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):
November 6, 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
Registrants 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 November 6, 2012, American Assets Trust, Inc. (the Company) issued a press release regarding its financial results for the quarter ended September 30, 2012. Also on November 6, 2012, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Companys financial results and operations for the quarter ended September 30, 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 ended September 30, 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 |
Exhibit Description | |
99.1** | Press release issued by American Assets Trust, Inc. on November 6, 2012. | |
99.2** | American Assets Trust, Inc. Supplemental Information for the quarter ended September 30, 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 |
November 6, 2012
EXHIBIT INDEX
Exhibit |
Exhibit Description | |
99.1 | Press release issued by American Assets Trust, Inc. on November 6, 2012. | |
99.2 | American Assets Trust, Inc. Supplemental Information for the quarter ended September 30, 2012. |
Exhibit 99.1
American Assets Trust, Inc. Reports Third Quarter 2012 Financial Results
Company Release - 11/6/12
SAN DIEGO - American Assets Trust, Inc. (NYSE: AAT) (the Company) today reported financial results for its third quarter ended September 30, 2012.
Financial Results and Recent Developments
| Funds From Operations of $0.36 and $0.98 per diluted share/unit for the three and nine months ended September 30, 2012, respectively |
| $229 million acquisition of City Center Bellevue, a 27-story LEED-EB Gold certified office tower with approximately 497,000 square feet in Bellevue, Washington |
| $111 million 10 year interest-only mortgage loan secured by City Center Bellevue with a fixed rate of 3.98% closed on October 10, 2012 |
| Increased 2012 annual guidance approximately 10% over the prior midpoint of $1.20 of FFO per diluted share to a range of $1.30 to $1.33 of FFO per diluted share |
| Introducing 2013 annual guidance range of $1.35 to $1.44 of FFO per diluted share |
| Re-leased last remaining Borders space at Del Monte Center at an average cash basis increase of 29% per square foot; all previous Borders spaces leased and occupied at an average cash basis increase of 26% |
| Entered into an agreement to sell San Francisco office building known as 160 King Street for approximately $94 million, and the acquisition is expected to close in the fourth quarter of 2012, subject to customary closing conditions |
| Entered into an agreement to acquire Geary Marketplace, a newly constructed approximately 35,000 square foot, 100% leased, grocery anchored shopping center in Walnut Creek, California, for approximately $21 million, and the acquisition is expected to close early in the first quarter of 2013, subject to customary closing conditions |
| Same-store NOI retail, office and mixed-use growth increased 8.9%, 2.3% and 16.9%, respectively, for the three months ended September 30, 2012 |
| Net income available to common stockholders of $2.8 million and $6.4 million for the three and nine months ended September 30, 2012, respectively, or $0.08 and $0.17 per diluted share, respectively |
During the third quarter of 2012, the Company generated funds from operations (FFO) for common stockholders and unitholders of $20.6 million, or $0.36 per diluted share/unit, compared to $16.6 million or $0.29 per diluted share/unit for the three months ended September 30, 2011. For the nine months ended September 30, 2012, the Company generated FFO for common stockholders and unitholders of $55.9 million, or $0.98 per diluted share/unit, compared to $41.0 million or $0.77 per diluted share/unit for the nine months ended September 30, 2011. Unitholders refers to holders of common units of our operating partnership. The increase in FFO was largely due to additional operating income from office properties of $2.7 million and $10.6 million for the three and nine months ended September 30, 2012, respectively, including non-same store properties.
Net income attributable to common stockholders was $2.8 million, or $0.08 per basic and diluted share, for the three months ended September 30, 2012, compared to net income attributable to common stockholders of $3.1 million, or $0.08 per basic and diluted share, for the three months ended September 30, 2011. For the nine months ended September 30, 2012, net income attributable to common stockholders was $6.4 million, or $0.17 per basic and diluted share, compared to net income attributable to common stockholder of $2.6 million, or $0.07 per basic and diluted share, for the nine months ended September 30, 2011. The increase in net income attributable to common stockholders was largely due to additional operating income from office properties, as noted above, and non-recurring IPO related costs incurred during the nine months ended September 30, 2011.
FFO is a non-GAAP supplemental earnings measure which the Company considers meaningful in measuring its operating performance. Reconciliations of FFO 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:
September 30, 2012 |
June 30, 2012 |
September 30, 2011 |
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Total Portfolio |
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Retail |
96.9 | % | 96.2 | % | 92.6 | % | ||||||
Office |
94.0 | % | 95.0 | % | 94.1 | % | ||||||
Multifamily |
96.2 | % | 97.7 | % | 94.4 | % | ||||||
Mixed-Use: |
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Retail |
97.4 | % | 93.9 | % | 99.2 | % | ||||||
Hotel |
90.2 | % | 90.4 | % | 88.8 | % | ||||||
Same-Store Portfolio |
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Retail |
96.9 | % | 96.2 | % | 94.8 | % | ||||||
Office |
94.1 | % | 96.7 | % | 96.3 | % | ||||||
Multifamily |
96.2 | % | 97.7 | % | 94.4 | % |
During the third quarter of 2012, the Company signed 42 leases for approximately 173,000 square feet of retail and office space, as well as 232 multifamily apartment leases. Renewals accounted for 93.3% of the comparable retail leases, 80.0% of the comparable office leases and 47.4% of the multifamily leases.
Retail
On a comparable space basis (i.e., leases for which there was a former tenant), the Company leased 57,000 square feet of retail space at an average cash-basis contractual rent increase of 3.4% during the third quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $25.90 per square foot, compared to an average contractual rent of $25.04 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 8.4% for the third quarter of 2012.
Office
On a comparable space basis, the Company leased 71,000 square feet of office space at an average cash-basis contractual rent increase of 4.1% during the third quarter of 2012. The average contractual rent on this comparable space for the first year of the new leases is $29.88 per square foot, compared to an average contractual rent of $28.71 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 increased 11.7% over the prior quarter for the third quarter of 2012.
Multifamily
At September 30, 2012, the average monthly base rent per leased unit was $1,370 compared to an average monthly base rent per leased unit of $1,421 at September 30, 2011.
Mixed-Use
Waikiki Beach Walk - Retail and Embassy SuitesTM had revenue of $12.3 million and net operating income of $5.4 million for the three months ended September 30, 2012. Revenue per available room, or RevPAR, increased 22% compared to the same period last year. RevPAR was $263 for the three months ended September 30, 2012 and $215 for the three months ended September 30, 2011. Average Daily Rate also increased over 21% compared to same period last year.
2
Same-Store Net Operating Income
Same-store net operating income increased approximately 6.9% and 1.6% for the three and nine months ended September 30, 2012, respectively, on a GAAP basis, compared to the corresponding periods in 2011. The same-store net operating income by segment was as follows (in thousands):
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||||
Retail |
$ | 16,891 | $ | 15,512 | 8.9 | % | $ | 44,029 | $ | 43,150 | 2.0 | % | ||||||||||||
Office |
12,244 | 11,972 | 2.3 | 21,663 | 21,277 | 1.8 | ||||||||||||||||||
Multifamily |
2,348 | 2,416 | (2.8 | ) | 6,520 | 6,614 | (1.4 | ) | ||||||||||||||||
Mixed-Use |
5,447 | 4,661 | 16.9 | | | | ||||||||||||||||||
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$ | 36,930 | $ | 34,561 | 6.9 | % | $ | 72,212 | $ | 71,041 | 1.6 | % | |||||||||||||
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The increase in same-store retail net operating income is primarily due to an increase in the percentage leased for the retail properties, which include our Nordstrom Rack leases at Carmel Mountain Plaza and Alamo Quarry Market, and additional cost reimbursements.
Same-store multifamily net operating income decreased primarily due to additional real estate tax assessments during 2012.
The increase in mixed-use rental revenue was due to increased tourist travel to Hawaii and higher RevPAR for the three months ended September 30, 2012 compared to the three months ended September 30, 2011, with average occupancy for the three months ended September 30, 2012 of 89.7% compared to 88.8% for the three months ended September 30, 2011.
In the tables 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, City Center Bellevue, which was acquired in August 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 and Dispositions
On August 21, 2012, the Company acquired City Center Bellevue, a 27-story trophy LEED-EB Gold certified office tower consisting of approximately 497,000 square feet, located in the heart of Bellevues Central Business District at 500 108th Avenue NE, Bellevue, Washington. The purchase price was approximately $228.8 million, with credits of approximately $6.9 million related to outstanding tenant improvement obligations and rent abatements. On October 10, 2012, the Company entered into a ten-year non-recourse mortgage loan with PNC Bank, National Association, with an original principal amount of $111.0 million. Proceeds of the loan were used to reduce the amounts outstanding on the Companys credit facility.
On August 28, 2012, we entered into an agreement to acquire Geary Marketplace, a newly constructed, approximately 35,000 square foot, 100% leased, grocery anchored shopping center in Walnut Creek, California. The purchase price is approximately $21.0 million. The acquisition is expected to close early in the first quarter of 2013, subject to customary closing conditions.
On October 23, 2012, we entered into an agreement to sell 160 King Street located in San Francisco, California for approximately $93.8 million. The decision to sell 160 King Street was a result of our desire to reallocate capital within our existing and future portfolio. The sale is expected to be completed in connection with the reverse tax deferred exchange structured for the acquisition of City Center Bellevue pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended, and applicable state revenue and taxation code sections.
Balance Sheet and Liquidity
As of September 30, 2012, the Company had gross real estate assets of $2.0 billion and liquidity of $113.3 million, comprised of cash and cash equivalents of $34.9 million and approximately $219.4 million of availability on its line of credit, of which $141.0 million was outstanding.
Dividends
The Company declared dividends on its shares of common stock of $0.21 per share for the third quarter of 2012. The dividends were declared on July 26, 2012 to holders of record on September 14, 2012 and were paid on September 28, 2012. Total dividends paid on shares of the Companys common stock for the nine months ended September 30, 2012 were $0.63 per share.
3
In addition, the Company has declared a dividend on its common stock of $0.21 per share for the quarter ending December 31, 2012. The dividend will be paid on December 28, 2012 to stockholders of record on December 14, 2012.
Guidance
The Company increased 2012 FFO per diluted share, approximately 10% from the prior range of $1.17 to $1.22 per share to a range of $1.30 to $1.33 per share. Additionally, the Company is providing initial 2013 guidance of $1.35 to $1.44 diluted FFO per share. Other than the acquisition of Geary Marketplace and disposition of 160 King Street, the Companys 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.
Conference Call
The Company will hold a conference call to discuss the results for the third quarter 2012 on Wednesday, November 7, 2012 at 8:00 a.m. Pacific Time (PT). To participate in the event by telephone, please dial 1-800-591-6923 and use the pass code 42503060. A telephonic replay of the conference call will be available beginning at 10:00 a.m. PT on Wednesday, November 7, 2012 through Wednesday, November 21, 2012. To access the replay, dial 1-888-286-8010 and use the pass code 87876989. A live on-demand audio webcast of the conference call will be available on the Companys website at www.americanassetstrust.com. A replay of the call will also be available on the Companys website.
Supplemental Information
Supplemental financial information regarding the Companys third quarter 2012 results may be found in the Investor Relations section of the Companys 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)
September 30, 2012 |
December 31, 2011 |
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(unaudited) | ||||||||
ASSETS |
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Real estate, at cost |
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Operating real estate |
$ | 1,917,089 | $ | 1,659,106 | ||||
Construction in progress |
34,369 | 3,495 | ||||||
Held for development |
14,877 | 24,675 | ||||||
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1,966,335 | 1,687,276 | |||||||
Accumulated depreciation |
(267,840 | ) | (234,595 | ) | ||||
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Net real estate |
1,698,495 | 1,452,681 | ||||||
Cash and cash equivalents |
34,917 | 112,723 | ||||||
Restricted cash |
10,251 | 9,216 | ||||||
Marketable securities |
| 28,235 | ||||||
Accounts receivable, net |
6,076 | 6,847 | ||||||
Deferred rent |
29,392 | 23,294 | ||||||
Other assets, net |
81,806 | 76,285 | ||||||
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TOTAL ASSETS |
$ | 1,860,937 | $ | 1,709,281 | ||||
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LIABILITIES AND EQUITY |
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LIABILITIES: |
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Secured notes payable |
$ | 964,068 | $ | 943,479 | ||||
Line of credit |
141,000 | | ||||||
Accounts payable and accrued expenses |
33,950 | 25,476 | ||||||
Security deposits payable |
5,482 | 4,790 | ||||||
Other liabilities and deferred credits |
61,140 | 55,808 | ||||||
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Total liabilities |
1,205,640 | 1,029,553 | ||||||
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Commitments and contingencies |
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EQUITY: |
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American Assets Trust, Inc. stockholders equity |
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Common stock, $0.01 par value, 490,000,000 shares authorized, 39,316,461 and 39,283,796 shares outstanding at September 30, 2012 and December 31, 2011, respectively |
393 | 393 | ||||||
Additional paid-in capital |
656,425 | 653,645 | ||||||
Accumulated dividends in excess of net income |
(46,004 | ) | (28,007 | ) | ||||
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Total American Assets Trust, Inc. stockholders equity |
610,814 | 626,031 | ||||||
Noncontrolling interests |
44,483 | 53,697 | ||||||
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Total equity |
655,297 | 679,728 | ||||||
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TOTAL LIABILITIES AND EQUITY |
$ | 1,860,937 | $ | 1,709,281 | ||||
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5
American Assets Trust, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUE: |
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Rental income |
$ | 59,915 | $ | 53,278 | $ | 169,199 | $ | 146,860 | ||||||||
Other property income |
2,921 | 3,015 | 8,484 | 7,416 | ||||||||||||
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Total revenue |
62,836 | 56,293 | 177,683 | 154,276 | ||||||||||||
EXPENSES: |
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Rental expenses |
17,024 | 16,187 | 48,219 | 42,720 | ||||||||||||
Real estate taxes |
6,301 | 5,390 | 17,689 | 14,800 | ||||||||||||
General and administrative |
3,959 | 3,733 | 11,716 | 10,786 | ||||||||||||
Depreciation and amortization |
16,432 | 15,827 | 46,356 | 41,916 | ||||||||||||
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Total operating expenses |
43,716 | 41,137 | 123,980 | 110,222 | ||||||||||||
OPERATING INCOME |
19,120 | 15,156 | 53,703 | 44,054 | ||||||||||||
Interest expense |
(14,690 | ) | (14,738 | ) | (43,522 | ) | (41,791 | ) | ||||||||
Early extinguishment of debt |
| | | (25,867 | ) | |||||||||||
Loan transfer and consent fees |
| | | (9,019 | ) | |||||||||||
Gain on acquisition |
| | | 46,371 | ||||||||||||
Other income (expense), net |
68 | (108 | ) | (188 | ) | (179 | ) | |||||||||
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INCOME FROM CONTINUING OPERATIONS DISCONTINUED OPERATIONS |
4,498 | 310 | 9,993 | 13,569 | ||||||||||||
Results from discontinued operations |
(213 | ) | 4,308 | (213 | ) | 5,100 | ||||||||||
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NET INCOME |
4,285 | 4,618 | 9,780 | 18,669 | ||||||||||||
Net income attributable to restricted shares |
(133 | ) | (132 | ) | (396 | ) | (350 | ) | ||||||||
Net loss attributable to Predecessors noncontrolling interests in consolidated real estate entities |
| | | 2,458 | ||||||||||||
Net income attributable to Predecessors controlled owners equity |
| | | (16,995 | ) | |||||||||||
Net (income) loss attributable to unitholders in the Operating Partnership |
(1,335 | ) | (1,434 | ) | (3,022 | ) | (1,209 | ) | ||||||||
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NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS |
$ | 2,817 | $ | 3,052 | $ | 6,362 | $ | 2,573 | ||||||||
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Basic net income (loss) from continuing operations attributable to common stockholders per share |
$ | 0.08 | $ | | $ | 0.17 | $ | (0.03 | ) | |||||||
Basic net income from discontinued operations attributable to common stockholders per share |
| 0.08 | | 0.10 | ||||||||||||
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Basic net income (loss) attributable to common stockholders per share |
$ | 0.08 | $ | 0.08 | $ | 0.17 | $ | 0.07 | ||||||||
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Weighted average shares of common stock outstanding - basic |
38,673,617 | 38,655,084 | 38,663,352 | 36,106,397 | ||||||||||||
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Diluted net income (loss) from continuing operations attributable to common stockholders per share |
$ | 0.08 | $ | | $ | 0.17 | $ | (0.03 | ) | |||||||
Diluted net income from discontinued operations attributable to common stockholders per share |
| 0.08 | | 0.10 | ||||||||||||
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Diluted net income (loss) attributable to common stockholders per share |
$ | 0.08 | $ | 0.08 | $ | 0.17 | $ | 0.07 | ||||||||
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Weighted average shares of common stock outstanding - diluted |
57,054,425 | 57,051,173 | 57,054,425 | 53,265,648 | ||||||||||||
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Dividends declared per common share |
$ | 0.21 | $ | 0.21 | $ | 0.63 | $ | 0.59 | ||||||||
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6
Reconciliation of Net Income to Funds From Operations
The Companys FFO attributable to common stockholders and operating partnership unitholders and a reconciliation to net income is as follows (in thousands except shares and per share data):
Three Months Ended September 30, 2012 |
Nine Months Ended September 30, 2012 |
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Funds From Operations (FFO) |
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Net income |
$ | 4,285 | $ | 9,780 | ||||
Depreciation and amortization of real estate assets |
16,432 | 46,356 | ||||||
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FFO, as defined by NAREIT |
20,717 | 56,136 | ||||||
Less: Nonforfeitable dividends on incentive stock awards |
(89 | ) | (266 | ) | ||||
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FFO attributable to common stock and units |
$ | 20,628 | $ | 55,870 | ||||
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FFO per diluted share/unit |
$ | 0.36 | $ | 0.98 | ||||
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Weighted average number of common shares and units, diluted |
57,266,166 | 57,261,363 | ||||||
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Reported results are preliminary and not final until the filing of the Companys Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.
Use of Non-GAAP Information
The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Companys 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 Companys operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Companys 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 Companys properties, all of which have real economic effects and could materially impact the Companys results from operations, the utility of FFO as a measure of the Companys 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 Companys FFO may not be comparable to such other REITs FFO. Accordingly, FFO should be considered only as supplements to net income as measures of the Companys performance. FFO should not be used as measures of the Companys liquidity, nor are they indicative of funds available to fund the Companys cash needs, including the Companys ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
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 nations most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington and Hawaii. The Companys retail portfolio comprises approximately 3.0 million rentable square feet, and its office portfolio comprises approximately 2.8 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.
7
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 Companys 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 Companys future results to differ materially from any forward-looking statements, see the section entitled Risk Factors in the Companys most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
Source: American Assets Trust, Inc.
Investor and Media Contact:
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607
8
Exhibit 99.2
THIRD QUARTER 2012
Supplemental Information
Investor and Media Contact American Assets Trust Robert F. Barton Executive Vice President and Chief Financial Officer 858-350-2607 |
American Asset Trust, Inc.s Portfolio is concentrated in high-barrier-to-entry markets with favorable supply/demand characteristics
Retail | Office | Multifamily | Mixed-Use | |||||||||||||||||||
Market |
Square Feet |
Square Feet |
Units | Square Feet |
Suites | |||||||||||||||||
San Diego | 1,217,919 | 668,772 | 922 | (1) | - | - | ||||||||||||||||
San Francisco | - | 687,534 | - | - | - | |||||||||||||||||
Oahu | 549,695 | - | - | 96,569 | 369 | |||||||||||||||||
Monterey | 675,385 | - | - | - | - | |||||||||||||||||
San Antonio | 589,501 | - | - | - | - | |||||||||||||||||
Portland | - | 971,036 | - | - | - | |||||||||||||||||
Seattle | - | 489,856 | - | - | - | |||||||||||||||||
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Total | 3,032,500 | 2,817,198 | 922 | 96,569 | 369 | |||||||||||||||||
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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 September 30, 2012.
(1) Includes 122 RV spaces. |
Retail | 3.0 million | 52% | |||
Office | 2.8 million | 48% | ||||
Totals | 5.8 million | |||||
Third Quarter 2012 Supplemental Information | Page 2 |
INDEX |
THIRD QUARTER 2012 SUPPLEMENTAL INFORMATION | ||||||
1. |
FINANCIAL HIGHLIGHTS | |||||
5 | ||||||
6 | ||||||
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution |
7 | |||||
9 | ||||||
10 | ||||||
12 | ||||||
13 | ||||||
14 | ||||||
15 | ||||||
17 | ||||||
18 | ||||||
19 | ||||||
20 | ||||||
2. |
||||||
Property Report | 22 | |||||
Retail Leasing Summary | 24 | |||||
Office Leasing Summary | 25 | |||||
Lease Expirations | 26 | |||||
Portfolio Leased Statistics | 27 | |||||
Top Tenants - Retail | 28 | |||||
Top Tenants - Office | 29 | |||||
3. |
APPENDIX | |||||
Glossary of Terms | 31 |
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.
Third Quarter 2012 Supplemental Information | Page 3 |
Third Quarter 2012 Supplemental Information | Page 4 |
CONSOLIDATED BALANCE SHEETS |
(Amounts in thousands, except share data)
September 30, 2012 |
December 31, 2011 |
|||||||
(unaudited) | (audited) | |||||||
ASSETS |
||||||||
Real estate, at cost |
||||||||
Operating real estate |
$ | 1,917,089 | $ | 1,659,106 | ||||
Construction in progress |
34,369 | 3,495 | ||||||
Held for development |
14,877 | 24,675 | ||||||
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1,966,335 | 1,687,276 | |||||||
Accumulated depreciation |
(267,840) | (234,595) | ||||||
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Net real estate |
1,698,495 | 1,452,681 | ||||||
Cash and cash equivalents |
34,917 | 112,723 | ||||||
Restricted cash |
10,251 | 9,216 | ||||||
Marketable securities |
- | 28,235 | ||||||
Accounts receivable, net |
6,076 | 6,847 | ||||||
Deferred rent |
29,392 | 23,294 | ||||||
Other assets, net |
81,806 | 76,285 | ||||||
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TOTAL ASSETS |
$ | 1,860,937 | $ | 1,709,281 | ||||
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LIABILITIES AND EQUITY |
||||||||
LIABILITIES: |
||||||||
Secured notes payable |
$ | 964,068 | $ | 943,479 | ||||
Line of credit |
141,000 | - | ||||||
Accounts payable and accrued expenses |
33,950 | 25,476 | ||||||
Security deposits payable |
5,482 | 4,790 | ||||||
Other liabilities and deferred credits |
61,140 | 55,808 | ||||||
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Total liabilities |
1,205,640 | 1,029,553 | ||||||
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Commitments and contingencies |
||||||||
EQUITY: |
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American Assets Trust, Inc. stockholders equity |
||||||||
Common stock, $0.01 par value, 490,000,000 shares authorized, 39,316,461 and 39,283,796 shares outstanding at September 30, 2012 and December 31, 2011, respectively |
393 | 393 | ||||||
Additional paid in capital |
656,425 | 653,645 | ||||||
Accumulated dividends in excess of net income |
(46,004) | (28,007) | ||||||
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Total American Assets Trust, Inc. stockholders equity |
610,814 | 626,031 | ||||||
Noncontrolling interests |
44,483 | 53,697 | ||||||
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Total equity |
655,297 | 679,728 | ||||||
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TOTAL LIABILITIES AND EQUITY |
$ | 1,860,937 | $ | 1,709,281 | ||||
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Third Quarter 2012 Supplemental Information | Page 5 |
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited, amounts in thousands, except shares and per share data) | Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUE: |
||||||||||||||||
Rental income |
$ | 59,915 | $ | 53,278 | $ | 169,199 | $ | 146,860 | ||||||||
Other property income |
2,921 | 3,015 | 8,484 | 7,416 | ||||||||||||
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Total revenue |
62,836 | 56,293 | 177,683 | 154,276 | ||||||||||||
EXPENSES: |
||||||||||||||||
Rental expenses |
17,024 | 16,187 | 48,219 | 42,720 | ||||||||||||
Real estate taxes |
6,301 | 5,390 | 17,689 | 14,800 | ||||||||||||
General and administrative |
3,959 | 3,733 | 11,716 | 10,786 | ||||||||||||
Depreciation and amortization |
16,432 | 15,827 | 46,356 | 41,916 | ||||||||||||
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Total operating expenses |
43,716 | 41,137 | 123,980 | 110,222 | ||||||||||||
OPERATING INCOME |
19,120 | 15,156 | 53,703 | 44,054 | ||||||||||||
Interest expense |
(14,690) | (14,738) | (43,522) | (41,791) | ||||||||||||
Early extinguishment of debt |
- | - | - | (25,867) | ||||||||||||
Loan transfer and consent fees |
- | - | - | (9,019) | ||||||||||||
Gain on acquisition |
- | - | - | 46,371 | ||||||||||||
Other income (expense), net |
68 | (108) | (188) | (179) | ||||||||||||
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INCOME FROM CONTINUING OPERATIONS |
4,498 | 310 | 9,993 | 13,569 | ||||||||||||
DISCONTINUED OPERATIONS |
||||||||||||||||
Income from discontinued operations |
(213) | 327 | (213) | 1,119 | ||||||||||||
Gain on sale of real estate property |
- | 3,981 | - | 3,981 | ||||||||||||
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Results from discontinued operations |
(213) | 4,308 | (213) | 5,100 | ||||||||||||
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NET INCOME |
4,285 | 4,618 | 9,780 | 18,669 | ||||||||||||
Net income attributable to restricted shares |
(133) | (132) | (396) | (350) | ||||||||||||
Net loss attributable to Predecessors noncontrolling interests in consolidated real estate entities |
- | - | - | 2,458 | ||||||||||||
Net income attributable to Predecessors controlled owners equity |
- | - | - | (16,995) | ||||||||||||
Net income attributable to unitholders in the Operating Partnership |
(1,335) | (1,434) | (3,022) | (1,209) | ||||||||||||
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NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS |
$ | 2,817 | $ | 3,052 | $ | 6,362 | $ | 2,573 | ||||||||
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Basic net income (loss) from continuing operations attributable to common stockholders per share |
$ | 0.08 | $ | - | $ | 0.17 | $ | (0.03) | ||||||||
Basic net income from discontinued operations attributable to common stockholders per share |
- | 0.08 | - | 0.10 | ||||||||||||
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Basic net income attributable to common stockholders per share |
$ | 0.08 | $ | 0.08 | $ | 0.17 | $ | 0.07 | ||||||||
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Weighted average shares of common stock outstandingbasic |
38,673,617 | 38,655,084 | 38,663,352 | 36,106,397 | ||||||||||||
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Diluted net income (loss) from continuing operations attributable to common stockholders per share |
$
|
0.08 |
|
$ | - | $ | 0.17 | $ | (0.03) | |||||||
Diluted net income from discontinued operations attributable to common stockholders per share |
- | 0.08 | - | 0.10 | ||||||||||||
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Diluted net income (loss) attributable to common stockholders per share |
$ | 0.08 | $ | 0.08 | $ | 0.17 | $ | 0.07 | ||||||||
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Weighted average shares of common stock outstandingdiluted |
57,054,425 | 57,051,173 | 57,054,425 | 53,265,648 | ||||||||||||
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Third Quarter 2012 Supplemental Information | Page 6 |
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION |
(Unaudited, amounts in thousands, except share and per share data) | Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Funds from Operations (FFO) (1) |
||||||||||||||||
Net income |
$ | 4,285 | $ | 4,618 | $ | 9,780 | $ | 18,669 | ||||||||
Depreciation and amortization of real estate assets (2) |
16,432 | 16,053 | 46,356 | 42,820 | ||||||||||||
Depreciation and amortization on unconsolidated real estate joint ventures (pro rata) |
- | - | - | 688 | ||||||||||||
Gain on sale of real estate |
- | (3,981) | - | (3,981) | ||||||||||||
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FFO, as defined by NAREIT |
20,717 | 16,690 | 56,136 | 58,196 | ||||||||||||
Less: FFO attributable to Predecessors controlled and noncontrolled owners equity |
- | - | - | (16,973) | ||||||||||||
Less: Nonforfeitable dividends on incentive stock awards |
(89) | (88) | (266) | (227) | ||||||||||||
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FFO attributable to common stock and common units |
$ | 20,628 | $ | 16,602 | $ | 55,870 | $ | 40,996 | ||||||||
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FFO per diluted share/unit |
$ | 0.36 | $ | 0.29 | $ | 0.98 | $ | 0.77 | ||||||||
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Weighted average number of common shares and common units, diluted (3) |
57,266,166 | 57,258,190 | 57,261,363 | 53,459,442 | ||||||||||||
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FFO As Adjusted (1) |
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FFO |
$ | 20,717 | $ | 16,690 | $ | 56,136 | $ | 58,196 | ||||||||
Early extinguishment of debt |
- | - | - | 25,867 | ||||||||||||
Loan transfer and consent fees |
- | - | - | 9,019 | ||||||||||||
Gain on acquisition of controlling interests (4) |
- | - | - | (46,371) | ||||||||||||
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FFO As Adjusted |
20,717 | 16,690 | 56,136 | 46,711 | ||||||||||||
Less: FFO As Adjusted attributable to Predecessors controlled and noncontrolled owners equity |
- | - | - | (2,462) | ||||||||||||
Less: Nonforfeitable dividends on incentive stock awards |
(89) | (88) | (266) | (227) | ||||||||||||
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FFO As Adjusted attributable to common stock and units |
$ | 20,628 | $ | 16,602 | $ | 55,870 | $ | 44,022 | ||||||||
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FFO As Adjusted per diluted share/unit |
$ | 0.36 | $ | 0.29 | $ | 0.98 | $ | 0.82 | ||||||||
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Weighted average number of common shares and units, diluted (3) |
57,266,166 | 57,258,190 | 57,261,363 | 53,459,442 | ||||||||||||
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Dividends |
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Dividends declared and paid |
$ | 12,114 | $ | 12,113 | $ | 36,340 | $ | 34,010 | ||||||||
Dividends declared and paid per share/unit |
$ | 0.21 | $ | 0.21 | $ | 0.63 | $ | 0.59 |
Third Quarter 2012 Supplemental Information | Page 7 |
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED) |
(Unaudited, amounts in thousands, except share and per share data) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Funds Available for Distribution (FAD) (1) |
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FFO As Adjusted |
$ | 20,717 | $ | 16,690 | $ | 56,136 | $ | 46,711 | ||||||||
Adjustments: |
||||||||||||||||
Tenant improvements, leasing commissions and maintenance capital expenditures (5) |
(13,208) | (3,765) | (23,067) | (6,997) | ||||||||||||
Net effect of straight-line rents (6) |
(2,300) | (1,996) | (6,487) | (3,328) | ||||||||||||
Amortization of net above (below) market rents (7) |
9 | 863 | 720 | 1,644 | ||||||||||||
Net effect of other lease intangibles (8) |
59 | 518 | 197 | 1,054 | ||||||||||||
Amortization of debt issuance costs and debt fair value adjustment |
985 | 1,031 | 2,964 | 2,924 | ||||||||||||
Non-cash compensation expense |
722 | 712 | 2,128 | 1,902 | ||||||||||||
Unrealized (gains) losses on marketable securities |
(86) | 56 | 538 | 3 | ||||||||||||
Loss on sale of marketable securities |
121 | - | 121 | - | ||||||||||||
Nonforfeitable dividends on incentive stock awards |
(89) | (88) | (266) | (227) | ||||||||||||
Adjustments related to discontinued operations |
- | (137) | - | (664) | ||||||||||||
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FAD |
$ | 6,930 | $ | 13,884 | $ | 32,984 | $ | 43,022 | ||||||||
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Summary of Capital Expenditures |
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Tenant improvements and leasing commissions (5) |
$ | 11,779 | $ | 1,779 | $ | 18,437 | $ | 4,352 | ||||||||
Maintenance capital expenditures |
1,429 | 1,986 | 4,630 | 2,645 | ||||||||||||
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$ | 13,208 | $ | 3,765 | $ | 23,067 | $ | 6,997 | |||||||||
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Notes:
(1) | See Glossary of Terms. |
(2) | The nine months ended September 30, 2011 includes depreciation and amortization on Valencia Corporate Center, which was sold on August 30, 2011 and is classified as discontinued operations. |
(3) | For the nine months ended September 30, 2012 and 2011, the weighted average common shares and common units used to compute FFO and FFO As Adjusted per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO 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) | Includes $6.1 million of tenant improvements related to salesforce.com, which was identified during the IPO as a Use of Proceeds. |
(6) | 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. |
(7) | Represents the adjustment related to the acquisition of buildings with above (below) market rents. |
(8) | 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 WalkRetail. |
Third Quarter 2012 Supplemental Information | Page 8 |
CORPORATE GUIDANCE |
(Unaudited, amounts in thousands, except share and per share data) | ||||||||
2012 Guidance Range (1) | ||||||||
Funds from Operations (FFO) |
||||||||
Net income |
$ | 12,193 | $ | 13,559 | ||||
Depreciation and amortization of real estate assets |
62,838 | 62,838 | ||||||
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FFO, as defined by NAREIT |
75,031 | 76,397 | ||||||
Less: Nonfortfeitable dividends on incentive stock awards |
(356) | (356) | ||||||
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FFO attributable to common stock and units |
$ | 74,675 | $ | 76,041 | ||||
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Weighted average number of common shares and units, diluted |
57,263,568 | 57,263,568 | ||||||
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FFO per diluted share |
$ | 1.30 | $ | 1.33 | ||||
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2013 Guidance Range (1) |
||||||||
Funds from Operations (FFO) |
||||||||
Net income |
$ | 14,953 | $ | 20,103 | ||||
Depreciation and amortization of real estate assets |
62,806 | 62,806 | ||||||
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|
|||||
FFO, as defined by NAREIT |
77,759 | 82,909 | ||||||
Less: Nonfortfeitable dividends on incentive stock awards |
(358) | (358) | ||||||
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|
|||||
FFO attributable to common stock and units |
$ | 77,401 | $ | 82,551 | ||||
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Weighted average number of common shares and units, diluted |
57,269,499 | 57,269,499 | ||||||
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FFO per diluted share |
$ | 1.35 | $ | 1.44 | ||||
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Notes:
(1) | Other than the acquisition of Geary Marketplace and disposition of 160 King Street, our guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments. |
These estimates are forward-looking and reflect managements 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.
Third Quarter 2012 Supplemental Information | Page 9 |
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI) |
(Unaudited, amounts in thousands) | Three Months Ended September 30, 2012 | |||||||||||||||||||
Retail | Office | Multifamily | Mixed-Use | Total | ||||||||||||||||
Real estate rental revenue |
||||||||||||||||||||
Same-store portfolio |
$ | 23,684 | $ | 18,398 | $ | 3,906 | $ | 13,579 | $ | 59,567 | ||||||||||
Non-same store portfolio (1) |
10 | 3,259 | - | - | 3,269 | |||||||||||||||
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Total |
23,694 | 21,657 | 3,906 | 13,579 | 62,836 | |||||||||||||||
Real estate expenses |
||||||||||||||||||||
Same-store portfolio |
6,793 | 6,154 | 1,558 | 8,132 | 22,637 | |||||||||||||||
Non-same store portfolio (1) |
35 | 653 | - | - | 688 | |||||||||||||||
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Total |
6,828 | 6,807 | 1,558 | 8,132 | 23,325 | |||||||||||||||
Net Operating Income (NOI), GAAP basis |
||||||||||||||||||||
Same-store portfolio |
16,891 | 12,244 | 2,348 | 5,447 | 36,930 | |||||||||||||||
Non-same store portfolio (1) |
(25) | 2,606 | - | - | 2,581 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 16,866 | $ | 14,850 | $ | 2,348 | $ | 5,447 | $ | 39,511 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Same-store portfolio NOI, GAAP basis |
$ | 16,891 | $ | 12,244 | $ | 2,348 | $ | 5,447 | $ | 36,930 | ||||||||||
Net effect of straight-line rents (2) |
(565) | (859) | - | (84) | (1,508) | |||||||||||||||
Amortization of net above (below) market rents (3) |
(186) | 225 | - | 294 | 333 | |||||||||||||||
Net effect of other lease intangibles (4) |
- | 73 | - | (14) | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Same-store portfolio NOI, cash basis |
$ | 16,140 | $ | 11,683 | $ | 2,348 | $ | 5,643 | $ | 35,814 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Notes:
(1) | Same-store portfolio and non-same store portfolio are determined based on properties held on September 30, 2012 and September 30, 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 and retail space at Waikiki Beach WalkRetail. |
Third Quarter 2012 Supplemental Information | Page 10 |
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI) |
(Unaudited, amounts in thousands) | Nine Months Ended September 30, 2012 | |||||||||||||||||||
Retail | Office | Multifamily | Mixed-Use | Total | ||||||||||||||||
Real estate rental revenue |
||||||||||||||||||||
Same-store portfolio |
$ | 61,078 | $ | 32,133 | $ | 10,957 | $ | - | $ | 104,168 | ||||||||||
Non-same store portfolio (1) |
6,759 | 28,705 | - | 38,051 | 73,515 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
67,837 | 60,838 | 10,957 | 38,051 | 177,683 | |||||||||||||||
Real estate expenses |
||||||||||||||||||||
Same-store portfolio |
17,049 | 10,470 | 4,437 | - | 31,956 | |||||||||||||||
Non-same store portfolio (1) |
1,599 | 8,988 | - | 23,365 | 33,952 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
18,648 | 19,458 | 4,437 | 23,365 | 65,908 | |||||||||||||||
Net Operating Income (NOI), GAAP basis |
||||||||||||||||||||
Same-store portfolio |
44,029 | 21,663 | 6,520 | - | 72,212 | |||||||||||||||
Non-same store portfolio (1) |
5,160 | 19,717 | - | 14,686 | 39,563 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 49,189 | $ | 41,380 | $ | 6,520 | $ | 14,686 | $ | 111,775 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Same-store portfolio NOI, GAAP basis |
$ | 44,029 | $ | 21,663 | $ | 6,520 | $ | - | $ | 72,212 | ||||||||||
Net effect of straight-line rents (2) |
(854) | (3,568) | - | - | (4,422) | |||||||||||||||
Amortization of net above (below) market rents (3) |
186 | 222 | - | - | 408 | |||||||||||||||
Net effect of other lease intangibles (4) |
- | 241 | - | - | 241 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Same-store portfolio NOI, cash basis |
$ | 43,361 | $ | 18,558 | $ | 6,520 | $ | - | $ | 68,439 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Notes:
(1) | Same-store portfolio and non-same store portfolio are determined based on properties held on September 30, 2012 and September 30, 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 and retail space at Waikiki Beach Walk-Retail. |
Third Quarter 2012 Supplemental Information | Page 11 |
SAME-STORE PORTFOLIO NOI COMPARISON |
(Unaudited, amounts in thousands) |
Three Months Ended September 30, |
Change | Nine Months Ended September 30, |
Change | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||
Cash Basis: |
||||||||||||||||||||||||
Retail |
$ | 16,140 | $ | 15,449 | 4.5 % | $ | 43,361 | $ | 43,285 | 0.2 % | ||||||||||||||
Office |
11,683 | 11,153 | 4.8 | 18,558 | 20,926 | (11.3) | ||||||||||||||||||
Multifamily |
2,348 | 2,416 | (2.8) | 6,520 | 6,614 | (1.4) | ||||||||||||||||||
Mixed-Use |
5,643 | 4,759 | 18.6 | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 35,814 | $ | 33,777 | 6.0 % | $ | 68,439 | $ | 70,825 | (3.4) % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
GAAP Basis: |
||||||||||||||||||||||||
Retail |
$ | 16,891 | $ | 15,512 | 8.9 % | $ | 44,029 | $ | 43,150 | 2.0 % | ||||||||||||||
Office |
12,244 | 11,972 | 2.3 | 21,663 | 21,277 | 1.8 | ||||||||||||||||||
Multifamily |
2,348 | 2,416 | (2.8) | 6,520 | 6,614 | (1.4) | ||||||||||||||||||
Mixed-Use |
5,447 | 4,661 | 16.9 | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 36,930 | $ | 34,561 | 6.9 % | $ | 72,212 | $ | 71,041 | 1.6 % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2012 Supplemental Information | Page 12 |
NOI BY REGION |
(Unaudited, amounts in thousands) |
Three Months Ended September 30, 2012 | |||||||||||||||||||
Retail | Office | Multifamily | Mixed-Use | Total | ||||||||||||||||
Southern California |
||||||||||||||||||||
NOI, GAAP basis (1) |
$ | 7,155 | $ | 4,014 | $ | 2,348 | $ | - | $ | 13,517 | ||||||||||
Net effect of straight-line rents (2) |
(445) | (82) | - | - | (527) | |||||||||||||||
Amortization of net above (below) market rents (3) |
(214) | 53 | - | - | (161) | |||||||||||||||
Net effect of other lease intangibles |
- | 92 | - | - | 92 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
6,496 | 4,077 | 2,348 | - | 12,921 | |||||||||||||||
Northern California |
||||||||||||||||||||
NOI, GAAP basis (1) |
2,271 | 5,389 | - | - | 7,660 | |||||||||||||||
Net effect of straight-line rents (2) |
(5) | (990) | - | - | (995) | |||||||||||||||
Amortization of net above (below) market rents (3) |
(68) | (67) | - | - | (135) | |||||||||||||||
Net effect of other lease intangibles (4) |
- | (19) | - | - | (19) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
2,198 | 4,313 | - | - | 6,511 | |||||||||||||||
Hawaii |
||||||||||||||||||||
NOI, GAAP basis (1) |
4,402 | - | - | 5,447 | 9,849 | |||||||||||||||
Net effect of straight-line rents (2) |
116 | - | - | (84) | 32 | |||||||||||||||
Amortization of net above (below) market rents (3) |
174 | - | - | 294 | 468 | |||||||||||||||
Net effect of other lease intangibles (4) |
- | - | - | (14) | (14) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
4,692 | - | - | 5,643 | 10,335 | |||||||||||||||
Oregon |
||||||||||||||||||||
NOI, GAAP basis (1) |
- | 3,626 | - | - | 3,626 | |||||||||||||||
Net effect of straight-line rents (2) |
- | 54 | - | - | 54 | |||||||||||||||
Amortization of net above (below) market rents (3) |
- | 174 | - | - | 174 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
- | 3,854 | - | - | 3,854 | |||||||||||||||
Texas |
||||||||||||||||||||
NOI, GAAP basis (1) |
3,038 | - | - | - | 3,038 | |||||||||||||||
Net effect of straight-line rents (2) |
(231) | - | - | - | (231) | |||||||||||||||
Amortization of net above (below) market rents (3) |
(78) | - | - | - | (78) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
2,729 | - | - | - | 2,729 | |||||||||||||||
Washington |
||||||||||||||||||||
NOI, GAAP basis (1) |
- | 1,821 | - | - | 1,821 | |||||||||||||||
Net effect of straight-line rents (2) |
- | (633) | - | - | (633) | |||||||||||||||
Amortization of net above (below) market rents (3) |
- | (259) | - | - | (259) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
- | 929 | - | - | 929 | |||||||||||||||
Total |
||||||||||||||||||||
NOI, GAAP basis (1) |
16,866 | 14,850 | 2,348 | 5,447 | 39,511 | |||||||||||||||
Net effect of straight-line rents (2) |
(565) | (1,651) | - | (84) | (2,300) | |||||||||||||||
Amortization of net above (below) market rents (3) |
(186) | (99) | - | 294 | 9 | |||||||||||||||
Net effect of other lease intangibles (4) |
- | 73 | - | (14) | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI, cash basis |
$ | 16,115 | $ | 13,173 | $ | 2,348 | $ | 5,643 | $ | 37,279 | ||||||||||
|
|
|
|
|
|
|
|
|
|
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. |
Third Quarter 2012 Supplemental Information | Page 13 |
NOI BREAKDOWN |
Three Months Ended September 30, 2012
Third Quarter 2012 Supplemental Information | Page 14 |
PROPERTY REVENUE AND OPERATING EXPENSES |
(Unaudited, amounts in thousands) | Three Months Ended September 30, 2012 | |||||||||||||||
Property |
Base Rent (1) | Additional Property Income (2) |
Billed Expense Reimbursements (3) |
Property Operating Expenses (4) |
||||||||||||
Retail Portfolio |
||||||||||||||||
Carmel Country Plaza |
$ | 802 | $ | 21 | $ | 188 | $ | (185) | ||||||||
Carmel Mountain Plaza |
2,287 | 42 | 841 | (854) | ||||||||||||
South Bay Marketplace |
507 | 1 | 111 | (130) | ||||||||||||
Rancho Carmel Plaza |
190 | 9 | 35 | (53) | ||||||||||||
Lomas Santa Fe Plaza |
1,316 | 51 | 307 | (359) | ||||||||||||
Solana Beach Towne Centre |
1,367 | 57 | 808 | (802) | ||||||||||||
Del Monte Center |
2,098 | 288 | 980 | (1,164) | ||||||||||||
The Shops at Kalakaua |
392 | 20 | 40 | (63) | ||||||||||||
Waikele Center |
4,368 | 338 | 1,110 | (1,517) | ||||||||||||
Alamo Quarry Market |
2,947 | 62 | 1,367 | (1,647) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal Retail Portfolio |
$ | 16,274 | $ | 889 | $ | 5,787 | $ | (6,774) | ||||||||
Office Portfolio |
||||||||||||||||
Torrey Reserve Campus (5) |
$ | 3,730 | $ | 109 | $ | 288 | $ | (1,021) | ||||||||
Solana Beach Corporate Centre |
1,693 | 3 | (46) | (369) | ||||||||||||
160 King Street |
1,433 | 471 | 173 | (752) | ||||||||||||
One Beach Street |
697 | - | 152 | (266) | ||||||||||||
The Landmark at One Market |
4,741 | 23 | 53 | (1,815) | ||||||||||||
First & Main |
2,740 | 123 | 103 | (747) | ||||||||||||
Lloyd District Portfolio |
2,831 | 146 | 19 | (1,334) | ||||||||||||
City Center Bellevue (6) |
1,405 | 214 | 122 | (425) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal Office Portfolio |
$ | 19,270 | $ | 1,089 | $ | 864 | $ | (6,729) | ||||||||
Multifamily Portfolio |
||||||||||||||||
Loma Palisades |
$ | 2,446 | $ | 173 | $ | - | $ | (921) | ||||||||
Imperial Beach Gardens |
648 | 54 | - | (271) | ||||||||||||
Mariners Point |
287 | 25 | - | (158) | ||||||||||||
Santa Fe Park RV Resort |
258 | 20 | - | (207) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal Multifamily Portfolio |
$ | 3,639 | $ | 272 | $ | - | $ | (1,557) |
Third Quarter 2012 Supplemental Information | Page 15 |
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED) |
(Unaudited, amounts in thousands) | Three Months Ended September 30, 2012 | |||||||||||||||
Property |
Base Rent (1) | Additional Property Income (2) |
Billed Expense Reimbursements (3) |
Property Operating Expenses (4) |
||||||||||||
Mixed-Use Portfolio |
||||||||||||||||
Waikiki Beach Walk Retail |
$ | 2,318 | $ | 885 | $ | 914 | $ | (1,600) | ||||||||
Waikiki Beach Walk Embassy Suites |
9,017 | 649 | - | (6,540) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal Mixed-Use Portfolio |
$ | 11,335 | $ | 1,534 | $ | 914 | $ | (8,140) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 50,518 | $ | 3,784 | $ | 7,565 | $ | (23,200) | ||||||||
|
|
|
|
|
|
|
|
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 September 30, 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 approximately $36 and $1,299, respectively, for the three months ended September 30, 2012. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended September 30, 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 $6 for the three months ended September 30, 2012. For Waikiki Beach Walk Embassy Suites TM, base rent is equal to the actual room revenue for the three months ended September 30, 2012. |
(2) | Represents additional property-related income for the three months ended September 30, 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 September 30, 2012. |
(4) | Represents property operating expenses for the three months ended September 30, 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 $134 and abatements were $134 for the three months ended September 30, 2012. |
(6) | Includes revenue and expenses since the acquisition of City Center Bellevue for the period from August 21, 2012 to September 30, 2012. |
Third Quarter 2012 Supplemental Information | Page 16 |
SEGMENT CAPITAL EXPENDITURES |
(Unaudited, amounts
in thousands) |
Three Months Ended September 30, 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 |
$ | 4,091 | $ | 134 | $ | 4,225 | $ | - | $ | 67 | $ | 4,292 | ||||||||||||
Office Portfolio |
7,678 | 938 | 8,616 | 385 | 1,380 | 10,381 | ||||||||||||||||||
Multifamily Portfolio |
- | 259 | 259 | - | - | 259 | ||||||||||||||||||
Mixed-Use Portfolio |
10 | 98 | 108 | - | - | 108 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 11,779 | $ | 1,429 | $ | 13,208 | $ | 385 | $ | 1,447 | $ | 15,040 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Nine Months Ended September 30, 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 |
$ | 8,221 | $ | 1,397 | $ | 9,618 | $ | 1,905 | $ | 211 | $ | 11,734 | ||||||||||||
Office Portfolio |
10,195 | 2,219 | 12,414 | 385 | 2,938 | 15,737 | ||||||||||||||||||
Multifamily Portfolio |
- | 782 | 782 | - | - | 782 | ||||||||||||||||||
Mixed-Use Portfolio |
21 | 232 | 253 | - | - | 253 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 18,437 | $ | 4,630 | $ | 23,067 | $ | 2,290 | $ | 3,149 | $ | 28,506 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2012 Supplemental Information | Page 17 |
SUMMARY OF OUTSTANDING DEBT |
(Unaudited, amounts in thousands) | Amount Outstanding at September 30, 2012 |
Interest Rate | Annual Debt
Service |
Maturity Date | Balance
at Maturity |
|||||||||||||||
Debt |
||||||||||||||||||||
Alamo Quarry Market (1)(2) |
$ | 94,482 | 5.67 % | $ | 7,567 | January 8, 2014 | $ | 91,717 | ||||||||||||
160 King Street (3) |
30,214 | 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 | 7,558 | 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 | 3,397 | July 1, 2016 | 84,500 | |||||||||||||||
Imperial Beach Gardens (4) |
20,000 | 6.16 | 1,250 | September 1, 2016 | 20,000 | |||||||||||||||
Mariners Point (4) |
7,700 | 6.09 | 476 | 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 | 7,020 | July 1, 2017 | 130,310 | |||||||||||||||
Solana Beach Corporate Centre III-IV (5) |
37,302 | 6.39 | 2,798 | August 1, 2017 | 35,136 | |||||||||||||||
Loma Palisades (4) |
73,744 | 6.09 | 4,553 | July 1, 2018 | 73,744 | |||||||||||||||
One Beach Street (4) |
21,900 | 3.94 | 875 | April 1, 2019 | 21,900 | |||||||||||||||
Torrey Reserve - North Court (1) |
21,727 | 7.22 | 1,836 | June 1, 2019 | 19,443 | |||||||||||||||
Torrey Reserve - VCI, VCII, VCIII (1) |
7,316 | 6.36 | 560 | June 1, 2020 | 6,439 | |||||||||||||||
Solana Beach Corporate Centre I-II (1) |
11,676 | 5.91 | 855 | June 1, 2020 | 10,169 | |||||||||||||||
Solana Beach Towne Centre (1) |
38,922 | 5.91 | 2,849 | June 1, 2020 | 33,898 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total / Weighted Average |
$ | 977,793 | 5.42 % | $ | 58,760 | $ | 960,469 | |||||||||||||
Unamortized fair value adjustment |
(13,725) | |||||||||||||||||||
|
|
|||||||||||||||||||
Secured Notes Payable |
$ | 964,068 | ||||||||||||||||||
|
|
|||||||||||||||||||
Fixed Rate Debt Ratio of Secured Notes Payable |
||||||||||||||||||||
Fixed rate debt |
100 % | |||||||||||||||||||
Line of Credit |
$ | 141,000 | ||||||||||||||||||
|
|
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 was 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 October 1, 2012 through September 30, 2013. |
Third Quarter 2012 Supplemental Information | Page 18 |
MARKET CAPITALIZATION |
(Unaudited, amounts in thousands, except per share data) | September 30, 2012 | |||||
Market data |
||||||
Common shares outstanding |
39,316 | |||||
Common units outstanding |
18,371 | |||||
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|
|||||
Common shares and common units outstanding |
57,687 | |||||
Market price per common share |
$ | 26.79 | ||||
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|
|||||
Equity market capitalization |
$ | 1,545,435 | ||||
Total debt |
$ | 1,118,793 | ||||
|
|
|||||
Total market capitalization |
$ | 2,664,228 | ||||
Less: Cash on hand |
$ | (34,917) | ||||
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|
|||||
Total enterprise value |
$ | 2,629,311 | ||||
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|
|||||
Total assets, gross |
$ | 2,128,777 | ||||
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|
|||||
Total debt/Total capitalization |
42.0% | |||||
Total debt/Total enterprise value |
42.6% | |||||
Net debt/Total enterprise value (1) |
41.2% | |||||
Total debt/Total assets, gross |
52.6% | |||||
Total debt/EBITDA (2)(3) |
7.9x | |||||
Net debt/EBITDA (2)(3) |
7.7x | |||||
Interest coverage ratio (4) |
2.5x | |||||
Fixed charge coverage ratio (4) |
2.5x |
Notes:
(1) | Net debt is equal to total debt less cash on hand. |
(2) | See Glossary of Terms for discussion of EBITDA. |
(3) | As used here, EBITDA represents the actual for the three months ended September 30, 2012 annualized. |
(4) | Calculated as EBITDA divided by interest on borrowed funds, including capitalized interest, excluding debt fair value adjustments and loan fee amortization. |
(5) | The revolving line of credit, which has a capacity of $250 million, matures in January 2016 and has an option to extend through January 2017. The availability on the revolving line of credit was approximately $219.4 million at September 30, 2012, of which $141.0 million is outstanding as of September 30, 2012. The credit facility bears interest at the rate of either LIBOR or a base rate, in each case plus a margin that will vary depending on our leverage ratio. At September 30, 2012, the interest rate was 1.8075%. |
Third Quarter 2012 Supplemental Information | Page 19 |
SUMMARY OF REDEVELOPMENT OPPORTUNITIES |
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
Property |
Property Type | 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 | Office | San Diego, CA | 2012 | 2014 | 2015 | 81,500 | $34,100,000 | 8.6% | ||||||||
Carmel Mountain Plaza | Retail | San Diego, CA | 2012 | 2013 | 2013 | 10,000 | $800,000 | 37.5% |
Development/Redevelopment Pipeline
Property |
Property Type | Location | Estimated Square Footage |
Multifamily Units | ||||||||||||||
Solana Beach Corporate Centre (Building 5) |
Retail | Solana Beach, CA | 10,000 | N/A | ||||||||||||||
Lomas Santa Fe Plaza | Retail | Solana Beach, CA | 45,000 | N/A | ||||||||||||||
Sorrento Pointe | Office | San Diego, CA | 88,000 | N/A | ||||||||||||||
Lloyd District Portfolio (5) | Mixed Use | Portland, OR | 60,000 | 655 | ||||||||||||||
Solana Beach Highway 101 | Mixed Use | Solana Beach, CA | 48,000 | 36 |
Notes:
(1) | Based on managements estimation of stabilized occupancy (95%). |
(2) | Excludes allocated land costs and capitalized interest costs capitalized in accordance with Accounting Standards Codification (ASC) 835-20-50-1. |
(3) | Calculated as return on invested capital when project has reached stabilized occupancy, and excludes allocated land costs and interest cost capitalized in accordance with ASC 838-20-50-1. |
(4) | Represents commercial portion of development opportunity for Lloyd District Portfolio and Solana Beach Highway 101 |
(5) | Development plans began during the second quarter of 2012. |
Third Quarter 2012 Supplemental Information | Page 20 |
PORTFOLIO DATA
Third Quarter 2012 Supplemental Information | Page 21 |
PROPERTY REPORT |
As of September 30, 2012 |
Retail and Office Portfolios |
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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 |
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Carmel Country Plaza |
San Diego, CA | 1991 | 9 | 78,098 | 100.0 | % | $ | 3,248,183 | $ | 41.59 | Sharp Healthcare, Frazee Industries Inc. | |||||||||||||||||||
Carmel Mountain Plaza (7) |
San Diego, CA | 1994 | 13 | 520,228 | 92.1 | 10,084,868 | 21.05 | Sears | Sports Authority, Nordstrom Rack | |||||||||||||||||||||
South Bay Marketplace (7) |
San Diego, CA | 1997 | 9 | 132,873 | 100.0 | 2,148,977 | 16.17 | Ross Dress for Less, Grocery Outlet | ||||||||||||||||||||||
Rancho Carmel Plaza |
San Diego, CA | 1993 | 3 | 30,421 | 89.3 | 761,446 | 28.03 | Oggis Pizza & Brewing Co., Sprint PCS Assets | ||||||||||||||||||||||
Lomas Santa Fe Plaza |
Solana Beach, CA | 1972/1997 | 9 | 209,569 | 94.8 | 5,253,359 | 26.44 | Vons, Ross Dress for Less | ||||||||||||||||||||||
Del Monte Center (7) |
Monterey, CA | 1967/1984/2006 | 16 | 675,385 | 98.9 | 9,030,237 | 13.52 | Macys, KLA Monterrey | Century Theatres, Macys Furniture Gallery | |||||||||||||||||||||
The Shops at Kalakaua |
Honolulu, HI | 1971/2006 | 3 | 11,671 | 100.0 | 1,569,640 | 134.49 | Whalers General Store, Diesel U.S.A. Inc. | ||||||||||||||||||||||
Waikele Center |
Waipahu, HI | 1993/2008 | 9 | 538,024 | 94.8 | 17,614,463 | 34.53 | Lowes, Kmart, Sports Authority, Foodland Super Market |
Old Navy, Officemax | |||||||||||||||||||||
20.66 | ||||||||||||||||||||||||||||||
Alamo Quarry Market (7) |
San Antonio, TX | 1997/1999 | 16 | 589,501 | 99.9 | 11,842,918 | 20.11 | Regal Cinemas | Bed Bath & Beyond, Whole Foods Market, Nordstrom Rack | |||||||||||||||||||||
Solana Beach Towne Centre |
Solana Beach, CA | 1973/2000/2004 | 12 | 246,730 | 99.4 | 5,477,937 | 22.34 | Dixieline Probuild, Marshalls | ||||||||||||||||||||||
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Subtotal/Weighted Average Retail Portfolio |
99 | 3,032,500 | 96.9 | % | $ | 67,032,028 | $ | 22.81 | ||||||||||||||||||||||
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Office Properties |
||||||||||||||||||||||||||||||
Torrey Reserve Campus |
San Diego, CA | 1996-2000 | 9 | 456,801 | 93.7 | % | $ | 15,116,500 | $ | 35.32 | ||||||||||||||||||||
160 King Street |
San Francisco, CA | 2002 | 1 | 167,986 | 97.9 | 5,810,384 | 35.33 | |||||||||||||||||||||||
The Landmark at One Market (8) |
San Francisco, CA | 1917/2000 | 1 | 421,934 | 100.0 | 18,966,745 | 44.95 | |||||||||||||||||||||||
Solana Beach Corporate Centre |
Solana Beach, CA | 1982/2005 | 4 | 211,971 | 97.8 | 7,032,739 | 33.92 | |||||||||||||||||||||||
First & Main |
Portland, OR | 2010 | 1 | 360,955 | 98.8 | 10,963,591 | 30.74 | |||||||||||||||||||||||
Lloyd District Portfolio |
Portland, OR | 1940-2011 | 6 | 610,081 | 85.2 | 11,364,979 | 21.86 | |||||||||||||||||||||||
One Beach Street |
San Francisco, CA | |
1924/1972/1987/ 1992 |
|
1 | 97,614 | 100.0 | 2,786,371 | 28.54 | |||||||||||||||||||||
City Center Bellevue |
Bellevue, WA | 1987 | 1 | 489,856 | 92.1 | 13,016,679 | 28.85 | |||||||||||||||||||||||
Subtotal/Weighted Average Office Portfolio |
24 | 2,817,198 | 94.0 | % | $ | 85,057,988 | $ | 32.12 | ||||||||||||||||||||||
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|
|
|||||||||||||||||||||
Total/Weighted Average Retail and Office Portfolio |
123 | 5,849,698 | 95.5 | % | $ | 152,090,016 | $ | 27.22 | ||||||||||||||||||||||
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Third Quarter 2012 Supplemental Information | Page 22 |
PROPERTY REPORT (CONTINUED) |
As of September 30, 2012 |
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 | 100.0 % | $ | 9,951,864 | $ | 1,513 | |||||||||||||||||||
Imperial Beach Gardens |
Imperial Beach, CA |
|
1959/ 2008-present |
|
26 | 160 | 98.8 | 2,596,812 | 1,369 | |||||||||||||||||||||
Mariners Point |
Imperial Beach, CA | 1986 | 8 | 88 | 100.0 | 1,158,144 | 1,097 | |||||||||||||||||||||||
Santa Fe Park RV Resort (9) |
San Diego, CA |
|
1971/ 2007-2008 |
|
1 | 126 | 73.8 | 873,204 | 783 | |||||||||||||||||||||
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Total/Weighted Average Multifamily Portfolio |
|
115 | 922 | 96.2 % | $ | 14,580,024 | $ | 1,370 | ||||||||||||||||||||||
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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 | 97.4 % | $ | 9,208,893 | $ | 97.91 | 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 | 89.7 % | $ | 292.8 | $ | 262.64 |
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, managements 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 September 30, 2012, including leases which may not have commenced as of September 30, 2012. Percentage leased for our multifamily properties includes total units rented as of September 30, 2012. |
(3) | Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended September 30, 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 September 30, 2012. Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of September 30, 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 September 30, 2012, the highest average monthly occupancy rate for this property was 92%, occurring in July 2012. 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 September 30, 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 September 30, 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 September 30, 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. |
Third Quarter 2012 Supplemental Information | Page 23 |
RETAIL LEASING SUMMARY |
As of September 30, 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. |
|||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
15 | 100 % | 56,673 | $ | 25.90 | $ | 25.04 | $ | 48,868 | 3.4 % | 8.4 % | 4.9 | $ | 111,000 | $ | 1.96 | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
15 | 100 | 96,932 | 32.25 | 31.13 | 95,543 | 3.6 | 5.8 | 5.0 | 996,157 | 11.75 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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Total 12 months |
67 | 100 % | 258,490 | $ | 31.51 | $ | 30.89 | $ | 144,171 | 1.9 % | 11.2 % | 5.4 | $ | 1,938,250 | $ | 8.05 | ||||||||||||||||||||||||||||
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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. |
|||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
1 | 7 % | 1,392 | $ | 42.00 | $ | 56.75 | $ | (20,532) | (26.0) % | (26.0) % | 4.2 | $ | - | $ | - | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
2 | 13 | 20,545 | 42.25 | 30.59 | 98,174 | 38.1 | 42.5 | 9.5 | 976,884 | 47.55 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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Total 12 months |
11 | 16 % | 61,816 | $ | 33.26 | $ | 27.44 | $ | 218,441 | 12.9 % | 42.0 % | 9.5 | $ | 1,708,852 | $ | 27.64 | ||||||||||||||||||||||||||||
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|||||||||||||||||||||||
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. |
|||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
14 | 93 % | 55,281 | $ | 25.50 | $ | 24.24 | $ | 69,400 | 5.2 % | 10.5 % | 4.9 | $ | 111,000 | $ | 2.01 | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
13 | 87 | 76,387 | 31.15 | 31.18 | (2,631) | (0.1) | 1.9 | 4.5 | 19,273 | 0.25 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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Total 12 months |
56 | 84 % | 196,674 | $ | 31.58 | $ | 31.95 | $ | (74,270) | (1.2) % | 4.5 % | 4.4 | $ | 229,398 | $ | 1.17 | ||||||||||||||||||||||||||||
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|||||||||||||||||||||||
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. |
||||||||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
19 | 78,236 | $ | 25.10 | 5.0 | $ | 939,550 | $ | 12.01 | |||||||||||||||||||||||||||||||||||
2nd Quarter 2012 |
19 | 134,567 | 32.16 | 6.4 | 2,738,277 | 20.35 | ||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
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Total 12 months |
80 | 381,116 | $ | 29.70 | 6.6 | $ | 7,593,210 | $ | 19.92 | |||||||||||||||||||||||||||||||||||
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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. |
Third Quarter 2012 Supplemental Information | Page 24 |
OFFICE LEASING SUMMARY |
As of September 30, 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. |
|||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
15 | 100 % | 71,469 | $ | 29.88 | $ | 28.71 | $ | 83,359 | 4.1 % | 11.7 % | 3.2 | $ | 339,270 | $ | 4.75 | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
10 | 100 | 70,231 | 44.88 | 34.59 | 722,907 | 29.8 | 49.4 | 5.5 | 339,141 | 4.83 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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Total 12 months |
52 | 100 % | 234,419 | $ | 34.08 | $ | 31.57 | $ | 589,642 | 8.0 % | 9.8 % | 4.4 | $ | 1,473,407 | $ | 6.29 | ||||||||||||||||||||||||||||
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New Lease Summary - Comparable (1) |
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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. |
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3rd Quarter 2012 |
3 | 20 % | 4,427 | $ | 34.44 | $ | 37.42 | $ | (13,172) | (8.0) % | (1.4) % | 3.6 | $ | 17,592 | $ | 3.97 | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
5 | 50 | 39,469 | 51.69 | 33.05 | 735,528 | 56.4 | 69.6 | 6.4 | 274,361 | 6.95 | |||||||||||||||||||||||||||||||||
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 |
- | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
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Total 12 months |
14 | 27 % | 56,179 | $ | 46.79 | $ | 33.77 | $ | 731,829 | 38.6 % | 16.7 % | 5.7 | $ | 585,911 | $ | 10.43 | ||||||||||||||||||||||||||||
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Renewal Lease Summary - Comparable (1)(5) |
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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. |
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3rd Quarter 2012 |
12 | 80 % | 67,042 | $ | 29.58 | $ | 28.14 | $ | 96,531 | 5.1 % | 12.9 % | 3.2 | $ | 321,678 | $ | 4.80 | ||||||||||||||||||||||||||||
2nd Quarter 2012 |
5 | 50 | 30,762 | 36.15 | 36.56 | (12,621) | (1.1) | 19.7 | 4.4 | 64,780 | 2.11 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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Total 12 months |
38 | 73 % | 178,240 | $ | 30.07 | $ | 30.87 | $ | (142,187) | 2.6 % | 3.4 % | 4.0 | $ | 887,496 | $ | 4.98 | ||||||||||||||||||||||||||||
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Total Lease Summary - Comparable and Non-Comparable |
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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. |
||||||||||||||||||||||||||||||||||||||
3rd Quarter 2012 |
23 | 94,803 | $ | 30.08 | 3.4 | $ | 698,008 | $ | 7.36 | |||||||||||||||||||||||||||||||||||
2nd Quarter 2012 |
13 | 82,830 | 41.48 | 5.9 | 1,202,425 | 14.52 | ||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
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Total 12 months |
70 | 292,092 | $ | 32.76 | 4.5 | $ | 2,982,739 | $ | 10.21 | |||||||||||||||||||||||||||||||||||
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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. |
Third Quarter 2012 Supplemental Information | Page 25 |
LEASE EXPIRATIONS |
As of September 30, 2012
Assumes no exercise of lease options |
|
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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 |
32,684 | 1.2 % | 0.6 % | $ | 7.70 | 9,636 | 0.3 % | 0.2 % | $ | 26.02 | 8,693 | 9.0 % | 0.1 % | $ | 16.76 | 51,013 | 0.9 % | $ | 12.70 | |||||||||||||||||||||||||||||||||||||||||
2012 |
67,745 | 2.4 | 1.2 | 29.55 | 39,473 | 1.3 | 0.7 | 31.29 | 4,183 | 4.3 | 0.1 | 150.03 | 111,401 | 1.9 | 34.69 | |||||||||||||||||||||||||||||||||||||||||||||
2013 |
215,773 | 7.7 | 3.6 | 32.08 | 327,164 | (2) | 10.8 | 5.5 | 27.61 | 6,650 | 6.9 | 0.1 | 141.76 | 549,587 | 9.2 | 30.75 | ||||||||||||||||||||||||||||||||||||||||||||
2014 |
209,477 | 7.4 | 3.5 | 30.43 | 405,138 | 13.4 | 6.8 | 28.93 | 1,374 | 1.4 | - | 211.21 | 615,989 | 10.4 | 29.84 | |||||||||||||||||||||||||||||||||||||||||||||
2015 |
428,493 | 15.2 | 7.2 | 31.59 | 236,178 | 7.8 | 4.0 | 25.43 | 9,545 | 9.9 | 0.2 | 205.62 | 674,216 | 11.3 | 31.90 | |||||||||||||||||||||||||||||||||||||||||||||
2016 |
250,660 | 8.9 | 4.2 | 28.29 | 191,248 | 6.3 | 3.2 | 34.55 | 12,402 | 12.8 | 0.2 | 146.81 | 454,310 | 7.6 | 34.16 | |||||||||||||||||||||||||||||||||||||||||||||
2017 |
339,047 | (3) | 12.0 | 5.7 | 37.91 | 303,441 | 10.0 | 5.1 | 23.87 | 6,505 | 6.7 | 0.1 | 138.23 | 648,993 | 10.9 | 32.35 | ||||||||||||||||||||||||||||||||||||||||||||
2018 |
157,709 | 5.6 | 2.7 | 32.99 | 909,256 | 30.0 | 15.3 | 16.36 | 4,673 | 4.8 | 0.1 | 142.23 | 1,071,638 | 18.0 | 19.36 | |||||||||||||||||||||||||||||||||||||||||||||
2019 |
303,736 | 10.8 | 5.1 | 39.41 | 71,553 | (4) | 2.4 | 1.2 | 28.16 | 11,690 | 12.1 | 0.2 | 53.16 | 386,979 | 6.5 | 37.75 | ||||||||||||||||||||||||||||||||||||||||||||
2020 |
243,114 | (5) | 8.6 | 4.1 | 39.20 | 118,506 | 3.9 | 2.0 | 8.87 | 17,843 | 18.5 | 0.3 | 44.42 | 379,463 | 6.4 | 29.98 | ||||||||||||||||||||||||||||||||||||||||||||
2021 |
198,313 | 7.0 | 3.3 | 35.10 | 41,170 | 1.4 | 0.7 | 39.25 | - | - | - | - | 239,483 | 4.0 | 35.82 | |||||||||||||||||||||||||||||||||||||||||||||
Thereafter |
102,798 | 3.7 | 1.7 | 22.97 | 223,864 | 7.2 | 3.7 | 24.01 | 10,467 | 11.0 | 0.2 | 42.16 | 337,129 | 5.7 | 24.26 | |||||||||||||||||||||||||||||||||||||||||||||
Signed Leases |
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Not Commenced |
97,238 | 3.5 | 1.6 | - | 62,837 | 2.1 | 1.1 | - | - | - | - | - | 160,075 | 2.7 | - | |||||||||||||||||||||||||||||||||||||||||||||
Available |
170,411 | 6.0 | 2.9 | - | 93,036 | 3.1 | 1.6 | - | 2,544 | 2.6 | - | - | 265,991 | 4.5 | - | |||||||||||||||||||||||||||||||||||||||||||||
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Total |
2,817,198 | 100.0 % | 47.4 % | $ | 30.19 | 3,032,500 | 100.0 % | 51.1 % | $ | 22.10 | 96,569 | 100.0 % | 1.6 % | $ | 95.36 | 5,946,267 | 100.0 % | $ | 27.13 | |||||||||||||||||||||||||||||||||||||||||
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Assumes all lease options are exercised |
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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) |
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Month to Month |
32,684 | 1.2 % | 0.6 % | $ | 7.70 | 9,636 | 0.3 % | 0.2 % | $ | 26.02 | 8,693 | 9.0 % | 0.1 % | $ | 16.76 | 51,013 | 0.9 % | $ | 12.70 | |||||||||||||||||||||||||||||||||||||||||
2012 |
64,329 | 2.3 | 1.1 | 27.94 | 33,213 | 1.1 | 0.6 | 32.10 | 4,183 | 4.3 | 0.1 | 150.03 | 101,725 | 1.7 | 34.32 | |||||||||||||||||||||||||||||||||||||||||||||
2013 |
126,203 | 4.5 | 2.1 | 32.71 | 109,624 | 3.6 | 1.8 | 35.34 | 6,650 | 6.9 | 0.1 | 141.76 | 242,477 | 4.1 | 36.89 | |||||||||||||||||||||||||||||||||||||||||||||
2014 |
44,645 | 1.6 | 0.8 | 33.10 | 192,558 | 6.4 | 3.2 | 31.64 | 1,374 | 1.4 | - | 211.21 | 238,577 | 4.0 | 32.94 | |||||||||||||||||||||||||||||||||||||||||||||
2015 |
187,315 | 6.7 | 3.1 | 34.71 | 56,632 | 1.9 | 1.0 | 34.67 | 3,331 | 3.4 | 0.1 | 122.46 | 247,278 | 4.1 | 35.88 | |||||||||||||||||||||||||||||||||||||||||||||
2016 |
212,990 | 7.6 | 3.6 | 26.33 | 62,198 | 2.1 | 1.0 | 30.60 | 8,374 | 8.7 | 0.1 | 159.90 | 283,562 | 4.8 | 31.21 | |||||||||||||||||||||||||||||||||||||||||||||
2017 |
57,225 | 2.0 | 1.0 | 33.64 | 90,677 | 3.0 | 1.5 | 31.36 | 5,465 | 5.7 | 0.1 | 130.96 | 153,367 | 2.6 | 35.76 | |||||||||||||||||||||||||||||||||||||||||||||
2018 |
77,679 | 2.8 | 1.3 | 31.70 | 158,583 | 5.2 | 2.7 | 22.47 | 4,673 | 4.8 | 0.1 | 142.23 | 240,935 | 4.0 | 27.77 | |||||||||||||||||||||||||||||||||||||||||||||
2019 |
125,383 | 4.5 | 2.1 | 32.52 | 106,741 | 3.5 | 1.8 | 26.52 | - | - | - | - | 232,124 | 3.9 | 29.76 | |||||||||||||||||||||||||||||||||||||||||||||
2020 |
211,067 | 7.5 | 3.5 | 28.65 | 293,842 | 9.7 | 4.9 | 15.41 | 1,951 | 2.0 | - | 135.66 | 506,860 | 8.5 | 21.39 | |||||||||||||||||||||||||||||||||||||||||||||
2021 |
39,400 | 1.4 | 0.7 | 32.37 | 51,578 | 1.7 | 0.9 | 47.73 | 10,242 | 10.6 | 0.2 | 198.84 | 101,220 | 1.7 | 57.04 | |||||||||||||||||||||||||||||||||||||||||||||
Thereafter |
1,370,629 | (3)(5) | 48.4 | 23.0 | 36.12 | 1,711,345 | (4) | 56.3 | 28.8 | 20.83 | 39,089 | 40.6 | 0.7 | 45.39 | 3,121,063 | 52.5 | 27.85 | |||||||||||||||||||||||||||||||||||||||||||
Signed Leases |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Not Commenced |
97,238 | 3.5 | 1.6 | - | 62,837 | 2.1 | 1.1 | - | - | - | - | - | 160,075 | 2.7 | - | |||||||||||||||||||||||||||||||||||||||||||||
Available |
170,411 | 6.0 | 2.9 | - | 93,036 | 3.1 | 1.6 | - | 2,544 | 2.6 | - | - | 265,991 | 4.5 | - | |||||||||||||||||||||||||||||||||||||||||||||
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Total |
2,817,198 | 100.0 % | 47.4 % | $ | 30.19 | 3,032,500 | 100.0 % | 51.1 % | $ | 22.10 | 96,569 | 100.0 % | 1.6 % | $ | 95.36 | 5,946,267 | 100.0 % | $ | 27.13 | |||||||||||||||||||||||||||||||||||||||||
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As of September 30, 2012
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 September 30, 2012 for the leases expiring during the applicable period, by (ii) 12. |
(2) | The expirations include 1,900 square feet currently leased by Yankee Candle at Alamo Quarry Market, for which Lucchese Boot Company has signed an agreement to lease such space upon Yankee Candle lease termination from January 31, 2013 through May 31, 2013. |
(3) | The expirations include 45,795 square feet currently leased by Microsoft Corporation at The Landmark at One Market, for which Autodesk, Inc. has signed an agreement to lease such space upon Microsofts lease termination from December 31, 2012 through December 31, 2017 with an option to extend the lease through December 31, 2024. |
(4) | The expirations include 966 square feet currently leased by Quarry Nails at Alamo Quarry Market, for which Whole Earth Provision Co. has signed an agreement to lease such space upon Quarry Nails lease termination from August 31, 2012 through January 21, 2019 with an option to extend the lease through January 31, 2029. |
(5) | The expirations include 27,276 square feet currently leased by Simpson Gumpterz & Heger at The Landmark at One Market, for which salesforce.com has signed an agreement to lease such space upon Simpson Gumpterz & Hegers lease termination from October 31, 2013 through April 30, 2020 with an option to extend the lease through April 30, 2030. |
Third Quarter 2012 Supplemental Information | Page 26 |
PORTFOLIO LEASED STATISTICS |
At September 30, 2012 | At September 30, 2011 | |||||||||||||||||||||||
Type |
Size | Leased (1) | Leased % | Size | Leased (1) | Leased % | ||||||||||||||||||
Overall Portfolio Statistics |
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Retail Properties (square feet) |
3,032,500 | 2,939,464 | 96.9% | 3,031,054 | 2,806,642 | 92.6% | ||||||||||||||||||
Office Properties (square feet) |
2,817,198 | 2,646,787 | 94.0% | 2,232,536 | 2,100,098 | 94.1% | ||||||||||||||||||
Multifamily Properties (units) |
922 | 887 | 96.2% | 922 | 870 | 94.4% | ||||||||||||||||||
Mixed-Use Properties (square feet) |
96,569 | 94,025 | 97.4% | 96,569 | 95,783 | 99.2% | ||||||||||||||||||
Mixed-Use Properties (units) |
369 | 333 (3) | 90.2% | 369 | 328 (3) | 88.8% | ||||||||||||||||||
Same-Store(2) Statistics |
||||||||||||||||||||||||
Retail Properties (square feet) |
3,032,500 | 2,939,646 | 96.9% | 2,704,324 (4) | 2,564,818 | 94.8% | ||||||||||||||||||
Office Properties (square feet) |
2,229,728 | 2,098,137 | 94.1% | 1,046,721 (5) | 1,008,510 | 96.3% | ||||||||||||||||||
Multifamily Properties (units) |
922 | 887 | 96.2% | 922 | 870 | 94.4% | ||||||||||||||||||
Mixed-Use Properties (square feet) |
96,569 | 94,025 | 97.4% | - (6) | - | - % | ||||||||||||||||||
Mixed-Use Properties (units) |
369 | 333 (3) | 90.2% | - (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 nine months ended September 30, 2012 and September 30, 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. City Center Bellevue is excluded as it was acquired on August 21, 2012. |
(6) | Excludes the Waikiki Beach Walk property as the controlling interest in this entity was acquired on January 19, 2011. |
Third Quarter 2012 Supplemental Information | Page 27 |
TOP TENANTS - RETAIL |
As of September 30, 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 |
Lowes | Waikele Center | 5/31/2018 | 155,000 | 5.1 % | 2.6 % | $ | 4,221,786 | 6.3 % | 2.6 % | ||||||||||||||||||||
2 |
Kmart | Waikele Center | 6/30/2018 | 119,590 | 3.9 | 2.0 | 3,826,880 | 5.7 | 2.4 | |||||||||||||||||||||
3 |
Foodland Super Market | Waikele Center | 1/25/2014 | 50,000 | 1.6 | 0.8 | 2,430,981 | 3.6 | 1.5 | |||||||||||||||||||||
4 |
Sports Authority | Carmel Mountain Plaza, Waikele Center |
11/30/2013 7/18/2018 |
90,722 | 3.0 | 1.5 | 2,076,602 | 3.1 | 1.3 | |||||||||||||||||||||
5 |
Ross Dress for Less | South Bay Marketplace, Lomas Santa Fe Plaza, Carmel Mountain Plaza |
1/31/2013 1/31/2014 1/31/2014 |
81,125 | 2.7 | 1.4 | 1,595,826 | 2.4 | 1.0 | |||||||||||||||||||||
6 |
Old Navy | Alamo Quarry Market, Waikele Center, South Bay Marketplace, |
9/30/2017 7/31/2016 4/30/2016 |
59,780 | 2.0 | 1.0 | * | * | * | |||||||||||||||||||||
7 |
Officemax | Waikele Center, Alamo Quarry Market |
1/31/2014 9/30/2017 |
47,962 | 1.6 | 0.8 | 1,164,761 | 1.7 | 0.7 | |||||||||||||||||||||
8 |
Marshalls | Solana Beach Towne Centre, Carmel Mountain Plaza | 1/13/2015 1/31/2019 |
68,055 | 2.2 | 1.1 | 1,106,146 | 1.7 | 0.7 | |||||||||||||||||||||
9 |
Nordstrom Rack | Carmel Mountain Plaza, Alamo Quarry Market |
9/30/2022 10/31/2022 |
69,047 | 2.3 | 1.2 | 1,093,316 | 1.6 | 0.7 | |||||||||||||||||||||
10 |
Vons | Lomas Santa Fe Plaza | 12/31/2017 | 49,895 | 1.6 | 0.8 | 1,058,000 | 1.6 | 0.7 | |||||||||||||||||||||
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Top 10 Retail Tenants Total | 791,176 | 26.0 % | 13.2 % | $ | 18,574,298 | 27.7 % | 11.6 % | |||||||||||||||||||||||
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* Data withheld at tenants request.
Third Quarter 2012 Supplemental Information | Page 28 |
TOP TENANTS - OFFICE |
As of September 30, 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 |
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1 | salesforce.com | The Landmark at One Market | 6/30/2019 4/30/2020 5/31/2021 |
226,892 | 8.1 % | 3.8 % | $ | 10,624,175 | 12.5 % | 6.6 % | ||||||||||||||||||||
2 | Veterans Benefits Administration | First & Main | 8/31/2020 | 93,572 | 3.3 | 1.6 | 3,006,453 | 3.5 | 1.9 | |||||||||||||||||||||
3 | Autodesk, Inc. | The Landmark at One Market | 12/31/2015 12/31/2017 |
68,869 | 2.4 | 1.2 | 2,984,838 | 3.5 | 1.9 | |||||||||||||||||||||
4 | Microsoft Corporation | The Landmark at One Market | 12/31/2012 | 45,795 | 1.6 | 0.8 | 2,976,675 | 3.5 | 1.8 | |||||||||||||||||||||
5 | Ancestry.com | 160 King Street | 5/31/2015 5/31/2019 |
64,992 | 2.3 | 1.1 | 2,729,664 | 3.2 | 1.7 | |||||||||||||||||||||
6 | Treasury Tax Administration | First & Main | 8/31/2015 | 70,660 | 2.5 | 1.2 | 2,583,330 | 3.0 | 1.6 | |||||||||||||||||||||
7 | Insurance Company of the West | Torrey Reserve Campus | 12/31/2016 | 81,040 | 2.9 | 1.4 | 2,449,631 | 2.9 | 1.5 | |||||||||||||||||||||
8 | Treasury Call Center | First & Main | 8/31/2020 | 63,648 | 2.3 | 1.1 | 2,184,302 | 2.6 | 1.4 | |||||||||||||||||||||
9 | Caradigm USA LLC | City Center Bellevue | 8/14/2017 | 68,956 | 2.4 | 1.2 | 2,103,158 | 2.5 | 1.3 | |||||||||||||||||||||
10 | Alliant International University | One Beach Street | 10/31/2019 | 64,161 | 2.3 | 1.1 | 1,775,176 | 2.1 | 1.1 | |||||||||||||||||||||
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Top 10 Office Tenants Total | 848,585 | 30.1 % | 14.5 % | $ | 33,417,402 | 39.3 % | 20.8 % | |||||||||||||||||||||||
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Third Quarter 2012 Supplemental Information | Page 29 |
APPENDIX
Third Quarter 2012 Supplemental Information | Page 30 |
GLOSSARY OF TERMS |
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three and nine months ended September 30, 2012 and 2011 is as follows:
Three Months
Ended September 30, |
Nine Months
Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
Net income |
$ | 4,285 | $ | 4,618 | $ | 9,780 | $ | 18,669 | ||||||||
Depreciation and amortization |
16,432 | 15,827 | 46,356 | 41,916 | ||||||||||||
Interest expense |
14,690 | 14,738 | 43,522 | 41,791 | ||||||||||||
Interest income |
(177) | (388) | (329) | (1,086) | ||||||||||||
Income tax expense |
(5) | 309 | 388 | 690 | ||||||||||||
Gain on sale of real estate |
- | (3,981) | - | (3,981) | ||||||||||||
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EBITDA |
$ | 35,225 | $ | 31,123 | $ | 99,717 | $ | 97,999 | ||||||||
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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 September 30, |
Nine Months
Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
EBITDA |
$ | 35,225 | $ | 31,123 | $ | 99,717 | $ | 97,999 | ||||||||
Early extinguishment of debt |
- | - | - | 25,867 | ||||||||||||
Loan transfer and consent fees |
- | - | - | 9,019 | ||||||||||||
Gain on acquisition |
- | - | - | (46,371) | ||||||||||||
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Adjusted EBITDA |
$ | 35,225 | $ | 31,123 | $ | 99,717 | $ | 86,514 | ||||||||
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Funds From Operations (FFO): FFO is a supplemental measure of real estate companies operating performances. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as follows: net income, computed in accordance with GAAP plus depreciation and amortization of real estate assets and excluding extraordinary items, gains and losses on sale of real estate and impairment losses. NAREIT developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider FFO a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
Funds 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.
Third Quarter 2012 Supplemental Information | Page 31 |
GLOSSARY OF TERMS (CONTINUED) |
Funds Available for Distribution (FAD): FAD is a supplemental measure of our liquidity. We compute FAD by subtracting from FFO As Adjusted tenant improvements, leasing commissions and maintenance capital expenditures, eliminating the net effect of straight-line rents, amortization of above (below) market rents for acquisition properties, the effects of other lease intangibles, adding noncash amortization of deferred financing costs and debt fair value adjustments, adding noncash compensation expense, and adding (subtracting) unrealized losses (gains) on marketable securities. FAD provides an additional perspective on our ability to fund cash needs and make distributions by adjusting FFO for the impact of certain cash and noncash items, as well as adjusting FFO for recurring capital expenditures and leasing costs. However, other REITs may use different methodologies for calculating FAD and, accordingly, our FAD may not be comparable to other REITs.
Net Operating Income (NOI): We define NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance). NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expense, other nonproperty income and losses, gains and losses from property dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Since NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. However, NOI should not be viewed as an alternative measure of our financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations.
Three Months
Ended September 30, |
Nine Months
Ended September 30, |
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Reconciliation of NOI to net income | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Total NOI |
$ | 39,511 | $ | 34,716 | $ | 111,775 | $ | 96,756 | ||||||||
General and administrative |
(3,959) | (3,733) | (11,716) | (10,786) | ||||||||||||
Depreciation and amortization |
(16,432) | (15,827) | (46,356) | (41,916) | ||||||||||||
Interest expense |
(14,690) | (14,738) | (43,522) | (41,791) | ||||||||||||
Early extinguishment of debt |
- | - | - | (25,867) | ||||||||||||
Loan transfer and consent fees |
- | - | - | (9,019) | ||||||||||||
Gain on acquisition |
- | - | - | 46,371 | ||||||||||||
Other income (expense), net |
68 | (108) | (188) | (179) | ||||||||||||
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Income from continuing operations |
4,498 | 310 | 9,993 | 13,569 | ||||||||||||
Discontinued operations |
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Income (loss) from discontinued operations |
(213) | 327 | (213) | 1,119 | ||||||||||||
Gain on sale of real estate property |
- | 3,981 | - | 3,981 | ||||||||||||
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Results from discontinued operations |
(213) | 4,308 | (213) | 5,100 | ||||||||||||
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Net income |
4,285 | 4,618 | 9,780 | 18,669 | ||||||||||||
Net income attributable to restricted shares |
(133) | (132) | (396) | (350) | ||||||||||||
Net loss attributable to Predecessors noncontrolling interests in consolidated real estate entities |
- | - | - | 2,458 | ||||||||||||
Net income attributable to Predecessors controlled owners equity |
- | - | - | (16,995) | ||||||||||||
Net (income) loss attributable to unitholders in the Operating Partnership |
(1,335) | (1,434) | (3,022) | (1,209) | ||||||||||||
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Net income (loss) attributable to American Assets Trust, Inc. stockholders |
$ | 2,817 | $ | 3,052 | $ | 6,362 | $ | 2,573 | ||||||||
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Overall Portfolio: Includes all operating properties owned by us as of September 30, 2012.
Third Quarter 2012 Supplemental Information | Page 32 |
GLOSSARY OF TERMS (CONTINUED) |
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 September 30, 2012 to 2011 |
Comparison of Nine Months Ended September 30, 2012 to 2011 |
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Same-Store | Non-Same Store | Same-Store | Non-Same Store | |||||||||||||
Retail Properties |
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Carmel Country Plaza |
X | X | ||||||||||||||
Carmel Mountain Plaza |
X | X | ||||||||||||||
South Bay Marketplace |
X | X | ||||||||||||||
Rancho Carmel Plaza |
X | X | ||||||||||||||
Lomas Santa Fe Plaza |
X | X | ||||||||||||||
Solana Beach Towne Centre |
X | X | ||||||||||||||
Del Monte Center |
X | X | ||||||||||||||
The Shops at Kalakaua |
X | X | ||||||||||||||
Waikele Center |
X | X | ||||||||||||||
Alamo Quarry Market |
X | X | ||||||||||||||
Office Properties |
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Torrey Reserve Campus |
X | X | ||||||||||||||
Solana Beach Corporate Centre |
X | X | ||||||||||||||
160 King Street |
X | X | ||||||||||||||
One Beach Street |
X | X | ||||||||||||||
The Landmark at One Market |
X | X | ||||||||||||||
First & Main |
X | X | ||||||||||||||
Lloyd District Portfolio |
X | X | ||||||||||||||
City Center Bellevue |
X | X | ||||||||||||||
Multifamily Properties |
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Loma Palisades |
X | X | ||||||||||||||
Imperial Beach Gardens |
X | X | ||||||||||||||
Mariners Point |
X | X | ||||||||||||||
Santa Fe Park RV Resort |
X | X | ||||||||||||||
Mixed-Use Properties |
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Waikiki Beach Walk - Retail |
X | X | ||||||||||||||
Waikiki Beach Walk - Embassy Suites |
X | X | ||||||||||||||
Development Properties |
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Sorrento Pointe - Land |
X | X | ||||||||||||||
Torrey Reserve - Land |
X | X | ||||||||||||||
Solana Beach Corporate Centre - Land |
X | X | ||||||||||||||
Solana Beach - Highway 101 - Land |
X | X | ||||||||||||||
Lloyd District Portfolio - Land |
X | X |
Tenant Improvements and Incentives: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators, new entrances, etc.) which are required to make the space leasable. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.
Third Quarter 2012 Supplemental Information | Page 33 |