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8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT

Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
February 19, 2013
_________________________
American Assets Trust, Inc.
(Exact name of registrant as specified in its charter)

_________________________

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
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 February 19, 2013, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter and fiscal year ending December 31, 2012. Also on February19, 2013, the Company made available on its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter and fiscal year ending December 31, 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 and fiscal year ending December 31, 2012 and made available on its website certain supplement information relating thereto.

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


Item 9.01
Financial Statements and Exhibits.
(d)    Exhibits:
The following exhibits are filed herewith:
Exhibit Number
 
Exhibit Description
99.1**
 
Press release issued by American Assets Trust, Inc. on February 19, 2013.
99.2**
 
American Assets Trust, Inc. Supplemental Information for the period ended December 31, 2012.
_____________________
** Furnished herewith

2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
American Assets Trust, Inc.
 
By:
/s/ Robert F. Barton
 
Robert F. Barton
Executive Vice President, CFO
February 19, 2013
 
 

3



EXHIBIT INDEX
Exhibit Number
 
Exhibit Description
99.1
 
Press release issued by American Assets Trust, Inc. on February 19, 2013.
99.2
 
American Assets Trust, Inc. Supplemental Information for the period ended December 31, 2012.


4
4Q12 Earnings Release



American Assets Trust, Inc. Reports Fourth Quarter and Year-End 2012 Financial Results
Company Release - 2/19/13

SAN DIEGO - American Assets Trust, Inc. (NYSE: AAT) (the “Company”) today reported financial results for its fourth quarter and year-end December 31, 2012.

Financial Results and Recent Developments
•
Funds From Operations increased 36% and 29% to $0.38 and $1.35 per diluted share/unit for the three months and year ended December 31, 2012, respectively, compared to the same periods for the year ended December 31, 2011
•
Increasing 2013 annual guidance to a range of $1.38 to $1.46 with a midpoint of $1.42 of FFO per diluted share from our initial midpoint guidance of $1.40 of FFO per diluted share
•
Net income available to common stockholders of $28.6 million and $34.9 million for the three months and year ended December 31, 2012, respectively, or $0.73 and $0.90 per diluted share, respectively
•
Same-store GAAP NOI growth increased 13.0% and 5.8% for the three months and year ended December 31, 2012, respectively, compared to the same periods for the year ended December 31, 2011
•
$21 million acquisition of Geary Marketplace, a newly constructed, approximately 35,000 square foot, 100% leased, grocery-anchored shopping center in Walnut Creek, California, a high barrier to entry submarket in the San Francisco Bay Area
•
Sale of 160 King Street in San Francisco, California for approximately $94 million, resulting in a gain on sale of $36.7 million or approximately a 36% return on the initial acquisition price
•
$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

During the fourth quarter of 2012, the Company generated funds from operations (“FFO”) for common stockholders and unitholders of $21.7 million, or $0.38 per diluted share/unit compared to $16.3 million or $0.28 per diluted share/unit for the quarter ended December 31, 2011. For the year ended December 31, 2012, the Company generated FFO for common stockholders and unitholders of $77.5 million, or $1.35 per diluted share/unit compared to $57.3 million or $1.05 per diluted share/unit for the year ended December 31, 2011. Unitholders refers to holders of units of our operating partnership. The increase in FFO from the prior year was largely due to additional operating income from our 2011 and 2012 office acquisitions, primarily First & Main, Lloyd District Portfolio and City Center Bellevue.

Net income attributable to common stockholders was $28.6 million, or $0.73 per basic and diluted share, for the three months ended December 31, 2012 compared to $0.3 million, or $0.01 per basic and diluted share, for the three months ended December 31, 2011. For the year ended December 31, 2012, net income attributable to common stockholders was $34.9 million, or $0.90 per basic and diluted share compared to net income attributable to common stockholders of $2.9 million, or $0.08 per basic and diluted share, for the year ended December 31, 2011. The increase in net income attributable to common stockholders was largely due to the gain on sale of 160 King Street during the fourth quarter of 2012.

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


1


Portfolio Results
The portfolio leased status as of the end of the indicated quarter was as follows:
 
December 31, 2012
September 30, 2012
December 31, 2011
Total Portfolio
 
 
 
Retail
97.0%
96.9%
95.0%
Office
93.3%
93.7%
93.9%
Multifamily
94.7%
96.2%
91.8%
Mixed-Use:
 
 
 
Retail
95.5%
97.4%
99.2%
Hotel
88.9%
90.2%
88.4%
 
 
 
 
Same-Store Portfolio
 
 
Retail
96.9%
96.9%
94.8%
Office
93.3%
93.8%
96.6%
Multifamily
94.7%
96.2%
91.8%
Mixed-Use:
 
 
 
Retail
95.5%
97.4%
—
Hotel
88.9%
90.2%
—

During the fourth quarter of 2012, the Company signed 29 leases for approximately 128,600 square feet of retail and office space, as well as 171 multifamily apartment leases. Renewals accounted for 100.0% of the comparable retail leases, 85.7% of the comparable office leases and 61.4% of the residential leases.

Retail and Office
On a comparable space basis (i.e., leases for which there was a former tenant) during the fourth quarter of 2012, our retail and office leasing spreads are shown below:
Q4 2012
Number of Leases Signed
Comparable Leased Sq. Ft.
Average Cash Basis % Change Over Prior Rent
Average Contractual Rent Per Sq. Ft.
Prior Average Contractual Rent Per Sq. Ft.
GAAP Straight-Line Basis % Change Over Prior Rent
Retail
13
33,000
4.6%
$33.32
$31.86
12.3%
Office
14
93,000
16.0%
$39.76
$34.28
16.1%

Multifamily
At December 31, 2012, the average monthly base rent per leased unit was $1,399 compared to an average monthly base rent per leased unit of $1,370 at September 30, 2012 and $1,404 at December 31, 2011.


2


Same-Store Operating Income
For the three months and year ended December 31, 2012, same-store property operating income increased approximately 13.0% and 5.8%, respectively, on a GAAP basis, compared to the corresponding periods in 2011. The same-store property operating income by segment was as follows (in thousands):
 
Three Months Ended (1)
 
 
 
 
Year Ended (2)
 
 
 
 
December 31,
 
 
 
 
December 31,
 
 
 
 
2012
 
2011
 
Change
 
2012
 
2011
 
Change
Retail
$
17,827

 
$
14,512

 
22.8

%
 
$
60,105

 
$
56,038

 
7.3

%
Office
12,005

 
11,824

 
1.5

 
 
24,918

 
24,045

 
3.6

 
Multifamily
2,418

 
2,129

 
13.6

 
 
8,938

 
8,743

 
2.2

 
Mixed-Use
4,371

 
3,946

 
10.8

 
 
—

 
—

 
—

 
 
$
36,621

 
$
32,411

 
13.0

%
 
$
93,961

 
$
88,826

 
5.8

%
(1)
Same-store portfolio excludes One Beach Street, City Center Bellevue, Geary Marketplace and land held for development. Valencia Corporate Center and 160 King Street are excluded from same-store portfolio, as they are classified as discontinued operations for all periods presented.
(2)
Same-store portfolio excludes Solana Beach Towne Centre, Solana Beach Corporate Centre, Waikiki Beach Walk entities, First & Main, Lloyd District Portfolio, One Beach Street, City Center Bellevue, Geary Marketplace and land held for development. Valencia Corporate Center and 160 King Street are excluded from same-store portfolio, as they are classified as discontinued operations for all periods presented.

The increase in same-store retail net operating income is primarily due to an increase in rental revenue attributed to an increase in average percentage leased and higher average straight line rent for leases signed in 2012. Additionally, there was a decrease in retail rental expenses specifically related to an allowance recorded for an outstanding deferred rent receivable from Kmart in 2011.

Same-store office property operating income increased due to higher average straight line rent for leases signed in 2012.

Same-store multifamily property operating income increased for the year ended December 31, 2012 compared to the corresponding period in 2011 due to an increase in average percentage leased throughout 2012 and a decrease in operating expenses.

Acquisitions and Dispositions
On December 4, 2012, the Company sold 160 King Street, an office property located in San Francisco, California, for approximately $93.8 million and recognized a gain on sale of approximately $36.7 million during the fourth quarter of 2012. The sale was 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.
On December 19, 2012, we acquired Geary Marketplace in Walnut Creek, California, one of the San Francisco Bay Area's most desirable submarkets.  Geary Marketplace is a newly constructed, approximately 35,000 square foot, 100% leased, grocery anchored shopping center. The property sits within easy walking distance (just 1/5 of a mile via the I-680 overpass) to the Pleasant Hill BART station and Contra Costa Centre - one of the United States' top Transit Oriented Developments. Contra Costa Centre is home to over 2.4 million square feet of Class A office/commercial space, two full-service hotels and nearly 2,700 multi-family residential units. In total there are over 9,300 households within one mile of the property. The high barriers to entry for new developments in the area and the population's strong household incomes ensure a high probability of tenant retention for this well located, convenience based center. The purchase price was approximately $21.0 million, excluding closing costs of approximately $0.02 million.

Balance Sheet and Liquidity
At December 31, 2012, the Company had gross real estate assets of $1.9 billion and liquidity of $268.8 million, comprised of cash and cash equivalents of $42.5 million and approximately $226.3 million of availability on its line of credit.

3


Dividends
The Company declared dividends on its shares of common stock of $0.21 per share for the fourth quarter of 2012. The dividends were declared on October 30, 2012 to holders of record on December 14, 2012 and were paid on December 28, 2012. Total dividends paid on shares of the Company's common stock for the year ended December 31, 2012 were $0.84 per share.

In addition, the Company has declared a dividend on its common stock of $0.21 per share for the quarter ending March 31, 2013. The dividend will be paid on March 29, 2013 to stockholders of record on March 15, 2013.

2013 Guidance
The Company increased full year 2013 FFO per diluted share to a range of $1.38 to $1.46 per share with a midpoint of $1.42 of FFO per diluted share from its initial 2013 guidance of $1.35 to $1.44 with a midpoint of $1.40. The Company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments. The Company will discuss key assumptions regarding the increase in guidance tomorrow on the conference call.

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

Conference Call
The Company will hold a conference call to discuss the results for the fourth quarter and year end 2012 on Wednesday, February 20, 2013 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-866-825-3308 and use the pass code 68217226. A telephonic replay of the conference call will be available beginning at 10:00 a.m. PT on Wednesday, February 20, 2013 through Wednesday, February 27, 2013. To access the replay, dial 1-888-286-8010 and use the pass code 27279353. A live on-demand audio webcast of the conference call will be available on the Company's website at www.americanassetstrust.com. A replay of the call will also be available on the Company's website.

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



4


Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
December 31, 2012
 
December 31, 2011
Assets
 
 

 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
1,891,549

 
$
1,600,643

Construction in progress
 
32,183

 
 
3,495

Held for development
 
14,944

 
 
24,675

 
 
1,938,676

 
 
1,628,813

Accumulated depreciation
 
(270,494
)
 
 
(224,867
)
Net real estate
 
1,668,182

 
 
1,403,946

Cash and cash equivalents
 
42,479

 
 
112,723

Restricted cash
 
7,421

 
 
8,978

Marketable securities
 
—

 
 
28,235

Accounts receivable, net
 
6,440

 
 
6,810

Deferred rent receivables, net
 
29,395

 
 
22,344

Prepaid expenses and other assets
 
73,670

 
 
74,424

Assets of discontinued operations
 
—

 
 
51,821

Total assets
$
1,827,587

 
$
1,709,281

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable
$
1,044,682

 
$
912,067

Accounts payable and accrued expenses
 
29,509

 
 
24,805

Security deposits payable
 
4,856

 
 
4,091

Other liabilities and deferred credits
 
62,811

 
 
55,579

Liabilities of discontinued operations
 
—

 
 
33,011

Total liabilities
 
1,141,858

 
 
1,029,553

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock $0.01 par value, 490,000,000 shares authorized, 39,664,212 and 39,283,796 shares outstanding at December 31, 2012 and December 31, 2011, respectively
 
397

 
 
393

Additional paid-in capital
 
663,589

 
 
653,645

Accumulated dividends in excess of net income
 
(25,625
)
 
 
(28,007
)
Total American Assets Trust, Inc. stockholders' equity
 
638,361

 
 
626,031

Noncontrolling interests
 
47,368

 
 
53,697

Total equity
 
685,729

 
 
679,728

Total liabilities and equity
$
1,827,587

 
$
1,709,281


5


American Assets Trust, Inc.
Consolidated Statements of Income
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2012
 
2011
 
2012
 
2011
Revenue:
 
 
 
 
 
 
 
Rental income
$
60,191

 
$
51,458

 
$
225,249

 
$
194,168

Other property income
2,929

 
2,380

 
10,217

 
8,617

Total revenue
63,120

 
53,838

 
235,466

 
202,785

Expenses:
 
 
 
 
 
 
 
Rental expenses
17,287

 
16,723

 
64,089

 
58,133

Real estate taxes
4,947

 
4,549

 
22,025

 
18,746

General and administrative
4,063

 
3,091

 
15,593

 
13,627

Depreciation and amortization
16,576

 
15,293

 
61,853

 
55,936

Total operating expenses
42,873

 
39,656

 
163,560

 
146,442

Operating income
20,247

 
14,182

 
71,906

 
56,343

Interest expense
(15,152
)
 
(14,236
)
 
(57,328
)
 
(54,580
)
Early extinguishment of debt
—

 
—

 
—

 
(25,867
)
Loan transfer and consent fees
—

 
—

 
—

 
(8,808
)
Gain on acquisition
—

 
—

 
—

 
46,371

Other income (expense), net
(273
)
 
614

 
(629
)
 
212

Income from continuing operations
4,822

 
560

 
13,949

 
13,671

Discontinued operations
 
 
 
 
 
 
 
Income from discontinued operations
279

 
95

 
932

 
1,672

Gain on sale of real estate property
36,720

 
—

 
36,720

 
3,981

Results from discontinued operations
36,999

 
95

 
37,652

 
5,653

Net income
41,821

 
655

 
51,601

 
19,324

Net income attributable to restricted shares
(133
)
 
(132
)
 
(529
)
 
(482
)
Net loss attributable to Predecessor's noncontrolling interests in consolidated real estate entities
—

 
—

 
—

 
2,458

Net (income) loss attributable to Predecessor's controlled owners' equity
—

 
—

 
—

 
(16,995
)
Net income attributable to unitholders in the Operating Partnership
(13,111
)
 
(179
)
 
(16,133
)
 
(1,388
)
Net income attributable to American Assets Trust, Inc. stockholders
$
28,577

 
$
344

 
$
34,939

 
$
2,917

Basic net income (loss) from continuing operations attributable to common stockholders per share
$
0.08

 
$
0.01

 
$
0.24

 
$
(0.02
)
Basic net income from discontinued operations attributable to common stockholders per share
0.65

 
—

 
0.66

 
0.10

Basic net income attributable to common stockholders per share
$
0.73

 
$
0.01

 
$
0.90

 
$
0.08

Weighted average shares of common stock outstanding - basic
38,952,816

 
38,655,084

 
38,736,113

 
36,748,806

Diluted net income (loss) from continuing operations attributable to common stockholders per share
$
0.08

 
$
0.01

 
$
0.24

 
$
(0.02
)
Diluted net income from discontinued operations attributable to common stockholders per share
0.65

 
—

 
0.66

 
0.10

Diluted net income attributable to common stockholders per share
$
0.73

 
$
0.01

 
$
0.90

 
$
0.08

Weighted average shares of common stock outstanding - diluted
57,054,425

 
57,051,173

 
57,053,909

 
54,219,807

Dividends declared per common share
$
0.21

 
$
0.21

 
$
0.84

 
$
0.80



6


Reconciliation of Net Income to Funds From Operations
The Company's 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
 
Year Ended
 
December 31, 2012
 
December 31, 2012
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
41,821

 
$
51,601

Depreciation and amortization of real estate assets (1)
 
16,656

 
 
63,011

Gain on sale of real estate
 
(36,720
)
 
 
(36,720
)
FFO, as defined by NAREIT
$
21,757

 
$
77,892

Less: Nonforfeitable dividends on incentive stock awards
 
(88
)
 
 
(354
)
FFO attributable to common stock and units
$
21,669

 
$
77,538

FFO per diluted share/unit
$
0.38

 
$
1.35

Weighted average number of common shares and units, diluted
 
57,266,950

 
 
57,262,767

(1)
The year ended December 31, 2012 includes depreciation and amortization on 160 King Street, which was sold on December 4, 2012. The year ended December 31, 2011 includes depreciation and amortization on 160 King Street and Valencia Corporate Center, which was sold on August 30, 2011. 160 King Street and Valencia Corporate Center are classified as discontinued operations.

Reported results are preliminary and not final until the filing of the Company's Form 10-K with the Securities and Exchange Commission and, therefore, remain subject to adjustment.

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

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

7


About American Assets Trust, Inc.
American Assets Trust, Inc. (the “Company”) is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. For over 40 years, the Company has been acquiring, improving, developing and managing premier retail, office and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington and Hawaii. The Company's retail portfolio comprises approximately 3.1 million rentable square feet, and its office portfolio comprises approximately 2.6 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 was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

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

Source: American Assets Trust, Inc.

Investor and Media Contact:
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607


8
4Q12 Supplemental exibit

 
 
 
FOURTH 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
 
1,217,923

 
668,869

 
922

(1)
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
35,156

 
519,548

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Oahu
 
549,494

 
—

 
—

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 
676,571

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 
589,501

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Portland
 
—

 
966,642

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
—

 
490,508

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,068,645

 
2,645,567

 
922

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
Retail
 
3.1

million
 
54%
 
Office
 
2.6

million
 
46%
Data is as of December 31, 2012.
 
Totals
 
5.7

million
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 

Fourth Quarter 2012 Supplemental Information
                               Page 2
 
 
INDEX
 
 

 
FOURTH QUARTER 2012 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Income
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
Corporate Guidance
 
Same-Store Portfolio Net Operating Income (NOI)
 
Same-Store Portfolio NOI Comparison
 
NOI By Region
 
NOI Breakdown
 
Property Revenue and Operating Expenses
 
Segment Capital Expenditures
 
Summary of Outstanding Debt
 
Market Capitalization
 
Summary of Redevelopment Opportunities
2.
PORTFOLIO DATA
 
 
Property Report
 
Retail Leasing Summary
 
Office Leasing Summary
 
Multifamily Leasing Summary
 
Mixed-Use Leasing Summary
 
Lease Expirations
 
Portfolio Leased Statistics
 
Top Tenants - Retail
 
Top Tenants - Office
3.
APPENDIX
 
 
Glossary of Terms
This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

Fourth Quarter 2012 Supplemental Information
                               Page 3
 
 
 
 
 






FINANCIAL HIGHLIGHTS





Fourth Quarter 2012 Supplemental Information
                               Page 4
 
 
CONSOLIDATED BALANCE SHEETS
 
 

(Amounts in thousands, except shares and per share data)
December 31, 2012
 
December 31, 2011
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
1,891,549

 
$
1,600,643

Construction in progress
32,183

 
3,495

Held for development
14,944

 
24,675

 
1,938,676

 
1,628,813

Accumulated depreciation
(270,494
)
 
(224,867
)
Net real estate
1,668,182

 
1,403,946

Cash and cash equivalents
42,479

 
112,723

Restricted cash
7,421

 
8,978

Marketable securities
—

 
28,235

Accounts receivable, net
6,440

 
6,810

Deferred rent
29,395

 
22,344

Other assets, net
73,670

 
74,424

Assets of discontinued operations
—

 
51,821

TOTAL ASSETS
$
1,827,587

 
$
1,709,281

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable
$
1,044,682

 
$
912,067

Accounts payable and accrued expenses
29,509

 
24,805

Security deposits payable
4,856

 
4,091

Other liabilities and deferred credits
62,811

 
55,579

Liabilities of discontinued operations
—

 
33,011

Total liabilities
1,141,858

 
1,029,553

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock $0.01 par value, 490,000,000 shares authorized, 39,664,212 and 39,283,796 shares outstanding at December 31, 2012 and December 31, 2011, respectively
397

 
393

Additional paid in capital
663,589

 
653,645

Accumulated dividends in excess of net income
(25,625
)
 
(28,007
)
Total American Assets Trust, Inc. stockholders' equity
638,361

 
626,031

Noncontrolling interests
47,368

 
53,697

Total equity
685,729

 
679,728

TOTAL LIABILITIES AND EQUITY
$
1,827,587

 
$
1,709,281


Fourth Quarter 2012 Supplemental Information
                               Page 5
 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2012
 
2011
 
2012
 
2011
REVENUE:
 
 
 
 
 
 
 
Rental income
$
60,191

 
$
51,458

 
$
225,249

 
$
194,168

Other property income
2,929

 
2,380

 
10,217

 
8,617

Total revenue
63,120

 
53,838

 
235,466

 
202,785

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
17,287

 
16,723

 
64,089

 
58,133

Real estate taxes
4,947

 
4,549

 
22,025

 
18,746

General and administrative
4,063

 
3,091

 
15,593

 
13,627

Depreciation and amortization
16,576

 
15,293

 
61,853

 
55,936

Total operating expenses
42,873

 
39,656

 
163,560

 
146,442

OPERATING INCOME
20,247

 
14,182

 
71,906

 
56,343

Interest expense
(15,152
)
 
(14,236
)
 
(57,328
)
 
(54,580
)
Early extinguishment of debt
—

 
—

 
—

 
(25,867
)
Loan transfer and consent fees
—

 
—

 
—

 
(8,808
)
Gain on acquisition
—

 
—

 
—

 
46,371

Other income (expense), net
(273
)
 
614

 
(629
)
 
212

INCOME FROM CONTINUING OPERATIONS
4,822

 
560

 
13,949

 
13,671

DISCONTINUED OPERATIONS
 
 
 
 
 
 
 
Income from discontinued operations
279

 
95

 
932

 
1,672

Gain on sale of real estate property
36,720

 
—

 
36,720

 
3,981

Results from discontinued operations
36,999

 
95

 
37,652

 
5,653

NET INCOME
41,821

 
655

 
51,601

 
19,324

Net income attributable to restricted shares
(133
)
 
(132
)
 
(529
)
 
(482
)
Net loss attributable to Predecessor's noncontrolling interests in consolidated real estate entities
—

 
—

 
—

 
2,458

Net income attributable to Predecessor's controlled owners' equity
—

 
—

 
—

 
(16,995
)
Net income attributable to unitholders in the Operating Partnership
(13,111
)
 
(179
)
 
(16,133
)
 
(1,388
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
28,577

 
$
344

 
$
34,939

 
$
2,917

Basic net income (loss) from continuing operations attributable to common stockholders per share
$
0.08

 
$
0.01

 
$
0.24

 
$
(0.02
)
Basic net income from discontinued operations attributable to common stockholders per share
0.65

 
—

 
0.66

 
0.10

Basic net income attributable to common stockholders per share
$
0.73

 
$
0.01

 
$
0.90

 
$
0.08

Weighted average shares of common stock outstanding - basic
38,952,816

 
38,655,084

 
38,736,113

 
36,748,806

Diluted net income (loss) from continuing operations attributable to common stockholders per share
$
0.08

 
$
0.01

 
$
0.24

 
$
(0.02
)
Diluted net income (loss) from discontinued operations attributable to common stockholders per share
0.65

 
—

 
0.66

 
0.10

Diluted net income attributable to common stockholders per share
$
0.73

 
$
0.01

 
$
0.90

 
$
0.08

Weighted average shares of common stock outstanding - diluted
57,054,425

 
57,051,173

 
57,053,909

 
54,219,807


Fourth Quarter 2012 Supplemental Information
                               Page 6
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
 
 

(Amounts in thousands, except share and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2012
 
2011
 
2012
 
2011
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
41,821

 
$
655

 
$
51,601

 
$
19,324

Depreciation and amortization of real estate assets (2)
16,656

 
15,723

 
63,011

 
58,543

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

 
—

 
—

 
688

Gain on sale of real estate
(36,720
)
 
—

 
(36,720
)
 
(3,981
)
FFO, as defined by NAREIT
21,757

 
16,378

 
77,892

 
74,574

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

 
—

 
—

 
(16,973
)
Less: Nonforfeitable dividends on incentive stock awards
(88
)
 
(89
)
 
(354
)
 
(316
)
FFO attributable to common stock and common units
$
21,669

 
$
16,289

 
$
77,538

 
$
57,285

FFO per diluted share/unit
$
0.38

 
$
0.28

 
$
1.35

 
$
1.05

Weighted average number of common shares and common units, diluted (3)
57,266,950

 
57,258,935

 
57,262,767

 
54,417,123

 
 
 
 
 
 
 
 
FFO As Adjusted (1)
 
 
 
 
 
 
 
FFO
$
21,757

 
$
16,378

 
$
77,892

 
$
74,574

Early extinguishment of debt
—

 
—

 
—

 
25,867

Loan transfer and consent fees
—

 
—

 
—

 
9,019

Gain on acquisition of controlling interests (4)
—

 
—

 
—

 
(46,371
)
FFO As Adjusted
21,757

 
16,378

 
77,892

 
63,089

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

 
—

 
—

 
(2,462
)
Less: Nonforfeitable dividends on incentive stock awards
(88
)
 
(89
)
 
(354
)
 
(316
)
FFO As Adjusted attributable to common stock and units
$
21,669

 
$
16,289

 
$
77,538

 
$
60,311

FFO As Adjusted per diluted share/unit
$
0.38

 
$
0.28

 
$
1.35

 
$
1.11

Weighted average number of common shares and units, diluted (3)
57,266,950

 
57,258,935

 
57,262,767

 
54,417,123

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
12,114

 
$
12,113

 
$
48,452

 
$
46,123

Dividends declared and paid per share/unit
$
0.21

 
$
0.21

 
$
0.84

 
$
0.80


Fourth Quarter 2012 Supplemental Information
                               Page 7
 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
 
 

(Amounts in thousands, except share and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2012
 
2011
 
2012
 
2011
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO As Adjusted
$
21,757

 
$
16,378

 
$
77,892

 
$
63,089

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures (5)
(8,040
)
 
(4,674
)
 
(30,898
)
 
(11,199
)
Net effect of straight-line rents (6)
(2,125
)
 
(694
)
 
(7,580
)
 
(3,778
)
Amortization of net above (below) market rents (7)
(254
)
 
506

 
237

 
1,117

Net effect of other lease intangibles (8)
71

 
(482
)
 
268

 
584

Amortization of debt issuance costs and debt fair value adjustment
983

 
1,018

 
3,911

 
3,883

Non-cash compensation expense
724

 
713

 
2,852

 
2,615

Unrealized (gains) losses on marketable securities
—

 
(128
)
 
538

 
(125
)
Loss on sale of marketable securities
—

 
—

 
121

 
—

Nonforfeitable dividends on incentive stock awards
(88
)
 
(89
)
 
(354
)
 
(316
)
Adjustments related to discontinued operations
(303
)
 
(199
)
 
(1,313
)
 
(544
)
FAD
$
12,725

 
$
12,349

 
$
45,674

 
$
55,326

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions (5)
$
5,804

 
$
2,753

 
$
24,032

 
$
6,635

Maintenance capital expenditures
2,236

 
1,921

 
6,866

 
4,564

 
$
8,040

 
$
4,674

 
$
30,898

 
$
11,199


Notes:
(1)
See Glossary of Terms.
(2)
The year ended December 31, 2012 includes depreciation and amortization on 160 King Street, which was sold on December 4, 2012. The year ended December 31, 2011 includes depreciation and amortization on 160 King Street and Valencia Corporate Center, which was sold on August 30, 2011. 160 King Street and Valencia Corporate Center are classified as discontinued operations.
(3)
For the years ended December 31, 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 Walk - Retail.


Fourth Quarter 2012 Supplemental Information
                               Page 8
 
 
CORPORATE GUIDANCE
 
 

(Unaudited, amounts in thousands, except share and per share data)
 
 
 
 
 
 
2013 Guidance Range (1)
Funds from Operations (FFO)
 
 
 
 
Net income
 
$
15,220

 
$
20,054

Depreciation and amortization of real estate assets
 
64,040

 
64,040

FFO, as defined by NAREIT
 
79,260

 
84,094

Less: Nonfortfeitable dividends on incentive stock awards
 
(352
)
 
(352
)
FFO attributable to common stock and units
 
$
78,908

 
$
83,742

Weighted average number of common shares and units, diluted
 
57,270,283

 
57,270,283

FFO per diluted share
 
$
1.38

 
$
1.46

Notes:
(1)
The Company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments.

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



Fourth Quarter 2012 Supplemental Information
                               Page 9
 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
 
 

(Amounts in thousands)
Three Months Ended December 31, 2012
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
24,104

 
$
16,881

 
$
3,895

 
$
12,471

 
$
57,351

Non-same store portfolio (1)
50

 
5,719

 
—

 
—

 
5,769

Total
24,154

 
22,600

 
3,895

 
12,471

 
63,120

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
6,277

 
4,876

 
1,477

 
8,100

 
20,730

Non-same store portfolio (1)
30

 
1,474

 
—

 
—

 
1,504

Total
6,307

 
6,350

 
1,477

 
8,100

 
22,234

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
17,827

 
12,005

 
2,418

 
4,371

 
36,621

Non-same store portfolio (1)
20

 
4,245

 
—

 
—

 
4,265

Total
$
17,847

 
$
16,250

 
$
2,418

 
$
4,371

 
$
40,886

Same-store portfolio NOI, GAAP basis
$
17,827

 
$
12,005

 
$
2,418

 
$
4,371

 
$
36,621

Net effect of straight-line rents (2)
44

 
(519
)
 
—

 
(92
)
 
(567
)
Amortization of net above (below) market rents (3)
(195
)
 
198

 
—

 
226

 
229

Net effect of other lease intangibles (4)
—

 
85

 
—

 
(14
)
 
71

Same-store portfolio NOI, cash basis
$
17,676

 
$
11,769

 
$
2,418

 
$
4,491

 
$
36,354


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on December 31, 2012 and December 31, 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.

Fourth Quarter 2012 Supplemental Information
                               Page 10
 
 
SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)
 
 

(Amounts in thousands)
Year Ended December 31, 2012
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
82,955

 
$
36,000

 
$
14,852

 
$
—

 
$
133,807

Non-same store portfolio (1)
9,036

 
42,101

 
—

 
50,522

 
101,659

Total
91,991

 
78,101

 
14,852

 
50,522

 
235,466

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store portfolio
22,850

 
11,082

 
5,914

 
—

 
39,846

Non-same store portfolio (1)
2,105

 
12,698

 
—

 
31,465

 
46,268

Total
24,955

 
23,780

 
5,914

 
31,465

 
86,114

Net Operating Income (NOI), GAAP basis
 
 
 
 
 
 
 
 
 
Same-store portfolio
60,105

 
24,918

 
8,938

 
—

 
93,961

Non-same store portfolio (1)
6,931

 
29,403

 
—

 
19,057

 
55,391

Total
$
67,036

 
$
54,321

 
$
8,938

 
$
19,057

 
$
149,352

Same-store portfolio NOI, GAAP basis
$
60,105

 
$
24,918

 
$
8,938

 
$
—

 
$
93,961

Net effect of straight-line rents (2)
(715
)
 
(2,976
)
 
—

 
—

 
(3,691
)
Amortization of net above (below) market rents (3)
225

 
(9
)
 
—

 
—

 
216

Net effect of other lease intangibles (4)
—

 
327

 
—

 
—

 
327

Same-store portfolio NOI, cash basis
$
59,615

 
$
22,260

 
$
8,938

 
$
—

 
$
90,813


Notes:
(1)
Same-store portfolio and non-same store portfolio are determined based on properties held on December 31, 2012 and December 31, 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.


Fourth Quarter 2012 Supplemental Information
                               Page 11
 
 
SAME-STORE PORTFOLIO NOI COMPARISON
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2012
 
2011
 
Change
 
2012
 
2011
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,676

 
$
15,526

 
13.8
%
 
$
59,615

 
$
57,424

 
3.8
%
Office
11,769

 
9,719

 
21.1

 
22,260

 
22,138

 
0.6

Multifamily
2,418

 
2,129

 
13.6

 
8,938

 
8,743

 
2.2

Mixed-Use
4,491

 
4,136

 
8.6

 
—

 
—

 
—

 
$
36,354

 
$
31,510

 
15.4
%
 
$
90,813

 
$
88,305

 
2.8
%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
Retail
$
17,827

 
$
14,512

 
22.8
%
 
$
60,105

 
$
56,038

 
7.3
%
Office
12,005

 
11,824

 
1.5

 
24,918

 
24,044

 
3.6

Multifamily
2,418

 
2,129

 
13.6

 
8,938

 
8,743

 
2.2

Mixed-Use
4,371

 
3,946

 
10.8

 
—

 
—

 
—

 
$
36,621

 
$
32,411

 
13.0
%
 
$
93,961

 
$
88,825

 
5.8
%


Fourth Quarter 2012 Supplemental Information
                               Page 12
 
 
NOI BY REGION
 
 

(Amounts in thousands)
Three Months Ended December 31, 2012
 
Retail
 
Office
 
Multifamily
 
Mixed-Use
 
Total
Southern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
$
7,147

 
$
4,510

 
$
2,418

 
$
—

 
$
14,075

Net effect of straight-line rents (2)
(109
)
 
(137
)
 
—

 
—

 
(246
)
Amortization of net above (below) market rents (3)
(220
)
 
48

 
—

 
—

 
(172
)
Net effect of other lease intangibles
—

 
104

 
—

 
—

 
104

NOI, cash basis
6,818

 
4,525

 
2,418

 
—

 
13,761

Northern California
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
2,705

 
4,068

 
—

 
—

 
6,773

Net effect of straight-line rents (2)
(2
)
 
(489
)
 
—

 
—

 
(491
)
Amortization of net above (below) market rents (3)
(67
)
 
(67
)
 
—

 
—

 
(134
)
Net effect of other lease intangibles (4)
—

 
(19
)
 
—

 
—

 
(19
)
NOI, cash basis
2,636

 
3,493

 
—

 
—

 
6,129

Hawaii
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
4,695

 
—

 
—

 
4,371

 
9,066

Net effect of straight-line rents (2)
152

 
—

 
—

 
(92
)
 
60

Amortization of net above (below) market rents (3)
174

 
—

 
—

 
226

 
400

Net effect of other lease intangibles (4)
—

 
—

 
—

 
(14
)
 
(14
)
NOI, cash basis
5,021

 
—

 
—

 
4,491

 
9,512

Oregon
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
—

 
4,156

 
—

 
—

 
4,156

Net effect of straight-line rents (2)
—

 
(50
)
 
—

 
—

 
(50
)
Amortization of net above (below) market rents (3)
—

 
151

 
—

 
—

 
151

Net effect of other lease intangibles (4)
—

 
—

 
—

 
—

 
—

NOI, cash basis
—

 
4,257

 
—

 
—

 
4,257

Texas
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
3,300

 
—

 
—

 
—

 
3,300

Net effect of straight-line rents (2)
1

 
—

 
—

 
—

 
1

Amortization of net above (below) market rents (3)
(82
)
 
—

 
—

 
—

 
(82
)
NOI, cash basis
3,219

 
—

 
—

 
—

 
3,219

Washington
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
—

 
3,516

 
—

 
—

 
3,516

Net effect of straight-line rents (2)
—

 
(1,399
)
 
—

 
—

 
(1,399
)
Amortization of net above (below) market rents (3)
—

 
(417
)
 
—

 
—

 
(417
)
NOI, cash basis
—

 
1,700

 
—

 
—

 
1,700

Total
 
 
 
 
 
 
 
 
 
NOI, GAAP basis (1)
17,847

 
16,250

 
2,418

 
4,371

 
40,886

Net effect of straight-line rents (2)
42

 
(2,075
)
 
—

 
(92
)
 
(2,125
)
Amortization of net above (below) market rents (3)
(195
)
 
(285
)
 
—

 
226

 
(254
)
Net effect of other lease intangibles (4)
—

 
85

 
—

 
(14
)
 
71

NOI, cash basis
$
17,694

 
$
13,975

 
$
2,418

 
$
4,491

 
$
38,578

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.

Fourth Quarter 2012 Supplemental Information
                               Page 13
 
 
NOI BREAKDOWN
 
 


Three Months Ended December 31, 2012
Portfolio Cash NOI Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
 
 
 
 
 
 
 
Portfolio GAAP NOI Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
 
 
 
 

Fourth Quarter 2012 Supplemental Information
                               Page 14
 
 
PROPERTY REVENUE AND OPERATING EXPENSES
 
 

(Amounts in thousands)
 
Three Months Ended December 31, 2012
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Retail Portfolio
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
$
857

 
$
19

 
$
183

 
$
(201
)
Carmel Mountain Plaza
 
2,532

 
43

 
697

 
(846
)
South Bay Marketplace
 
538

 
25

 
239

 
(205
)
Rancho Carmel Plaza
 
191

 
109

 
47

 
(80
)
Lomas Santa Fe Plaza
 
1,306

 
32

 
302

 
(356
)
Solana Beach Towne Centre
 
1,395

 
42

 
471

 
(477
)
Del Monte Center
 
2,212

 
515

 
981

 
(1,114
)
Geary Marketplace (5)
 
48

 
—

 
—

 
(2
)
The Shops at Kalakaua
 
393

 
20

 
30

 
(66
)
Waikele Center
 
4,403

 
469

 
1,081

 
(1,311
)
Alamo Quarry Market
 
3,208

 
284

 
1,385

 
(1,658
)
Subtotal Retail Portfolio
 
$
17,083

 
$
1,558

 
$
5,416

 
$
(6,316
)
Office Portfolio
 
 
 
 
 
 
 
 
Torrey Reserve Campus (6)
 
$
3,818

 
$
160

 
$
187

 
$
(787
)
Solana Beach Corporate Centre
 
1,694

 
1

 
37

 
(391
)
The Landmark at One Market
 
4,742

 
21

 
157

 
(1,880
)
One Beach Street
 
698

 
—

 
11

 
(256
)
First & Main
 
2,756

 
117

 
29

 
(529
)
Lloyd District Portfolio
 
2,852

 
267

 
110

 
(1,319
)
City Center Bellevue (7)
 
3,391

 
494

 
108

 
(1,213
)
Subtotal Office Portfolio
 
$
19,951

 
$
1,060

 
$
639

 
$
(6,375
)
Multifamily Portfolio
 
 
 
 
 
 
 
 
Loma Palisades
 
$
2,490

 
$
171

 
$
—

 
$
(962
)
Imperial Beach Gardens
 
652

 
48

 
—

 
(264
)
Mariner's Point
 
296

 
22

 
—

 
(127
)
Santa Fe Park RV Resort
 
195

 
17

 
—

 
(124
)
Subtotal Multifamily Portfolio
 
$
3,633

 
$
258

 
$
—

 
$
(1,477
)

Fourth Quarter 2012 Supplemental Information
                               Page 15
 
 
PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)
 
 

(Amounts in thousands)
 
Three Months Ended December 31, 2012
 
 
 
 
Additional
 
 
 
Property
 
 
 
 
Property
 
Billed Expense
 
Operating
Property
 
Base Rent (1)
 
Income (2)
 
Reimbursements (3)
 
Expenses (4)
Mixed-Use Portfolio
 
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
 
$
2,361

 
$
1,147

 
$
896

 
$
(1,647
)
Waikiki Beach Walk - Embassy Suites™
 
7,588

 
597

 
—

 
(6,451
)
Subtotal Mixed-Use Portfolio
 
$
9,949

 
$
1,744

 
$
896

 
$
(8,098
)
Total
 
$
50,616

 
$
4,620

 
$
6,951

 
$
(22,266
)

Notes:
(1)
Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended December 31, 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 $19 and $1,351, respectively, for the three months ended December 31, 2012. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended December 31, 2012. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Multifamily portfolio base rent represents base rent (including parking, before abatements) less vacancy allowance and employee rent credits and includes additional rents (additional rents include insufficient notice penalties, month-to-month charges and pet rent). Total abatements for our multifamily portfolio were insignificant for the three months ended December 31, 2012. For Waikiki Beach Walk - Embassy Suites TM, base rent is equal to the actual room revenue for the three months ended December 31, 2012.
(2)
Represents additional property-related income for the three months ended December 31, 2012, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
(3)
Represents billed tenant expense reimbursements for the three months ended December 31, 2012.
(4)
Represents property operating expenses for the three months ended December 31, 2012. Property operating expenses includes all rental expenses, except non-cash rent expense and the provision for bad debt recorded for deferred rent receivables.
(5)
Includes revenue and expenses since the acquisition of Geary Marketplace for the period from December 19, 2012 to December 31, 2012.
(6)
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 December 31, 2012.
(7)
Includes revenue and expenses since the acquisition of City Center Bellevue for the period from August 21, 2012 to December 31, 2012.


Fourth Quarter 2012 Supplemental Information
                               Page 16
 
 
SEGMENT CAPITAL EXPENDITURES
 
 

(Amounts in thousands)
 
Three Months Ended December 31, 2012
Segment
 
Tenant Improvements and Leasing Commissions
 
Maintenance Capital Expenditures
 
Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures
 
Redevelopment and Expansions
 
New Development
 
Total Capital Expenditures
Retail Portfolio
 
$
1,893

 
$
565

 
$
2,458

 
$
—

 
$
19

 
$
2,477

Office Portfolio
 
3,896

 
1,030

 
4,926

 
1,608

 
74

 
6,608

Multifamily Portfolio
 
—

 
182

 
182

 
—

 
—

 
182

Mixed-Use Portfolio
 
15

 
459

 
474

 
—

 
—

 
474

Total
 
$
5,804

 
$
2,236

 
$
8,040

 
$
1,608

 
$
93

 
$
9,741

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2012
Segment
 
Tenant Improvements and Leasing Commissions
 
Maintenance Capital Expenditures
 
Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures
 
Redevelopment and Expansions
 
New Development
 
Total Capital Expenditures
Retail Portfolio
 
$
10,114

 
$
1,962

 
$
12,076

 
$
1,905

 
$
230

 
$
14,211

Office Portfolio
 
13,882

 
3,249

 
17,131

 
1,993

 
3,012

 
22,136

Multifamily Portfolio
 
—

 
964

 
964

 
—

 
—

 
964

Mixed-Use Portfolio
 
36

 
691

 
727

 
—

 
—

 
727

Total
 
$
24,032

 
$
6,866

 
$
30,898

 
$
3,898

 
$
3,242

 
$
38,038

 
 
 
 
 
 
 
 
 
 
 
 
 



Fourth Quarter 2012 Supplemental Information
                               Page 17
 
 
SUMMARY OF OUTSTANDING DEBT
 
 

(Amounts in thousands)
 
Amount
 
 
 
 
 
 
 
 
 
 
Outstanding at
 
 
 
Annual Debt
 
 
 
Balance at
Debt
 
December 31, 2012
 
Interest Rate
 
Service
 
Maturity Date
 
Maturity
Alamo Quarry Market (1)(2)
 
$
93,942

 
5.67
%
 
$
7,567

 
January 8, 2014
 
$
91,717

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

Mariner's 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)
 
37,204

 
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)
 
21,659

 
7.22

 
1,836

 
June 1, 2019
 
19,443

Torrey Reserve - VCI, VCII, VCIII (1)
 
7,294

 
6.36

 
560

 
June 1, 2020
 
6,439

Solana Beach Corporate Centre I-II (1)
 
11,637

 
5.91

 
855

 
June 1, 2020
 
10,169

Solana Beach Towne Centre (1)
 
38,790

 
5.91

 
2,849

 
June 1, 2020
 
33,898

City Center Bellevue (4)
 
111,000

 
3.98

 
4,479

 
November 1, 2022
 
111,000

Total / Weighted Average
 
$
1,057,680

 
5.26
%
 
$
59,888

 
 
 
$
1,043,956

Unamortized fair value adjustment
 
(12,998
)
 
 
 
 
 
 
 
 
Secured Notes Payable
 
$
1,044,682

 
 
 
 
 
 
 
 
Fixed Rate Debt Ratio of Secured Notes Payable
 
 
 
 
 
 
 
 
 
 
Fixed rate debt
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.

Fourth Quarter 2012 Supplemental Information
                               Page 18
 
 
MARKET CAPITALIZATION
 
 

(Amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
Market data
 
December 31, 2012
 
 
Common shares outstanding
 
39,664

 
 
Common units outstanding
 
18,024

 
Common shares and common units outstanding
 
57,688

 
Market price per common share
 
$
27.93

 
Equity market capitalization
 
$
1,611,226

 
Total debt
 
$
1,057,680

 
Total market capitalization
 
$
2,668,906

 
Less: Cash on hand
 
$
(42,479
)
 
Total enterprise value
 
$
2,626,427

 
Total assets, gross
 
$
2,098,081

 
 
 
 
 
Total debt/Total capitalization
 
39.6
%
 
Total debt/Total enterprise value
 
40.3
%
 
Net debt/Total enterprise value (1)
 
38.7
%
 
Total debt/Total assets, gross
 
50.4
%
 
 
 
 
 
Total debt/EBITDA (2)(3)
 
7.0
x
 
Net debt/EBITDA (2)(3)
 
6.7
x
 
Interest coverage ratio (4)
 
2.5
x
 
Fixed charge coverage ratio (4)
 
2.5
x
 

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 December 31, 2012 annualized.
(4)
Calculated as EBITDA divided by interest on borrowed funds, including capitalized interest and excluding debt fair value adjustments and loan fee amortization.

Fourth 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
 
Cost Incurred to Date (2)
 
Total Estimated Investment (2)
 
Estimated Stabilized Yield (3)
Torrey Reserve III & IV
 
Office
 
San Diego, CA
 
2012
 
2014
 
2015
 
81,500
 
$
6,413,000

 
$
34,100,000

 
8.6%
Carmel Mountain Plaza
 
Retail
 
San Diego, CA
 
2012
 
2013
 
2013
 
10,000
 
$
495,000

 
$
800,000

 
37.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Development/Redevelopment Pipeline
 
Property
 
Property Type
 
Location
 
Estimated Square Footage (4)
 
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
 
53,000
 
637
 
Solana Beach - Highway 101
 
Mixed Use
 
Solana Beach, CA
 
48,000
 
36
 

Notes:
(1)
Based on management's 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.

Fourth Quarter 2012 Supplemental Information
                               Page 20
 
 
 
 
 






PORTFOLIO DATA





Fourth Quarter 2012 Supplemental Information
                               Page 21
 
 
PROPERTY REPORT
 
 

As of December 31, 2012
 
 
 
 
 
Retail and Office Portfolios
 
 
 
 
 
 
 
 
 
 
 
 
Net
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
Rentable
 
 
 
 
 
Base Rent
 
 
 
 
 
 
 
 
Year Built/
 
of
 
Square
 
Percentage
 
Annualized
 
per Leased
 
 
 
 
Property
 
Location
 
Renovated
 
Buildings
 
Feet (1)
 
Leased (2)
 
Base Rent (3)
 
Square Foot (4)
 
Retail Anchor Tenant(s) (5)
 
Other Principal Retail Tenants (6)
Retail Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carmel Country Plaza
 
San Diego, CA
 
1991
 
9

 
78,098

 
100.0%
 
$
3,418,273

 
$43.77
 
 
 
Sharp Healthcare, San Diego County Credit Union
Carmel Mountain Plaza (7)
 
San Diego, CA
 
1994
 
13

 
520,228

 
92.1
 
10,333,487

 
21.57
 
Sears
 
Sports Authority, Nordstrom Rack
South Bay Marketplace (7)
 
San Diego, CA
 
1997
 
9

 
132,877

 
100.0
 
2,150,465

 
16.18
 
 
 
Ross Dress for Less, Grocery Outlet
Rancho Carmel Plaza
 
San Diego, CA
 
1993
 
3

 
30,421

 
89.3
 
765,496

 
28.18
 
 
 
Oggi's Pizza & Brewing Co., Sprint PCS Assets
Lomas Santa Fe Plaza
 
Solana Beach, CA
 
1972/1997
 
9

 
209,569

 
94.8
 
5,265,448

 
26.50
 
 
 
Vons, Ross Dress for Less
Solana Beach Towne Centre
 
Solana Beach, CA
 
1973/2000/2004
 
12

 
246,730

 
99.4
 
5,652,581

 
23.05
 
 
 
Dixieline Probuild, Marshalls
Del Monte Center (7)
 
Monterey, CA
 
1967/1984/2006
 
16

 
676,571

 
98.9
 
9,192,149

 
13.74
 
Macy's, KLA Monterrey
 
Century Theatres, Macy's Furniture Gallery
Geary Marketplace
 
Walnut Creek, CA
 
2012
 
3

 
35,156

 
100.0
 
1,068,883

 
30.40
 
 
 
Sprouts Farmer Market, Freebirds Wild Burrito
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

 
537,823

 
94.8
 
17,616,476

 
34.55
 
Lowe's, Kmart, Sports Authority, Foodland Super Market
 
Old Navy, Officemax
Alamo Quarry Market (7)
 
San Antonio, TX
 
1997/1999
 
16

 
589,501

 
99.9
 
12,895,221

 
21.90
 
Regal Cinemas
 
Bed Bath & Beyond, Whole Foods Market
Subtotal/Weighted Average Retail Portfolio
 
 
 
102

 
3,068,645

 
97.0%
 
$
69,928,119

 
$23.49
 
 
 
 
Office Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Torrey Reserve Campus
 
San Diego, CA
 
1996-2000
 
9

 
456,850

 
93.1%
 
$
15,431,733

 
$36.28
 
 
 
 
Solana Beach Corporate Centre
 
Solana Beach, CA
 
1982/2005
 
4

 
212,019

 
93.5
 
6,752,284

 
34.06
 
 
 
 
The Landmark at One Market (8)
 
San Francisco, CA
 
1917/2000
 
1

 
421,934

 
100.0
 
18,966,745

 
44.95
 
 
 
 
One Beach Street
 
San Francisco, CA
 
1924/1972/1987/1992
 
1

 
97,614

 
100.0
 
2,794,437

 
28.63
 
 
 
 
First & Main
 
Portland, OR
 
2010
 
1

 
361,229

 
98.8
 
11,150,871

 
31.24
 
 
 
 
Lloyd District Portfolio
 
Portland, OR
 
1940-2011
 
6

 
605,413

 
85.3
 
11,462,073

 
22.20
 
 
 
 
City Center Bellevue
 
Bellevue, WA
 
1987
 
1

 
490,508

 
92.1
 
13,595,919

 
30.10
 
 
 
 
Subtotal/Weighted Average Office Portfolio
 
 
 
23

 
2,645,567

 
93.3%
 
$
80,154,062

 
$32.47
 
 
 
 
Total/Weighted Average Retail and Office Portfolio
 
 
 
125

 
5,714,212

 
95.3%
 
$
150,082,181

 
$27.56
 
 
 
 

Fourth Quarter 2012 Supplemental Information
                               Page 22
 
 
PROPERTY REPORT (CONTINUED)
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Monthly
 
 
 
 
 
 
 
 
Year Built/
 
of
 
 
 
Percentage
 
Annualized
 
Base Rent per
 
 
 
 
Property
 
Location
 
Renovated
 
Buildings
 
Units
 
Leased (2)
 
Base Rent (3)
 
Leased Unit (4)
 
 
 
 
Loma Palisades
 
San Diego, CA
 
1958/2001-2008
 
80

 
548

 
97.4%
 
$
9,932,424

 
$
1,551

 
 
 
 
Imperial Beach Gardens
 
Imperial Beach, CA
 
1959/2008-present
 
26

 
160

 
98.8
 
2,619,372

 
$
1,381

 
 
 
 
Mariner's Point
 
Imperial Beach, CA
 
1986
 
8

 
88

 
100.0
 
1,189,188

 
$
1,126

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

 
126

 
74.0
 
913,200

 
$
816

 
 
 
 
Total/Weighted Average Multifamily Portfolio
 
 
 
115

 
922

 
94.7%
 
$
14,654,184

 
$
1,399

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

 
96,707

 
95.5
%
 
$
9,977,318

 
$
108.03

 
 
 
Yardhouse, Ruth's Chris
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annualized
 
 
 
 
 
 
 
 
 
 
Number
 
 
 
 
 
 
 
Revenue per
 
 
 
 
 
 
 
 
Year Built/
 
of
 
 
 
Average
 
Average
 
Available
 
 
 
 
Hotel Portion
 
Location
 
Renovated
 
Buildings
 
Units
 
Occupancy (10)
 
Daily Rate(10)
 
Room (10)
 
 
 
 
Waikiki Beach Walk - Embassy Suites™
 
Honolulu, HI
 
2008
 
2

 
369

 
84.3
%
 
$
265.13

 
$
223.50

 
 
 
 
Notes:
(1)
The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, management’s estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines.
(2)
Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property includes square footage under leases as of December 31, 2012, including leases which may not have commenced as of December 31, 2012. Percentage leased for our multifamily properties includes total units rented as of December 31, 2012.
(3)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 2012, by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of December 31, 2012. Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of December 31, 2012.
(5)
Retail anchor tenants are defined as retail tenants leasing 50,000 square feet or more.
(6)
Other principal retail tenants are defined as the two tenants leasing the most square footage, excluding anchor tenants.
(7)
Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases in the following table:
Property
 
Number of Ground Leases
 
Square Footage Leased Pursuant to Ground Leases
 
Aggregate Annualized Base Rent
Carmel Mountain Plaza
 
6
 
127,112

 
$
1,020,900

South Bay Marketplace
 
1
 
2,824

 
$
91,320

Del Monte Center
 
2
 
295,100

 
$
201,291

Alamo Quarry Market
 
4
 
31,994

 
$
459,075

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

Fourth Quarter 2012 Supplemental Information
                               Page 23
 
 
RETAIL LEASING SUMMARY
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
13

 
100%
 
33,269

 
$33.32
 
$31.86
 
$
48,639

 
4.6
 %
 
12.3
 %
 
3.7
 
$
61,650

 
$1.85
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
Total 12 months
 
56

 
100%
 
213,989

 
$32.20
 
$31.53
 
$
131,676

 
2.0
 %
 
13.2
 %
 
4.8
 
$
1,462,480

 
$7.50
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
—

 
—
 
—

 
—

 
—

 
$
—

 
—

 
—

 
—
 
$
—

 
—

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
Total 12 months
 
6

 
11%
 
26,843

 
$41.27
 
$33.36
 
$
71,101

 
7.9
 %
 
85.9
 %
 
8.8
 
$
1,200,432

 
$44.72
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
13

 
100%
 
33,269

 
$33.32
 
$31.86
 
$
48,639

 
4.6
 %
 
12.3
 %
 
3.7
 
$
61,650

 
$1.85
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
Total 12 months
 
50

 
89%
 
187,146

 
$31.55
 
$31.23
 
$
60,575

 
1.0
 %
 
6.5
 %
 
4.6
 
$
262,048

 
$1.40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
13

 
33,269

 
$33.32
 
3.7
 
$
61,650

 
$1.85
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
67

 
277,968

 
$31.40
 
5.6
 
$
4,058,960

 
$14.60
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Fourth Quarter 2012 Supplemental Information
                               Page 24
 
 
OFFICE LEASING SUMMARY
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
14

 
100%
 
93,022

 
$39.76
 
$34.28
 
$
509,561

 
16.0
 %
 
16.1
 %
 
3.3
 
$
82,927

 
$0.89
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
Total 12 months
 
52

 
100%
 
286,854

 
$36.83
 
$33.04
 
$
1,084,788

 
11.4
 %
 
19.9
 %
 
4.0
 
$
1,472,277

 
$5.13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lease Summary - Comparable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
2

 
14%
 
10,096

 
$30.03
 
$34.67
 
$
(46,826
)
 
(13.4
)%
 
(18.0
)%
 
1.9
 
$
—

 
—

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
Total 12 months
 
16

 
31%
 
66,275

 
$44.24
 
$33.90
 
$
685,003

 
30.5
 %
 
42.6
 %
 
5.1
 
$
585,911

 
$8.84
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (1)(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
% of Comparable Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Prior Rent Per Sq. Ft. (3)
 
Annual Change in Rent
 
Cash Basis % Change Over Prior Rent
 
Straight-Line Basis % Change Over Prior Rent
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
12

 
86%
 
82,926

 
$40.95
 
$34.24
 
$
556,387

 
19.6
 %
 
20.3
 %
 
3.5
 
$
82,927

 
$1.00
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
Total 12 months
 
36

 
69%
 
220,579

 
$34.60
 
$32.79
 
$
399,785

 
5.5
 %
 
12.5
 %
 
3.7
 
$
886,366

 
$4.02
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-Comparable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Leases Signed
 
Net Rentable Square Feet Signed
 
Contractual Rent Per Sq. Ft. (2)
 
Weighted Average Lease
Term (4)
 
Tenant Improvements & Incentives
 
Tenant Improvements & Incentives Per Sq. Ft.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
16

 
95,263

 
$39.66
 
3.3
 
$
82,927

 
$0.87
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
Total 12 months
 
68

 
336,865

 
$35.39
 
4.1
 
$
2,891,121

 
$8.58
 
 
 
 
 
 
 
 
 
 
Notes:
(1)
Comparable leases represent those leases signed on spaces for which there was a previous lease.
(2)
Contractual rent represents contractual minimum rent under the new lease for the first twelve months of the term.
(3)
Prior rent represents the minimum rent paid under the previous lease in the final twelve months of the term.
(4)
Weighted average is calculated on the basis of square footage.
(5)
Excludes renewals at fixed contractual rates specified in the lease.

Fourth Quarter 2012 Supplemental Information
                               Page 25
 
 
MULTIFAMILY LEASING SUMMARY
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Loma Palisades
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2012
 
534
 
97.4%
 
$9,932,424
 
$1,551
3rd Quarter 2012
 
548
 
100.0%
 
$9,951,864
 
$1,513
2nd Quarter 2012
 
541
 
98.7%
 
$9,419,424
 
$1,451
1st Quarter 2012
 
489
 
89.2%
 
$9,419,892
 
$1,606
 
 
 
 
 
 
 
 
 
Lease Summary - Imperial Beach Garden
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2012
 
158
 
98.8%
 
$2,619,372
 
$1,381
3rd Quarter 2012
 
158
 
98.8%
 
$2,596,812
 
$1,369
2nd Quarter 2012
 
159
 
99.4%
 
$2,555,880
 
$1,339
1st Quarter 2012
 
143
 
89.4%
 
$2,388,684
 
$1,392
 
 
 
 
 
 
 
 
 
Lease Summary - Mariner's Point
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2012
 
88
 
100.0%
 
$1,189,188
 
$1,126
3rd Quarter 2012
 
88
 
100.0%
 
$1,158,144
 
$1,097
2nd Quarter 2012
 
86
 
97.7%
 
$1,101,828
 
$1,068
1st Quarter 2012
 
85
 
96.6%
 
$1,063,440
 
$1,042
 
 
 
 
 
 
 
 
 
Lease Summary - Santa Fe Park RV Resort
 
 
 
 
 
 
Number of Leased Units
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2012
 
93
 
74.0%
 
$913,200
 
$816
3rd Quarter 2012
 
93
 
73.8%
 
$873,204
 
$783
2nd Quarter 2012
 
115
 
97.0%
 
$1,022,496
 
$743
1st Quarter 2012
 
98
 
78.0%
 
$727,224
 
$617
 
 
 
 
 
 
 
 
 
Total Multifamily Lease Summary
 
 
 
 
 
 
Number of Leased Unit
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Average Monthly Base Rent per Leased Unit (3)
Quarter
 
 
 
 
4th Quarter 2012
 
873
 
94.7%
 
$14,654,184
 
$1,399
3rd Quarter 2012
 
887
 
96.2%
 
$14,580,024
 
$1,370
2nd Quarter 2012
 
901
 
97.7%
 
$14,099,628
 
$1,304
1st Quarter 2012
 
815
 
88.4%
 
$13,599,240
 
$1,390
Notes:
(1)
Percentage leased for our multifamily properties includes total units rented as of each respective quarter end date.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) as of each respective quarter end date.
(3)
Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of each respective quarter end date.

Fourth Quarter 2012 Supplemental Information
                               Page 26
 
 
MIXED-USE LEASING SUMMARY
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Lease Summary - Retail Portion
 
 
 
 
 
 
Number of Leased Square Feet
 
Percentage leased (1)
 
Annualized Base Rent (2)
 
Annualized base Rent per Leased Square Foot (3)
Quarter
 
 
 
 
4th Quarter 2012
 
92,333
 
95.5%
 
$9,977,318
 
$108
3rd Quarter 2012
 
94,025
 
97.4%
 
$9,208,893
 
$98
2nd Quarter 2012
 
90,699
 
93.9%
 
$9,494,329
 
$105
1st Quarter 2012
 
95,423
 
98.8%
 
$9,592,426
 
$101
 
 
 
 
 
 
 
 
 
Lease Summary - Hotel Portion
 
 
 
 
 
 
Number of Leased Units
 
Average Occupancy (4)
 
Average Daily Rate (4)
 
Annualized Revenue per Available Room (4)
Quarter
 
 
 
 
4th Quarter 2012
 
328
 
84.3%
 
$265
 
$224
3rd Quarter 2012
 
333
 
89.7%
 
$293
 
$263
2nd Quarter 2012
 
334
 
88.7%
 
$250
 
$222
1st Quarter 2012
 
341
 
92.2%
 
$248
 
$228
Notes:
(1)
Percentage leased for mixed-use property includes square footage under leases as of December 31, 2012, including leases which may not have commenced as of December 31, 2012.
(2)
Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 2012, by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(3)
Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of December 31, 2012.
(4)
Average occupancy represents the percentage of available units that were sold during the three months ended December 31, 2012, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for each respective quarter period by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for each respective quarter period and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.


Fourth Quarter 2012 Supplemental Information
                               Page 27
 
 
LEASE EXPIRATIONS
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumes no exercise of lease options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Mixed-Use (Retail Portion Only)
 
Total
 
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
Annualized
 
 
Expiring
 
Office
 
Total
 
Base Rent
 
Expiring
 
Retail
 
Total
 
Base Rent
 
Expiring
 
Mixed-Use
 
Total
 
Base Rent
 
Expiring
 
Total
 
Base Rent
Year
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
Month to Month
 
35,557

 
1.3
%
 
0.6
%
 
$6.82
 
19,274

 
0.6
%
 
0.3
%
 
$30.30
 
5,105

 
5.3
%
 
0.1
%
 
$15.49
 
59,936

 
1.0
%
 
$15.11
2013
 
189,760

 
7.2

 
3.3

 
$30.65
 
319,639

(2) 
10.4

 
5.5

 
$26.98
 
8,048

 
8.3

 
0.1

 
$120.80
 
517,447

 
8.9

 
$29.79
2014
 
227,965

 
8.6

 
3.9

 
$30.18
 
406,347

 
13.2

 
7.0

 
$28.98
 
2,438

 
2.5

 
—

 
$227.99
 
636,750

 
11.0

 
$30.17
2015
 
389,307

 
14.7

 
6.7

 
$31.18
 
240,152

 
7.8

 
4.1

 
$25.92
 
11,607

 
12.0

 
0.2

 
$219.27
 
641,066

 
11.0

 
$32.61
2016
 
250,823

(3)(4) 
9.5

 
4.3

 
$29.56
 
186,468

 
6.1

 
3.2

 
$34.29
 
12,402

 
12.8

 
0.2

 
$146.97
 
449,693

 
7.7

 
$34.76
2017
 
308,855

(6) 
11.7

 
5.3

 
$39.87
 
327,463

 
10.7

 
5.6

 
$24.71
 
7,407

(5) 
7.7

 
0.1

 
$156.42
 
643,725

 
11.1

 
$33.50
2018
 
187,428


7.1

 
3.2

 
$34.44
 
930,231

 
30.3

 
16.0

 
$16.78
 
4,673

 
4.8

 
0.1

 
$142.23
 
1,122,332

 
19.3

 
$20.25
2019
 
245,469

 
9.3

 
4.2

 
$38.97
 
78,364

(7) 
2.6

 
1.3

 
$28.63
 
11,690

 
12.1

 
0.2

 
$53.16
 
335,523

 
5.8

 
$37.05
2020
 
243,114

(8) 
9.2

 
4.2

 
$39.23
 
118,506

 
3.9

 
2.0

 
$8.87
 
17,843

 
18.5

 
0.3

 
$44.82
 
379,463

 
6.5

 
$30.02
2021
 
198,313

 
7.5

 
3.4

 
$35.10
 
42,990

 
1.4

 
0.7

 
$39.26
 
—

 
—

 
—

 
—
 
241,303

 
4.2

 
$35.84
2022
 
9,364

 
0.4

 
0.2

 
$20.00
 
143,655

 
4.7

 
2.5

 
$30.07
 
10,617

 
11.0

 
0.2

 
$71.39
 
163,636

 
2.8

 
$32.18
Thereafter
 
103,450

 
3.8

 
1.8

 
$25.49
 
156,032

 
5.1

 
2.7

 
$21.31
 
—

 
—

 
—

 
—
 
259,482

 
4.5

 
$22.98
Signed Leases Not Commenced
 
78,794

 
3.0

 
1.4

 
—
 
6,488

 
0.2

 
0.1

 
—
 
503

 
0.5

 
—

 
—
 
85,785

 
1.5

 
—
Available
 
177,368

 
6.7

 
3.1

 
—
 
93,036

 
3.0

 
1.6

 
—
 
4,374

 
4.5

 
0.1

 
—
 
274,778

 
4.7

 
—
Total
 
2,645,567

 
100.0
%
 
45.6
%
 
$30.30
 
3,068,645

 
100.0
%
 
52.6
%
 
$22.79
 
96,707

 
100.0
%
 
1.6
%
 
$103.17
 
5,810,919

 
100.0
%
 
$27.54
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumes all lease options are exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Mixed-Use (Retail Portion Only)
 
Total
 
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
% of
 
Annualized
 
 
 
% of
 
Annualized
 
 
Expiring
 
Office
 
Total
 
Base Rent
 
Expiring
 
Retail
 
Total
 
Base Rent
 
Expiring
 
Mixed-Use
 
Total
 
Base Rent
 
Expiring
 
Total
 
Base Rent
Year
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
 
Sq. Ft.
 
Sq. Ft.
 
Per Sq. Ft.(1)
Month to Month
 
35,557

 
1.3
%
 
0.6
%
 
$6.82
 
19,274

 
0.6
%
 
0.3
%
 
$30.30
 
5,105

 
5.3
%
 
0.1
%
 
$15.49
 
59,936

 
1.0
%
 
$15.11
2013
 
139,015

 
5.3

 
2.4

 
$30.46
 
128,841

 
4.2

 
2.2

 
$34.77
 
8,048

 
8.3

 
0.1

 
$120.80
 
275,904

 
4.7

 
$35.11
2014
 
57,609

 
2.2

 
1.0

 
$31.10
 
166,573

 
5.4

 
2.9

 
$30.92
 
2,438

 
2.5

 
—

 
$227.99
 
226,620

 
3.9

 
$33.09
2015
 
166,110

 
6.3

 
2.9

 
$34.36
 
56,632

 
1.9

 
1.0

 
$34.79
 
5,393

 
5.6

 
0.1

 
$181.55
 
228,135

 
3.9

 
$37.95
2016
 
199,017

 
7.5

 
3.4

 
$28.17
 
57,418

 
1.9

 
1.0

 
$29.32
 
8,374

 
8.7

 
0.1

 
$160.13
 
264,809

 
4.6

 
$32.59
2017
 
51,303

 
1.9

 
0.9

 
$32.13
 
101,182

 
3.3

 
1.7

 
$31.31
 
6,367

 
6.6

 
0.1

 
$153.15
 
158,852

 
2.7

 
$36.46
2018
 
58,884

 
2.2

 
1.0

 
$32.50
 
156,254

 
5.1

 
2.7

 
$21.62
 
4,673

 
4.8

 
0.1

 
$142.23
 
219,811

 
3.8

 
$27.10
2019
 
116,098

 
4.4

 
2.0

 
$31.85
 
136,241

 
4.4

 
2.3

 
$24.68
 
—

 
—

 
—

 
—
 
252,339

 
4.3

 
$27.98
2020
 
203,360

 
7.7

 
3.5

 
$28.15
 
211,242

 
6.9

 
3.6

 
$20.97
 
1,951

 
2.0

 
—

 
$135.66
 
416,553

 
7.2

 
$25.01
2021
 
44,276

 
1.7

 
0.8

 
$31.85
 
54,991

 
1.8

 
0.9

 
$46.19
 
10,242

 
10.6

 
0.2

 
$199.93
 
109,509

 
1.9

 
$54.77
2022
 
339,696

 
12.8

 
5.8

 
$32.33
 
83,663

 
2.7

 
1.4

 
$34.69
 
10,617

 
11.0

 
0.2

 
$71.39
 
433,976

 
7.5

 
$33.74
Thereafter
 
978,480

(6)(8) 
37.0

 
16.8

 
$38.01
 
1,796,810

(7) 
58.6

 
30.9

 
$20.19
 
28,622

 
29.6

 
0.5

 
$46.82
 
2,803,912

 
48.3

 
$26.68
Signed Leases Not Commenced
 
78,794

 
3.0

 
1.4

 
—
 
6,488

 
0.2

 
0.1

 
—
 
503

 
0.5

 
—

 
—
 
85,785

 
1.5

 
—
Available
 
177,368

 
6.7

 
3.1

 
—
 
93,036

 
3.0

 
1.6

 
—
 
4,374

 
4.5

 
0.1

 
—
 
274,778

 
4.7

 
—
Total
 
2,645,567

 
100.0
%
 
45.6
%
 
$30.30
 
3,068,645

 
100.0
%
 
52.6
%
 
$22.79
 
96,707

 
100.0
%
 
1.6
%
 
$103.17
 
5,810,919

 
100.0
%
 
$27.54

Fourth Quarter 2012 Supplemental Information
                               Page 28
 
 
LEASE EXPIRATIONS (CONTINUED)
 
 

As of December 31, 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 December 31, 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's lease termination from January 31, 2013 through May 31, 2013.
(3)
The expirations include 2,823 square feet currently leased by Windermere Services, Inc. at Lloyd District Portfolio, for which Pinnacle Capital has signed an agreement to lease such space upon Windermere Services, Inc.'s lease termination from March, 31 2013 through March 31, 2016.
(4)
The expirations include 2,220 square feet currently leased by Northwest Media at City Center Bellevue, for which PAH Investments, LLC has signed an agreement to lease such space upon Northwest Media's lease termination from January 31, 2013 through February 28, 2016.
(5)
The expirations include 503 square feet currently leased by Kaiwa at Waikiki Beach Walk - Retail, for which Natur Hawii has signed an agreement to lease such space upon Kaiwa's lease termination from December 31, 2012 through December 31, 2017.
(6)
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 Microsoft's lease termination from December 31, 2012 through December 31, 2017, with an option to extend the lease through December 31, 2023.
(7)
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 March 31, 2013 through January 21, 2019, with an option to extend the lease through January 31, 2029.
(8)
The expirations include 27,226 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 & Heger's lease termination from October 31, 2013 through April 30, 2020, with an option to extend the lease through April 30, 2030.
   

Fourth Quarter 2012 Supplemental Information
                               Page 29
 
 
PORTFOLIO LEASED STATISTICS
 
 

 
 
At December 31, 2012
 
At December 31, 2011
Type
 
Size
 
Leased (1)
 
Leased %
 
Size
 
Leased (1)
 
Leased %
Overall Portfolio Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,068,645

 
2,975,609

 
97.0
%
 
3,031,339

 
2,878,832

 
95.0
%
Office Properties (square feet) (3)
 
2,645,567

 
2,468,199

 
93.3
%
 
2,061,742

 
1,936,678

 
93.9
%
Multifamily Properties (units)
 
922

 
873

 
94.7
%
 
922

 
846

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

 
92,333

 
95.5
%
 
96,569

 
95,783

 
99.2
%
Mixed-Use Properties (units)
 
369

 
328

(4) 
88.9
%
 
369

 
326.196

(4) 
88.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-Store(2) Statistics
 
 
 
 
 
 
 
 
 
 
 
 
Retail Properties (square feet)
 
3,033,489

 
2,940,453

 
96.9
%
 
2,784,609

(5) 
2,638,754

 
94.8
%
Office Properties (square feet)
 
2,057,445

 
1,918,897

 
93.3
%
 
878,735

(6) 
848,555

 
96.6
%
Multifamily Properties (units)
 
922

 
873

 
94.7
%
 
922

 
846

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

 
92,333

 
95.5
%
 
—

(7) 
—

 
—
%
Mixed-Use Properties (units)
 
369

 
328

(4) 
88.9
%
 
—

(7) 
—

 
—
%

Notes:
(1)
Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.
(2)
See Glossary of Terms.
(3)
Excludes 160 King Street, which was sold on December 4, 2012.
(4)
Represents average occupancy for the years ended December 31, 2012 and December 31, 2011.
(5)
Excludes Solana Beach Towne Centre, as the controlling interest in this entity was acquired on January 19, 2011.
(6)
Excludes Solana Beach Corporate Centre, as the controlling interest in this entity was acquired on January 19, 2011, First & Main, as it was acquired on March 11, 2011, Lloyd District Portfolio, as it was acquired on July 1, 2011, One Beach Street, as it was acquired on January 24, 2012 and City Center Bellevue, as it was acquired on August 21, 2012.
(7)
Excludes the Waikiki Beach Walk property, as the controlling interest in this entity was acquired on January 19, 2011.



Fourth Quarter 2012 Supplemental Information
                               Page 30
 
 
TOP TENANTS - RETAIL
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property(ies)
 
Lease Expiration
 
Total Leased Square Feet
 
Rentable Square Feet as a Percentage of Total Retail
 
Rentable Square Feet as a Percentage of Total
 
Annualized Base Rent
 
Annualized Base Rent as a Percentage of Total Retail
 
Annualized Base Rent as a Percentage of Total
1

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

 
5.1
%
 
2.7
%
 
$
4,221,786

 
6.0
%
 
2.6
%
2

Kmart
 
Waikele Center
 
6/30/2018
 
119,590

 
3.9

 
2.1

 
3,826,880

 
5.5

 
2.4

3

Foodland Super Market
 
Waikele Center
 
1/25/2014
 
50,000

 
1.6

 
0.9

 
2,430,981

 
3.5

 
1.5

4

Sports Authority
 
Carmel Mountain Plaza,Waikele Center
 
11/30/2013
7/18/2018
 
90,722

 
3.0

 
1.6

 
2,076,602

 
3.0

 
1.3

5

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

 
2.3

 
1.2

 
1,990,316

 
2.8

 
1.2

6

Sprouts Farmers Market
 
Solana Beach Towne Centre, Carmel Mountain Plaza, Geary Marketplace
 
6/30/2014
3/31/2025
9/30/2032
 
71,431

 
2.3

 
1.2

 
1,763,776

 
2.5

 
1.1

7

Ross Dress for Less
 
Lomas Santa Fe Plaza, Carmel Mountain Plaza, South Bay Marketplace
 
1/31/2013
1/31/2014
1/31/2018
 
81,125

 
2.6

 
1.4

 
1,595,826

 
2.3

 
1.0

8

Old Navy
 
South Bay Marketplace, Waikele Center, Alamo Quarry Market
 
4/30/2016
7/31/2016
9/30/2017
 
59,780

 
1.9

 
1.0

 
*

 
*

 
*

9

Officemax
 
Waikele Center, Alamo Quarry Market
 
1/31/2014
9/30/2017
 
47,962

 
1.6

 
0.8

 
1,176,511

 
1.7

 
0.7

10

Marshalls
 
Solana Beach Towne Centre, Carmel Mountain Plaza
 
1/13/2015
1/31/2019
 
68,055

 
2.2

 
1.2

 
1,106,146

 
1.6

 
0.7

 
Top 10 Retail Tenants Total
 
 
 
812,712

 
26.5
%
 
14.1
%
 
$
20,188,824

 
28.9
%
 
12.5
%


*
Data withheld at tenant's request.


Fourth Quarter 2012 Supplemental Information
                               Page 31
 
 
TOP TENANTS - OFFICE
 
 

As of December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
 
Property(ies)
 
Lease Expiration
 
Total Leased Square Feet
 
Rentable Square Feet as a Percentage of Total Office
 
Rentable Square Feet as a Percentage of Total
 
Annualized Base Rent
 
Annualized Base Rent as a Percentage of Total Office
 
Annualized Base Rent as a Percentage of Total
1

salesforce.com
 
The Landmark at One Market
 
6/30/2019 4/30/2020 5/31/2021
 
226,892

 
8.6
%
 
3.9
%
 
$
10,624,175

 
13.3
%
 
6.6
%
2

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

 
3.5

 
1.6

 
3,006,453

 
3.8

 
1.9

3

Autodesk, Inc.
 
The Landmark at One Market
 
12/31/2015 12/31/2017
 
68,869

 
2.6

 
1.2

 
2,984,838

 
3.7

 
1.9

4

Microsoft Corporation
 
The Landmark at One Market
 
12/31/2012
 
45,795

 
1.7

 
0.8

 
2,976,675

 
3.7

 
1.9

5

Treasury Tax Administration
 
First & Main
 
8/31/2015
 
70,660

 
2.7

 
1.2

 
2,583,330

 
3.2

 
1.6

6

Insurance Company of the West
 
Torrey Reserve Campus
 
12/31/2016
 
81,040

 
3.1

 
1.4

 
2,449,631

 
3.1

 
1.5

7

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

 
2.4

 
1.1

 
2,184,302

 
2.7

 
1.4

8

Caradigm USA LLC
 
City Center Bellevue
 
8/14/2017
 
68,956

 
2.6

 
1.2

 
2,103,158

 
2.6

 
1.3

9

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

 
2.4

 
1.1

 
1,775,176

 
2.2

 
1.1

10

Portland Energy Conservation
 
First & Main
 
1/31/2021
 
73,422

 
2.8

 
1.3

 
1,588,118

 
2.0

 
1.0

 
Top 10 Office Tenants Total
 
 
 
857,015

 
32.4
%
 
14.8
%
 
$
32,275,856

 
40.3
%
 
20.2
%




Fourth Quarter 2012 Supplemental Information
                               Page 32
 
 
 
 
 






APPENDIX





Fourth Quarter 2012 Supplemental Information
                               Page 33
 
 
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 months and year ended December 31, 2012 and 2011 is as follows:
    
 
 
Three Months Ended
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
Net income
 
$
41,821

 
$
655

 
$
51,601

 
$
19,324

Depreciation and amortization (including discontinued operations)
 
16,656

 
15,723

 
63,011

 
58,543

Interest expense (including discontinued operations)
 
15,521

 
14,696

 
59,043

 
56,552

Interest income
 
(7
)
 
(535
)
 
(336
)
 
(1,621
)
Income tax expense
 
460

 
(82
)
 
1,016

 
831

Gain on sale of real estate
 
(36,720
)
 
—

 
(36,720
)
 
(3,981
)
EBITDA
 
$
37,731

 
$
30,457

 
$
137,615

 
$
129,648


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
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
EBITDA
 
$
37,731

 
$
30,457

 
$
137,615

 
$
129,648

Early extinguishment of debt
 
—

 
—

 
—

 
25,867

Loan transfer and consent fees
 
—

 
—

 
—

 
8,808

Gain on acquisition
 
—

 
—

 
—

 
(46,371
)
Adjusted EBITDA
 
$
37,731

 
$
30,457

 
$
137,615

 
$
117,952


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.


Fourth Quarter 2012 Supplemental Information
                               Page 34
 
 
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
 
Year Ended
 
 
December 31,
 
December 31,
Reconciliation of NOI to net income
 
2012
 
2011
 
2012
 
2011
Total NOI
 
$
40,886

 
$
32,566

 
$
149,352

 
$
125,906

General and administrative
 
(4,063
)
 
(3,091
)
 
(15,593
)
 
(13,627
)
Depreciation and amortization
 
(16,576
)
 
(15,293
)
 
(61,853
)
 
(55,936
)
Interest expense
 
(15,152
)
 
(14,236
)
 
(57,328
)
 
(54,580
)
Early extinguishment of debt
 
—

 
—

 
—

 
(25,867
)
Loan transfer and consent fees
 
—

 
—

 
—

 
(8,808
)
Gain on acquisition
 
—

 
—

 
—

 
46,371

Other income (expense), net
 
(273
)
 
614

 
(629
)
 
212

Income from continuing operations
 
4,822

 
560

 
13,949

 
13,671

Discontinued operations
 
 
 
 
 
 
 
 
Income from discontinued operations
 
279

 
95

 
932

 
1,672

Gain on sale of real estate property
 
36,720

 
—

 
36,720

 
3,981

Results from discontinued operations
 
36,999

 
95

 
37,652

 
5,653

Net income
 
41,821

 
655

 
51,601

 
19,324

Net income attributable to restricted shares
 
(133
)
 
(132
)
 
(529
)
 
(482
)
Net loss attributable to Predecessor's noncontrolling interests in consolidated real estate entities
 
—

 
—

 
—

 
2,458

Net income attributable to Predecessor's controlled owners' equity
 
—

 
—

 
—

 
(16,995
)
Net loss attributable to unitholders in the Operating Partnership
 
(13,111
)
 
(179
)
 
(16,133
)
 
(1,388
)
Net income attributable to American Assets Trust, Inc. stockholders
 
$
28,577

 
$
344

 
$
34,939

 
$
2,917


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


Fourth Quarter 2012 Supplemental Information
                               Page 35
 
 
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
 
Comparison of Year Ended
 
December 31, 2012 to 2011
 
December 31, 2012 to 2011
 
Same-Store
 
Non-Same Store
 
Same-Store
 
Non-Same Store
Retail Properties
 
 
 
 
 
 
 
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
 
 
Geary Marketplace
 
 
X
 
 
 
X
The Shops at Kalakaua
X
 
 
 
X
 
 
Waikele Center
X
 
 
 
X
 
 
Alamo Quarry Market
X
 
 
 
X
 
 
Office Properties
 
 
 
 
 
 
 
Torrey Reserve Campus
X
 
 
 
X
 
 
Solana Beach Corporate Centre
X
 
 
 
 
 
X
The Landmark at One Market
X
 
 
 
X
 
 
One Beach Street
 
 
X
 
 
 
X
First & Main
X
 
 
 
 
 
X
Lloyd District Portfolio
X
 
 
 
 
 
X
City Center Bellevue
 
 
X
 
 
 
X
Multifamily Properties
 
 
 
 
 
 
 
Loma Palisades
X
 
 
 
X
 
 
Imperial Beach Gardens
X
 
 
 
X
 
 
Mariner's Point
X
 
 
 
X
 
 
Santa Fe Park RV Resort
X
 
 
 
X
 
 
Mixed-Use Properties
 
 
 
 
 
 
 
Waikiki Beach Walk - Retail
X
 
 
 
 
 
X
Waikiki Beach Walk - Embassy Suites™
X
 
 
 
 
 
X
Development Properties
 
 
 
 
 
 
 
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.

Fourth Quarter 2012 Supplemental Information
                               Page 36