,545
)

Notes:
(1)
Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended June 30, 2017 (before abatements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our retail and office portfolio were approximately $11 and $431, respectively, for the three months ended June 30, 2017. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended June 30, 2017. 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 $152 of abatements for our multifamily portfolio for the three months ended June 30, 2017. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended June 30, 2017.
(2)
Represents additional property-related income for the three months ended June 30, 2017, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
(3)
Represents billed tenant expense reimbursements for the three months ended June 30, 2017.
(4)
Represents property operating expenses for the three months ended June 30, 2017. Property operating expenses includes all rental expenses, except non cash rent expense and the provision for bad debt recorded for deferred rent receivables.
(5)
Base rent shown includes amounts related to American Assets Trust, L.P.'s leases at Torrey Reserve Campus and Lloyd District Portfolio. This intercompany rent is eliminated in the consolidated statement of operations. The base rent and abatements were both $279 for the three months ended June 30, 2017.
(6)
Includes revenue and expenses since the acquisition of the Pacific Ridge Apartments for the period from April 28, 2017 to June 30, 2017.




Second Quarter 2017 Supplemental Information
                               Page 16

 
 
SEGMENT CAPITAL EXPENDITURES
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

 
(Unaudited, amounts in thousands)
 
Three Months Ended June 30, 2017
 
Segment
 
Tenant Improvements and Leasing Commissions
 
Maintenance Capital Expenditures
 
Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures
 
Redevelopment and Expansions
 
New Development
 
Total Capital Expenditures
 
Retail Portfolio
 
$
2,120

 
$
680

 
$
2,800

 
$

 
$

 
$
2,800

 
Office Portfolio
 
2,565

 
1,924

 
4,489

 

 
4,311

 
8,800

 
Multifamily Portfolio
 

 
2,109

 
2,109

 

 

 
2,109

 
Mixed-Use Portfolio
 
24

 
89

 
113

 

 

 
113

 
Total
 
$
4,709

 
$
4,802

 
$
9,511

 
$

 
$
4,311

 
$
13,822

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
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
 
$
3,019

 
$
1,027

 
$
4,046

 
$

 
$

 
$
4,046

 
Office Portfolio
 
4,281

 
3,322

 
7,603

 

 
7,557

 
15,160

 
Multifamily Portfolio
 

 
2,568

 
2,568

 

 

 
2,568

 
Mixed-Use Portfolio
 
84

 
119

 
203

 

 

 
203

 
Total
 
$
7,384

 
$
7,036

 
$
14,420

 
$

 
$
7,557

 
$
21,977

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Second Quarter 2017 Supplemental Information
                               Page 17

 
 
SUMMARY OF OUTSTANDING DEBT
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
June 30, 2017
 
Interest Rate
 
Service
 
Maturity Date
 
Maturity
Loma Palisades (1)
 
$
73,744

 
6.09
%
 
$
4,553

 
July 1, 2018
 
$
73,744

One Beach Street (1)
 
21,900

 
3.94
%
 
875

 
April 1, 2019
 
21,900

Torrey Reserve - North Court (2)
 
20,215

 
7.22
%
 
1,836

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII (2)
 
6,824

 
6.36
%
 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II (2)
 
10,825

 
5.91
%
 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre (2)
 
36,082

 
5.91
%
 
2,849

 
June 1, 2020
 
33,898

City Center Bellevue (1)
 
111,000

 
3.98
%
 
4,479

 
November 1, 2022
 
111,000

Secured Notes Payable / Weighted Average (3)
 
$
280,590

 
5.15
%
 
$
16,007

 
 
 
$
276,593

 
 
 
 
 
 
 
 
 
 
 
Term Loan A (4)
 
$
100,000

 
3.08
%
 
$
3,125

 
January 9, 2019
 
$
100,000

Series A Notes (5)
 
150,000

 
3.88
%
 
6,060

 
October 31, 2021
 
150,000

Term Loan B (6)
 
100,000

 
3.15
%
 
3,149

 
March 1, 2023
 
100,000

Term Loan C (7)
 
50,000

 
3.14
%
 
1,571

 
March 1, 2023
 
50,000

Series B Notes
 
100,000

 
4.45
%
 
4,450

 
February 2, 2025
 
100,000

Series C Notes
 
100,000

 
4.50
%
 
4,500

 
April 1, 2025
 
100,000

Series D Notes (8)
 
250,000

 
3.87
%
 
10,725

 
March 1, 2027
 
250,000

Series E Notes (9)
 
100,000

 
4.18
%
 
4,240

 
May 23, 2029
 
100,000

Unsecured Notes Payable / Weighted Average (10)
 
$
950,000

 
3.83
%
 
$
37,820

 
 
 
$
950,000

Notes:
(1)
Interest only.
(2)
Principal payments based on a 30-year amortization schedule.
(3)
The Secured Notes Payable total does not include debt issuance costs, net of $0.4 million.
(4)
Term Loan A has a maturity date of January 9, 2018 and we have one 12-month option remaining to extend its maturity to 2019, which we intend to exercise. Term Loan A accrues interest at a variable rate, which we fixed as part of an interest rate swap for an effective interest rate of 3.08%, subject to adjustments based on our consolidated leverage ratio.
(5)
$150 million of 4.04% Senior Guaranteed Notes, Series A, due October 31, 2021. Net of the settlement of the forward-starting interest rate swap, the effective interest rate for the Series A Notes is approximately 3.88% per annum, through maturity.
(6)
Term Loan B matures on March 1, 2023. Term Loan B accrues interest at a variable rate, which we fixed as part of an interest rate swap for an all-in interest rate of 3.15%, 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 3.14%, subject to adjustments based on our consolidated leverage ratio.
(8)
$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.
(9)
$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.
(10)
The Unsecured Notes Payable total does not include debt issuance costs, net of $5.2 million.

Second Quarter 2017 Supplemental Information
                               Page 18

 
 
MARKET CAPITALIZATION
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
Market data
 
June 30, 2017
Common shares outstanding
 
47,130

Common units outstanding
 
17,195

Common shares and common units outstanding
 
64,325

Market price per common share
 
$
39.39

Equity market capitalization
 
$
2,533,762

Total debt
 
$
1,230,590

Total market capitalization
 
$
3,764,352

Less: Cash on hand
 
$
(31,380
)
Total enterprise value
 
$
3,732,972

Total assets, gross
 
$
2,673,727

Total unencumbered assets, gross
 
$
2,170,539

 
 
 
Total debt/Total capitalization
 
32.7
%
Total debt/Total enterprise value
 
33.0
%
Net debt/Total enterprise value (1)
 
32.1
%
Total debt/Total assets, gross
 
46.0
%
Net debt/Total assets, gross (1)
 
44.9
%
Total unencumbered assets, gross/Unsecured debt
 
228.5
%
 
 
 
Total debt/Adjusted EBITDA (2)(3)
 
6.8
x
Net debt/Adjusted EBITDA (1)(2)(3)
 
6.7
x
Interest coverage ratio (4)
 
3.6
x
Fixed charge coverage ratio (4)
 
3.6
x
 
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-debtgraph2017q2.jpg
Weighted Average Fixed Interest Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
%
6.1
%
3.8
%
6.0
%
3.9
%
4.0
%
3.1
%
%
4.5
%
%
3.9
%
%
4.2
%
Total Weighed Average Fixed Interest Rate:
4.1%
Weighted Average Term to Maturity:
6.3 years
Credit Ratings
Rating Agency
Rating
Outlook
Fitch
BBB
Stable
Moody's
Baa3
Stable
Standard & Poors
BBB-
Stable

Notes:
(1)
Net debt is equal to total debt less cash on hand.
(2)
See Glossary of Terms for discussion of EBITDA and Adjusted EBITDA.
(3)
As used here, Adjusted EBITDA represents the actual for the three months ended June 30, 2017 annualized.
(4)
Calculated as Adjusted EBITDA divided by interest on borrowed funds, including capitalized interest and excluding debt fair value adjustments and loan fee amortization.
(5)
Assumes the exercise of the one 12-month option remaining to extend the maturity of the unsecured term loan to January 2019.

Second Quarter 2017 Supplemental Information
                               Page 19

 
 
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.
 
 
 
 
 
 
 
 
 
 
In-Process Development Projects
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Project Costs (in thousands) (2)
 
 
 
Start
Date
Estimated Completion Date
Estimated Stabilization Date (1)
Estimated Rentable Square Feet
Three Months
Cost Incurred to Date
Total Estimated Investment
Estimated Stabilized
Yield (3)
 
 
Ended
Property
Location
June 30, 2017
Office Property:
 
 
 
 
 
 
 
 
Torrey Point
San Diego, CA
2015
2017
2018
88,000
$2,980
$37,226
$55,800
7% - 8%
 
 
 
 
 
 
 
 
 
 
Development/Redevelopment Pipeline
 
Property
Property Type
Location
Estimated Rentable
Square Feet
Multifamily Units
 
Solana Beach Corporate Centre (Building 5)
Retail
Solana Beach, CA
10,000
N/A
 
Lomas Santa Fe Plaza
Retail
Solana Beach, CA
45,000
N/A
 
Solana Beach - Highway 101 (4)
Mixed Use
Solana Beach, CA
48,000
36
 
Lloyd District Portfolio - multiple phases (5)
Mixed Use
Portland, OR
TBD
TBD
 

Notes:
(1)
Based on management's estimation of stabilized occupancy (90%).
(2)
For all properties, project costs exclude capitalized interest cost which is calculated in accordance with Accounting Standards Codification 835-20-50-1.
(3)
The estimated stabilized yield is calculated based on total estimated project costs, as defined above, when the project has reached stabilized occupancy.
(4)
Represents commercial portion of development opportunity for Solana Beach - Highway 101. A third party has been granted an option to acquire this property exercisable on or prior to August 22, 2018 at a price ranging from $9.0 million to $9.45 million in consideration for a non-refundable $0.6 million option payment.
(5)
The Lloyd District Portfolio was acquired in 2011 consisting of approximately 600,000 rentable square feet on more than 16 acres located in the Lloyd District of Portland, Oregon. The portion of the property that has been designated for additional development to include a high density, transit oriented, mixed-use urban village, with the potential to be in excess of approximately three million square feet. The entitlement for such development opportunity allows a 12:1 Floor Area Ratio with a 250 foot height limit and provides for retail, office and/or multifamily development.  Additional development plans are in the early stages and will continue to progress as demand and economic conditions allow.


Second Quarter 2017 Supplemental Information
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PORTFOLIO DATA





Second Quarter 2017 Supplemental Information
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PROPERTY REPORT
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As of June 30, 2017
 
 
 
 
 
Retail and Office Portfolios
 
 
 
 
 
 
 
 
 
 
 
 
Net
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
Rentable
 
 
 
 
 
Base Rent
 
 
 
 
 
 
 
 
Year Built/
 
of
 
Square
 
Percentage
 
Annualized
 
per Leased
 
 
 
 
Property
 
Location
 
Renovated
 
Buildings
 
Feet (1)
 
Leased (2)
 
Base Rent (3)
 
Square Foot (4)
 
Retail Anchor Tenant(s) (5)
 
Other Principal Retail Tenants (6)
Retail Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
San Diego, CA
 
1991

 
9

 
78,098

 
93.4%
 
$
3,622,507

 
$49.66
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994/2014

 
15

 
528,416

 
99.1
 
12,835,575

 
24.51
 
Sears
 
Dick's Sporting Goods, Saks Fifth Avenue Off 5th
South Bay Marketplace (7)
 
San Diego, CA
 
1997

 
9

 
132,877

 
100.0
 
2,138,977

 
16.10
 
 
 
Ross Dress for Less, Grocery Outlet
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997

 
9

 
209,569

 
98.0
 
5,500,689

 
26.78
 
 
 
Vons, Home Goods
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004

 
12

 
246,730

 
99.1
 
6,256,688

 
25.59
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006

 
16

 
675,486

 
97.8
 
9,993,513

 
15.13
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012

 
3

 
35,156

 
100.0
 
1,198,166

 
34.08
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
The Shops at Kalakaua
 
Honolulu, HI
 
1971/2006

 
3

 
11,671

 
100.0
 
1,949,473

 
167.04
 
 
 
Hawaii Beachware & Fashion, Diesel U.S.A. Inc.
Waikele Center
 
Waipahu, HI
 
1993/2008

 
9

 
537,637

 
90.7
 
16,505,824

 
33.85
 
Lowe's, Kmart(8)
 
UFC Gym, Old Navy
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999

 
16

 
589,362

 
99.0
 
13,938,785

 
23.89
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Hassalo on Eighth
 
Portland, OR
 
2015

 
3

 
44,153

 
76.6
 
936,396

 
27.69
 
 
 
Providence Health & Services, Green Zebra Grocery
Subtotal/Weighted Average Retail Portfolio
 
 
 
104

 
3,089,155

 
96.8%
 
$
74,876,593

 
$25.04
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000/2014-2016

 
14

 
515,192

 
78.6%
 
$
17,427,890

 
$43.04
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005

 
4

 
212,491

 
92.4
 
7,363,433

 
37.50
 
 
 
 
The Landmark at One Market (9)
 
San Francisco, CA
 
1917/2000

 
1

 
419,371

 
100.0
 
24,827,187

 
59.20
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992

 
1

 
97,614

 
84.2
 
3,271,980

 
39.81
 
 
 
 
First & Main
 
Portland, OR
 
2010

 
1

 
360,641

 
98.7
 
11,044,572

 
31.03
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2015

 
6

 
581,670

 
75.7
 
11,074,372

 
25.15
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987

 
1

 
494,658

 
96.8
 
17,817,407

 
37.21
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
28

 
2,681,637

 
88.7%
 
$
92,826,841

 
$39.03
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
132

 
5,770,792

 
93.1%
 
$
167,703,434

 
$31.21
 
 
 
 

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PROPERTY REPORT (CONTINUED)
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As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (10)
 
San Diego, CA
 
1958/2001-2008
 
80

 
548

 
94.9%
 
$
12,286,836

 
$
1,969

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008
 
26

 
160

 
96.9
 
3,563,640

 
$
1,915

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
98.9
 
1,687,608

 
$
1,616

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

 
126

 
78.0
 
1,827,960

 
$
1,550

 
 
 
 
Pacific Ridge Apartments
 
San Diego, CA
 
2013
 
3

 
533

 
94.2
 
16,075,440

 
$
2,668

 
 
 
 
Hassalo on Eighth - Velomor
 
Portland, OR
 
2015
 
1

 
177

 
93.8
 
3,221,940

 
$
1,617

 
 
 
 
Hassalo on Eighth - Aster Tower
 
Portland, OR
 
2015
 
1

 
337

 
87.8
 
6,196,128

 
$
1,745

 
 
 
 
Hassalo on Eighth - Elwood
 
Portland, OR
 
2015
 
1

 
143

 
91.6
 
2,438,040

 
$
1,551

 
 
 
 
Total/Weighted Average Multifamily Portfolio (10)
 
 
 
121

 
2,112

 
92.6%
 
$
47,297,592

 
$
2,015

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

 
96,707

 
95.7
%
 
$
10,408,616

 
$
112.47

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

 
369

 
91.1
%
 
$
305.44

 
$
278.31

 
 
 
 

Notes:

(1)
The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
(2)
Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of June 30, 2017, including leases which may not have commenced as of June 30, 2017. Percentage leased for our multifamily properties includes total units rented as of June 30, 2017.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2017 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2017. Annualized base rent per leased unit is calculated by dividing annualized base rent by units under lease as of June 30, 2017.
(5)
Retail anchor tenants are defined as retail tenants leasing 50,000 square feet or more.
(6)
Other principal retail tenants are defined as the two tenants leasing the most square footage, excluding anchor tenants.
(7)    Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases in the following table:
Property
 
Number of Ground Leases
 
Square Footage Leased Pursuant to Ground Leases
 
Aggregate Annualized Base Rent
Carmel Mountain Plaza
 
6
 
125,477

 
$
1,193,816

South Bay Marketplace
 
1
 
2,824

 
$
91,320

Del Monte Center
 
2
 
295,100

 
$
201,291

Alamo Quarry Market
 
4
 
31,994

 
$
470,075


(8)
In December 2016, the Kmart store at Waikele Center ceased its operations, but continues to remain fully liable for all of its lease obligations until the lease's scheduled expiration on June 30, 2018.
(9)
This property contains 419,371 net rentable square feet consisting of The Landmark at One Market (375,151 net rentable square feet) as well as a separate long-term leasehold interest in approximately 44,220 net rentable square feet of space located in an adjacent six-story leasehold known as the Annex. We currently lease the Annex from an affiliate of the Paramount Group pursuant to a long-term master lease effective through June 30, 2021, which we have the option to extend until 2031 pursuant to two five-year extension options.

Second Quarter 2017 Supplemental Information
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PROPERTY REPORT (CONTINUED)
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(10)
Excluding the 21 units associated with the Loma Palisades repositioning, Loma Palisades was 98.7% leased and total multifamily was 93.5% leased at June 30, 2017.
(11)
The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended June 30, 2017, the highest average monthly occupancy rate for this property was 100%, occurring in August 2016. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.
(12)
Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2017, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended June 30, 2017 by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended June 30, 2017 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

Second Quarter 2017 Supplemental Information
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RETAIL LEASING SUMMARY
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As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
25

 
100%
 
207,012

 
$30.31
 
$34.77
 
$
(922,740
)
 
(12.8
)%
 
5.2
 %
 
8.7
 
$
2,088,639

 
$10.09
1st Quarter 2017
 
12

 
100%
 
33,114

 
$45.40
 
$44.41
 
$
32,606

 
2.2
 %
 
10.2
 %
 
5.0
 
$
382,595

 
$11.55
4th Quarter 2016
 
14

 
100%
 
28,604

 
$44.50
 
$42.67
 
$
52,501

 
4.3
 %
 
17.5
 %
 
7.3
 
$
555,445

 
$19.42
3rd Quarter 2016
 
21

 
100%
 
98,723

 
$31.94
 
$28.20
 
$
370,189

 
13.3
 %
 
18.2
 %
 
7.2
 
$
1,974,000

 
$20.00
Total 12 months
 
72

 
100%
 
367,453

 
$33.21
 
$34.49
 
$
(467,444
)
 
(3.7
)%
 
10.1
 %
 
7.9
 
$
5,000,679

 
$13.61
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
5

 
20%
 
7,353

 
$69.78
 
$78.54
 
$
(64,397
)
 
(11.2
)%
 
1.4
 %
 
7.4
 
$
289,041

 
$39.31
1st Quarter 2017
 
3

 
25%
 
10,381

 
$50.05
 
$53.92
 
$
(40,120
)
 
(7.2
)%
 
(1.0
)%
 
8.2
 
$
361,545

 
$34.83
4th Quarter 2016
 
4

 
29%
 
3,246

 
$80.62
 
$77.70
 
$
9,477

 
3.8
 %
 
12.4
 %
 
6.1
 
$
51,745

 
$15.94
3rd Quarter 2016
 
3

 
14%
 
47,066

 
$24.25
 
$19.01
 
$
246,521

 
27.6
 %
 
30.4
 %
 
10.5
 
$
1,974,000

 
$41.94
Total 12 months
 
15

 
21%
 
68,046

 
$35.79
 
$33.57
 
$
151,481

 
6.6
 %
 
13.6
 %
 
9.6
 
$
2,676,331

 
$39.33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
20

 
80%
 
199,659

 
$28.86
 
$33.16
 
$
(858,343
)
 
(13.0
)%
 
5.5
 %
 
8.7
 
$
1,799,598

 
$9.01
1st Quarter 2017
 
9

 
75%
 
22,733

 
$43.27
 
$40.07
 
$
72,726

 
8.0
 %
 
17.0
 %
 
3.5
 
$
21,050

 
$0.93
4th Quarter 2016
 
10

 
71%
 
25,358

 
$39.88
 
$38.18
 
$
43,024

 
4.4
 %
 
18.9
 %
 
7.5
 
$
503,700

 
$19.86
3rd Quarter 2016
 
18

 
86%
 
51,657

 
$38.96
 
$36.57
 
$
123,668

 
6.5
 %
 
12.3
 %
 
4.1
 
$

 
$0.00
Total 12 months
 
57

 
79%
 
299,407

 
$32.63
 
$34.70
 
$
(618,925
)
 
(6.0
)%
 
9.2
 %
 
7.4
 
$
2,324,348

 
$7.76
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
28

 
211,355

 
$30.37
 
8.6
 
$
2,439,264

 
$11.54
 
 
 
 
 
 
 
 
 
 
1st Quarter 2017
 
15

 
42,915

 
$43.67
 
5.7
 
$
1,049,120

 
$24.45
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
16

 
31,064

 
$43.51
 
7.1
 
$
599,245

 
$19.29
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2016
 
24

 
103,348

 
$32.02
 
7.1
 
$
2,188,512

 
$21.18
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
83

 
388,682

 
$33.33
 
7.8
 
$
6,276,141

 
$16.15
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease, including leases signed for the retail portion of our mixed-use property.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Second Quarter 2017 Supplemental Information
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OFFICE LEASING SUMMARY
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As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
11

 
100%
 
88,675

 
$62.62
 
$47.24
 
$
1,363,412

 
32.5
 %
 
47.4
 %
 
4.9
 
$
956,040

 
$10.78
1st Quarter 2017
 
12

 
100%
 
92,029

 
$41.79
 
$40.08
 
$
157,322

 
4.3
 %
 
6.7
 %
 
4.2
 
$
2,577,621

 
$28.01
4th Quarter 2016
 
11

 
100%
 
103,401

 
$38.81
 
$33.78
 
$
519,828

 
14.9
 %
 
31.8
 %
 
4.6
 
$
1,218,128

 
$11.78
3rd Quarter 2016
 
12

 
100%
 
38,822

 
$41.43
 
$37.79
 
$
141,420

 
9.6
 %
 
16.8
 %
 
4.2
 
$
729,389

 
$18.79
Total 12 months
 
46

 
100%
 
322,927

 
$46.51
 
$39.75
 
$
2,181,982

 
17.0
 %
 
27.4
 %
 
4.5
 
$
5,481,178

 
$16.97
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
3

 
27%
 
6,583

 
$40.87
 
$36.56
 
$
28,395

 
11.8
 %
 
20.3
 %
 
5.1
 
$
96,700

 
$14.69
1st Quarter 2017
 
8

 
67%
 
69,802

 
$41.32
 
$37.73
 
$
250,566

 
9.5
 %
 
10.6
 %
 
4.9
 
$
2,547,352

 
$36.49
4th Quarter 2016
 
5

 
45%
 
46,060

 
$40.17
 
$34.77
 
$
248,871

 
15.5
 %
 
30.7
 %
 
3.5
 
$
700,600

 
$15.21
3rd Quarter 2016
 
4

 
33%
 
10,953

 
$43.51
 
$38.64
 
$
53,277

 
12.6
 %
 
13.5
 %
 
4.1
 
$
73,700

 
$6.73
Total 12 months
 
20

 
43%
 
133,398

 
$41.08
 
$36.72
 
$
581,109

 
11.9
 %
 
17.8
 %
 
4.4
 
$
3,418,352

 
$25.62
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
8

 
73%
 
82,092

 
$64.36
 
$48.10
 
$
1,335,017

 
33.8
 %
 
49.2
 %
 
4.9
 
$
859,340

 
$10.47
1st Quarter 2017
 
4

 
33%
 
22,227

 
$43.24
 
$47.44
 
$
(93,244
)
 
(8.8
)%
 
(1.6
)%
 
1.8
 
$
30,269

 
$1.36
4th Quarter 2016
 
6

 
55%
 
57,341

 
$37.71
 
$32.98
 
$
270,957

 
14.3
 %
 
32.8
 %
 
5.5
 
$
517,528

 
$9.03
3rd Quarter 2016
 
8

 
67%
 
27,869

 
$40.61
 
$37.45
 
$
88,143

 
8.4
 %
 
18.2
 %
 
4.3
 
$
655,689

 
$23.53
Total 12 months
 
26

 
57%
 
189,529

 
$50.33
 
$41.88
 
$
1,600,873

 
20.2
 %
 
33.4
 %
 
4.6
 
$
2,062,826

 
$10.89
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2017
 
13

 
92,875

 
$61.74
 
5.0
 
$
1,115,237

 
$12.01
 
 
 
 
 
 
 
 
 
 
1st Quarter 2017
 
16

 
123,929

 
$39.46
 
5.2
 
$
4,136,001

 
$33.37
 
 
 
 
 
 
 
 
 
 
4th Quarter 2016
 
16

 
125,836

 
$39.48
 
5.0
 
$
2,796,553

 
$22.22
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2016
 
15

 
47,637

 
$42.59
 
4.8
 
$
1,256,475

 
$26.38
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
60

 
390,277

 
$45.15
 
5.0
 
$
9,304,266

 
$23.84
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Second Quarter 2017 Supplemental Information
                               Page 26

 
 
MULTIFAMILY LEASING SUMMARY
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

As of June 30, 2017
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
520
 
94.9%
(4) 
$12,286,836
 
$1,969
1st Quarter 2017
 
522
 
95.3%
(4) 
$11,977,260
 
$1,911
4th Quarter 2016
 
521
 
95.1%
 
$11,930,772
 
$1,908
3rd Quarter 2016
 
536
 
97.8%
 
$12,083,664
 
$1,879
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Gardens
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
155
 
96.9%
 
$3,563,640
 
$1,915
1st Quarter 2017
 
157
 
98.1%
 
$3,507,744
 
$1,862
4th Quarter 2016
 
155
 
96.9%
 
$3,402,948
 
$1,829
3rd Quarter 2016
 
156
 
97.6%
 
$3,422,268
 
$1,826
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
87
 
98.9%
 
$1,687,608
 
$1,616
1st Quarter 2017
 
86
 
97.7%
 
$1,666,164
 
$1,615
4th Quarter 2016
 
86
 
97.7%
 
$1,626,312
 
$1,576
3rd Quarter 2016
 
86
 
97.7%
 
$1,617,708
 
$1,568
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
98
 
78.0%
 
$1,827,960
 
$1,550
1st Quarter 2017
 
102
 
81.0%
 
$1,359,780
 
$1,110
4th Quarter 2016
 
101
 
80.2%
 
$1,173,324
 
$968
3rd Quarter 2016
 
97
 
77.0%
 
$1,123,284
 
$965
 
 
 
 
 
 
 
 
 
Lease Summary - Pacific Ridge Apartments
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
502
 
94.2%
 
$16,075,440
 
$2,668








Second Quarter 2017 Supplemental Information
                               Page 27

 
 
MULTIFAMILY LEASING SUMMARY (CONTINUED)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 


As of June 30, 2017
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Velomor
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
166
 
93.8%
 
$3,221,940
 
$1,617
1st Quarter 2017
 
164
 
92.7%
 
$3,225,948
 
$1,638
4th Quarter 2016
 
156
 
88.1%
 
$3,130,644
 
$1,673
3rd Quarter 2016
 
163
 
92.1%
 
$3,211,500
 
$1,642
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Aster Tower
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
296
 
87.8%
 
$6,196,128
 
$1,745
1st Quarter 2017
 
308
 
91.4%
 
$6,011,100
 
$1,626
4th Quarter 2016
 
287
 
85.2%
 
$5,843,700
 
$1,696
3rd Quarter 2016
 
288
 
85.5%
 
$6,294,240
 
$1,820
 
 
 
 
 
 
 
 
 
Lease Summary - Hassalo on Eighth - Elwood
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
131
 
91.6%
 
$2,438,040
 
$1,551
1st Quarter 2017
 
135
 
94.4%
 
$2,424,204
 
$1,497
4th Quarter 2016
 
120
 
83.9%
 
$2,208,456
 
$1,534
3rd Quarter 2016
 
122
 
85.3%
 
$2,424,792
 
$1,657
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
1,955
 
92.6%
(5) 
$47,297,592
 
$2,015
1st Quarter 2017
 
1,474
 
93.4%
(5) 
$30,172,200
 
$1,705
4th Quarter 2016
 
1,426
 
90.3%
 
$29,316,156
 
$1,713
3rd Quarter 2016
 
1,448
 
91.7%
 
$30,177,456
 
$1,737

Notes:
(1)
Percentage leased for our multifamily properties includes total units rented as of each respective quarter end date.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) as of each respective quarter end date.
(3)
Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of each respective quarter end date.
(4)
Excluding the 21 units associated with the Loma Palisades repositioning, Loma Palisades was 98.7% and 99.1% leased at June 30, 2017 and March 31, 2017, respectively.
(5)
Excluding the 21 units associated with the Loma Palisades repositioning, total multifamily was 93.5% and 94.6% leased at June 30, 2017 and March 31, 2017, respectively.

Second Quarter 2017 Supplemental Information
                               Page 28

 
 
MIXED-USE LEASING SUMMARY
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Retail Portion
 
 
 
 
 
 
Number of Leased Square Feet
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Annualized base Rent per Leased Square Foot (3)
Quarter
 
 
 
 
2nd Quarter 2017
 
92,564
 
95.7%
 
$10,408,616
 
$112
1st Quarter 2017
 
90,979
 
94.1%
 
$10,195,628
 
$112
4th Quarter 2016
 
95,450
 
98.7%
 
$10,838,934
 
$114
3rd Quarter 2016
 
95,588
 
98.8%
 
$10,810,032
 
$113
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
2nd Quarter 2017
 
336
 
91.1%
 
$305
 
$278
1st Quarter 2017
 
338
 
91.5%
 
$325
 
$297
4th Quarter 2016
 
326
 
88.4%
 
$311
 
$275
3rd Quarter 2016
 
346
 
93.9%
 
$357
 
$335
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of June 30, 2017, including leases which may not have commenced as of June 30, 2017.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2017 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(3)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of June 30, 2017.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended June 30, 2017, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for each respective quarter period by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for each respective quarter period and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

Second Quarter 2017 Supplemental Information
                               Page 29

 
 
LEASE EXPIRATIONS
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
15,398

 
0.6
%
 
0.3
%
 
$1.77
 
16,472

 
0.5
%
 
0.3
%
 
$39.91
 
1,602

 
1.7
%
 
%
 
$—
 
33,472

 
0.6
%
 
$20.45
2017
 
147,915

 
5.5

 
2.5

 
$37.12
 
56,433

 
1.8

 
1.0

 
$33.17
 
5,801

 
6.0

 
0.1

 
$124.38
 
210,149

 
3.6

 
$38.47
2018
 
277,033

 
10.3

 
4.7

 
$51.59
 
520,965

 
16.9

 
8.9

 
$25.72
 
15,289

 
15.8

 
0.3

 
$113.30
 
813,287

 
13.9

 
$36.18
2019
 
332,025

 
12.4

 
5.7

 
$42.93
 
357,180

 
11.6

 
6.1

 
$28.75
 
19,519

 
20.2

 
0.3

 
$94.97
 
708,724

 
12.1

 
$37.22
2020
 
368,274

(2) 
13.7

 
6.3

 
$40.91
 
300,850

 
9.7

 
5.1

 
$22.24
 
20,994

 
21.7

 
0.4

 
$68.39
 
690,118

 
11.8

 
$33.61
2021
 
295,982

 
11.0

 
5.0

 
$44.35
 
165,472

 
5.4

 
2.8

 
$42.90
 
12,383

 
12.8

 
0.2

 
$238.51
 
473,837

 
8.1

 
$48.92
2022
 
222,008

(3)(4) 
8.3

 
3.8

 
$41.22
 
431,834

 
14.0

 
7.4

 
$28.07
 
13,540

 
14.0

 
0.2

 
$95.56
 
667,382

 
11.4

 
$33.81
2023
 
161,399

 
6.0

 
2.8

 
$33.84
 
96,511

 
3.1

 
1.6

 
$20.84
 
1,004

 
1.0

 

 
$186.24
 
258,914

 
4.4

 
$29.59
2024
 
152,485

 
5.7

 
2.6

 
$35.65
 
248,674

 
8.0

 
4.2

 
$25.28
 
1,027

 
1.1

 

 
$225.00
 
402,186

 
6.9

 
$29.72
2025
 
210,320

 
7.8

 
3.6

 
$29.88
 
162,586

 
5.3

 
2.8

 
$22.97
 

 

 

 
 
372,906

 
6.4

 
$26.87
2026
 
25,120

 
0.9

 
0.4

 
$26.82
 
51,045

 
1.7

 
0.9

 
$34.54
 

 

 

 
 
76,165

 
1.3

 
$31.99
Thereafter
 
117,076

 
4.4

 
2.0

 
$30.47
 
554,125

 
17.9

 
9.4

 
$16.20
 

 

 

 
 
671,201

 
11.4

 
$18.69
Signed Leases Not Commenced
 
53,318

 
2.0

 
0.9

 
 
29,325

 
0.9

 
0.5

 
 
1,405

 
1.5

 

 
 
84,048

 
1.4

 
Available
 
303,284

 
11.3

 
5.2

 
 
97,683

 
3.2

 
1.7

 
 
4,143

 
4.3

 
0.1

 
 
405,110

 
6.9

 
Total (5)
 
2,681,637

 
100.0
%
 
45.7
%
 
$34.62
 
3,089,155

 
100.0
%
 
52.6
%
 
$24.24
 
96,707

 
100.0
%
 
1.6
%
 
$107.63
 
5,867,499

 
100.0
%
 
$30.36
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
15,398

 
0.6
%
 
0.3
%
 
$1.77
 
16,472

 
0.5
%
 
0.3
%
 
$39.91
 
1,602

 
1.7
%
 
%
 
$—
 
33,472

 
0.6
%
 
$20.45
2017
 
147,915

 
5.5

 
2.5

 
$37.12
 
55,180

 
1.8

 
0.9

 
$33.07
 
5,801

 
6.0

 
0.1

 
$124.38
 
208,896

 
3.6

 
$38.47
2018
 
88,517

 
3.3

 
1.5

 
$41.19
 
48,372

 
1.6

 
0.8

 
$36.89
 
15,289

 
15.8

 
0.3

 
$113.30
 
152,178

 
2.6

 
$47.07
2019
 
125,727

 
4.7

 
2.1

 
$40.61
 
92,291

 
3.0

 
1.6

 
$35.79
 
7,829

 
8.1

 
0.1

 
$145.66
 
225,847

 
3.8

 
$42.28
2020
 
155,707

 
5.8

 
2.7

 
$38.32
 
85,868

 
2.8

 
1.5

 
$28.71
 
3,632

 
3.8

 
0.1

 
$153.45
 
245,207

 
4.2

 
$36.66
2021
 
91,632

 
3.4

 
1.6

 
$34.74
 
93,040

 
3.0

 
1.6

 
$46.23
 
12,383

 
12.8

 
0.2

 
$238.51
 
197,055

 
3.4

 
$52.97
2022
 
79,435

 
3.0

 
1.4

 
$43.25
 
87,380

 
2.8

 
1.5

 
$36.44
 
13,970

 
14.4

 
0.2

 
$98.50
 
180,785

 
3.1

 
$44.23
2023
 
143,737

(2) 
5.4

 
2.4

 
$43.08
 
93,965

 
3.0

 
1.6

 
$34.06
 
1,004

 
1.0

 

 
$186.24
 
238,706

 
4.1

 
$40.13
2024
 
125,162

 
4.7

 
2.1

 
$35.37
 
216,089

 
7.0

 
3.7

 
$28.99
 
1,027

 
1.1

 

 
$225.00
 
342,278

 
5.8

 
$31.91
2025
 
156,134

 
5.8

 
2.7

 
$35.08
 
98,329

 
3.2

 
1.7

 
$29.67
 

 

 

 
 
254,463

 
4.3

 
$32.99
2026
 
147,994

 
5.5

 
2.5

 
$37.25
 
38,642

 
1.3

 
0.7

 
$43.84
 

 

 

 
 
186,636

 
3.2

 
$38.61
Thereafter
 
1,047,677

(3)(4) 
39.1

 
17.9

 
$42.34
 
2,036,519

 
65.9

 
34.7

 
$21.25
 
28,622

 
29.6

 
0.5

 
$52.74
 
3,112,818

 
53.1

 
$28.64
Signed Leases Not Commenced
 
53,318

 
2.0

 
0.9

 
 
29,325

 
0.9

 
0.5

 
 
1,405

 
1.5

 

 
 
84,048

 
1.4

 
Available
 
303,284

 
11.3

 
5.2

 
 
97,683

 
3.2

 
1.7

 
 
4,143

 
4.3

 
0.1

 
 
405,110

 
6.9

 
Total (5)
 
2,681,637

 
100.0
%
 
45.7
%
 
$34.62
 
3,089,155

 
100.0
%
 
52.6
%
 
$24.24
 
96,707

 
100.0
%
 
1.6
%
 
$107.63
 
5,867,499

 
100.0
%
 
$30.36

Second Quarter 2017 Supplemental Information
                               Page 30

 
 
LEASE EXPIRATIONS (CONTINUED)
https://cdn.kscope.io/f1a3452aeef49c96fb2e85645e116a09-aat2015q4a06.jpg
 
 

As of June 30, 2017
 
Notes:
(1)
Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2017 for the leases expiring during the applicable period by (ii) 12 months.
(2)
The expirations include 12,282 square feet leased by Peopleconnect, Inc. at City Center Bellevue through July 31, 2017, for which Point Inside, Inc. has signed an agreement to lease such space beginning August 1, 2017 through October 31, 2020 with option to extend the lease through November 30, 2023
(3)
The expirations include 18,740 square feet leased by Peopleconnect, Inc. at City Center Bellevue through July 31, 2017, for which VMWare, Inc. has signed an agreement to lease such space beginning December 1, 2017 through November 30, 2022 with options to extend the lease through November 30, 2032
(4)
The expirations include 18,552 square feet leased by Scantron Corporation at City Center Bellevue through April 30, 2018, for which VMWare, Inc. has signed an agreement to lease such space beginning May 1, 2018 through November 30, 2022 with options to extend the lease through November 30, 2032
(5)
Individual items may not add up to total due to rounding.



Second Quarter 2017 Supplemental Information
                               Page 31

 
 
PORTFOLIO LEASED STATISTICS
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At June 30, 2017
 
At June 30, 2016
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
Overall Portfolio (2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,089,155

 
2,991,472

 
96.8
%
 
3,067,978

 
3,013,280

 
98.2
%
Office Properties (square feet) 
 
2,681,637

 
2,378,353

 
88.7
%
 
2,696,150

 
2,438,007

 
90.4
%
Multifamily Properties (units)
 
2,112

 
1,955

 
92.6
%
(3) 
1,579

 
1,460

 
92.5
%
Mixed-Use Properties (square feet)
 
96,707

 
92,564

 
95.7
%
 
96,707

 
95,085

 
98.3
%
Mixed-Use Properties (units)
 
369

 
337

(4) 
91.3
%
 
369

 
326

(4) 
88.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,045,002

(5) 
2,957,648

 
97.1
%
 
3,045,194

(5) 
3,002,279

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

 
2,378,353

 
88.7
%
 
2,696,150

 
2,438,007

 
90.4
%
Multifamily Properties (units)
 
922

(6) 
860

 
93.3
%
(3) 
922

(6) 
896

 
97.2
%
Mixed-Use Properties (square feet)
 
96,707

 
92,564

 
95.7
%
 
96,707

 
95,085

 
98.3
%
Mixed-Use Properties (units)
 
369

 
337

(4) 
91.3
%
 
369

 
326

(4) 
88.4
%

Notes:
(1)
Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
(2)
See Glossary of Terms.
(3)
Excluding the 21 units associated with the Loma Palisades repositioning, total multifamily was 93.5% leased and same-store multifamily was 95.4% leased at June 30, 2017.
(4)
Represents average occupancy for the six months ended June 30, 2017 and 2016.
(5)
The same-store portfolio excludes Hassalo on Eighth - Retail; the retail component of the Elwood building was placed into operations in April 2016, the retail component of the Velomor building was placed into operations in July 2016 and the retail component of the Aster Tower building was placed into operations October 2016.
(6)
The same-store portfolio excludes Hassalo on Eighth - Multifamily, as the Velomor building was placed into operations and available for occupancy in July 2015 and the Aster Tower and Elwood buildings were placed into operations and available for occupancy in October 2015. The same-store portfolio also excludes the Pacific Ridge Apartments, as it was acquired on April 28, 2017.


Second Quarter 2017 Supplemental Information
                               Page 32

 
 
TOP TENANTS - RETAIL
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As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property(ies)
 
Lease Expiration
 
Total Leased Square Feet
 
Rentable Square Feet as a Percentage of Total Retail
 
Rentable Square Feet as a Percentage of Total
 
Annualized Base Rent
 
Annualized Base Rent as a Percentage of Total Retail
 
Annualized Base Rent as a Percentage of Total
1

Kmart(1)
 
Waikele Center
 
6/30/2018
 
119,590

 
3.9
%
 
2.0
%
 
$
4,903,090

 
6.5
%
 
2.8
%
2

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

 
5.0

 
2.6

 
4,586,349

 
6.1

 
2.6

3

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

 
2.2

 
1.2

 
1,990,316

 
2.7

 
1.1

4

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

 
2.3

 
1.2

 
1,919,436

 
2.6

 
1.1

5

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

 
2.2

 
1.2

 
1,335,447

 
1.8

 
0.7

7

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

 
1.6

 
0.9

 
1,216,700

 
1.6

 
0.7

8

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

 
2.3

 
1.2

 
1,122,929

 
1.5

 
0.6

9

Gap
 
Del Monte Center,
Waikele Center,
Alamo Quarry Market
 
9/20/2020
2/28/2022
4/30/2024
 
36,614

 
1.2

 
0.6

 
1,027,419

 
1.4

 
0.6

10

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

 
1.1

 
0.6

 
958,657

 
1.3

 
0.5

 
Top 10 Retail Tenants Total
 
 
 
736,420

 
23.7
%
 
12.5
%
 
$
19,060,343

 
25.5
%
 
10.7
%


*

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

 
 
 
 

Second Quarter 2017 Supplemental Information
                               Page 33

 
 
TOP TENANTS - OFFICE
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As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property
 
Lease Expiration
 
Total Leased Square Feet
 
Rentable Square Feet as a Percentage of Total Office
 
Rentable Square Feet as a Percentage of Total
 
Annualized Base Rent
 
Annualized Base Rent as a Percentage of Total Office
 
Annualized Base Rent as a Percentage of Total
1

salesforce.com
 
The Landmark at One Market
 
6/30/2019
4/30/2020
5/31/2021
 
254,118

 
9.5
%
 
4.3
%
 
$
14,290,648

 
15.4
%
 
8.0
%
2

Autodesk, Inc.
 
The Landmark at One Market
 
12/31/2018
12/31/2022
 
114,664

 
4.3

 
2.0

 
8,196,441

 
8.8

 
4.6

3

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

 
3.5

 
1.6

 
3,006,453

 
3.2

 
1.7

4

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

 
3.8

 
1.7

 
2,656,401

 
2.9

 
1.5

5

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

 
3.3

 
1.5

 
2,458,036

 
2.6

 
1.4

6

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

 
2.4

 
1.1

 
2,374,710

 
2.6

 
1.3

7

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

 
2.4

 
1.1

 
2,184,302

 
2.4

 
1.2

8

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

 
2.1

 
1.0

 
2,156,924

 
2.3

 
1.2

9

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

 
1.3

 
0.6

 
1,754,961

 
1.9

 
1.0

10

Familycare, Inc.
 
Lloyd District Portfolio
 
9/30/2024
 
61,082

 
2.3

 
1.0

 
1,746,222

 
1.9

 
1.0

 
Top 10 Office Tenants Total
 
 
 
931,635

 
34.9
%
 
15.9
%
 
$
40,825,098

 
44.0
%
 
22.9
%




Second Quarter 2017 Supplemental Information
                               Page 34

 
 
 
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APPENDIX





Second Quarter 2017 Supplemental Information
                               Page 35

 
 
GLOSSARY OF TERMS
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Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three and six months ended June 30, 2017 and 2016 is as follows:
    
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Net income
$
7,588

 
$
10,650

 
$
17,896

 
$
21,371

Depreciation and amortization
24,182

 
17,714

 
42,168

 
35,167

Interest expense
12,652

 
13,153

 
25,983

 
26,099

Interest income
(113
)
 
(24
)
 
(260
)
 
(39
)
Income tax expense/(benefit)
(79
)
 
(45
)
 
(242
)
 
42

EBITDA
$
44,230

 
$
41,448

 
$
85,545

 
$
82,640


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

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
EBITDA
$
44,230

 
$
41,448

 
$
85,545

 
$
82,640

Pro forma adjustments
814

 

 
814

 

Adjusted EBITDA
$
45,044

 
$
41,448

 
$
86,359

 
$
82,640


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.



Second Quarter 2017 Supplemental Information
                               Page 36

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

Net Operating Income (NOI): We define NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance). NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expense, other nonproperty income and losses, gains and losses from property dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Since NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. However, NOI should not be viewed as an alternative measure of our financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations.
    
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
Reconciliation of NOI to net income
2017
 
2016
 
2017
 
2016
Total NOI
$
49,361

 
$
45,812

 
$
95,758

 
$
91,457

General and administrative
(5,131
)
 
(4,394
)
 
(10,213
)
 
(8,943
)
Depreciation and amortization
(24,182
)
 
(17,714
)
 
(42,168
)
 
(35,167
)
Interest expense
(12,652
)
 
(13,153
)
 
(25,983
)
 
(26,099
)
Other income, net
192

 
99

 
502

 
123

Net income
7,588

 
10,650

 
17,896

 
21,371

Net income attributable to restricted shares
(61
)
 
(43
)
 
(121
)
 
(86
)
Net loss attributable to unitholders in the Operating Partnership
(2,008
)
 
(3,008
)
 
(4,869
)
 
(6,035
)
Net income attributable to American Assets Trust, Inc. stockholders
$
5,519

 
$
7,599

 
$
12,906

 
$
15,250


Overall Portfolio: Includes all operating properties owned by us as of June 30, 2017.


Second Quarter 2017 Supplemental Information
                               Page 37

 
 
GLOSSARY OF TERMS (CONTINUED)
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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
 
Comparison of Six Months Ended
 
June 30, 2017 to 2016
 
June 30, 2017 to 2016
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
 
Same-Store
 
Non Same-Store
 
Redevelopment Same-Store
Retail Properties
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
X
 
 
 
X
 
X
 
 
 
X
Carmel Mountain Plaza
X
 
 
 
X
 
X
 
 
 
X
South Bay Marketplace
X
 
 
 
X
 
X
 
 
 
X
Lomas Santa Fe Plaza
X
 
 
 
X
 
X
 
 
 
X
Solana Beach Towne Centre
X
 
 
 
X
 
X
 
 
 
X
Del Monte Center
X
 
 
 
X
 
X
 
 
 
X
Geary Marketplace
X
 
 
 
X
 
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
 
X
 
 
 
X
Waikele Center
X
 
 
 
X
 
X
 
 
 
X
Alamo Quarry Market
X
 
 
 
X
 
X
 
 
 
X
Hassalo on Eighth - Retail
 
 
X
 
 
 
 
 
X
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
X
 
 
 
X
 
 
 
X
 
X
Solana Beach Corporate Centre
X
 
 
 
X
 
X
 
 
 
X
The Landmark at One Market
X
 
 
 
X
 
X
 
 
 
X
One Beach Street
X
 
 
 
X
 
X
 
 
 
X
First & Main
X
 
 
 
X
 
X
 
 
 
X
Lloyd District Portfolio
X
 
 
 
X
 
X
 
 
 
X
City Center Bellevue
X
 
 
 
X
 
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
 
 
 
 
 
 
Loma Palisades
X
 
 
 
X
 
X
 
 
 
X
Imperial Beach Gardens
X
 
 
 
X
 
X
 
 
 
X
Mariner's Point
X
 
 
 
X
 
X
 
 
 
X
Santa Fe Park RV Resort
X
 
 
 
X
 
X
 
 
 
X
Pacific Ridge Apartments
 
 
X
 
 
 
 
 
X
 
 
Hassalo on Eighth
 
 
X
 
 
 
 
 
X
 
 
Mixed-Use Properties
 
 
 
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
X
 
X
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
X
 
X
 
 
 
X
Development Properties
 
 
 
 
 
 
 
 
 
 
 
Torrey Point - Construction in Progress
 
 
X
 
 
 
 
 
X
 
 
Solana Beach Corporate Centre - Land
 
 
X
 
 
 
 
 
X
 
 
Solana Beach - Highway 101 - Land
 
 
X
 
 
 
 
 
X
 
 
Lloyd District Portfolio - Land
 
 
X
 
 
 
 
 
X
 
 
Tenant Improvements and Incentives: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators, new entrances, etc.) which are required to make the space leasable. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

Second Quarter 2017 Supplemental Information
                               Page 38