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Form 8-K

 

 

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):

May 1, 2012

 

 

American Assets Trust, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-35030    27-3338708

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

  

(I.R.S. Employer

Identification No.)

11455 El Camino Real, Suite 200

San Diego, California 92130

   92130
(Address of principal executive offices)    (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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On May 1, 2012, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending March 31, 2012. Also on May 1, 2012, 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 March 31, 2012. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

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

 

Item 7.01 Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ending March 31, 2012 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 furnished with this Current Report on Form 8-K:

 

Exhibit
Number

 

Exhibit Description

99.1**   Press release issued by American Assets Trust, Inc. on May 1, 2012.
99.2**   American Assets Trust, Inc. Supplemental Information for the period ended March 31, 2012.

 

** Furnished herewith


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

May 1, 2012


EXHIBIT INDEX

 

Exhibit
Number

  

Exhibit Description

99.1    Press release issued by American Assets Trust, Inc. on May 1, 2012. American Assets Trust, Inc.
99.2    American Assets Trust, Inc. Supplemental Information for the period ended March 31, 2012.
Press release

Exhibit 99.1

LOGO

American Assets Trust, Inc. Reports First Quarter 2012 Financial Results

Company Release – 5/1/12

SAN DIEGO – American Assets Trust, Inc. (NYSE: AAT) (the “Company”) today reported financial results for its first quarter ended March 31, 2012.

Financial Results and Recent Developments

 

   

Funds From Operations of $0.31 per diluted share/unit for the three months ended March 31, 2012

   

Company increased 2012 annual guidance 4% to a range of $1.14 to $1.22 of FFO per share

   

Embassy Suites—Waikiki Beach WalkTM has best first quarter performance since 2006 with Revenue per Available Room increasing 11% compared to same period last year

   

$36.5 million acquisition of One Beach Street office property with approximately 97,000 square feet in San Francisco, California

   

Re-leased 2 of the 3 former Borders spaces, representing 86% of the combined Borders square footage, at an average cash-basis increase of 24%

   

Amended revolving credit facility to extend maturity date and decrease applicable interest rate, resulting in savings in excess of $0.01 of FFO per share on an annual basis

During the first quarter of 2012, the Company generated funds from operations (“FFO”) for common stockholders and unitholders of $18.0 million, or $0.31 per diluted share/unit. For the three months ended March 31, 2011, the Company generated FFO for common stockholders and unitholders of $9.8 million, or $0.21 per diluted share/unit, and FFO As Adjusted for common stockholders and unitholders of $12.8 million, or $0.28 per diluted share/unit. FFO As Adjusted reflects adjustments to FFO for nonoperational items directly related to the Company’s initial public offering (“IPO”) on January 19, 2011. Unitholders refers to holders of units of our operating partnership. The increase in FFO and FFO As Adjusted was largely due to additional operating income from office properties of $3.8 million, including non-same store properties, and additional operating income from our mixed-use property of $1.7 million.

Net income attributable to common stockholders was $1.9 million, or $0.05 per basic and diluted share, for the three months ended March 31, 2012, compared to net loss attributable to common stockholders of $(0.7) million, or $(0.02) per basic and diluted share, for the three months ended March 31, 2011. The increase in net income attributable to common stockholders was largely due to additional operating income from office properties and our mixed-use property, as noted above, and non-recurring IPO related costs incurred during the three months ended March 31, 2011.

FFO and FFO As Adjusted are non-GAAP supplemental earnings measures which the Company considers meaningful in measuring its operating performance. Reconciliations of FFO and FFO As Adjusted to net income are attached to this press release.

 

1


Portfolio Results

The portfolio leased status as of the end of the indicated quarter was as follows:

 

     March 31, 2012     December 31, 2011     March 31, 2011  

Total Portfolio

      

Retail

     94.8     95.0     94.3

Office

     94.7     94.4     94.9

Multifamily

     88.4     91.8     92.1

Mixed-Use:

      

Retail

     98.8     99.2     97.8

Hotel

     92.2     88.4     87.6

Same-Store Portfolio

      

Retail

     94.5     94.8     94.0

Office

     96.8     97.1     96.0

Multifamily

     88.4     91.8     92.1

During the first quarter of 2012, the Company signed 32 leases for approximately 95,900 square feet of retail and office space, as well as 168 multifamily apartment leases. Renewals accounted for 76.9% of the comparable retail leases, 53.8% of the comparable office leases and 61.9% of the residential leases.

Retail

On a comparable space basis (i.e., leases for which there was a former tenant), the Company leased 27,115 square feet of retail space at an average cash-basis contractual rent decrease of 4.9% during the first quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $43.83 per square foot, compared to an average contractual rent of $46.10 per square foot for the last year of the prior leases. On a GAAP basis (including the impact of straight-line rents), average rent per square foot for the comparable retail space increased 4.0% for the first quarter of 2012.

Office

On a comparable space basis, the Company leased 52,132 square feet of office space at an average cash-basis contractual rent decrease of 12.8% during the first quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $30.26 per square foot, compared to an average contractual rent of $34.69 per square foot for the last year of the prior leases. On a GAAP basis (including the impact of straight-line rents), average rent per square foot for the comparable office space decreased 2.6% for the first quarter of 2012.

Multifamily

At March 31, 2012, the average monthly base rent per leased unit was $1,390 compared to an average monthly base rent per leased unit of $1,404 at December 31, 2011 and $1,318 at March 31, 2011.

Mixed-Use

Embassy Suites—Waikiki Beach Walk outperformed expectations for the quarter with revenue of $8.2 million and net operating income of $2.3 million for the three months ended March 31, 2012, which was the best first quarter performance since the hotel opened in 2006. Revenue per available room, or RevPAR, increased 11% compared to the same period last year. RevPar was $228 for the three months ended March 31, 2012, $202 for the three months ended December 31, 2011, and $205 for the three months ended March 31, 2011. Occupancy and Average Daily Rate also increased over 5% compared to same period last year.

Same-Store Net Operating Income

For the three months ended March 31, 2012, same-store net operating income decreased approximately 4.4%, on a GAAP basis, compared to the three months ended March 31, 2011. The same-store net operating income by segment was as follows (in thousands):

 

     Three Months Ended
March 31,
        
     2012      2011      Change  

Retail

   $ 14,229       $ 14,575         (2.4 )% 

Office

     7,200         8,036         (10.4

Multifamily

     2,228         2,132         4.5   

Mixed-Use

     —           —           —     
  

 

 

    

 

 

    

 

 

 
   $ 23,657       $ 24,743         (4.4 )% 
  

 

 

    

 

 

    

 

 

 

The decrease in same-store retail net operating income primarily reflects a decrease in rental revenue resulting from the closure of Borders at three properties and increased property taxes. This decrease was offset by increased rental revenue related to the increase in the average percentage leased and additional cost reimbursements. The Company has already re-leased two of the three former Borders spaces, representing 86% of the space previously

 

2


occupied by Borders, at an average cash-basis contractual rent increase of 24% for the first year of the new leases compared to the last year of the Borders leases. The Company anticipates that the former Borders space at Del Monte Center will also be re-leased at increased rent.

Same-store office net operating income decreased primarily due to rental revenue rolldown on the salesforce.com lease at The Landmark at One Market and vacancy at 160 King Street on the former DLA Piper space, for which Ancestry.com and another tenant will take possession of the full space in the second quarter of 2012.

Same-store multifamily net operating income increased primarily due to higher rents per unit and a slight increase in the average percentage leased during the period compared to the three months ended March 31, 2011.

In the table above, same-store property operating income excludes income from First & Main, which was acquired in March 2011, Lloyd District Portfolio, which was acquired in July 2011, One Beach Street, which was acquired in January 2012 and Solana Beach Town Centre, Solana Beach Corporate Centre and Waikiki Beach Walk, as these three properties represented noncontrolled properties that were not consolidated until our IPO in January 2011.

Acquisitions

The Company completed the acquisition of One Beach Street on January 24, 2012 for a purchase price of approximately $36.5 million, which was paid with cash on hand. One Beach Street is a 3-story, approximately 97,000 square foot fully renovated historic office building located along the Embarcadero in San Francisco’s North Waterfront District. One Beach Street’s location provides tenants on each floor with stunning views of the San Francisco Bay, Alcatraz and the boat marina at Pier 39, and is within walking distance to numerous restaurants, shops and entertainment. One Beach Street offers tenants convenient regional access via the Embarcadero to nearby Interstate 80 and U.S. Highway 101 and numerous public transportation options. One Beach Street is 100% leased to three widely recognized tenants.

Financings

On March 29, 2012, a wholly-owned subsidiary of the Company’s operating partnership closed a seven-year, $21.9 million non-recourse mortgage loan secured by One Beach Street. PNC Bank, National Association, provided the financing, which carries a fixed interest rate per annum of 3.94% and is interest only. The Company’s operating partnership has provided a non-recourse carve-out guaranty and environmental indemnity. Proceeds of the loan will be used for general corporate purposes, including working capital and future acquisitions.

On January 10, 2012, the Company amended its revolving credit facility. The revolving credit facility, arranged by Bank of America, N.A., was amended to, among other things, (1) extend the maturity date to January 10, 2016 (with a one-year extension option), (2) decrease the applicable interest rates (by 90 to 130 basis points, depending upon the consolidated leverage ratio) and (3) modify certain financial covenants contained therein. Under the amended credit facility, the annual utilization fees were reduced, which combined with lower amortization of debt issuance costs, will result in savings in excess of $0.01 of FFO per share on an annual basis.

Balance Sheet and Liquidity

As of March 31, 2012, the Company had gross real estate assets of $1.7 billion and liquidity of $339.9 million, comprised of cash and cash equivalents of $100.7 million, marketable securities of $26.3 million and approximately $212.9 million of availability on its line of credit.

Dividends

The Company declared dividends on its shares of common stock of $0.21 per share for the first quarter of 2012. The dividends were declared on February 24, 2012 to holders of record on March 15, 2012 and were paid on March 30, 2012.

In addition, the Company has declared a dividend on its common stock of $0.21 per share for the quarter ending June 30, 2012. The dividend will be paid on June 29, 2012 to stockholders of record on June 15, 2012.

2012 Guidance

The Company increased its guidance for full year 2012 FFO per diluted share from the prior range of $1.09 to $1.17 to an increased range of $1.14 to $1.22 per share, which represents a 4% increase at the midpoint. The Company’s guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments. The Company will discuss key assumptions regarding the increase in guidance tomorrow on the conference call.

 

3


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 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 first quarter 2012 on Wednesday, May 2, 2012 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-800-573-4752 and use the pass code 22941257. A telephonic replay of the conference call will be available beginning at 10:00 a.m. PT on Wednesday, May 2, 2012 through Wednesday, May 16, 2012. To access the replay, dial 1-888-286-8010 and use the pass code 12198511. A live on-demand audio webcast of the conference call will be available on the Company’s website at www.americanassetstrust.com. A replay of the call will also be available on the Company’s website.

Supplemental Information

Supplemental financial information regarding the Company’s first quarter 2012 results may be found in the “Investor Relations” section of the Company’s website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

 

4


Financial Information

American Assets Trust, Inc.

Consolidated Balance Sheets

(In Thousands, Except Share Data)

 

     March 31,
2012
    December 31,
2011
 
     (unaudited)        

Assets

    

Real estate, at cost

    

Operating real estate

   $ 1,696,044      $ 1,659,106   

Construction in progress

     4,786        3,495   

Held for development

     25,354        24,675   
  

 

 

   

 

 

 
     1,726,184        1,687,276   

Accumulated depreciation

     (245,717     (234,595
  

 

 

   

 

 

 

Net real estate

     1,480,467        1,452,681   

Cash and cash equivalents

     100,652        112,723   

Restricted cash

     10,179        9,216   

Marketable securities

     26,326        28,235   

Accounts receivable, net

     5,313        6,847   

Deferred rent receivables, net

     25,073        23,294   

Other assets, net

     74,461        76,285   
  

 

 

   

 

 

 

Total assets

   $ 1,722,471      $ 1,709,281   
  

 

 

   

 

 

 

Liabilities and equity

    

Liabilities:

    

Secured notes payable

   $ 964,942      $ 943,479   

Accounts payable and accrued expenses

     25,922        25,476   

Security deposits payable

     4,801        4,790   

Other liabilities and deferred credits

     55,621        55,808   
  

 

 

   

 

 

 

Total liabilities

     1,051,286        1,029,553   
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

American Assets Trust, Inc. stockholders’ equity

    

Common stock $0.01 par value, 490,000,000 shares authorized, 39,284,593 and 39,283,796 shares outstanding at March 31, 2012 and December 31, 2011, respectively

     393        393   

Additional paid-in capital

     654,344        653,645   

Accumulated dividends in excess of net income

     (34,269     (28,007
  

 

 

   

 

 

 

Total American Assets Trust, Inc. stockholders’ equity

     620,468        626,031   

Noncontrolling interests

     50,717        53,697   
  

 

 

   

 

 

 

Total equity

     671,185        679,728   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,722,471      $ 1,709,281   
  

 

 

   

 

 

 

 

5


American Assets Trust, Inc.

Unaudited Consolidated Statements of Operations

(In Thousands, Except Shares and Per Share Data)

 

     Three Months Ended March 31,  
     2012     2011  

Revenue:

    

Rental income

   $ 54,320      $ 44,966   

Other property income

     2,718        1,917   
  

 

 

   

 

 

 

Total revenue

     57,038        46,883   

Expenses:

    

Rental expenses

     15,243        12,211   

Real estate taxes

     5,444        3,958   

General and administrative

     3,765        3,186   

Depreciation and amortization

     15,253        12,155   
  

 

 

   

 

 

 

Total operating expenses

     39,705        31,510   

Operating income

     17,333        15,373   

Interest expense

     (14,356     (12,991

Early extinguishment of debt

     —          (25,867

Loan transfer and consent fees

     —          (9,019

Gain on acquisition

     —          46,371   

Other income (expense), net

     (106     (602
  

 

 

   

 

 

 

Income from continuing operations

     2,871        13,265   

Discontinued operations

    

Results from discontinued operations

     —          331   
  

 

 

   

 

 

 

Net income

     2,871        13,596   

Net income attributable to restricted shares

     (132     (86

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     —          2,458   

Net income attributable to Predecessor’s controlled owners’ equity

     —          (16,995

Net (income) loss attributable to unitholders in the Operating Partnership

     (883     329   
  

 

 

   

 

 

 

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

   $ 1,856      $ (698
  

 

 

   

 

 

 

Basic net income (loss) from continuing operations attributable to common stockholders per share

   $ 0.05      $ (0.03

Basic net income from discontinued operations attributable to common stockholders per share

     —          0.01   
  

 

 

   

 

 

 

Basic net income (loss) attributable to common stockholders per share

   $ 0.05      $ (0.02
  

 

 

   

 

 

 

Weighted average shares of common stock outstanding—basic

     38,657,170        30,924,067   
  

 

 

   

 

 

 

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

   $ 0.05      $ (0.03

Diluted net income from discontinued operations attributable to common stockholders per share

     —          0.01   
  

 

 

   

 

 

 

Diluted net income (loss) attributable to common stockholders per share

   $ 0.05      $ (0.02
  

 

 

   

 

 

 

Weighted average shares of common stock outstanding—diluted

     57,053,259        30,924,067   
  

 

 

   

 

 

 

Dividends declared per common share

   $ 0.21      $ 0.17   
  

 

 

   

 

 

 

 

6


Reconciliation of Net Income to Funds From Operations and Funds From Operations As Adjusted

The Company’s FFO attributable to common stockholders and operating partnership unitholders, FFO As Adjusted available to common stockholders and operating partnership unitholders and a reconciliation of both to net income is as follows (in thousands except shares and per share data):

 

     Three Months Ended March 31,  
     2012     2011  

Funds From Operations (FFO)

    

Net income

   $ 2,871      $ 13,596   

Depreciation and amortization of real estate assets

     15,253        12,490   

Depreciation and amortization on unconsolidated real estate joint ventures (pro rata)

     —          688   
  

 

 

   

 

 

 

FFO, as defined by NAREIT

     18,124        26,774   

Less: FFO attributable to Predecessor’s controlled and noncontrolled owners’ equity

     —          (16,973

Less: Nonforfeitable dividends on incentive stock awards

     (89     (50
  

 

 

   

 

 

 

FFO attributable to common stock and units

   $ 18,035      $ 9,751   
  

 

 

   

 

 

 

FFO per diluted share/unit

   $ 0.31      $ 0.21   
  

 

 

   

 

 

 

Weighted average number of common shares and units, diluted

     57,258,935        45,734,618   
  

 

 

   

 

 

 

FFO As Adjusted

    

FFO

   $ 18,124      $ 26,774   

Early extinguishment of debt

     —          25,867   

Loan transfer and consent fees

     —          9,019   

Gain on acquisition of controlling interests

     —          (46,371
  

 

 

   

 

 

 

FFO As Adjusted

     18,124        15,289   

Less: FFO As Adjusted attributable to Predecessor’s controlled and noncontrolled owners’ equity

     —          (2,462

Less: Nonforfeitable dividends on incentive stock awards

     (89     (50
  

 

 

   

 

 

 

FFO As Adjusted attributable to common stock and units

   $ 18,035      $ 12,777   
  

 

 

   

 

 

 

FFO As Adjusted per diluted share/unit

   $ 0.31      $ 0.28   
  

 

 

   

 

 

 

Weighted average number of common shares and units, diluted

     57,258,935        45,734,618   
  

 

 

   

 

 

 

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. The Company also presents FFO As Adjusted, which represents FFO adjusted for certain identified items.

FFO and FFO As Adjusted are supplemental non-GAAP financial measures. Management uses FFO and FFO As Adjusted as supplemental performance measures because it believes that FFO and FFO As Adjusted are 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

 

7


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. FFO As Adjusted reflects certain additional adjustments for items that management believes do not reflect the operational performance of the Company’s properties. Accordingly, FFO and FFO As Adjusted should be considered only as supplements to net income as measures of the Company’s performance. FFO and FFO As Adjusted should not be used as measures of the Company’s liquidity, nor are they indicative of funds available to fund the Company’s cash needs, including the Company’s ability to pay dividends or service indebtedness. FFO and FFO As Adjusted also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

About 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. For over 40 years, the Company has been 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 and Hawaii. The Company’s retail portfolio comprises approximately 3.0 million rentable square feet, and its office portfolio comprises approximately 2.3 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 over 900 multifamily units. In 2011, the Company succeeded to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

Forward Looking Statements

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

Source: American Assets Trust, Inc.

Investor and Media Contact:

American Assets Trust

Robert F. Barton

Executive Vice President and Chief Financial Officer

858-350-2607

 

8

Supplemental Information

Exhibit 99.2

 

 

FIRST QUARTER 2012

Supplemental Information

 

 

 

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Investor and Media Contact

American Assets Trust

Robert F. Barton

Executive Vice President and Chief Financial Officer

858-350-2607

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American Asset Trust, Inc.’s Portfolio is concentrated in high-barrier-to-entry markets

with favorable supply/demand characteristics

 

 

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Market

   Property
Type
         No. of
Properties
         Square
Feet/Units
 

San

Diego

   Retail       6       1,217,919
     Office       2       668,772
     Multifamily       4       922 units (1)
                
 

San

Francisco

   Office       3       687,534
                
  Oahu    Retail       2       549,695
     Mixed-Use       1       96,569
(retail)/369
suites
                
  Monterey    Retail       1       675,385
                
 

San

Antonio

   Retail       1       589,501
                
  Portland    Office       2       971,036
                
                
                

 

         Square Feet    %

Note: Circled areas represent all markets in which American Assets Trust, Inc. (the “Company”) currently owns and operates its real

estate assets. Size of circle denotes approximation of square feet / units.

Data is as of March 31, 2012.

(1)    Includes 122 RV spaces.

  Retail    3.0 million    57%
  Office    2.3 million    43%
  Totals    5.3 million       
             

 

 

  First Quarter 2012 Supplemental Information    Page 2   


 

INDEX    LOGO

 

 

 

     FIRST QUARTER 2012 SUPPLEMENTAL INFORMATION    PAGE  

1.

  

FINANCIAL HIGHLIGHTS

  
  

Consolidated Balance Sheets

     5   
  

Consolidated Statements of Operations

     6   
  

Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution

     7   
  

2012 Guidance

     9   
  

Same-Store Portfolio Net Operating Income (NOI)

     10   
  

Same-Store Portfolio NOI Comparison

     11   
  

NOI By Region

     12   
  

NOI Breakdown

     13   
  

Property Revenue and Operating Expenses

     14   
  

Segment Capital Expenditures

     16   
  

Summary of Outstanding Debt

     17   
  

Market Capitalization

     18   
  

Summary of Redevelopment Opportunities

     19   

2.

  

PORTFOLIO DATA

  
  

Property Report

     21   
  

Retail Leasing Summary

     23   
  

Office Leasing Summary

     24   
  

Lease Expirations

     25   
  

Portfolio Leased Statistics

     26   
  

Top Tenants – Retail

     27   
  

Top Tenants – Office

     28   

3.

  

APPENDIX

  
  

Glossary of Terms

     30   

This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

 

 

  First Quarter 2012 Supplemental Information    Page 3   


 

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FINANCIAL HIGHLIGHTS

 

 

 

 

  First Quarter 2012 Supplemental Information      


 

CONSOLIDATED BALANCE SHEETS    LOGO

 

 

(Amounts in thousands, except share data)

 

     March 31,
2012
     December 31,
2011
 

Assets

     

Real estate, at cost

     

Operating real estate

     $ 1,696,044            $ 1,659,106      

Construction in progress

     4,786            3,495      

Held for development

     25,354            24,675      
  

 

 

    

 

 

 
     1,726,184            1,687,276      

Accumulated depreciation

     (245,717)           (234,595)     
  

 

 

    

 

 

 

Net real estate

     1,480,467            1,452,681      

Cash and cash equivalents

     100,652            112,723      

Restricted cash

     10,179            9,216      

Marketable securities

     26,326            28,235      

Accounts receivable, net

     5,313            6,847      

Deferred rent receivables, net

     25,073            23,294      

Other assets, net

     74,461            76,285      
  

 

 

    

 

 

 

Total assets

     $     1,722,471            $ 1,709,281      
  

 

 

    

 

 

 

Liabilities and equity

     

Liabilities:

     

Secured notes payable

     $ 964,942            $ 943,479      

Accounts payable and accrued expenses

     25,922            25,476      

Security deposits payable

     4,801            4,790      

Other liabilities and deferred credits

     55,621            55,808      
  

 

 

    

 

 

 

Total liabilities

     1,051,286            1,029,553      
  

 

 

    

 

 

 

Commitments and contingencies

     

Equity:

     

American Assets Trust, Inc. stockholders’ equity

     

Common stock $0.01 par value, 490,000,000 shares authorized, 39,284,593 and 39,283,796 shares outstanding at March 31, 2012 and December 31, 2011, respectively

     393            393      

Additional paid in capital

     654,344            653,645      

Accumulated dividends in excess of net income

     (34,269)           (28,007)     
  

 

 

    

 

 

 

Total American Assets Trust, Inc. stockholders’ equity

     620,468            626,031      

Noncontrolling interests

     50,717            53,697      
  

 

 

    

 

 

 

Total equity

     671,185            679,728      
  

 

 

    

 

 

 

Total liabilities and equity

     $ 1,722,471            $     1,709,281      
  

 

 

    

 

 

 

 

 

  First Quarter 2012 Supplemental Information    Page 5   


 

CONSOLIDATED STATEMENTS OF OPERATIONS    LOGO

 

 

 

(Amounts in thousands, except shares and per share data)    Three Months Ended March 31,  
     2012      2011  

Revenue:

     

Rental income

           $ 54,320                 $ 44,966     

Other property income

     2,718           1,917     
  

 

 

    

 

 

 

Total revenue

     57,038           46,883     

Expenses:

     

Rental expenses

     15,243           12,211     

Real estate taxes

     5,444           3,958     

General and administrative

     3,765           3,186     

Depreciation and amortization

     15,253           12,155     
  

 

 

    

 

 

 

Total operating expenses

     39,705           31,510     

Operating income

     17,333           15,373     

Interest expense

     (14,356)          (12,991)    

Early extinguishment of debt

     -               (25,867)    

Loan transfer and consent fees

     -               (9,019)    

Gain on acquisition

     -               46,371     

Other income (expense), net

     (106)          (602)    
  

 

 

    

 

 

 

Income from continuing operations

     2,871           13,265     

Discontinued operations

     

Results from discontinued operations

     -               331     
  

 

 

    

 

 

 

Net income

     2,871           13,596     

Net income attributable to restricted shares

     (132)          (86)    

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     -               2,458     

Net income attributable to Predecessor’s controlled owners’ equity

     -               (16,995)    

Net (income) loss attributable to unitholders in the Operating Partnership

     (883)          329     
  

 

 

    

 

 

 

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

           $ 1,856                 $ (698)    
  

 

 

    

 

 

 

Basic net income (loss) from continuing operations attributable to common stockholders per share

           $ 0.05                 $ (0.03)    

Basic net income from discontinued operations attributable to common stockholders per share

     -               0.01     
  

 

 

    

 

 

 

Basic net income (loss) attributable to common stockholders per share

           $ 0.05                 $ (0.02)    
  

 

 

    

 

 

 

Weighted average shares of common stock outstanding – basic

     38,657,170               30,924,067     
  

 

 

    

 

 

 

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

           $ 0.05                 $ (0.03)    

Diluted net income from discontinued operations attributable to common stockholders per share

     -               0.01     
  

 

 

    

 

 

 

Diluted net income (loss) attributable to common stockholders per share

           $ 0.05                 $ (0.02)    
  

 

 

    

 

 

 

Weighted average shares of common stock outstanding – diluted

         57,053,259           30,924,067     
  

 

 

    

 

 

 

 

 

  First Quarter 2012 Supplemental Information    Page 6   


 

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION

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(Amounts in thousands, except share and per share data)    Three Months Ended
March 31,
 
     2012      2011  

Funds from Operations (FFO) (1)

     

Net income

               $ 2,871                     $ 13,596     

Depreciation and amortization of real estate assets (2)

     15,253           12,490     

Depreciation and amortization on unconsolidated real estate joint ventures (pro rata)

     -               688     
  

 

 

    

 

 

 

FFO, as defined by NAREIT

     18,124           26,774     

Less: FFO attributable to Predecessor’s controlled and noncontrolled owners’ equity

     -               (16,973)    

Less: Nonforfeitable dividends on incentive stock awards

     (89)          (50)    
  

 

 

    

 

 

 

FFO attributable to common stock and units

               $ 18,035                     $ 9,751     
  

 

 

    

 

 

 

FFO per diluted share/unit

               $ 0.31                     $ 0.21     
  

 

 

    

 

 

 

Weighted average number of common shares and units, diluted (3)

     57,258,935           45,734,618     
  

 

 

    

 

 

 

FFO As Adjusted (1)

     

FFO

               $ 18,124                     $ 26,774     

Early extinguishment of debt

     -               25,867     

Loan transfer and consent fees

     -               9,019     

Gain on acquisition of controlling interests (4)

     -               (46,371)    
  

 

 

    

 

 

 

FFO As Adjusted

     18,124           15,289     

Less: FFO As Adjusted attributable to Predecessor’s controlled and noncontrolled owners’ equity

     -               (2,462)    

Less: Nonforfeitable dividends on incentive stock awards

     (89)          (50)    
  

 

 

    

 

 

 

FFO As Adjusted attributable to common stock and units

               $ 18,035                     $ 12,777     
  

 

 

    

 

 

 

FFO As Adjusted per diluted share/unit

               $ 0.31                     $ 0.28     
  

 

 

    

 

 

 

Weighted average number of common shares and units, diluted (3)

     57,258,935           45,734,618     
  

 

 

    

 

 

 

Dividends

     

Dividends declared and paid

               $ 12,113                     $ 9,784     

Dividends declared and paid per share/unit

               $ 0.21                     $ 0.17     

 

 

  First Quarter 2012 Supplemental Information    Page 7   


 

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION (CONTINUED)

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(Amounts in thousands, except share and per share data)    Three Months Ended
March 31,
 
     2012     2011  

Funds Available for Distribution (FAD) (1)

    

FFO As Adjusted

               $         18,124                  $         15,289   

Adjustments:

    

Tenant improvements, leasing commissions and maintenance capital expenditures

     (4,527     (1,074

Net effect of straight-line rents (5)

     (1,986     (280

Amortization of net above (below) market rents (6)

     521        395   

Net effect of other lease intangibles (7)

     70        270   

Amortization of debt issuance costs and debt fair value adjustment

     974        865   

Non-cash compensation expense

     699        491   

Unrealized losses on marketable securities

     295        265   

Nonforfeitable dividends on incentive stock awards

     (89     (50

Adjustments related to discontinued operations

     -              (445
  

 

 

   

 

 

 

FAD

               $ 14,081                  $ 15,726   
  

 

 

   

 

 

 

Summary of Capital Expenditures

    

Tenant improvements and leasing commissions

               $ 3,001                  $ 777   

Maintenance capital expenditures

     1,526        297   
  

 

 

   

 

 

 
               $ 4,527                  $ 1,074   
  

 

 

   

 

 

 

Notes:

  (1) See Glossary of Terms.
  (2) The three months ended March 31, 2011 includes depreciation and amortization on Valencia Corporate Center, which sold on August 30, 2011 and is classified as discontinued operations.
  (3) For the three months ended March 31, 2012 and 2011, the weighted average common shares and units used to compute FFO and FFO As Adjusted per diluted share/unit include operating partnership units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO and FFO As Adjusted 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.
  (4) Represents the gain recognized upon acquisition of the outside ownership interests in the Solana Beach Centre entities and the Waikiki Beach Walk entities on January 19, 2011, in which we previously held a noncontrolling interest.
  (5) 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.
  (6) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
  (7) Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles 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.

 

 

  First Quarter 2012 Supplemental Information    Page 8   


 

2012 GUIDANCE    LOGO

 

 

 

(Amounts in thousands, except share and per share data)    2012 Guidance Range (1)  

Funds from Operations (FFO)

    

Net income

               $ 7,292                  $ 11,870   

Depreciation and amortization of real estate assets

     58,454        58,454   
  

 

 

   

 

 

 

FFO, as defined by NAREIT

     65,746        70,324   

Less: Nonfortfeitable dividends on incentive stock awards

     (354     (354
  

 

 

   

 

 

 

FFO attributable to common stock and units

               $ 65,392                  $ 69,970   
  

 

 

   

 

 

 

Weighted average number of common shares and units, diluted

         57,263,480            57,263,480   
  

 

 

   

 

 

 

FFO per diluted share

               $ 1.14                  $ 1.22   
  

 

 

   

 

 

 

Notes:

  (1) Our guidance for full year 2012 FFO per diluted share is a range of $1.14 to $1.22. Our guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments.

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

 

 

  First Quarter 2012 Supplemental Information    Page 9   


 

SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended March 31, 2012  
     Retail      Office      Multifamily      Mixed-Use      Total  

Real estate rental revenue

              

Same-store portfolio

       $ 19,602             $     10,494             $     3,542             $ -                 $     33,638     

Non-same store portfolio (1)

     2,089           8,982           -               12,329           23,400     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     21,691           19,476           3,542           12,329           57,038     

Real estate expenses

              

Same-store portfolio

     5,373           3,294           1,314           -               9,981     

Non-same store portfolio (1)

     353           2,852           -               7,501           10,706     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     5,726           6,146           1,314           7,501           20,687     

Net Operating Income (NOI), GAAP basis

              

Same-store portfolio

     14,229           7,200           2,228           -               23,657     

Non-same store portfolio (1)

     1,736           6,130           -               4,828           12,694     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       $ 15,965             $ 13,330             $ 2,228             $ 4,828             $ 36,351     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, GAAP basis

       $ 14,229             $ 7,200             $ 2,228             $ -                 $ 23,657     

Net effect of straight-line rents (2)

     90           (1,473)          -               -               (1,383)    

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

     100           226           -               -               326     

Net effect of other lease intangibles (4)

     -               84           -               -               84     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same-store portfolio NOI, cash basis

       $     14,419             $ 6,037             $ 2,228             $ -                 $     22,684     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1) Same-store portfolio and non-same store portfolio are determined based on properties held on March 31, 2012 and 2011. 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 and amortization of lease intangibles and straight-line rent expense for our lease of the Annex at The Landmark at One Market.

 

 

 

  First Quarter 2012 Supplemental Information    Page 10   


 

SAME-STORE PORTFOLIO NOI COMPARISON    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended
March 31,
     Change  
     2012      2011     

Cash Basis:

        

Retail

         $     14,419                $     14,539            (0.8) %     

Office

     6,037            8,531            (29.2)         

Multifamily

     2,228            2,132            4.5          

Mixed-Use

     -                 -                 -            
  

 

 

    

 

 

    

 

 

 
         $     22,684                $     25,202            (10.0) %     
  

 

 

    

 

 

    

 

 

 

GAAP Basis:

        

Retail

         $ 14,229                $ 14,575            (2.4) %     

Office

     7,200            8,036            (10.4)         

Multifamily

     2,228            2,132            4.5          

Mixed-Use

     -                 -                 -            
  

 

 

    

 

 

    

 

 

 
         $     23,657                $     24,743                    (4.4) %     
  

 

 

    

 

 

    

 

 

 

 

 

 

  First Quarter 2012 Supplemental Information    Page 11   


 

NOI BY REGION    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended March 31, 2012  
     Retail      Office      Multifamily      Mixed-Use      Total  

Southern California

              

NOI, GAAP basis (1)

       $ 6,844             $ 4,008             $     2,228             $ -                 $ 13,080     

Net effect of straight-line rents (2)

     (140)          (197)          -               -               (337)    

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

     (210)          87           -               -               (123)    

Net effect of other lease intangibles (4)

     -               92           -               -               92     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     6,494           3,990           2,228           -               12,712     

Northern California

              

NOI, GAAP basis (1)

     2,005           4,960           -               -               6,965     

Net effect of straight-line rents (2)

     (41)          (1,634)          -               -               (1,675)    

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

     (68)          161           -               -               93     

Net effect of other lease intangibles (4)

     -               (8)          -               -               (8)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     1,896           3,479           -               -               5,375     

Hawaii

              

NOI, GAAP basis (1)

     4,374           -               -               4,828           9,202     

Net effect of straight-line rents (2)

     107           -               -               (84)          23     

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

     171           -               -               194           365     

Net effect of other lease intangibles (4)

     -               -               -               (14)          (14)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     4,652           -               -               4,924           9,576     

Oregon

              

NOI, GAAP basis (1)

     -               4,362           -               -               4,362     

Net effect of straight-line rents (2)

     -               (82)          -               -               (82)    

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

     -               210           -               -               210     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     -               4,490           -               -               4,490     

Texas

              

NOI, GAAP basis (1)

     2,742           -               -               -               2,742     

Net effect of straight-line rents (2)

     85           -               -               -               85     

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

     (24)          -               -               -               (24)    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

     2,803           -               -               -               2,803     

Total

              

NOI, GAAP basis (1)

     15,965           13,330           2,228           4,828           36,351     

Net effect of straight-line rents (2)

     11           (1,913)          -               (84)          (1,986)    

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

     (131)          458           -               194           521     

Net effect of other lease intangibles (4)

     -               84           -               (14)          70     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI, cash basis

       $     15,845             $     11,959             $     2,228             $     4,924             $     34,956     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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 and amortization of lease intangibles 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.

 

 

  First Quarter 2012 Supplemental Information    Page 12   


 

NOI BREAKDOWN    LOGO

 

 

 

Three Months Ended March 31, 2012

 

 

 

LOGO

 

 

  First Quarter 2012 Supplemental Information    Page 13   


 

PROPERTY REVENUE AND OPERATING EXPENSES    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended March 31, 2012  

Property

   Base Rent (1)     Additional
Property
      Income (2)      
     Billed Expense
  Reimbursements (3)  
     Property
Operating
      Expenses (4)      
 

Retail Portfolio

          

Carmel Country Plaza

               $ 813           $ 26                    $ 154                $ (113)    

Carmel Mountain Plaza

     2,258         72          629          (618)    

South Bay Marketplace

     472                 151          (151)    

Rancho Carmel Plaza

     191         12          54          (51)    

Lomas Santa Fe Plaza

     1,294                 275          (392)    

Solana Beach Towne Centre

     1,344         17          394          (321)    

Del Monte Center

     1,998         177          905          (1,184)    

The Shops at Kalakaua

     389         20          40          (69)    

Waikele Center

     4,207         285          1,046          (1,266)    

Alamo Quarry Market

     2,919         20          1,330          (1,466)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Retail Portfolio

               $     15,885           $     635                    $ 4,978                $ (5,631)    

Office Portfolio

          

Torrey Reserve Campus

               $ 3,794  (5)        $ 85                    $ 250                $ (944)    

Solana Beach Corporate Centre

     1,553                 53          (421)    

160 King Street

     1,246         282          185          (627)    

One Beach Street (6)

     519         -              83          (190)    

The Landmark at One Market

     4,646         23          134          (1,753)    

First & Main

     2,712         94          186          (706)    

Lloyd District Portfolio (7)

     3,065         552          117          (1,511)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Office Portfolio

               $ 17,535           $ 1,042                    $     1,008                $     (6,152)    

Multifamily Portfolio

          

Loma Palisades

               $ 2,259           $ 171                    $ -                    $ (850)    

Imperial Beach Gardens

     589         55          -              (252)    

Mariner’s Point

     268         24          -              (105)    

Santa Fe Park RV Resort

     173         17          -              (107)    
  

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal Multifamily Portfolio

               $     3,289           $     267                    $     -                    $ (1,314)    

 

 

 

  First Quarter 2012 Supplemental Information    Page 14   


 

PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)    LOGO

 

 

 

(Amounts in thousands)    Three Months Ended March 31, 2012  

Property

   Base Rent  (1)      Additional
Property
Income (2)
     Billed Expense
Reimbursements (3)
     Property
Operating
      Expenses (4)      
 

Mixed-Use Portfolio

           

Waikiki Beach Walk – Retail

               $ 2,383                   $ 878                   $ 931                   $ (1,610)       

Waikiki Beach Walk – Embassy Suites™

     7,664         573         -              (5,895)       
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Mixed-Use Portfolio

               $ 10,047                   $ 1,451                   $ 931                   $ (7,505)       
           
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

               $     46,756                   $     3,395                   $     6,917                   $   (20,602)       
  

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

  (1)

Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended March 31, 2012 (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 $13,000 and $1.5 million, respectively, for the three months ended March 31, 2012. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended March 31, 2012. 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). Total abatements for our multifamily portfolio were $14,400 for the three months ended March 31, 2012. For Waikiki Beach Walk – Embassy Suites TM, base rent is equal to the actual room revenue for the three months ended March 31, 2012.

  (2) Represents additional property-related income for the three months ended March 31, 2012, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
  (3) Represents billed tenant expense reimbursements for the three months ended March 31, 2012.
  (4) Represents property operating expenses for the three months ended March 31, 2012. 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 lease at ICW Plaza. This intercompany rent is eliminated in the consolidated statement of operations. The base rent was $130 and abatements were $130 for the three months ended March 31, 2012.
  (6) Includes revenue and expenses since the acquisition of One Beach Street on January 24, 2012 through March 31, 2012.
  (7) Includes parking income and expenses generated from the land held for development at Lloyd District Portfolio.

 

 

 

  First Quarter 2012 Supplemental Information    Page 15   


 

SEGMENT CAPITAL EXPENDITURES    LOGO

 

 

(Amounts in thousands)    Three Months Ended March 31, 2012  

Segment

   Tenant
Improvements and
Leasing Commissions
     Maintenance Capital
Expenditures
     Total Tenant
Improvements, Leasing
Commissions and
Maintenance Capital
Expenditures
     Redevelopment
and Expansions
     New Development      Total Capital
Expenditures
 

Retail Portfolio

               $ 1,642                     $ 246                     $ 1,888                     $ 1,507                     $ 35                     $ 3,430     

Office Portfolio

     1,348           976           2,324           -               399           2,723     

Multifamily Portfolio

     -               238           238           -               -               238     

Mixed-Use Portfolio

     11           66           77           -               -               77     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

               $         3,001                     $         1,526                     $         4,527                     $         1,507                     $         434                     $         6,468     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

  First Quarter 2012 Supplemental Information    Page 16   


 

SUMMARY OF OUTSTANDING DEBT

   LOGO

 

 

 

(Amounts in thousands)    Amount Outstanding at
March 31, 2012
           Interest Rate                   Annual Debt      
Service
         Maturity Date          Balance at
        Maturity        
 

Debt

              

Alamo Quarry Market (1)(2)

               $ 95,510                        5.67 %                   $ 7,567            January 8, 2014                   $     91,717      

160 King Street (3)

     31,018            5.68              3,351            May 1, 2014         27,513      

Waikele Center (4)

     140,700            5.15              7,360            November 1, 2014         140,700      

The Shops at Kalakaua (4)

     19,000            5.45              1,053            May 1, 2015         19,000      

The Landmark at One Market (2)(4)

     133,000            5.61              7,579            July 5, 2015         133,000      

Del Monte Center (4)

     82,300            4.93              4,121            July 8, 2015         82,300      

First & Main (4)

     84,500            3.97              3,406            July 1, 2016         84,500      

Imperial Beach Gardens (4)

     20,000            6.16              1,253            September 1, 2016         20,000      

Mariner’s Point (4)

     7,700            6.09              477            September 1, 2016         7,700      

South Bay Marketplace (4)

     23,000            5.48              1,281            February 10, 2017         23,000      

Waikiki Beach Walk - Retail (4)

     130,310            5.39              7,039            July 1, 2017         130,310      

Solana Beach Corporate Centre III-IV (5)

     37,330            6.39              2,646            August 1, 2017         35,136      

Loma Palisades (4)

     73,744            6.09              4,566            July 1, 2018         73,744      

One Beach Street (4)

     21,900            3.94              875            April 1, 2019         21,900      

Torrey Reserve - North Court (1)

     21,858            7.22              1,836            June 1, 2019         19,443      

Torrey Reserve - VCI, VCII, VCIII (1)

     7,358            6.36              560            June 1, 2020         6,439      

Solana Beach Corporate Centre I-II (1)

     11,750            5.91              855            June 1, 2020         10,169      

Solana Beach Towne Centre (1)

     39,167            5.91              2,849            June 1, 2020         33,898      
  

 

 

    

 

 

    

 

 

       

 

 

 

Total / Weighted Average

               $     980,145            5.42 %                   $     58,674                         $     960,469      

Unamortized fair value adjustment

     (15,203)                
  

 

 

             

Debt Balance

               $ 964,942                  
  

 

 

             

Fixed Rate Debt Ratio

              

Fixed rate debt

     100%                 

Variable rate debt

     -                       

Notes:

  (1) Principal payments based on a 30-year amortization schedule.
  (2) Maturity date is the earlier of the loan maturity date under the loan agreement, or the “Anticipated Repayment Date” as specifically defined in the loan agreement, which is the date after which substantial economic penalties apply if the loan has not been paid off.
  (3) Principal payments based on a 20-year amortization schedule.
  (4) Interest only.
  (5) Loan is interest only through August 2012. Beginning in September 2012, principal payments are based on a 30-year amortization schedule. Annual debt service is for the period April 1, 2012 through March 31, 2013.

 

 

  First Quarter 2012 Supplemental Information    Page 17   


 

MARKET CAPITALIZATION    LOGO

 

 

 

(Amounts in thousands, except per share data)    March 31, 2012      LOGO

Market data

     

Common shares outstanding

     39,285       

Units outstanding

     18,396       
  

 

 

    

Common shares and units outstanding

     57,681       

Market price per common share

               $ 22.80       
  

 

 

    

Equity market capitalization

               $ 1,315,127       
  

 

 

    

Total debt

               $ 980,145       
  

 

 

    

Total market capitalization

               $         2,295,272       
  

 

 

    

Less: Cash on hand

               $ (126,978)  (1)    

Total enterprise value

               $ 2,168,294       
  

 

 

    

Total assets, gross

               $ 1,968,188      

Total debt/Total capitalization

     42.7%      

Total debt/Total enterprise value

     45.2%      

Net debt/Total enterprise value (2)

     39.3%      

Total debt/Total assets, gross

     49.8%      

Total debt/EBITDA (3)(4)

     7.5x      

Net debt/EBITDA (3)(4)

     6.5x      

Interest coverage ratio (5)

     2.4x      

Fixed charge coverage ratio (5)

     2.4x      

 

Notes:

(1) The cash balance includes marketable trading securities of $26.3 million.
(2) Net debt is equal to total debt less cash on hand.
(3) See Glossary of Terms for discussion of EBITDA.
(4) As used here, EBITDA represents the actual for the three months ended March 31, 2012 annualized.
(5) Calculated as EBITDA divided by interest expense, excluding amortization of debt issuance costs and debt fair value adjustments.
(6) The revolving line of credit, which has a capacity of $250 million, matures in January 2016, but at March 31, 2012, it has no outstanding balance and is not included herein. The availability on the revolving line of credit was approximately $212.9 million at March 31, 2012.

 

 

  First Quarter 2012 Supplemental Information    Page 18   


 

SUMMARY OF REDEVELOPMENT OPPORTUNITIES    LOGO

 

 

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

Office – Expansion Development of unused land at Torrey Reserve resulting in approximately 81,500 of additional rentable square feet.

 

Property                         

  

Location          

  

Estimated

Start Date

  

Estimated

Completion Date

  

Estimated

Stabilization Date (1)

  

Estimated

Rentable Square Feet

  

Total Estimated Investment (2)

  

Estimated

Stabilized Yield (3)

Torrey Reserve III & IV    San Diego, CA    2012    2014    2015    81,500    $34,100,000    8.6%

 

Potential Future Development/Redevelopment Pipeline

 

Retail – Pad Site Opportunities – Opportunity to invest in both single tenant and multi-tenant stand alone pads.

     

Property                      

  

Location        

        

Estimated

Square Footage

           
Carmel Mountain Plaza    San Diego, CA       9,000            

 

Retail – Expansion Opportunities – Opportunity to invest in order to expand and/or convert unused square footage into additional retail square footage.

 

Property                         

  

Location              

        

Estimated

Square Footage

           
Solana Beach Corporate Centre (Building 5)    Solana Beach, CA       10,000            
Lomas Santa Fe Plaza    Solana Beach, CA       45,000            

 

Office – Expansion Opportunities – Opportunity to invest in order to expand and/or convert unused square footage into additional office square footage.

 

Property          

  

Location        

        

Estimated

Square Footage

           
Sorrento Pointe    San Diego, CA       88,000            

 

Mixed-Use – Expansion Opportunities – Opportunity to invest in additional development rights that yield higher density.

 

Property                         

  

Location              

        

Estimated

Square Footage (4)

  

Multifamily Units

                 
Lloyd District Portfolio    Portland, OR       47,000    744         
Solana Beach - Highway 101    Solana Beach, CA       48,000    36         

Notes:

  (1) Based on management’s estimation of stabilized occupancy (95%).
  (2) Excludes allocated land costs.
  (3) Calculated as return on invested capital when project has reached stabilized occupancy and excludes allocated land costs.
  (4) Represents commercial portion of development opportunity.

 

 

  First Quarter 2012 Supplemental Information    Page 19   


 

   LOGO

 

 

 

PORTFOLIO DATA

 

 

 

 

  First Quarter 2012 Supplemental Information      


 

PROPERTY REPORT    LOGO

 

 

 

As of March 31, 2012    Same - Store Retail and Office Portfolios

Property

   Location    Year Built/
Renovated
     Number
of
Buildings
     Net
Rentable
Square
Feet (1)
     Percentage
Leased (2)
     Annualized
Base Rent  (3)
     Annualized
Base Rent
per Leased
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           93.2 %            $ 3,252,903             $     44.69            Sharp Healthcare, Frazee Industries Inc.

Carmel Mountain Plaza (7)

   San Diego, CA      1994         13           520,228           90.9              9,055,850           19.15         Sears    Sports Authority, Nordstrom Rack

South Bay Marketplace (7)

   San Diego, CA      1997         9           132,873           100.0              1,831,022           13.78            Ross Dress for Less, Grocery Outlet

Rancho Carmel Plaza

   San Diego, CA      1993         3           30,421           81.1              763,325           30.94            Oggi’s Pizza & Brewing Co., Sprint PCS Assets

Lomas Santa Fe Plaza

   Solana Beach, CA      1972/1997         9           209,569           95.9              5,180,374           25.78            Vons, Ross Dress for Less

Del Monte Center (7)

   Monterey, CA      1967/1984/2006         16           675,385           97.7              8,651,354           13.11         Macy’s, KLA Monterrey    Century Theatres, Macy’s Furniture Gallery

The Shops at Kalakaua

   Honolulu, HI      1971/2006         3           11,671           100.0              1,556,610           133.37            Whalers General Store, Diesel U.S.A. Inc.

Waikele Center

   Waipahu, HI      1993/2008         9           538,024           93.3              17,123,365           34.11         Lowe’s, Kmart, Sports Authority, Foodland Super Market    Old Navy, Officemax

Alamo Quarry Market (7)

   San Antonio, TX      1997/1999         16           589,501           94.1              11,703,567           21.10         Regal Cinemas    Bed Bath & Beyond, Whole Foods Market
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Subtotal/Weighted Average Retail Portfolio

  

     87           2,785,770           94.5 %            $ 59,118,370             $     22.46           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Office Properties

                          

Torrey Reserve Campus

   San Diego, CA      1996-2000         9           456,801           93.6 %            $ 15,330,254             $     35.85           

160 King Street

   San Francisco, CA      2002         1           167,986           97.9              3,080,357           18.73           

The Landmark at One Market (8)

   San Francisco, CA      1917/2000         1           421,934           100.0              18,585,204           44.05           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Subtotal/Weighted Average Office Portfolio

  

     11           1,046,721           96.9 %            $ 36,995,815             $     36.48           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Total/Weighted Average Retail and Office Portfolio

  

     98           3,832,491           95.1 %            $ 96,114,185             $     26.37           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       
Non - Same Store Retail and Office Portfolios

Property

   Location    Year Built/
Renovated
     Number
of
Buildings
     Net
Rentable
Square
Feet (1)
     Percentage
Leased (2)
     Annualized
Base Rent  (3)
     Annualized
Base Rent
per Leased
Square Foot (4)
    

Retail Anchor Tenant(s) (5)

  

Other Principal Retail Tenants (6)

Retail Property

                          

Solana Beach Towne Centre

   Solana Beach, CA      1973/2000/2004         12           246,730           98.7 %            $ 5,379,806             $     22.09            Dixieline Probuild, Marshalls

Office Properties

                          

Solana Beach Corporate Centre

   Solana Beach, CA      1982/2005         4           211,971           91.1 %            $ 6,279,945             $     32.52           

One Beach Street

   San Francisco, CA     
 
1924/1972/1987/
1992
  
  
     1           97,614           100.0              2,786,371           28.54           

First & Main

   Portland, OR      2010         1           360,955           96.3              10,958,091           31.53           

Lloyd District Portfolio

   Portland, OR      1940-2011         6           610,081           90.5              12,250,078           22.19           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Subtotal/Weighted Average Office Portfolio

  

     12           1,280,621           93.0 %            $ 32,274,485             $     27.10           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Total/Weighted Average Retail and Office Portfolio

  

     24           1,527,351           93.9 %            $ 37,654,291             $     26.25           
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

 

 

  First Quarter 2012 Supplemental Information    Page 21   


 

PROPERTY REPORT (CONTINUED)    LOGO

 

 

 

As of March 31, 2012

   Same - Store Multifamily Portfolio

Property

   Location    Year Built/
Renovated
     Number
of
Buildings
     Units      Percentage
Leased (2)
     Annualized
Base Rent  (3)
     Average
Monthly
Base Rent per
Leased Unit (4)
    

 

  

 

Loma Palisades

   San Diego, CA     

 

1958/  

2001-2008  

  

  

     80           548           89.2 %        $     9,419,892       $         1,606         

Imperial Beach Gardens

   Imperial Beach, CA     

 

1959/  

2008-present  

  

  

     26           160           89.4              2,388,684         1,392         

Mariner’s Point

   Imperial Beach, CA      1986           8           88           96.6              1,063,440         1,042         

Santa Fe Park RV Resort (9)

   San Diego, CA     

 

1971/  

2007-2008  

  

  

     1           126           78.0              727,224         617         
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Total/Weighted Average Multifamily Portfolio

  

     115           922           88.4 %        $     13,599,240       $         1,390         
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

       

Non - Same Store Mixed-Use Portfolio

Retail Portion

   Location    Year Built/
Renovated
     Number
of
Buildings
     Net
Rentable
Square
Feet (1)
     Percentage
Leased (2)
     Annualized
Base Rent (3)
     Annualized
Base Rent per
Leased
Square Foot (4)
    

Retail Anchor Tenant(s)  (5)

  

Other Principal Retail Tenants  (6)

Waikiki Beach Walk - Retail

   Honolulu, HI      2006           3           96,569           98.8 %        $ 9,592,426       $ 100.54          Yardhouse, Ruths Chris

Hotel Portion

   Location    Year Built/
Renovated
     Number
of
Buildings
     Units      Average
Occupancy  (10)
     Average
Daily Rate (10)
     Annualized
Revenue
per
Available
Room (10)
           

Waikiki Beach Walk - Embassy Suites™

   Honolulu, HI      2008           2           369           92.2 %            $ 247.63       $         228.20         
 
  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.

 

  (2) Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of March 31, 2012, including leases which may not have commenced as of March 31, 2012. Percentage leased for our multifamily properties includes total units rented as of March 31, 2012.

 

  (3) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2012, by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.

 

  (4) Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of March 31, 2012. Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of March 31, 2012.

 

  (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         127,112           $     1,020,900        

South Bay Marketplace

     1         2,824           $ 81,540        

Del Monte Center

     2         295,100           $ 201,291        

Alamo Quarry Market

     4         31,994           $ 428,250        

 

  (8) This property contains 421,934 net rentable square feet consisting of The Landmark at One Market (377,714 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, 2016, which we have the option to extend until 2026 pursuant to two five-year extension options.

 

  (9) The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended March 31, 2012, the highest average monthly occupancy rate for this property was 96%, occurring in July 2011. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.

 

  (10) Average occupancy represents the percentage of available units that were sold during the three months ended March 31, 2012, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended March 31, 2012, by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended March 31, 2012 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.

 

 

  First Quarter 2012 Supplemental Information    Page 22   


 

RETAIL LEASING SUMMARY    LOGO

 

 

As of March 31, 2012

Total Lease Summary - Comparable (1)

                                                  

Quarter

   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.
 

1st Quarter 2012

     13           100 %           27,115                    $         43.83                $     46.10               $     (61,374)             (4.9) %          4.0 %          5.6                $     293,673                $     10.83        

4th Quarter 2011

     24           100               77,770              30.37              29.59             61,134              2.7               8.9              6.3              537,420              6.91        

3rd Quarter 2011

     11           100               44,296              24.03              23.01             45,098              4.4               10.1              6.9              264,000              5.96        

2nd Quarter 2011

     12           100               20,260              35.89              36.61             (14,534)             (2.0)              4.2              5.0              72,000              3.55        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     60           100 %           169,441                    $         31.53                $     31.35               $     30,324              0.6  %          7.3 %          6.2                $     1,167,093                $     6.89        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

New Lease Summary - Comparable (1)

                                                  

Quarter

   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.
 

1st Quarter 2012

     3           23 %          4,906                    $         36.98                $     38.31               $ (6,541)             (3.5) %          (6.2) %         7.1                $     223,548                $     45.57        

4th Quarter 2011

     5           21              34,973              27.11              22.89             147,340              18.4               24.6              10.1              508,420              14.54        

3rd Quarter 2011

     1           9              5,280              23.00              16.48             34,407              39.5               34.0              10.0              264,000              50.00        

2nd Quarter 2011

     4           33              7,912              30.58              30.82             (1,918)             (0.8)              4.9              6.8              72,000              9.10        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     13           22 %          53,071                    $         28.13                $     24.86               $     173,288              13.1  %          16.9  %         9.3                $     1,067,968                $     20.12        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Renewal Lease Summary - Comparable (1)(5)

                                                  

Quarter

   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.
 

1st Quarter 2012

     10           77 %          22,209                    $         45.35                $     47.82               $     (54,833)             (5.2) %          6.0 %          5.2                $     70,125                $     3.16        

4th Quarter 2011

     19           79              42,797              33.04              35.05             (86,206)             (5.7)              0.4              3.2              29,000              0.68        

3rd Quarter 2011

     10           91              39,016              24.17              23.90             10,691             1.1               7.8              6.5              -              -        

2nd Quarter 2011

     8           67              12,348              39.30              40.32             (12,616)             (2.5)              3.8              3.8              -              -        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total 12 months

     47           78 %          116,370                    $         33.08                $     34.31               $     (142,964)             (3.6) %          4.0 %          4.7                $     99,125                $     0.85        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Lease Summary - Comparable and Non-Comparable

                                                  

Quarter

   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.
                                    

1st Quarter 2012

     16           31,896                $     41.65              5.3                $     319,483               $     10.02                       

4th Quarter 2011

     26           136,417              27.34              7.9              3,595,900             26.36                       

3rd Quarter 2011

     14           49,542              24.35              6.7              361,904             7.30                       

2nd Quarter 2011

     17           30,212              33.27              6.2              472,535             15.64                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Total 12 months

     73           248,067                $     29.30              7.1                $     4,749,822               $     19.15                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Notes:

(1) Comparable leases represent those leases signed on spaces for which there was a previous lease.

(2) Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.

(3) Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.

(4) Weighted average is calculated on the basis of square footage.

(5) Excludes renewals at fixed contractual rates specified in the lease.

 

 

  First Quarter 2012 Supplemental Information    Page 23   


 

OFFICE LEASING SUMMARY    LOGO

 

 

As of March 31, 2012

Total Lease Summary - Comparable (1)

 

Quarter

  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.
 

1st Quarter 2012

    13          100 %        52,132           $     30.26            $     34.69            $ (231,039)          (12.8) %          (2.6) %          4.2            $     710,939            $     13.64     

4th Quarter 2011

    14          100            40,587         27.70          27.35          14,415           1.3               2.9               5.1          84,057          2.07     

3rd Quarter 2011

    11          100            34,602         34.09          38.18          (141,785)          (10.7)              (8.8)              3.3          249,118          7.20     

2nd Quarter 2011

    6          100            81,360         39.25          45.54          (512,187)          (13.8)              (0.9)              5.8          231,840          2.85     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total 12 months

    44          100 %        208,681           $ 33.90            $ 38.07            $ (870,596)          (11.0) %          (2.0) %          4.8            $ 1,275,954            $ 6.11     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
New Lease Summary - Comparable (1)

  

Quarter

  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.
 

1st Quarter 2012

    6          46 %        12,283            $ 35.51            $ 34.74            $ 9,473           2.2  %          20.1  %        4.1            $     293,958            $ 23.93     

4th Quarter 2011

    -           -            -           -           -           -             -               -              -           -           -      

3rd Quarter 2011

    5          45            20,109          38.11          42.28          (83,753)          (9.9)              (7.9)            3.7          229,004          11.39     

2nd Quarter 2011

    3          50            68,085          40.69          46.47          (393,958)          (12.5)              1.1             6.5          212,691          3.12     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total 12 months

    14          32 %        100,477            $ 39.54            $ 44.20            $     (468,238)          (10.5) %          1.0  %        5.7            $     735,653            $ 7.32     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Renewal Lease Summary - Comparable (1)(5)

  

Quarter

  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.
 

1st Quarter 2012

    7          54 %        39,849            $ 28.64            $ 34.67            $ (240,512)          (17.4) %         (9.0) %        4.2            $     416,981            $ 10.46     

4th Quarter 2011

    14          100            40,587          27.70          27.35          14,415           1.3              2.9             5.1          84,057          2.07     

3rd Quarter 2011

    6          55            14,493          28.50          32.50          (58,032)          (12.3)             (10.3)            2.8          20,114          1.39     

2nd Quarter 2011

    3          50            13,275          31.86          40.76          (118,229)          (21.8)             (12.8)            1.7          19,149          1.44     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total 12 months

    30          68 %        108,204            $ 28.66            $ 32.38            $ (402,358)          (11.5) %        (5.7) %        4.0            $ 540,301            $ 4.99     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Lease Summary - Comparable and Non-Comparable

Quarter

   Number of
Leases Signed
     Net Rentable
Square Feet
Signed
     Contractual
Rent
Per Sq. Ft. (2)
     Weighted
Average
Lease Term (4)
     Tenant
Improvement

& Incentives
     Tenant
Improvement

& Incentives
Per Sq. Ft.
                          

1st Quarter 2012

     16         63,969             $     29.02           4.0           $ 907,761             $     14.19                    

4th Quarter 2011

     18         50,490           28.24           4.8         174,545           3.46                    

3rd Quarter 2011

     15         44,370           33.22           3.3         387,163           8.73                    

2nd Quarter 2011

     9         94,851           38.25           5.8         711,785           7.50                    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Total 12 months

     58         253,680             $ 33.05           4.7           $     2,181,254             $ 8.60                    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

                

Notes:

(1) Comparable leases represent those leases signed on spaces for which there was a previous lease.

(2) Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.

(3) Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.

(4) Weighted average is calculated on the basis of square footage.

(5) Excludes renewals at fixed contractual rates specified in the lease.

 

 

  First Quarter 2012 Supplemental Information    Page 24   


 

LEASE EXPIRATIONS    LOGO

 

 

 

As of March 31, 2012

Assumes no exercise of lease options

  

  

                       
     Office     Retail     Mixed-Use (Retail Portion Only)     Total  

Year

  Expiring Sq.
Ft.
    % of
Office

Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    % of
Retail

Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    % of
Mixed-Use
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    %  of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
 

Month to Month

    29,956              1.3  %           0.5  %           $ 8.40          11,599              0.4  %         0.2  %        $   24.96              7,065          7.3  %         0.1  %           $ 29.14          48,620          0.9  %           $ 15.37     

2012

    200,717                8.6                   3.7              38.16          187,892              6.2                   3.4             24.21              5,157          5.3              0.1              159.99          393,766          7.2              33.10     

2013

    230,805                9.9               4.2              31.76          514,683              17.0                   9.4             24.33              7,735          8.0              0.1              154.04          753,223          13.8              27.94     

2014

    195,975                8.4               3.6              30.39          400,132              13.2                   7.3             28.67              2,850          3.0              0.1              145.52          598,957          11.0              29.79     

2015

    386,977                16.6               7.1              31.13          221,011              7.3                   4.1             25.00              11,597          12.0              0.2              152.79          619,585          11.4              31.22     

2016

    231,865                10.0               4.2              28.47          169,856              5.6                   3.1             36.46              11,776          12.2              0.2              153.57          413,497          7.6              35.31     

2017

    88,896          (2)            3.8               1.6              24.64          182,952              6.0                   3.4             25.92              5,655          5.9              0.1              151.15          277,503          5.1              28.06     

2018

    78,112                3.4               1.4              34.76          738,906              24.4               13.5             15.55              4,673          4.8              0.1              142.23          821,691          15.1              18.10     

2019

    244,579                10.5               4.5              35.91          70,197              2.3                   1.3             27.42              11,690          12.1              0.2              53.16          326,466          6.0              34.70     

2020

    243,114                10.5               4.5              34.98          118,506              3.9                   2.2             8.86              17,843          18.5              0.3              44.42          379,463          7.0              27.27     

2021

    161,702                7.0               3.0              34.59          41,170              1.4                   0.8             38.15          -              -              -              -            202,872          3.7              35.32     

Thereafter

    63,919                2.6               1.2              25.62          138,230              4.4                   2.5             22.96              9,382          9.7              0.2              47.04          211,531          3.7              24.84     

Signed Leases

    47,702                2.1               0.9              -              81,062              2.7                   1.5             -                  -              -              -              -            128,764          2.4              -       

Not Commenced

                               

Available

    123,023                5.3               2.3              -              156,304          5.2                   2.9             -                  1,146          1.2              -              -            280,473          5.1              -       
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        2,327,342            100.0  %           42.7  %           $     29.76          3,032,500            100.0  %         55.6  %          $ 21.27          96,569          100.0  %         1.7  %           $   99.33          5,456,411          100.0  %           $ 26.27     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Assumes all lease options are exercised                         
     Office     Retail     Mixed-Use (Retail Portion Only)     Total  

Year

  Expiring Sq.
Ft.
    % of
Office
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    % of
Retail
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    % of
Mixed-Use
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
    Expiring
Sq. Ft.
    % of
Total
Sq. Ft.
    Annualized
Base Rent
Per Sq. Ft. (1)
 

Month to Month

    29,956                1.3  %           0.5  %           $ 8.40            11,599              0.4  %         0.2  %          $   24.96              7,065          7.3 %         0.1  %           $   29.14          48,620          0.9  %           $   15.37     

2012

    191,655                8.2               3.5              38.55            97,430              3.2                   1.8             28.87              4,093          4.2              0.1              137.94          293,178          5.4              36.72     

2013

    119,697                5.1               2.2              33.32            91,763              3.0                   1.7             37.34              7,735          8.0              0.1              154.04          219,195          4.0              39.26     

2014

    35,616                1.5               0.7              31.62            192,860              6.4                   3.5             31.24              2,850          3.0              0.1              145.52          231,326          4.2              32.70     

2015

    145,722                6.3               2.7              33.24            39,352              1.3                   0.7             37.55              5,383          5.6              0.1              40.34          190,457          3.5              34.33     

2016

    212,780                9.1               3.9              26.80            79,270              2.6                   1.5             30.57              8,812          9.1              0.1              180.11          300,862          5.5              32.29     

2017

    44,178                1.9               0.8              32.64            59,073              2.0                   1.1             35.40              4,615          4.8              0.1              147.36          107,866          2.0              39.06     

2018

    108,296                4.7               2.0              30.09            118,410              3.9                   2.2             24.33              4,673          4.8              0.1              142.23          231,379          4.2              29.41     

2019

    80,277                3.5               1.5              31.98            113,212              3.7                   2.1             26.55          -              -                -              -            193,489          3.5              28.80     

2020

    194,086                8.3               3.6              28.26            302,842              10.0                   5.6             15.55              1,951          2.0              -              131.19          498,879          9.1              20.95     

2021

    34,845                1.5               0.6              31.89            51,578              1.7                   0.9             47.03              10,242          10.6              0.2              198.84          96,665          1.8              57.66     

Thereafter

    959,509          (2)            41.2               17.5              33.46            1,637,745          53.9               29.9             20.11              38,004          39.4              0.7              46.69          2,635,258          48.4              25.35     

Signed Leases

    47,702                2.1               0.9              -                81,062              2.7                   1.5             -              -              -                -              -            128,764          2.4              -       

Not Commenced

                               

Available

    123,023                5.3               2.3              -                156,304          5.2                   2.9             -                  1,146          1.2              -              -            280,473          5.1              -       
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        2,327,342            100.0  %           42.7  %           $     29.76            3,032,500            100.0  %         55.6  %          $ 21.27              96,569          100.0  %         1.7  %           $ 99.33              5,456,411          100.0  %           $ 26.27     
 

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

(1) Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended March 31, 2012 for the leases expiring during the applicable period, by (ii) 12.
(2) The expirations include 45,795 square feet currently leased by Microsoft at The Landmark at One Market, for which Autodesk has signed an agreement to lease the space upon Microsoft’s lease termination from December 31, 2012 through December 31, 2017 with an option to extend the lease through December 31, 2024.

 

 

  First Quarter 2012 Supplemental Information    Page 25   


 

PORTFOLIO LEASED STATISTICS    LOGO

 

 

 

       At March 31, 2012     At March 31, 2011  

Type

     Size        Leased (1)        Leased %     Size        Leased (1)     Leased %  

Overall Portfolio Statistics

                       

Retail Properties (square feet)

       3,032,500               2,876,196               94.8     3,031,032           2,858,588        94.3

Office Properties (square feet)

       2,327,342               2,204,319               94.7     1,622,393           1,539,952        94.9

Multifamily Properties (units)

       922               815               88.4     922           849        92.1

Mixed-Use Properties (square feet)

       96,569               95,423               98.8     96,569           94,490        97.8

Mixed-Use Properties (units)

       369               341 (3)           92.2     369           323  (3)      87.6

Same-Store(2) Statistics

                       

Retail Properties (square feet)

       2,785,770 (4)           2,632,793               94.5     2,784,302           2,617,523        94.0

Office Properties (square feet)

       1,046,721 (5)           1,013,711               96.8     1,046,721           1,005,300        96.0

Multifamily Properties (units)

       922               815               88.4     922           849        92.1

Mixed-Use Properties (square feet)

       -  (6)           -                   -                -                   -                -       

Mixed-Use Properties (units)

       -  (6)           -                   -                -                   -                -       

Notes:

  (1) Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
  (2) See Glossary of Terms.
  (3) Represents average occupancy for the three months ended March 31, 2012 and 2011.
  (4) Excludes Solana Beach Towne Centre as the controlling interest in this entity was acquired on January 19, 2011.
  (5) Excludes Solana Beach Corporate Centre as the controlling interest in this entity was acquired on January 19, 2011. First & Main is excluded as it was acquired on March 11, 2011. Lloyd District Portfolio is excluded as it was acquired on July 1, 2011. One Beach Street is excluded as it was acquired on January 24, 2012.
  (6) Excludes the Waikiki Beach Walk property as the controlling interest in this entity was acquired on January 19, 2011.

 

 

  First Quarter 2012 Supplemental Information    Page 26   


 

TOP TENANTS – RETAIL    LOGO

 

 

As of March 31, 2012

 

   

Tenant

 

Property(ies)

  Lease
Expiration
   Total
Leased
Square

Feet
    Rentable
Square

Feet as a
Percentage of
Total Retail
    Rentable Square
Feet as a
Percentage of
Total
    Annualized
Base Rent
    Annualized
Base Rent as a
Percentage of
Total Retail
    Annualized
Base Rent as a
Percentage of
Total
 

1

 

Lowe’s

  Waikele Center   5/31/18          155,000              5.1 %         2.8 %         $ 4,059,585          6.3 %             2.8 %    

2

 

Kmart

  Waikele Center   6/30/18      119,590               3.9                  2.2             3,826,880               5.9                  2.7        

3

 

Foodland Super Market

  Waikele Center   1/25/14      50,000               1.6                  0.9             2,430,981               3.8                  1.7        

4

 

Sports Authority

  Carmel Mountain   11/30/13      90,722               3.0                  1.7             2,076,602               3.2                  1.4        
    Plaza,Waikele Center   7/18/13             

5

 

Ross Dress for Less

  South Bay Marketplace, Lomas   1/31/13      81,125               2.7                  1.5             1,595,826               2.5                  1.1        
    Santa Fe Plaza, Carmel   1/31/14             
    Mountain Plaza               

6

 

Old Navy

  Alamo Quarry Market,   9/30/12      59,780               2.0                  1.1             *                *               *          
    Waikele Center, South   7/31/12             
    Bay Marketplace   4/30/13             

7

 

Officemax

  Waikele Center, Alamo   1/31/14      47,962               1.6                  0.9             1,164,761               1.8                  0.8        
    Quarry Market   11/30/12             

8

 

Marshalls

  Solana Beach Towne   1/13/15      68,055               2.2                  1.2             1,106,146               1.7                  0.8        
   

Centre, Carmel

Mountain Plaza

  1/31/19             

9

 

Vons

  Lomas Santa Fe Plaza   12/31/17      49,895               1.6                  0.9             1,058,000               1.6                  0.7        

10

 

Sprouts Farmers Market

 

Carmel Mountain Plaza,

Solana Beach Towne

Centre

  3/31/25      45,959               1.5                  0.8             1,037,824               1.6                  0.7        
      6/30/14             
                  
        

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Top 10 Retail Tenants Total

             768,088          25.2 %        14.0 %        $     18,356,605          28.4 %        12.7 %   
        

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

* Data withheld at tenant’s request

 

 

  First Quarter 2012 Supplemental Information    Page 27   


 

TOP TENANTS – OFFICE    LOGO

 

 

As of March 31, 2012

 

   

Tenant

  Property(ies)   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   6/30/19
4/30/20
5/31/21
         226,892              9.7 %             4.2 %         $ 10,254,426              14.8 %               7.2 %    
2  

Veterans Benefits

Administration

  First & Main   8/31/20      93,572              4.0                   1.7             3,006,453              4.3                   2.1        
3   Autodesk   The Landmark at One Market   12/31/15
12/31/17
     68,869              3.0                   1.3             2,984,838              4.3                   2.1        
4  

Microsoft

  The Landmark at One Market   2/28/13
2/28/15
     45,795              2.0                   0.8             2,976,675              4.3                   2.1        
5  

Treasury Tax Administration

  First & Main   8/31/15      70,660              3.0                   1.3             2,583,330              3.7                   1.8        
6  

Insurance Company Of The

West

  Torrey Reserve Campus   12/31/16      81,040              3.5                   1.5             2,449,631              3.5                   1.7        
7   Treasury Call Center   First & Main   8/31/20      63,648              2.7                   1.2             2,184,302              3.2                   1.5        
8  

Alliant International

University

  One Beach Street   10/31/19      64,161              2.8                   1.2             1,775,176              2.6                   1.2        
9   Portland Energy Conservation   First & Main   1/31/21      73,422              3.2                   1.3             1,588,118              2.3                   1.1        
10  

Integra Telecom Holdings, Inc.

  Lloyd District Portfolio   5/31/14
3/31/16
1/31/14
12/31/20
     62,640              2.7                   1.1             1,540,625              2.2                   1.1        
        

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  Top 10 Office Tenants Total          850,699          36.6 %        15.6 %        $     31,343,574          45.2 %        21.9 %   
        

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

  First Quarter 2012 Supplemental Information    Page 28   


 

   LOGO

 

 

 

APPENDIX

 

 

 

 

  First Quarter 2012 Supplemental Information      


 

GLOSSARY OF TERMS    LOGO

 

 

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three months ended March 31, 2012 and 2011 is as follows:

 

     Three Months Ended
March  31,
 
     2012      2011  

Net income

   $ 2,871         $ 13,596     

Depreciation and amortization

     15,253           12,155     

Interest expense

     14,356           12,991     

Interest income (loss)

     (87)          90     

Income tax expense

     178           251     

Gain on sale of real estate

     -             -       
  

 

 

    

 

 

 

EBITDA

   $             32,571         $             39,083     
  

 

 

    

 

 

 

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. We use Adjusted EBITDA as a supplemental performance measure because losses from early extinguishment of debt, loan transfer and consent fees and gains on acquisitions of controlling interests create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential. The adjustments noted resulted from our initial public offering and formation transactions.

 

     Three Months Ended
March  31,
 
     2012      2011  

EBITDA

   $ 32,571         $ 39,083     

Early extinguishment of debt

     -             25,867     

Loan transfer and consent fees

     -             9,019     

Gain on acquisition

     -             (46,371)    
  

 

 

    

 

 

 

Adjusted EBITDA

   $             32,571         $             27,598     
  

 

 

    

 

 

 

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

Funds From Operations As Adjusted (FFO As Adjusted): FFO As Adjusted is a supplemental measure of real estate companies’ operating performances. We use FFO As Adjusted as a supplemental performance measure because losses from early extinguishment of debt, loan transfer and consent fees and gains on acquisitions of controlling interests create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential. The adjustments noted resulted from our initial public offering and formation transactions. However, other REITs may use different methodologies for defining adjustments and, accordingly, our FFO As Adjusted may not be comparable to other REITs.

 

 

 

  First Quarter 2012 Supplemental Information    Page 30   


 

GLOSSARY OF TERMS (CONTINUED)    LOGO

 

 

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 and other property income) less property and related expenses (property expenses and real estate taxes). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Since NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. However, NOI should not be viewed as an alternative measure of our financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations.

 

     Three Months Ended
March  31,
 
Reconciliation of NOI to net income    2012      2011  

Total NOI

   $     36,351            $     30,714        

General and administrative

     (3,765)             (3,186)       

Depreciation and amortization

     (15,253)             (12,155)       

Interest expense

     (14,356)             (12,991)       

Early extinguishment of debt

     -                 (25,867)       

Loan transfer and consent fees

     -                 (9,019)       

Gain on acquisition

     -                 46,371        

Other income (expense), net

     (106)             (602)       
  

 

 

    

 

 

 

Income from continuing operations

     2,871              13,265        

Discontinued operations

     

Results from discontinued operations

     -                 331        
  

 

 

    

 

 

 

Net income

     2,871              13,596        

Net income attributable to restricted shares

     (132)             (86)       

Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities

     -                 2,458        

Net income attributable to Predecessor’s controlled owners’ equity

     -                 (16,995)       

Net (income) loss attributable to unitholders in the Operating Partnership

     (883)             329        
  

 

 

    

 

 

 

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

   $ 1,856            $ (698)       
  

 

 

    

 

 

 

Overall Portfolio: Includes all operating properties owned by us as of March 31, 2012.

 

 

  First Quarter 2012 Supplemental Information    Page 31   


 

GLOSSARY OF TERMS (CONTINUED)    LOGO

 

 

Same-Store Portfolio and Non-Same Store Portfolio: Information provided on a same-store basis is provided for only those properties that were owned and operated for the entirety of both periods being compared and excludes properties that were redeveloped, expanded or under development and properties purchased or sold at any time during the periods being compared. The following table shows the properties included in the same-store and non-same store portfolio for the comparative periods presented.

 

     Comparison of Three Months Ended
March 31, 2012 to 2011
 
     Same-Store      Non-Same Store  

Retail Properties

     

Carmel Country Plaza

     X      

Carmel Mountain Plaza

     X      

South Bay Marketplace

     X      

Rancho Carmel Plaza

     X      

Lomas Santa Fe Plaza

     X      

Solana Beach Towne Centre

        X   

Del Monte Center

     X      

The Shops at Kalakaua

     X      

Waikele Center

     X      

Alamo Quarry Market

     X      

Office Properties

     

Torrey Reserve Campus

     X      

Solana Beach Corporate Centre

        X   

160 King Street

     X      

One Beach Street

        X   

The Landmark at One Market

     X      

First & Main

        X   

Lloyd District Portfolio

        X   

Multifamily Properties

     

Loma Palisades

     X      

Imperial Beach Gardens

     X      

Mariner’s Point

     X      

Santa Fe Park RV Resort

     X      

Mixed-Use Properties

     

Waikiki Beach Walk - Retail

        X   

Waikiki Beach Walk - Embassy Suites™

        X   

Development Properties

     

Sorrento Pointe - Land

        X   

Torrey Reserve - Land

        X   

Solana Beach Corporate Centre - Land

        X   

Solana Beach - Highway 101 - Land

        X   

Lloyd District Portfolio - Land

        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.

 

 

  First Quarter 2012 Supplemental Information    Page 32