American Assets Trust, Inc. - FORM 8-K - EX-99.2 - SUPPLEMENTAL INFORMATION

American Assets Trust, Inc. - FORM 8-K - EX-99.2 - SUPPLEMENTAL INFORMATION - November 6, 2012

Attached files

Attached files

American Assets Trust, Inc. Reports

file	filename
8-K - FORM 8-K - American Assets Trust, Inc.	d431385d8k.htm
EX-99.1 - PRESS RELEASE - American Assets Trust, Inc.	d431385dex991.htm

Exhibit 99.2

THIRD QUARTER 2012

Supplemental Information

LOGO

Investor and Media Contact

American Assets Trust

Robert F. Barton

Executive Vice President and Chief Financial Officer

858-350-2607

American Asset Trust, Inc.’s Portfolio is concentrated in high-barrier-to-entry markets with favorable supply/demand characteristics


	Retail		Office		Multifamily			Mixed-Use
Market	Square Feet		Square Feet		Units			Square Feet		Suites
San Diego		1,217,919		668,772		922	⁽¹⁾		-		-

San Francisco		-		687,534		-			-		-

Oahu		549,695		-		-			96,569		369

Monterey		675,385		-		-			-		-

San Antonio		589,501		-		-			-		-

Portland		-		971,036		-			-		-

Seattle		-		489,856		-			-		-


Total		3,032,500		2,817,198		922			96,569		369


Third Quarter 2012 Supplemental Information		Page 2


INDEX


	THIRD QUARTER 2012 SUPPLEMENTAL INFORMATION
1.	FINANCIAL HIGHLIGHTS
	Consolidated Balance Sheets	5
	Consolidated Statements of Income	6
	Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution	7
	Corporate Guidance	9
	Same-Store Portfolio Net Operating Income (NOI)	10
	Same-Store Portfolio NOI Comparison	12
	NOI By Region	13
	NOI Breakdown	14
	Property Revenue and Operating Expenses	15
	Segment Capital Expenditures	17
	Summary of Outstanding Debt	18
	Market Capitalization	19
	Summary of Redevelopment Opportunities	20

2.	PORTFOLIO DATA
	Property Report	22
	Retail Leasing Summary	24
	Office Leasing Summary	25
	Lease Expirations	26
	Portfolio Leased Statistics	27
	Top Tenants - Retail	28
	Top Tenants - Office	29

3.	APPENDIX
	Glossary of Terms	31

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

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


Third Quarter 2012 Supplemental Information		Page 3

FINANCIAL HIGHLIGHTS


Third Quarter 2012 Supplemental Information		Page 4


CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)


	September 30, 2012		December 31, 2011
	(unaudited)		(audited)
ASSETS
Real estate, at cost
Operating real estate	$	1,917,089	$	1,659,106
Construction in progress		34,369		3,495
Held for development		14,877		24,675

		1,966,335		1,687,276
Accumulated depreciation		(267,840)		(234,595)

Net real estate		1,698,495		1,452,681
Cash and cash equivalents		34,917		112,723
Restricted cash		10,251		9,216
Marketable securities		-		28,235
Accounts receivable, net		6,076		6,847
Deferred rent		29,392		23,294
Other assets, net		81,806		76,285

TOTAL ASSETS	$	1,860,937	$	1,709,281

LIABILITIES AND EQUITY
LIABILITIES:
Secured notes payable	$	964,068	$	943,479
Line of credit		141,000		-
Accounts payable and accrued expenses		33,950		25,476
Security deposits payable		5,482		4,790
Other liabilities and deferred credits		61,140		55,808

Total liabilities		1,205,640		1,029,553

Commitments and contingencies
EQUITY:
American Assets Trust, Inc. stockholders’ equity
Common stock, $0.01 par value, 490,000,000 shares authorized, 39,316,461 and 39,283,796 shares outstanding at September 30, 2012 and December 31, 2011, respectively		393		393
Additional paid in capital		656,425		653,645
Accumulated dividends in excess of net income		(46,004)		(28,007)

Total American Assets Trust, Inc. stockholders’ equity		610,814		626,031
Noncontrolling interests		44,483		53,697

Total equity		655,297		679,728

TOTAL LIABILITIES AND EQUITY	$	1,860,937	$	1,709,281


Third Quarter 2012 Supplemental Information		Page 5


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited, amounts in thousands, except shares and per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
REVENUE:
Rental income	$	59,915	$	53,278	$	169,199	$	146,860
Other property income		2,921		3,015		8,484		7,416

Total revenue		62,836		56,293		177,683		154,276
EXPENSES:
Rental expenses		17,024		16,187		48,219		42,720
Real estate taxes		6,301		5,390		17,689		14,800
General and administrative		3,959		3,733		11,716		10,786
Depreciation and amortization		16,432		15,827		46,356		41,916

Total operating expenses		43,716		41,137		123,980		110,222
OPERATING INCOME		19,120		15,156		53,703		44,054
Interest expense		(14,690)		(14,738)		(43,522)		(41,791)
Early extinguishment of debt		-		-		-		(25,867)
Loan transfer and consent fees		-		-		-		(9,019)
Gain on acquisition		-		-		-		46,371
Other income (expense), net		68		(108)		(188)		(179)

INCOME FROM CONTINUING OPERATIONS		4,498		310		9,993		13,569
DISCONTINUED OPERATIONS
Income from discontinued operations		(213)		327		(213)		1,119
Gain on sale of real estate property		-		3,981		-		3,981

Results from discontinued operations		(213)		4,308		(213)		5,100

NET INCOME		4,285		4,618		9,780		18,669
Net income attributable to restricted shares		(133)		(132)		(396)		(350)
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		(1,335)		(1,434)		(3,022)		(1,209)

NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS	$	2,817	$	3,052	$	6,362	$	2,573

Basic net income (loss) from continuing operations attributable to common stockholders per share	$	0.08	$	-	$	0.17	$	(0.03)
Basic net income from discontinued operations attributable to common stockholders per share		-		0.08		-		0.10

Basic net income attributable to common stockholders per share	$	0.08	$	0.08	$	0.17	$	0.07

Weighted average shares of common stock outstanding—basic		38,673,617		38,655,084		38,663,352		36,106,397

Diluted net income (loss) from continuing operations attributable to common stockholders per share	$	0.08	$	-	$	0.17	$	(0.03)
Diluted net income from discontinued operations attributable to common stockholders per share		-		0.08		-		0.10

Diluted net income (loss) attributable to common stockholders per share	$	0.08	$	0.08	$	0.17	$	0.07

Weighted average shares of common stock outstanding—diluted		57,054,425		57,051,173		57,054,425		53,265,648


Third Quarter 2012 Supplemental Information		Page 6

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION


(Unaudited, amounts in thousands, except share and per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Funds from Operations (FFO) ⁽¹⁾
Net income	$	4,285	$	4,618	$	9,780	$	18,669
Depreciation and amortization of real estate assets ⁽²⁾		16,432		16,053		46,356		42,820
Depreciation and amortization on unconsolidated real estate joint ventures (pro rata)		-		-		-		688
Gain on sale of real estate		-		(3,981)		-		(3,981)

FFO, as defined by NAREIT		20,717		16,690		56,136		58,196
Less: FFO attributable to Predecessor’s controlled and noncontrolled owners’ equity		-		-		-		(16,973)
Less: Nonforfeitable dividends on incentive stock awards		(89)		(88)		(266)		(227)

FFO attributable to common stock and common units	$	20,628	$	16,602	$	55,870	$	40,996

FFO per diluted share/unit	$	0.36	$	0.29	$	0.98	$	0.77

Weighted average number of common shares and common units, diluted ⁽³⁾		57,266,166		57,258,190		57,261,363		53,459,442

FFO As Adjusted ⁽¹⁾
FFO	$	20,717	$	16,690	$	56,136	$	58,196
Early extinguishment of debt		-		-		-		25,867
Loan transfer and consent fees		-		-		-		9,019
Gain on acquisition of controlling interests ⁽⁴⁾		-		-		-		(46,371)

FFO As Adjusted		20,717		16,690		56,136		46,711
Less: FFO As Adjusted attributable to Predecessor’s controlled and noncontrolled owners’ equity		-		-		-		(2,462)
Less: Nonforfeitable dividends on incentive stock awards		(89)		(88)		(266)		(227)

FFO As Adjusted attributable to common stock and units	$	20,628	$	16,602	$	55,870	$	44,022

FFO As Adjusted per diluted share/unit	$	0.36	$	0.29	$	0.98	$	0.82

Weighted average number of common shares and units, diluted ⁽³⁾		57,266,166		57,258,190		57,261,363		53,459,442

Dividends
Dividends declared and paid	$	12,114	$	12,113	$	36,340	$	34,010
Dividends declared and paid per share/unit	$	0.21	$	0.21	$	0.63	$	0.59


Third Quarter 2012 Supplemental Information		Page 7

FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS

AVAILABLE FOR DISTRIBUTION (CONTINUED)


(Unaudited, amounts in thousands, except share and per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Funds Available for Distribution (FAD) ⁽¹⁾
FFO As Adjusted	$	20,717	$	16,690	$	56,136	$	46,711
Adjustments:
Tenant improvements, leasing commissions and maintenance capital expenditures⁽⁵⁾		(13,208)		(3,765)		(23,067)		(6,997)
Net effect of straight-line rents ⁽⁶⁾		(2,300)		(1,996)		(6,487)		(3,328)
Amortization of net above (below) market rents ⁽⁷⁾		9		863		720		1,644
Net effect of other lease intangibles ⁽⁸⁾		59		518		197		1,054
Amortization of debt issuance costs and debt fair value adjustment		985		1,031		2,964		2,924
Non-cash compensation expense		722		712		2,128		1,902
Unrealized (gains) losses on marketable securities		(86)		56		538		3
Loss on sale of marketable securities		121		-		121		-
Nonforfeitable dividends on incentive stock awards		(89)		(88)		(266)		(227)
Adjustments related to discontinued operations		-		(137)		-		(664)

FAD	$	6,930	$	13,884	$	32,984	$	43,022

Summary of Capital Expenditures
Tenant improvements and leasing commissions⁽⁵⁾	$	11,779	$	1,779	$	18,437	$	4,352
Maintenance capital expenditures		1,429		1,986		4,630		2,645

	$	13,208	$	3,765	$	23,067	$	6,997

Notes:

(1)

See Glossary of Terms.

(2)

The nine months ended September 30, 2011 includes depreciation and amortization on Valencia Corporate Center, which was sold on August 30, 2011 and is classified as discontinued operations.

(3)

For the nine months ended September 30, 2012 and 2011, the weighted average common shares and common units used to compute FFO and FFO As Adjusted per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO and FFO As Adjusted per diluted share/unit include additional shares/units which were excluded from the computation of diluted EPS, as they were anti-dilutive for the periods presented.

(4)

Represents the gain recognized upon acquisition of the outside ownership interests in the Solana Beach Centre entities and the Waikiki Beach Walk entities on January 19, 2011, in which we previously held a noncontrolling interest.

(5)

Includes $6.1 million of tenant improvements related to salesforce.com, which was identified during the IPO as a Use of Proceeds.

(6)

Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.

(7)

Represents the adjustment related to the acquisition of buildings with above (below) market rents.

(8)

Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our leases of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk—Retail.


Third Quarter 2012 Supplemental Information		Page 8


CORPORATE GUIDANCE


(Unaudited, amounts in thousands, except share and per share data)
	2012 Guidance Range ⁽¹⁾
Funds from Operations (FFO)
Net income	$	12,193	$	13,559
Depreciation and amortization of real estate assets		62,838		62,838

FFO, as defined by NAREIT		75,031		76,397
Less: Nonfortfeitable dividends on incentive stock awards		(356)		(356)

FFO attributable to common stock and units	$	74,675	$	76,041

Weighted average number of common shares and units, diluted		57,263,568		57,263,568

FFO per diluted share	$	1.30	$	1.33

	2013 Guidance Range ⁽¹⁾
Funds from Operations (FFO)
Net income	$	14,953	$	20,103
Depreciation and amortization of real estate assets		62,806		62,806

FFO, as defined by NAREIT		77,759		82,909
Less: Nonfortfeitable dividends on incentive stock awards		(358)		(358)

FFO attributable to common stock and units	$	77,401	$	82,551

Weighted average number of common shares and units, diluted		57,269,499		57,269,499

FFO per diluted share	$	1.35	$	1.44

Notes:

(1)

Other than the acquisition of Geary Marketplace and disposition of 160 King Street, our guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financings or repayments.

These estimates are forward-looking and reflect 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.


Third Quarter 2012 Supplemental Information		Page 9


SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)


(Unaudited, amounts in thousands)	Three Months Ended September 30, 2012
	Retail		Office		Multifamily		Mixed-Use		Total
Real estate rental revenue
Same-store portfolio	$	23,684	$	18,398	$	3,906	$	13,579	$	59,567
Non-same store portfolio ⁽¹⁾		10		3,259		-		-		3,269

Total		23,694		21,657		3,906		13,579		62,836

Real estate expenses
Same-store portfolio		6,793		6,154		1,558		8,132		22,637
Non-same store portfolio ⁽¹⁾		35		653		-		-		688

Total		6,828		6,807		1,558		8,132		23,325

Net Operating Income (NOI), GAAP basis
Same-store portfolio		16,891		12,244		2,348		5,447		36,930
Non-same store portfolio ⁽¹⁾		(25)		2,606		-		-		2,581

Total	$	16,866	$	14,850	$	2,348	$	5,447	$	39,511


Same-store portfolio NOI, GAAP basis	$	16,891	$	12,244	$	2,348	$	5,447	$	36,930
Net effect of straight-line rents ⁽²⁾		(565)		(859)		-		(84)		(1,508)
Amortization of net above (below) market rents ⁽³⁾		(186)		225		-		294		333
Net effect of other lease intangibles ⁽⁴⁾		-		73		-		(14)		59

Same-store portfolio NOI, cash basis	$	16,140	$	11,683	$	2,348	$	5,643	$	35,814

Notes:

(1)

Same-store portfolio and non-same store portfolio are determined based on properties held on September 30, 2012 and September 30, 2011. See Glossary of Terms.

(2)

Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.

(3)

Represents the adjustment related to the acquisition of buildings with above (below) market rents.

(4)

Represents adjustments related to amortization of lease incentives paid to tenants and amortization of lease intangibles and straight-line rent expense for our lease of the Annex at The Landmark at One Market and retail space at Waikiki Beach Walk—Retail.


Third Quarter 2012 Supplemental Information		Page 10


SAME-STORE PORTFOLIO NET OPERATING INCOME (NOI)


(Unaudited, amounts in thousands)	Nine Months Ended September 30, 2012
	Retail		Office		Multifamily		Mixed-Use		Total
Real estate rental revenue
Same-store portfolio	$	61,078	$	32,133	$	10,957	$	-	$	104,168
Non-same store portfolio ⁽¹⁾		6,759		28,705		-		38,051		73,515

Total		67,837		60,838		10,957		38,051		177,683

Real estate expenses
Same-store portfolio		17,049		10,470		4,437		-		31,956
Non-same store portfolio ⁽¹⁾		1,599		8,988		-		23,365		33,952

Total		18,648		19,458		4,437		23,365		65,908

Net Operating Income (NOI), GAAP basis
Same-store portfolio		44,029		21,663		6,520		-		72,212
Non-same store portfolio ⁽¹⁾		5,160		19,717		-		14,686		39,563

Total	$	49,189	$	41,380	$	6,520	$	14,686	$	111,775


Same-store portfolio NOI, GAAP basis	$	44,029	$	21,663	$	6,520	$	-	$	72,212
Net effect of straight-line rents ⁽²⁾		(854)		(3,568)		-		-		(4,422)
Amortization of net above (below) market rents ⁽³⁾		186		222		-		-		408
Net effect of other lease intangibles ⁽⁴⁾		-		241		-		-		241

Same-store portfolio NOI, cash basis	$	43,361	$	18,558	$	6,520	$	-	$	68,439

Notes:

(1)

Same-store portfolio and non-same store portfolio are determined based on properties held on September 30, 2012 and September 30, 2011. See Glossary of Terms.

(2)

Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.

(3)

Represents the adjustment related to the acquisition of buildings with above (below) market rents.

(4)


Third Quarter 2012 Supplemental Information		Page 11


SAME-STORE PORTFOLIO NOI COMPARISON


(Unaudited, amounts in thousands)	Three Months Ended September 30,				Change		Nine Months Ended September 30,				Change
	2012		2011		Change		2012		2011		Change
Cash Basis:
Retail	$	16,140	$	15,449		4.5 %	$	43,361	$	43,285		0.2 %
Office		11,683		11,153		4.8		18,558		20,926		(11.3)
Multifamily		2,348		2,416		(2.8)		6,520		6,614		(1.4)
Mixed-Use		5,643		4,759		18.6		-		-		-

	$	35,814	$	33,777		6.0 %	$	68,439	$	70,825		(3.4) %

GAAP Basis:
Retail	$	16,891	$	15,512		8.9 %	$	44,029	$	43,150		2.0 %
Office		12,244		11,972		2.3		21,663		21,277		1.8
Multifamily		2,348		2,416		(2.8)		6,520		6,614		(1.4)
Mixed-Use		5,447		4,661		16.9		-		-		-

	$	36,930	$	34,561		6.9 %	$	72,212	$	71,041		1.6 %


Third Quarter 2012 Supplemental Information		Page 12


NOI BY REGION


(Unaudited, amounts in thousands)	Three Months Ended September 30, 2012
	Retail		Office		Multifamily		Mixed-Use		Total
Southern California
NOI, GAAP basis ⁽¹⁾	$	7,155	$	4,014	$	2,348	$	-	$	13,517
Net effect of straight-line rents ⁽²⁾		(445)		(82)		-		-		(527)
Amortization of net above (below) market rents ⁽³⁾		(214)		53		-		-		(161)
Net effect of other lease intangibles		-		92		-		-		92

NOI, cash basis		6,496		4,077		2,348		-		12,921
Northern California
NOI, GAAP basis ⁽¹⁾		2,271		5,389		-		-		7,660
Net effect of straight-line rents ⁽²⁾		(5)		(990)		-		-		(995)
Amortization of net above (below) market rents ⁽³⁾		(68)		(67)		-		-		(135)
Net effect of other lease intangibles ⁽⁴⁾		-		(19)		-		-		(19)

NOI, cash basis		2,198		4,313		-		-		6,511
Hawaii
NOI, GAAP basis ⁽¹⁾		4,402		-		-		5,447		9,849
Net effect of straight-line rents ⁽²⁾		116		-		-		(84)		32
Amortization of net above (below) market rents ⁽³⁾		174		-		-		294		468
Net effect of other lease intangibles ⁽⁴⁾		-		-		-		(14)		(14)

NOI, cash basis		4,692		-		-		5,643		10,335
Oregon
NOI, GAAP basis ⁽¹⁾		-		3,626		-		-		3,626
Net effect of straight-line rents ⁽²⁾		-		54		-		-		54
Amortization of net above (below) market rents ⁽³⁾		-		174		-		-		174

NOI, cash basis		-		3,854		-		-		3,854
Texas
NOI, GAAP basis ⁽¹⁾		3,038		-		-		-		3,038
Net effect of straight-line rents ⁽²⁾		(231)		-		-		-		(231)
Amortization of net above (below) market rents ⁽³⁾		(78)		-		-		-		(78)

NOI, cash basis		2,729		-		-		-		2,729
Washington
NOI, GAAP basis ⁽¹⁾		-		1,821		-		-		1,821
Net effect of straight-line rents ⁽²⁾		-		(633)		-		-		(633)
Amortization of net above (below) market rents ⁽³⁾		-		(259)		-		-		(259)

NOI, cash basis		-		929		-		-		929
Total
NOI, GAAP basis ⁽¹⁾		16,866		14,850		2,348		5,447		39,511
Net effect of straight-line rents ⁽²⁾		(565)		(1,651)		-		(84)		(2,300)
Amortization of net above (below) market rents ⁽³⁾		(186)		(99)		-		294		9
Net effect of other lease intangibles ⁽⁴⁾		-		73		-		(14)		59

NOI, cash basis	$	16,115	$	13,173	$	2,348	$	5,643	$	37,279

Notes:

(1)

See Glossary of Terms.

(2)

Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.

(3)

Represents the adjustment related to the acquisition of buildings with above (below) market rents.

(4)


Third Quarter 2012 Supplemental Information		Page 13


NOI BREAKDOWN

Three Months Ended September 30, 2012

LOGO


Third Quarter 2012 Supplemental Information		Page 14


PROPERTY REVENUE AND OPERATING EXPENSES


(Unaudited, amounts in thousands)	Three Months Ended September 30, 2012
Property	Base Rent ⁽¹⁾		Additional Property Income ⁽²⁾		Billed Expense Reimbursements ⁽³⁾		Property Operating Expenses ⁽⁴⁾
*Retail Portfolio*
Carmel Country Plaza	$	802	$	21	$	188	$	(185)
Carmel Mountain Plaza		2,287		42		841		(854)
South Bay Marketplace		507		1		111		(130)
Rancho Carmel Plaza		190		9		35		(53)
Lomas Santa Fe Plaza		1,316		51		307		(359)
Solana Beach Towne Centre		1,367		57		808		(802)
Del Monte Center		2,098		288		980		(1,164)
The Shops at Kalakaua		392		20		40		(63)
Waikele Center		4,368		338		1,110		(1,517)
Alamo Quarry Market		2,947		62		1,367		(1,647)

Subtotal Retail Portfolio	$	16,274	$	889	$	5,787	$	(6,774)

*Office Portfolio*
Torrey Reserve Campus ⁽⁵⁾	$	3,730	$	109	$	288	$	(1,021)
Solana Beach Corporate Centre		1,693		3		(46)		(369)
160 King Street		1,433		471		173		(752)
One Beach Street		697		-		152		(266)
The Landmark at One Market		4,741		23		53		(1,815)
First & Main		2,740		123		103		(747)
Lloyd District Portfolio		2,831		146		19		(1,334)
City Center Bellevue ⁽⁶⁾		1,405		214		122		(425)

Subtotal Office Portfolio	$	19,270	$	1,089	$	864	$	(6,729)

*Multifamily Portfolio*
Loma Palisades	$	2,446	$	173	$	-	$	(921)
Imperial Beach Gardens		648		54		-		(271)
Mariner’s Point		287		25		-		(158)
Santa Fe Park RV Resort		258		20		-		(207)

Subtotal Multifamily Portfolio	$	3,639	$	272	$	-	$	(1,557)


Third Quarter 2012 Supplemental Information		Page 15


PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED)


(Unaudited, amounts in thousands)	Three Months Ended September 30, 2012
Property	Base Rent ⁽¹⁾		Additional Property Income ⁽²⁾		Billed Expense Reimbursements ⁽³⁾		Property Operating Expenses ⁽⁴⁾
*Mixed-Use Portfolio*
Waikiki Beach Walk – Retail	$	2,318	$	885	$	914	$	(1,600)
Waikiki Beach Walk – Embassy Suites™		9,017		649		-		(6,540)


Subtotal Mixed-Use Portfolio	$	11,335	$	1,534	$	914	$	(8,140)

Total	$	50,518	$	3,784	$	7,565	$	(23,200)

Notes:

(1)

Base rent for our retail and office portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended September 30, 2012 (before abatements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our retail and office portfolio were approximately $36 and $1,299, respectively, for the three months ended September 30, 2012. There were no abatements for the retail portion of our mixed-use portfolio for the three months ended September 30, 2012. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Multifamily portfolio base rent represents base rent (including parking, before abatements) less vacancy allowance and employee rent credits and includes additional rents (additional rents include insufficient notice penalties, month-to-month charges and pet rent). Total abatements for our multifamily portfolio were $6 for the three months ended September 30, 2012. For Waikiki Beach Walk – Embassy Suites ^TM, base rent is equal to the actual room revenue for the three months ended September 30, 2012.

(2)

Represents additional property-related income for the three months ended September 30, 2012, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).

(3)

Represents billed tenant expense reimbursements for the three months ended September 30, 2012.

(4)

Represents property operating expenses for the three months ended September 30, 2012. Property operating expenses includes all rental expenses, except non-cash rent expense and the provision for bad debt recorded for deferred rent receivables.

(5)

Base rent shown includes amounts related to American Assets Trust, L.P.’s lease at ICW Plaza. This intercompany rent is eliminated in the consolidated statement of operations. The base rent was $134 and abatements were $134 for the three months ended September 30, 2012.

(6)

Includes revenue and expenses since the acquisition of City Center Bellevue for the period from August 21, 2012 to September 30, 2012.


Third Quarter 2012 Supplemental Information		Page 16


SEGMENT CAPITAL EXPENDITURES


(Unaudited, amounts in thousands)	Three Months Ended September 30, 2012
Segment	Tenant Improvements and Leasing Commissions		Maintenance Capital Expenditures		Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures		Redevelopment and Expansions		New Development		Total Capital Expenditures
Retail Portfolio	$	4,091	$	134	$	4,225	$	-	$	67	$	4,292
Office Portfolio		7,678		938		8,616		385		1,380		10,381
Multifamily Portfolio		-		259		259		-		-		259
Mixed-Use Portfolio		10		98		108		-		-		108

Total	$	11,779	$	1,429	$	13,208	$	385	$	1,447	$	15,040


	Nine Months Ended September 30, 2012
Segment	Tenant Improvements and Leasing Commissions		Maintenance Capital Expenditures		Total Tenant Improvements, Leasing Commissions and Maintenance Capital Expenditures		Redevelopment and Expansions		New Development		Total Capital Expenditures
Retail Portfolio	$	8,221	$	1,397	$	9,618	$	1,905	$	211	$	11,734
Office Portfolio		10,195		2,219		12,414		385		2,938		15,737
Multifamily Portfolio		-		782		782		-		-		782
Mixed-Use Portfolio		21		232		253		-		-		253

Total	$	18,437	$	4,630	$	23,067	$	2,290	$	3,149	$	28,506


Third Quarter 2012 Supplemental Information		Page 17


SUMMARY OF OUTSTANDING DEBT


(Unaudited, amounts in thousands)	Amount Outstanding at September 30, 2012		Interest Rate		Annual Debt Service		Maturity Date		Balance at Maturity
Debt	Amount Outstanding at September 30, 2012		Interest Rate		Annual Debt Service		Maturity Date		Balance at Maturity
Alamo Quarry Market ⁽¹⁾⁽²⁾	$	94,482		5.67 %	$	7,567		January 8, 2014	$	91,717
160 King Street ⁽³⁾		30,214		5.68		3,351		May 1, 2014		27,513
Waikele Center ⁽⁴⁾		140,700		5.15		7,360		November 1, 2014		140,700
The Shops at Kalakaua ⁽⁴⁾		19,000		5.45		1,053		May 1, 2015		19,000
The Landmark at One Market ⁽²⁾⁽⁴⁾		133,000		5.61		7,558		July 5, 2015		133,000
Del Monte Center ⁽⁴⁾		82,300		4.93		4,121		July 8, 2015		82,300
First & Main⁽⁴⁾		84,500		3.97		3,397		July 1, 2016		84,500
Imperial Beach Gardens ⁽⁴⁾		20,000		6.16		1,250		September 1, 2016		20,000
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⁾		37,302		6.39		2,798		August 1, 2017		35,136
Loma Palisades ⁽⁴⁾		73,744		6.09		4,553		July 1, 2018		73,744
One Beach Street ⁽⁴⁾		21,900		3.94		875		April 1, 2019		21,900
Torrey Reserve - North Court ⁽¹⁾		21,727		7.22		1,836		June 1, 2019		19,443
Torrey Reserve - VCI, VCII, VCIII⁽¹⁾		7,316		6.36		560		June 1, 2020		6,439
Solana Beach Corporate Centre I-II ⁽¹⁾		11,676		5.91		855		June 1, 2020		10,169
Solana Beach Towne Centre ⁽¹⁾		38,922		5.91		2,849		June 1, 2020		33,898


Total / Weighted Average	$	977,793		5.42 %	$	58,760			$	960,469
Unamortized fair value adjustment		(13,725)

Secured Notes Payable	$	964,068

Fixed Rate Debt Ratio of Secured Notes Payable
Fixed rate debt		100 %
Line of Credit	$	141,000

Notes:

(1)

Principal payments based on a 30-year amortization schedule.

(2)

Maturity date is the earlier of the loan maturity date under the loan agreement, or the “Anticipated Repayment Date” as specifically defined in the loan agreement, which is the date after which substantial economic penalties apply if the loan has not been paid off.

(3)

Principal payments based on a 20-year amortization schedule.

(4)

Interest only.

(5)

Loan was interest only through August 2012. Beginning in September 2012, principal payments are based on a 30-year amortization schedule. Annual debt service is for the period October 1, 2012 through September 30, 2013.


Third Quarter 2012 Supplemental Information		Page 18


MARKET CAPITALIZATION


(Unaudited, amounts in thousands, except per share data)	September 30, 2012
Market data
Common shares outstanding		39,316
Common units outstanding		18,371

Common shares and common units outstanding		57,687
Market price per common share	$	26.79

Equity market capitalization	$	1,545,435
Total debt	$	1,118,793

Total market capitalization	$	2,664,228
Less: Cash on hand	$	(34,917)

Total enterprise value	$	2,629,311

Total assets, gross	$	2,128,777

Total debt/Total capitalization		42.0%
Total debt/Total enterprise value		42.6%
Net debt/Total enterprise value⁽¹⁾		41.2%
Total debt/Total assets, gross		52.6%
Total debt/EBITDA ⁽²⁾⁽³⁾		7.9x
Net debt/EBITDA ⁽²⁾⁽³⁾		7.7x
Interest coverage ratio ⁽⁴⁾		2.5x
Fixed charge coverage ratio ⁽⁴⁾		2.5x

Notes:

(1)	Net debt is equal to total debt less cash on hand.

(2)	See Glossary of Terms for discussion of EBITDA.

(3)	As used here, EBITDA represents the actual for the three months ended September 30, 2012 annualized.

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

(5)

The revolving line of credit, which has a capacity of $250 million, matures in January 2016 and has an option to extend through January 2017. The availability on the revolving line of credit was approximately $219.4 million at September 30, 2012, of which $141.0 million is outstanding as of September 30, 2012. The credit facility bears interest at the rate of either LIBOR or a base rate, in each case plus a margin that will vary depending on our leverage ratio. At September 30, 2012, the interest rate was 1.8075%.


Third Quarter 2012 Supplemental Information		Page 19


SUMMARY OF REDEVELOPMENT OPPORTUNITIES

Our portfolio has numerous potential opportunities to create future shareholder value. These opportunities could be subject to government approvals, lender consents, tenant consents, market conditions, availability of debt and/or equity financing, etc. Many of these opportunities are in their preliminary stages and may not ultimately come to fruition. This schedule will update as we modify various assumptions and markets conditions change. Square footages and units set forth below are estimates only and ultimately may differ materially from actual square footages and units.

In-Process Development Projects


Property	Property Type	Location	Estimated Start Date	Estimated Completion Date	Estimated Stabilization Date ⁽¹⁾	Estimated Rentable Square Feet	Total Estimated Investment ⁽²⁾	Estimated Stabilized Yield⁽³⁾
Torrey Reserve III & IV	Office	San Diego, CA	2012	2014	2015	81,500	$34,100,000	8.6%
Carmel Mountain Plaza	Retail	San Diego, CA	2012	2013	2013	10,000	$800,000	37.5%

Development/Redevelopment Pipeline

Property

Property Type

Location

Estimated Square
Footage

Multifamily Units

Solana Beach Corporate

Centre (Building 5)

Retail

Solana Beach, CA

10,000

N/A

Lomas Santa Fe Plaza

Retail

Solana Beach, CA

45,000

N/A

Sorrento Pointe

Office

San Diego, CA

88,000

N/A

Lloyd District Portfolio ⁽⁵⁾

Mixed Use

Portland, OR

60,000

655

Solana Beach – Highway 101

Mixed Use

Solana Beach, CA

48,000

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.


Third Quarter 2012 Supplemental Information		Page 20

PORTFOLIO DATA


Third Quarter 2012 Supplemental Information		Page 21


PROPERTY REPORT


As of September 30, 2012		Retail and Office Portfolios
Property	Location	Year Built/ Renovated		Number of Buildings		Net Rentable Square Feet ⁽¹⁾		Percentage Leased⁽²⁾			Annualized Base Rent ⁽³⁾		Annualized Base Rent per Leased Square Foot⁽⁴⁾		Retail Anchor Tenant(s) ⁽⁵⁾	Other Principal Retail Tenants ⁽⁶⁾
Retail Properties
Carmel Country Plaza	San Diego, CA		1991		9		78,098		100.0	%	$	3,248,183	$	41.59		Sharp Healthcare, Frazee Industries Inc.
Carmel Mountain Plaza ⁽⁷⁾	San Diego, CA		1994		13		520,228		92.1			10,084,868		21.05	Sears	Sports Authority, Nordstrom Rack
South Bay Marketplace ⁽⁷⁾	San Diego, CA		1997		9		132,873		100.0			2,148,977		16.17		Ross Dress for Less, Grocery Outlet
Rancho Carmel Plaza	San Diego, CA		1993		3		30,421		89.3			761,446		28.03		Oggi’s Pizza & Brewing Co., Sprint PCS Assets
Lomas Santa Fe Plaza	Solana Beach, CA		1972/1997		9		209,569		94.8			5,253,359		26.44		Vons, Ross Dress for Less
Del Monte Center ⁽⁷⁾	Monterey, CA		1967/1984/2006		16		675,385		98.9			9,030,237		13.52	Macy’s, KLA Monterrey	Century Theatres, Macy’s Furniture Gallery
The Shops at Kalakaua	Honolulu, HI		1971/2006		3		11,671		100.0			1,569,640		134.49		Whalers General Store, Diesel U.S.A. Inc.
Waikele Center	Waipahu, HI		1993/2008		9		538,024		94.8			17,614,463		34.53	Lowe’s, Kmart, Sports Authority, Foodland Super Market	Old Navy, Officemax
															20.66
Alamo Quarry Market ⁽⁷⁾	San Antonio, TX		1997/1999		16		589,501		99.9			11,842,918		20.11	Regal Cinemas	Bed Bath & Beyond, Whole Foods Market, Nordstrom Rack
Solana Beach Towne Centre	Solana Beach, CA		1973/2000/2004		12		246,730		99.4			5,477,937		22.34		Dixieline Probuild, Marshalls

Subtotal/Weighted Average Retail Portfolio					99		3,032,500		96.9	%	$	67,032,028	$	22.81

Office Properties
Torrey Reserve Campus	San Diego, CA		1996-2000		9		456,801		93.7	%	$	15,116,500	$	35.32
160 King Street	San Francisco, CA		2002		1		167,986		97.9			5,810,384		35.33
The Landmark at One Market ⁽⁸⁾	San Francisco, CA		1917/2000		1		421,934		100.0			18,966,745		44.95
Solana Beach Corporate Centre	Solana Beach, CA		1982/2005		4		211,971		97.8			7,032,739		33.92
First & Main	Portland, OR		2010		1		360,955		98.8			10,963,591		30.74
Lloyd District Portfolio	Portland, OR		1940-2011		6		610,081		85.2			11,364,979		21.86
One Beach Street	San Francisco, CA		1924/1972/1987/ 1992		1		97,614		100.0			2,786,371		28.54
City Center Bellevue	Bellevue, WA		1987		1		489,856		92.1			13,016,679		28.85
Subtotal/Weighted Average Office Portfolio					24		2,817,198		94.0	%	$	85,057,988	$	32.12

Total/Weighted Average Retail and Office Portfolio					123		5,849,698		95.5	%	$	152,090,016	$	27.22


Third Quarter 2012 Supplemental Information		Page 22


PROPERTY REPORT (CONTINUED)


As of September 30, 2012	Multifamily Portfolio
Property	Location	Year Built/ Renovated		Number of Buildings		Units		Percentage Leased ⁽²⁾		Annualized Base Rent ⁽³⁾		Average Monthly Base Rent per Leased Unit ⁽⁴⁾
Loma Palisades	San Diego, CA		1958/ 2001-2008		80		548		100.0 %	$	9,951,864	$	1,513
Imperial Beach Gardens	Imperial Beach, CA		1959/ 2008-present		26		160		98.8		2,596,812		1,369
Mariner’s Point	Imperial Beach, CA		1986		8		88		100.0		1,158,144		1,097
Santa Fe Park RV Resort ⁽⁹⁾	San Diego, CA		1971/ 2007-2008		1		126		73.8		873,204		783

Total/Weighted Average Multifamily Portfolio					115		922		96.2 %	$	14,580,024	$	1,370

Mixed-Use Portfolio
Retail Portion	Location	Year Built/ Renovated		Number of Buildings		Net Rentable Square Feet ⁽¹⁾		Percentage Leased ⁽²⁾		Annualized Base Rent ⁽³⁾		Annualized Base Rent per Leased Square Foot ⁽⁴⁾		Retail Anchor Tenant(s) ⁽⁵⁾	Other Principal Retail Tenants ⁽⁶⁾
Waikiki Beach Walk - Retail	Honolulu, HI		2006		3		96,569		97.4 %	$	9,208,893	$	97.91		Yardhouse, Ruths Chris

Hotel Portion	Location	Year Built/ Renovated		Number of Buildings		Units		Average Occupancy ⁽¹⁰⁾		Average Daily Rate⁽¹⁰⁾		Annualized Revenue per Available Room ⁽¹⁰⁾
Waikiki Beach Walk - Embassy Suites™	Honolulu, HI		2008		2		369		89.7 %	$	292.8	$	262.64

Notes:

(1)

The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing leases, plus (2) for available space, 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 September 30, 2012, including leases which may not have commenced as of September 30, 2012. Percentage leased for our multifamily properties includes total units rented as of September 30, 2012.

(3)

Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended September 30, 2012, by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.

(4)

Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of September 30, 2012. Annualized base rent per leased unit is calculated by dividing annualized base rent, by units under lease as of September 30, 2012.

(5)

Retail anchor tenants are defined as retail tenants leasing 50,000 square feet or more.

(6)

Other principal retail tenants are defined as the two tenants leasing the most square footage, excluding anchor tenants.

(7)

Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases in the following table:


Property	Number of Ground Leases		Square Footage Leased Pursuant to Ground Leases		Aggregate Annualized Base Rent
Carmel Mountain Plaza		6		127,112	$	1,020,900
South Bay Marketplace		1		2,824	$	81,540
Del Monte Center		2		295,100	$	201,291
Alamo Quarry Market		4		31,994	$	428,250

(8)

This property contains 421,934 net rentable square feet consisting of The Landmark at One Market (377,714 net rentable square feet) as well as a separate long-term leasehold interest in approximately 44,220 net rentable square feet of space located in an adjacent six-story leasehold known as the Annex. We currently lease the Annex from an affiliate of the Paramount Group pursuant to a long-term master lease effective through June 30, 2016, which we have the option to extend until 2026 pursuant to two five-year extension options.

(9)

The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. During the 12 months ended September 30, 2012, the highest average monthly occupancy rate for this property was 92%, occurring in July 2012. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.

(10)

Average occupancy represents the percentage of available units that were sold during the three months ended September 30, 2012, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the three months ended September 30, 2012, by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the three months ended September 30, 2012 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.


Third Quarter 2012 Supplemental Information		Page 23


RETAIL LEASING SUMMARY

As of September 30, 2012


Total Lease Summary - Comparable ⁽¹⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		15		100 %		56,673	$	25.90	$	25.04	$	48,868		3.4 %		8.4 %		4.9	$	111,000	$	1.96
2nd Quarter 2012		15		100		96,932		32.25		31.13		95,543		3.6		5.8		5.0		996,157		11.75
1st Quarter 2012		13		100		27,115		43.83		46.10		(61,374)		(4.9)		4.0		5.6		293,673		10.83
4th Quarter 2011		24		100		77,770		30.37		29.59		61,134		2.7		8.9		6.3		537,420		6.91

Total 12 months		67		100 %		258,490	$	31.51	$	30.89	$	144,171		1.9 %		11.2 %		5.4	$	1,938,250	$	8.05

New Lease Summary - Comparable ⁽¹⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		1		7 %		1,392	$	42.00	$	56.75	$	(20,532)		(26.0) %		(26.0) %		4.2	$	-	$	-
2nd Quarter 2012		2		13		20,545		42.25		30.59		98,174		38.1		42.5		9.5		976,884		47.55
1st Quarter 2012		3		23		4,906		36.98		38.31		(6,541)		(3.5)		(6.2)		7.1		223,548		45.57
4th Quarter 2011		5		21		34,973		27.11		22.89		147,340		18.4		24.6		10.1		508,420		14.54

Total 12 months		11		16 %		61,816	$	33.26	$	27.44	$	218,441		12.9 %		42.0 %		9.5	$	1,708,852	$	27.64

Renewal Lease Summary - Comparable ⁽¹⁾⁽⁵⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		14		93 %		55,281	$	25.50	$	24.24	$	69,400		5.2 %		10.5 %		4.9	$	111,000	$	2.01
2nd Quarter 2012		13		87		76,387		31.15		31.18		(2,631)		(0.1)		1.9		4.5		19,273		0.25
1st Quarter 2012		10		77		22,209		45.35		47.82		(54,833)		(5.2)		6.0		5.2		70,125		3.16
4th Quarter 2011		19		79		42,797		33.04		35.05		(86,206)		(5.7)		0.4		3.2		29,000		0.68

Total 12 months		56		84 %		196,674	$	31.58	$	31.95	$	(74,270)		(1.2) %		4.5 %		4.4	$	229,398	$	1.17

Total Lease Summary - Comparable and Non-Comparable
Quarter	Number of Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		19		78,236	$	25.10		5.0	$	939,550	$	12.01
2nd Quarter 2012		19		134,567		32.16		6.4		2,738,277		20.35
1st Quarter 2012		16		31,896		41.65		5.3		319,483		10.02
4th Quarter 2011		26		136,417		27.34		7.9		3,595,900		26.36

Total 12 months		80		381,116	$	29.70		6.6	$	7,593,210	$	19.92

Notes:

(1)

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

(2)

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

(3)

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

(4)

Weighted average is calculated on the basis of square footage.

(5)

Excludes renewals at fixed contractual rates specified in the lease.


Third Quarter 2012 Supplemental Information		Page 24


OFFICE LEASING SUMMARY

As of September 30, 2012


Total Lease Summary - Comparable ⁽¹⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		15		100 %		71,469	$	29.88	$	28.71	$	83,359		4.1 %		11.7 %		3.2	$	339,270	$	4.75
2nd Quarter 2012		10		100		70,231		44.88		34.59		722,907		29.8		49.4		5.5		339,141		4.83
1st Quarter 2012		13		100		52,132		30.26		34.69		(231,039)		(12.8)		(2.6)		4.2		710,939		13.64
4th Quarter 2011		14		100		40,587		27.70		27.35		14,415		1.3		2.9		5.1		84,057		2.07

Total 12 months		52		100 %		234,419	$	34.08	$	31.57	$	589,642		8.0 %		9.8 %		4.4	$	1,473,407	$	6.29

New Lease Summary - Comparable ⁽¹⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		3		20 %		4,427	$	34.44	$	37.42	$	(13,172)		(8.0) %		(1.4) %		3.6	$	17,592	$	3.97
2nd Quarter 2012		5		50		39,469		51.69		33.05		735,528		56.4		69.6		6.4		274,361		6.95
1st Quarter 2012		6		46		12,283		35.51		34.74		9,473		2.2		20.1		4.1		293,958		23.93
4th Quarter 2011		-		-		-		-		-		-		-		-		-		-		-

Total 12 months		14		27 %		56,179	$	46.79	$	33.77	$	731,829		38.6 %		16.7 %		5.7	$	585,911	$	10.43

Renewal Lease Summary - Comparable ⁽¹⁾⁽⁵⁾
Quarter	Number of Leases Signed		% of Comparable Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Prior Rent Per Sq. Ft. ⁽³⁾		Annual Change in Rent		Cash Basis % Change Over Prior Rent		Straight-Line Basis % Change Over Prior Rent		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		12		80 %		67,042	$	29.58	$	28.14	$	96,531		5.1 %		12.9 %		3.2	$	321,678	$	4.80
2nd Quarter 2012		5		50		30,762		36.15		36.56		(12,621)		(1.1)		19.7		4.4		64,780		2.11
1st Quarter 2012		7		54		39,849		28.64		34.67		(240,512)		(17.4)		(9.0)		4.2		416,981		10.46
4th Quarter 2011		14		100		40,587		27.70		27.35		14,415		1.3		2.9		5.1		84,057		2.07

Total 12 months		38		73 %		178,240	$	30.07	$	30.87	$	(142,187)		2.6 %		3.4 %		4.0	$	887,496	$	4.98

Total Lease Summary - Comparable and Non-Comparable
Quarter	Number of Leases Signed		Net Rentable Square Feet Signed		Contractual Rent Per Sq. Ft. ⁽²⁾		Weighted Average Lease Term ⁽⁴⁾		Tenant Improvements & Incentives		Tenant Improvements & Incentives Per Sq. Ft.
3rd Quarter 2012		23		94,803	$	30.08		3.4	$	698,008	$	7.36
2nd Quarter 2012		13		82,830		41.48		5.9		1,202,425		14.52
1st Quarter 2012		16		63,969		29.02		4.0		907,761		14.19
4th Quarter 2011		18		50,490		28.24		4.8		174,545		3.46

Total 12 months		70		292,092	$	32.76		4.5	$	2,982,739	$	10.21

Notes:

(1)

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

(2)

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

(3)

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

(4)

Weighted average is calculated on the basis of square footage.

(5)

Excludes renewals at fixed contractual rates specified in the lease.


Third Quarter 2012 Supplemental Information		Page 25


LEASE EXPIRATIONS

As of September 30, 2012


Assumes no exercise of lease options
	Office									Retail									Mixed-Use (Retail Portion Only)								Total
Year	Expiring Sq. Ft.			% of Office Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.			% of Retail Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.		% of Mixed-Use Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾
Month to Month		32,684			1.2 %		0.6 %	$	7.70		9,636			0.3 %		0.2 %	$	26.02		8,693		9.0 %		0.1 %	$	16.76		51,013		0.9 %	$	12.70
2012		67,745			2.4		1.2		29.55		39,473			1.3		0.7		31.29		4,183		4.3		0.1		150.03		111,401		1.9		34.69
2013		215,773			7.7		3.6		32.08		327,164	⁽²⁾		10.8		5.5		27.61		6,650		6.9		0.1		141.76		549,587		9.2		30.75
2014		209,477			7.4		3.5		30.43		405,138			13.4		6.8		28.93		1,374		1.4		-		211.21		615,989		10.4		29.84
2015		428,493			15.2		7.2		31.59		236,178			7.8		4.0		25.43		9,545		9.9		0.2		205.62		674,216		11.3		31.90
2016		250,660			8.9		4.2		28.29		191,248			6.3		3.2		34.55		12,402		12.8		0.2		146.81		454,310		7.6		34.16
2017		339,047	⁽³⁾		12.0		5.7		37.91		303,441			10.0		5.1		23.87		6,505		6.7		0.1		138.23		648,993		10.9		32.35
2018		157,709			5.6		2.7		32.99		909,256			30.0		15.3		16.36		4,673		4.8		0.1		142.23		1,071,638		18.0		19.36
2019		303,736			10.8		5.1		39.41		71,553	⁽⁴⁾		2.4		1.2		28.16		11,690		12.1		0.2		53.16		386,979		6.5		37.75
2020		243,114	⁽⁵⁾		8.6		4.1		39.20		118,506			3.9		2.0		8.87		17,843		18.5		0.3		44.42		379,463		6.4		29.98
2021		198,313			7.0		3.3		35.10		41,170			1.4		0.7		39.25		-		-		-		-		239,483		4.0		35.82
Thereafter		102,798			3.7		1.7		22.97		223,864			7.2		3.7		24.01		10,467		11.0		0.2		42.16		337,129		5.7		24.26
Signed Leases
Not Commenced		97,238			3.5		1.6		-		62,837			2.1		1.1		-		-		-		-		-		160,075		2.7		-
Available		170,411			6.0		2.9		-		93,036			3.1		1.6		-		2,544		2.6		-		-		265,991		4.5		-

Total		2,817,198			100.0 %		47.4 %	$	30.19		3,032,500			100.0 %		51.1 %	$	22.10		96,569		100.0 %		1.6 %	$	95.36		5,946,267		100.0 %	$	27.13


Assumes all lease options are exercised
	Office									Retail									Mixed-Use (Retail Portion Only)								Total
Year	Expiring Sq. Ft.			% of Office Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.			% of Retail Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.		% of Mixed-Use Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾		Expiring Sq. Ft.		% of Total Sq. Ft.		Annualized Base Rent Per Sq. Ft.⁽¹⁾

Month to Month		32,684			1.2 %		0.6 %	$	7.70		9,636			0.3 %		0.2 %	$	26.02		8,693		9.0 %		0.1 %	$	16.76		51,013		0.9 %	$	12.70
2012		64,329			2.3		1.1		27.94		33,213			1.1		0.6		32.10		4,183		4.3		0.1		150.03		101,725		1.7		34.32
2013		126,203			4.5		2.1		32.71		109,624			3.6		1.8		35.34		6,650		6.9		0.1		141.76		242,477		4.1		36.89
2014		44,645			1.6		0.8		33.10		192,558			6.4		3.2		31.64		1,374		1.4		-		211.21		238,577		4.0		32.94
2015		187,315			6.7		3.1		34.71		56,632			1.9		1.0		34.67		3,331		3.4		0.1		122.46		247,278		4.1		35.88
2016		212,990			7.6		3.6		26.33		62,198			2.1		1.0		30.60		8,374		8.7		0.1		159.90		283,562		4.8		31.21
2017		57,225			2.0		1.0		33.64		90,677			3.0		1.5		31.36		5,465		5.7		0.1		130.96		153,367		2.6		35.76
2018		77,679			2.8		1.3		31.70		158,583			5.2		2.7		22.47		4,673		4.8		0.1		142.23		240,935		4.0		27.77
2019		125,383			4.5		2.1		32.52		106,741			3.5		1.8		26.52		-		-		-		-		232,124		3.9		29.76
2020		211,067			7.5		3.5		28.65		293,842			9.7		4.9		15.41		1,951		2.0		-		135.66		506,860		8.5		21.39
2021		39,400			1.4		0.7		32.37		51,578			1.7		0.9		47.73		10,242		10.6		0.2		198.84		101,220		1.7		57.04
Thereafter		1,370,629	⁽³⁾⁽⁵⁾		48.4		23.0		36.12		1,711,345	⁽⁴⁾		56.3		28.8		20.83		39,089		40.6		0.7		45.39		3,121,063		52.5		27.85
Signed Leases
Not Commenced		97,238			3.5		1.6		-		62,837			2.1		1.1		-		-		-		-		-		160,075		2.7		-
Available		170,411			6.0		2.9		-		93,036			3.1		1.6		-		2,544		2.6		-		-		265,991		4.5		-

Total		2,817,198			100.0 %		47.4 %	$	30.19		3,032,500			100.0 %		51.1 %	$	22.10		96,569		100.0 %		1.6 %	$	95.36		5,946,267		100.0 %	$	27.13

As of September 30, 2012

Notes:

(1)

Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent for leases expiring during the applicable period, by (ii) square footage under such expiring leases. Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended September 30, 2012 for the leases expiring during the applicable period, by (ii) 12.

(2)	The expirations include 1,900 square feet currently leased by Yankee Candle at Alamo Quarry Market, for which Lucchese Boot Company has signed an agreement to lease such space upon Yankee Candle lease termination from January 31, 2013 through May 31, 2013.

(3)

The expirations include 45,795 square feet currently leased by Microsoft Corporation at The Landmark at One Market, for which Autodesk, Inc. has signed an agreement to lease such space upon Microsoft’s lease termination from December 31, 2012 through December 31, 2017 with an option to extend the lease through December 31, 2024.

(4)

The expirations include 966 square feet currently leased by Quarry Nails at Alamo Quarry Market, for which Whole Earth Provision Co. has signed an agreement to lease such space upon Quarry Nails lease termination from August 31, 2012 through January 21, 2019 with an option to extend the lease through January 31, 2029.

(5)

The expirations include 27,276 square feet currently leased by Simpson Gumpterz & Heger at The Landmark at One Market, for which salesforce.com has signed an agreement to lease such space upon Simpson Gumpterz & Heger’s lease termination from October 31, 2013 through April 30, 2020 with an option to extend the lease through April 30, 2030.


Third Quarter 2012 Supplemental Information		Page 26


PORTFOLIO LEASED STATISTICS


	At September 30, 2012						At September 30, 2011
Type	Size		Leased ⁽¹⁾		Leased %		Size		Leased ⁽¹⁾		Leased %
Overall Portfolio Statistics
Retail Properties (square feet)		3,032,500		2,939,464		96.9%		3,031,054		2,806,642		92.6%
Office Properties (square feet)		2,817,198		2,646,787		94.0%		2,232,536		2,100,098		94.1%
Multifamily Properties (units)		922		887		96.2%		922		870		94.4%
Mixed-Use Properties (square feet)		96,569		94,025		97.4%		96,569		95,783		99.2%
Mixed-Use Properties (units)		369		333 ⁽³⁾		90.2%		369		328 ⁽³⁾		88.8%

Same-Store⁽²⁾ Statistics
Retail Properties (square feet)		3,032,500		2,939,646		96.9%		2,704,324 ⁽⁴⁾		2,564,818		94.8%
Office Properties (square feet)		2,229,728		2,098,137		94.1%		1,046,721 ⁽⁵⁾		1,008,510		96.3%
Multifamily Properties (units)		922		887		96.2%		922		870		94.4%
Mixed-Use Properties (square feet)		96,569		94,025		97.4%		- ⁽⁶⁾		-		- %
Mixed-Use Properties (units)		369		333 ⁽³⁾		90.2%		- ⁽⁶⁾		-		- %

Notes:

(1)

Leased square feet includes square feet under lease as of each date, including leases which may not have commenced as of that date. Leased units for our multifamily properties include total units rented as of that date.

(2)

See Glossary of Terms.

(3)

Represents average occupancy for the nine months ended September 30, 2012 and September 30, 2011.

(4)

Excludes Solana Beach Towne Centre as the controlling interest in this entity was acquired on January 19, 2011.

(5)

Excludes Solana Beach Corporate Centre as the controlling interest in this entity was acquired on January 19, 2011. First & Main is excluded as it was acquired on March 11, 2011. Lloyd District Portfolio is excluded as it was acquired on July 1, 2011. One Beach Street is excluded as it was acquired on January 24, 2012. City Center Bellevue is excluded as it was acquired on August 21, 2012.

(6)

Excludes the Waikiki Beach Walk property as the controlling interest in this entity was acquired on January 19, 2011.


Third Quarter 2012 Supplemental Information		Page 27


TOP TENANTS - RETAIL

As of September 30, 2012


	Tenant	Property(ies)	Lease Expiration	Total Leased Square Feet		Rentable Square Feet as a Percentage of Total Retail		Rentable Square Feet as a Percentage of Total		Annualized Base Rent		Annualized Base Rent as a Percentage of Total Retail		Annualized Base Rent as a Percentage of Total
1	Lowe’s	Waikele Center	5/31/2018		155,000		5.1 %		2.6 %	$	4,221,786		6.3 %		2.6 %
2	Kmart	Waikele Center	6/30/2018		119,590		3.9		2.0		3,826,880		5.7		2.4
3	Foodland Super Market	Waikele Center	1/25/2014		50,000		1.6		0.8		2,430,981		3.6		1.5
4	Sports Authority	Carmel Mountain Plaza, Waikele Center	11/30/2013 7/18/2018		90,722		3.0		1.5		2,076,602		3.1		1.3
5	Ross Dress for Less	South Bay Marketplace, Lomas Santa Fe Plaza, Carmel Mountain Plaza	1/31/2013 1/31/2014 1/31/2014		81,125		2.7		1.4		1,595,826		2.4		1.0
6	Old Navy	Alamo Quarry Market, Waikele Center, South Bay Marketplace,	9/30/2017 7/31/2016 4/30/2016		59,780		2.0		1.0		*		*		*
7	Officemax	Waikele Center, Alamo Quarry Market	1/31/2014 9/30/2017		47,962		1.6		0.8		1,164,761		1.7		0.7
8	Marshalls	Solana Beach Towne Centre, Carmel Mountain Plaza	1/13/2015 1/31/2019		68,055		2.2		1.1		1,106,146		1.7		0.7
9	Nordstrom Rack	Carmel Mountain Plaza, Alamo Quarry Market	9/30/2022 10/31/2022		69,047		2.3		1.2		1,093,316		1.6		0.7
10	Vons	Lomas Santa Fe Plaza	12/31/2017		49,895		1.6		0.8		1,058,000		1.6		0.7

	Top 10 Retail Tenants Total				791,176		26.0 %		13.2 %	$	18,574,298		27.7 %		11.6 %

* Data withheld at tenant’s request.


Third Quarter 2012 Supplemental Information		Page 28


TOP TENANTS - OFFICE

As of September 30, 2012


	Tenant	Property(ies)	Lease Expiration	Total Leased Square Feet		Rentable Square Feet as a Percentage of Total Office		Rentable Square Feet as a Percentage of Total		Annualized Base Rent		Annualized Base Rent as a Percentage of Total Office		Annualized Base Rent as a Percentage of Total
1	salesforce.com	The Landmark at One Market	6/30/2019 4/30/2020 5/31/2021		226,892		8.1 %		3.8 %	$	10,624,175		12.5 %		6.6 %
2	Veterans Benefits Administration	First & Main	8/31/2020		93,572		3.3		1.6		3,006,453		3.5		1.9
3	Autodesk, Inc.	The Landmark at One Market	12/31/2015 12/31/2017		68,869		2.4		1.2		2,984,838		3.5		1.9
4	Microsoft Corporation	The Landmark at One Market	12/31/2012		45,795		1.6		0.8		2,976,675		3.5		1.8
5	Ancestry.com	160 King Street	5/31/2015 5/31/2019		64,992		2.3		1.1		2,729,664		3.2		1.7
6	Treasury Tax Administration	First & Main	8/31/2015		70,660		2.5		1.2		2,583,330		3.0		1.6
7	Insurance Company of the West	Torrey Reserve Campus	12/31/2016		81,040		2.9		1.4		2,449,631		2.9		1.5
8	Treasury Call Center	First & Main	8/31/2020		63,648		2.3		1.1		2,184,302		2.6		1.4
9	Caradigm USA LLC	City Center Bellevue	8/14/2017		68,956		2.4		1.2		2,103,158		2.5		1.3
10	Alliant International University	One Beach Street	10/31/2019		64,161		2.3		1.1		1,775,176		2.1		1.1

	Top 10 Office Tenants Total				848,585		30.1 %		14.5 %	$	33,417,402		39.3 %		20.8 %


Third Quarter 2012 Supplemental Information		Page 29

APPENDIX


Third Quarter 2012 Supplemental Information		Page 30


GLOSSARY OF TERMS

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. EBITDA is presented because it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA for the three and nine months ended September 30, 2012 and 2011 is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income	$	4,285	$	4,618	$	9,780	$	18,669
Depreciation and amortization		16,432		15,827		46,356		41,916
Interest expense		14,690		14,738		43,522		41,791
Interest income		(177)		(388)		(329)		(1,086)
Income tax expense		(5)		309		388		690
Gain on sale of real estate		-		(3,981)		-		(3,981)

EBITDA	$	35,225	$	31,123	$	99,717	$	97,999

Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that begins with EBITDA and includes adjustments for certain items that we believe are not representative of ongoing operating performance. We use Adjusted EBITDA as a supplemental performance measure because losses from early extinguishment of debt, loan transfer and consent fees and gains on acquisitions of controlling interests create significant earnings volatility which in turn results in less comparability between reporting periods and less predictability regarding future earnings potential. The adjustments noted resulted from our initial public offering and formation transactions.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
EBITDA	$	35,225	$	31,123	$	99,717	$	97,999
Early extinguishment of debt		-		-		-		25,867
Loan transfer and consent fees		-		-		-		9,019
Gain on acquisition		-		-		-		(46,371)

Adjusted EBITDA	$	35,225	$	31,123	$	99,717	$	86,514

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

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


Third Quarter 2012 Supplemental Information		Page 31


GLOSSARY OF TERMS (CONTINUED)

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

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


	Three Months Ended September 30,				Nine Months Ended September 30,
Reconciliation of NOI to net income	2012		2011		2012		2011
Total NOI	$	39,511	$	34,716	$	111,775	$	96,756
General and administrative		(3,959)		(3,733)		(11,716)		(10,786)
Depreciation and amortization		(16,432)		(15,827)		(46,356)		(41,916)
Interest expense		(14,690)		(14,738)		(43,522)		(41,791)
Early extinguishment of debt		-		-		-		(25,867)
Loan transfer and consent fees		-		-		-		(9,019)
Gain on acquisition		-		-		-		46,371
Other income (expense), net		68		(108)		(188)		(179)

Income from continuing operations		4,498		310		9,993		13,569
Discontinued operations
Income (loss) from discontinued operations		(213)		327		(213)		1,119
Gain on sale of real estate property		-		3,981		-		3,981

Results from discontinued operations		(213)		4,308		(213)		5,100

Net income		4,285		4,618		9,780		18,669
Net income attributable to restricted shares		(133)		(132)		(396)		(350)
Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities		-		-		-		2,458
Net income attributable to Predecessor’s controlled owners’ equity		-		-		-		(16,995)
Net (income) loss attributable to unitholders in the Operating Partnership		(1,335)		(1,434)		(3,022)		(1,209)

Net income (loss) attributable to American Assets Trust, Inc. stockholders	$	2,817	$	3,052	$	6,362	$	2,573

Overall Portfolio: Includes all operating properties owned by us as of September 30, 2012.


Third Quarter 2012 Supplemental Information		Page 32


GLOSSARY OF TERMS (CONTINUED)

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

Comparison of Three Months Ended
September 30, 2012 to 2011

Comparison of Nine Months Ended
September 30, 2012 to 2011

Same-Store

Non-Same Store

Same-Store

Non-Same Store

Retail Properties

Carmel Country Plaza

Carmel Mountain Plaza

South Bay Marketplace

Rancho Carmel Plaza

Lomas Santa Fe Plaza

Solana Beach Towne Centre

Del Monte Center

The Shops at Kalakaua

Waikele Center

Alamo Quarry Market

Office Properties

Torrey Reserve Campus

Solana Beach Corporate Centre

160 King Street

One Beach Street

The Landmark at One Market

First & Main

Lloyd District Portfolio

City Center Bellevue

Multifamily Properties

Loma Palisades

Imperial Beach Gardens

Mariner’s Point

Santa Fe Park RV Resort

Mixed-Use Properties

Waikiki Beach Walk - Retail

Waikiki Beach Walk - Embassy Suites™

Development Properties

Sorrento Pointe - Land

Torrey Reserve - Land

Solana Beach Corporate Centre - Land

Solana Beach - Highway 101 - Land

Lloyd District Portfolio - Land

Tenant Improvements and Incentives: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators, new entrances, etc.) which are required to make the space leasable. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.


Third Quarter 2012 Supplemental Information		Page 33

Square Feet

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

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

Data is as of September 30, 2012.

(1) Includes 122 RV spaces.

Retail

3.0 million

Office

2.8 million

Totals

5.8 million