Attached files
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| 8-K - FORM 8-K DATED NOVEMBER 5, 2013 - AmREIT, Inc. | amreit134594_8k.htm |
Exhibit 99.1
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Quarterly
Earnings and
Supplemental Financial Disclosure
Quarter
and Year to Date Ended
September 30, 2013
(Unaudited)
Investor Relations
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Chad C. Braun |
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Mary Trupia |
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Chief Financial Officer/Chief Operating Officer |
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Vice President - Investor Services |
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(713) 860-4924 |
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(713) 860-4935 |
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cbraun@amreit.com |
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mtrupia@amreit.com |
8 Greenway Plaza,
Suite 1000
Houston, TX 77046
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Reconciliation of income from Advised funds to NOI from Advised Funds |
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2
This Supplemental Financial Information package contains forward-looking statements within the meaning of the federal securities laws, including statements related to full year 2013 Core FFO and FFO financial projections stated herein. These forward-looking statements 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. Many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions. While forward-looking statements reflect AmREIT’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, AmREIT 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. For a further discussion of these and other factors that could impact AmREIT’s future results, performance or transactions, see the section entitled “Risk Factors” in AmREIT’s final prospectus supplement dated July 16, 2013, filed with the Securities and Exchange Commission on July 16, 2013 and other risks described in documents subsequently filed by AmREIT from time to time with the Securities and Exchange Commission.
This Supplemental Financial Information package contains historical information of the Company and is intended to supplement the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2013. All financial information in this Supplemental Financial Information package is shown in thousands, except for per share data and share information.
We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry, which we refer to as Irreplaceable CornersTM. We seek to own properties in major cities in the United States that contain submarkets with characteristics comparable to our existing markets. Our shopping centers are often anchored by strong national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. Our remaining tenants consist primarily of specialty retailers and local restaurants. We have elected to be taxed as a REIT for federal income tax purposes.
Our current investment focus is predominantly concentrated in the affluent, high-growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta (collectively, our Core Markets), which represent five of the top population and job growth markets in the United States. We believe these metropolitan areas are compelling real estate markets given their favorable demographics, robust job growth and large and diverse economies. The primary economic drivers in these markets are transport and utilities (including energy), government (including defense), education and healthcare, professional and business services, and leisure and hospitality. We intend to continue to acquire additional properties within these Core Markets. Our targeted properties will include premier retail frontage locations in high-traffic, highly populated, affluent areas with high barriers to entry.
As of September 30, 2013, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA, which was 94.2% occupied with a weighted average remaining lease term of 6.5 years. Our neighborhood and community shopping centers accounted for 92.4% of our annualized base rent as of September 30, 2013, with our single-tenant retail properties accounting for the remaining 7.6% of our annualized base rent. In addition to our portfolio, we control and manage an additional 16 properties with approximately 2.4 million square feet of GLA through our Advised Funds with an undepreciated book value of $505 million as of September 30, 2013.
Corporate Office:
8 Greenway Plaza, Suite 1000
Houston, Texas 77046
(800) 888-4400
(713) 850-0498 (fax)
www.amreit.com
3
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FOR INFORMATION CONTACT: |
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Chad C. Braun (cbraun@amreit.com) |
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AmREIT, (713) 850-1400 |
AmREIT REPORTS THIRD QUARTER RESULTS AND
FOURTH QUARTER DIVIDEND
HOUSTON, November 5, 2013 – AmREIT, Inc. (NYSE:AMRE) (“AmREIT” or the “Company”), today announced financial results for the third quarter ended September 30, 2013 and dividends for the fourth quarter ended December 31, 2013.
Third Quarter and Year-to-Date Highlights:
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Financial Results |
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Core Funds from Operations (“Core FFO”) available to common stockholders for the third quarter of 2013 was $4.5 million, or $0.24 per share, compared to $3.7 million, or $0.26 per share for the comparable period in 2012. For the nine months ended September 30, 2013, Core FFO was $12.9 million, or $0.76 per share, compared to $11.1 million, or $0.88 per share for the comparable nine month period in 2012. |
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FFO available to common stockholders for the third quarter of 2013 was $4.8 million, or $0.26 per share, compared to $3.4 million, or $0.23 per share for the comparable period in 2012. For the nine months ended September 30, 2013, FFO was $13.0 million, or $0.76 per share, compared to $10.7 million, or $0.85 per share for the comparable nine month period in 2012. Included in FFO for the three months ended September 30, 2013 was a $799,000 gain from the sale of a non-core, single-tenant asset, $171,000 in acquisition costs related to the Woodlake Square acquisition in September 2013 and a $279,000 one-time charge recorded in connection with our acquisition of the Preston Royal Village fee interest in July 2013. Included in FFO for the nine months ended September 30, 2013, were the aforementioned third quarter items plus $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture with Goldman Sachs in March 2013 and $126,000 in acquisition costs related to the Fountain Oaks purchase in June 2013. |
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Net income available to common stockholders for the third quarter of 2013 was $1.3 million, or $0.06 per share, compared to $1.0 million, or $0.07 per share, for the same period in 2012. Included in net income for the three months ended September 30, 2013 was a $799,000 gain from the sale of a non-core, single-tenant asset, $171,000 in acquisition costs related to the Woodlake Square acquisition in September 2013 and a $279,000 one-time charge recorded in connection with our acquisition of the Preston Royal Village fee interest in July 2013. For the nine months ended September 30, 2013, net income was $10.6 million, or $0.62 per share, compared to $3.7 million, or $0.29 per share for the comparable nine month period in 2012. Included in net income for the nine months ended September 30, 2013 were the aforementioned third quarter items plus a $7.7 million gain on sale related to the sale of AmREIT’s MacArthur Park Property into the joint venture with Goldman Sachs in March 2013, $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture and an additional $126,000 in acquisition costs related to the Fountain Oaks purchase in June 2013. |
FFO and Core FFO are non-GAAP supplemental earnings measures that AmREIT considers meaningful in measuring its operating performance. Further explanation and a reconciliation of FFO and Core FFO to net income is attached to this press release.
4
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Portfolio Results |
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In the third quarter of 2013, excluding our redevelopment properties (Uptown Park – Baker site and The Courtyard on Post Oak), same-store net operating income (“NOI”) increased 1.8% over the same period in the prior year. Both of these properties are in ‘lease down’ and in the early stages of redevelopment. Including those two redevelopment properties, same-store NOI increased 0.8% over the same period in the prior year. For the nine months ended September 30, 2013, same-store NOI, excluding redevelopment properties, increased 2.9% and, including the two redevelopment properties, increased 1.6% over the same period in the prior year. Although we believe that market rates for these spaces today are at a 30% premium to their historically contracted rates, we believe that the redevelopment opportunities that we have on these two Irreplaceable Corners provide more meaningful growth in NOI and value for stockholders over the mid-term that more than outweighs the short term impact. |
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With the recent acquisitions of Fountain Oaks and Woodlake Square, which were 89% and 88% occupied respectively, portfolio occupancy as of September 30, 2013 was 94.2%, a decrease of approximately 250 basis points as compared to portfolio occupancy of 96.7% as of December 31, 2012. We have initiated vacancies at The Courtyard on Post Oak and at the Uptown Park – Baker site in preparation for their anticipated redevelopments which has put pressure on our occupancy in the short term. On a leased basis, which includes leases that have been executed but where rent has not yet commenced, the portfolio was 95.2% leased as of September 30, 2013. We anticipate rent commencement on these signed leases during the remainder of 2013. |
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During the third quarter of 2013, AmREIT signed 13 leases for 19,293 square feet of gross leasable area, including both new and renewal leases. Of these, 8 leases for 8,108 square feet were renewals or replacements of expiring leases which were deemed to be comparable leases. Cash leasing spreads, which is the new leasing rate per square foot compared to the expiring leasing rate per square foot on comparable leases, increased 11.1%. On a GAAP basis, which includes the effects of straight-line rent, leasing spreads increased 16.4%. For the nine months ended September 30, 2013, AmREIT signed 50 leases for 111,806 square feet of gross leasable area, including both new and renewal leases. Of these, 38 leases, or 87,082 square feet, were comparable leases. Cash leasing spreads increased 10.7%. On a GAAP basis, leasing spreads increased 17.5%. |
NOI and same store NOI are non-GAAP supplemental earnings measures that AmREIT considers meaningful in measuring its operating performance. Further explanation and a reconciliation of NOI and same store NOI to net income are attached to this press release.
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Dividends |
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AmREIT also announced today that the Company’s Board of Directors has approved a regular quarterly cash dividend of $0.20 per share. The dividend will be paid on December 31, 2013 to all common stockholders of record at the close of business on December 20, 2013. |
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Acquisitions and Dispositions |
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On September 18, 2013, AmREIT completed the previously announced acquisition of Woodlake Square Shopping Center, a 160,761 square foot Randalls (Safeway parent company) and Walgreens-anchored shopping center in Houston Texas. Average household incomes within a one-mile radius of Woodlake Square are $69,595, and there are 82,692 households within a three-mile radius of the property. Daytime employment within a three-mile radius is 126,883. Woodlake Square was acquired from a joint venture, the partners of which were one of our Advised Funds and AEW Value Investors II, L.P., a value-added real estate fund managed by AEW Capital Management. The asset was 90% owned by AEW Capital Management, 6% by AmREIT Monthly Income & Growth Fund IV, Ltd., 3% by AmREIT Monthly Income & Growth Fund III, Ltd., and 1% by AmREIT. We managed the joint venture and the property. Woodlake Square was acquired for approximately $41.6 million, funded by a $23.0 million new first mortgage with a 4.3% fixed interest rate and a 10-year term, and the balance of $18.6 million in cash. |
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On July 17, 2013, AmREIT completed the acquisition of the fee simple title to Preston Royal Village NEC. This acquisition served to unite the leasehold interest purchased on December 12, 2012 with the underlying land. Average household incomes within a one-mile radius of Preston Royal Village are $279,562 and there are 42,163 households within a three-mile radius. The Preston Royal Village NEC land was purchased for approximately $15.0 million in cash. |
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On June 25, 2013, AmREIT completed the acquisition of Fountain Oaks Shopping Center, a 160,600 square foot Kroger-anchored shopping center in the north Buckhead submarket of Atlanta, Georgia. Average household incomes within a one-mile radius of Fountain Oaks are $96,771, and there are 31,887 households within a three-mile radius of the property. Fountain Oaks was acquired for approximately $27.7 million, is unencumbered, and was funded with borrowings under AmREIT’s unsecured revolving credit facility. |
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On March 26, 2013, AmREIT entered into a joint venture agreement with Goldman Sachs pursuant to which AmREIT contributed equity in its MacArthur Park property to a single-purpose entity in exchange for a 30% interest in the joint venture, and Goldman Sachs contributed cash for a 70% interest in the joint venture. The joint venture entity concurrently purchased the contiguous property to the north known as MacArthur Park Phase I, excluding a Target store, for approximately $25.5 million and placed mortgage financing on the combined property of $43.9 million. Upon closing the transaction, AmREIT received net cash proceeds of approximately $35.6 million, which it used to repay borrowings under its unsecured revolving credit facility. AmREIT will continue to manage and lease MacArthur Park on behalf of the joint venture and will retain a right of first offer to acquire the project in the future, after a lock-out period. |
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Equity Offering |
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On June 21, 2013, AmREIT filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) registering the offer and sale, from time to time, of up to $350 million of securities, which was declared effective by the SEC on July 1, 2013. |
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On July 19, 2013 AmREIT completed the public underwritten offering of 3,450,000 shares of common stock, including 450,000 shares sold pursuant to the exercise of the underwriter’s over-allotment option, at a public offering price of $18.25 per share. The offering generated net proceeds of approximately $60 million, after deducting the underwriting discount and offering expenses. AmREIT used a portion of the net proceeds to repay borrowings under its unsecured revolving credit facility and to acquire the underlying land on our Preston Royal East property. AmREIT used a portion of the remaining proceeds to fund the cash portion of the acquisition of Woodlake Square. |
“Our team delivered another solid quarter in every area of our business,” said Kerr Taylor, Chairman & Chief Executive Officer of AmREIT. “Our Irreplaceable Corner TM portfolio showed its strength through cash and GAAP leasing spreads of 10.9% and 16.4%, respectively. Through our joint venture pipeline and local relationships, we acquired approximately $60 million of top tier properties within our dense and affluent core markets. And, we moved closer to transforming one of our seven re-development sites within Uptown Park into an iconic high-rise, residential tower.”
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Guidance |
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AmREIT maintains its full year Core FFO and revises its FFO guidance upward to contemplate the gains on sale related to two of its single-tenant properties: |
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Projected 2013 Range |
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Core FFO |
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$1.03 |
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$0.98 |
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FFO |
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$1.12 |
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$1.07 |
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During the third quarter, AmREIT sold Sunbelt Rentals, a non-core, single-tenant location owned by its taxable REIT subsidiary, resulting in a gain of approximately $799,000. Additionally, the Company has a binding earnest money contract to sell its CVS build-to-suit, also owned through its taxable REIT subsidiary, located at Loop 610 and Ella in Houston, Texas. The CVS is expected to close in November, simultaneous with the rent commencement, at an estimated gain of approximately $2 million. |
Conference Call
AmREIT will hold its quarterly conference call to discuss the results of its year to date and third quarter of 2013 on Wednesday, November 6, 2013, at 10:00 a.m. Central Standard Time (11:00 a.m. Eastern Standard Time). To participate in the quarterly conference call, please call 1-888-317-6016 approximately 10 minutes before the scheduled start time. The conference call will be recorded and a replay of the call will be available via webcast shortly after the call concludes.
The conference call will also be webcast live at www.amreit.com and can be accessed under the Investors tab of the Company’s website. A telephonic replay of the conference call will be available for 14 days following the conference call. To access the telephonic replay of the conference call, dial 1-877-344-7529 and enter passcode 10033647.
Supplemental Financial Information
Further details regarding AmREIT’s results of operations,
properties, and tenants are attached to this press release and can be accessed
at the Company’s web site at www.amreit.com.
Non-GAAP Financial Disclosure
This press release contains certain non-GAAP financial
measures that management believes are useful in evaluating an equity REIT’s
performance. AmREIT’s definitions and calculations of non-GAAP financial
measures may differ from those used by other equity REITs, and therefore may
not be comparable. The non-GAAP financial measures should not be considered as
an alternative to net income as an indication of our operating results, or to
net cash provided by operating activities as a measure of our liquidity.
Funds From Operations (FFO)
AmREIT considers FFO to be an appropriate measure of the
operating performance of an equity REIT. NAREIT defines FFO as net income
(loss) computed in accordance with GAAP, excluding gains or losses from sales
of property and impairment charges on properties held for investment, plus real
estate related depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. NAREIT recommends that
extraordinary items not be considered in arriving at FFO. AmREIT calculates FFO
in accordance with this definition.
Most industry analysts and equity REITs, including AmREIT, consider FFO to be an appropriate supplemental non-GAAP financial measure of operating performance because, by excluding gains or losses on dispositions, impairment charges and depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself.
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Additionally, AmREIT considers Core FFO, which adjusts FFO for items that do not reflect ongoing operations, such as acquisition expenses, non-recurring intangible asset write-offs and recoveries, expensed issuance costs and gains on the sale of real estate held for resale, to be a meaningful performance measurement. The computation of FFO in accordance with NAREIT’s definition includes certain items such as acquisition costs, issuance costs, non-recurring asset write-offs and recoveries and gains on sale of real estate held for resale that management believes are not indicative of AmREIT’s ongoing results and therefore affect the comparability of our period-over-period performance with the performances of similar REITs. Accordingly, management believes that it is helpful to investors to adjust FFO for such items. There can be no assurance that FFO or Core FFO presented by AmREIT is comparable to similarly titled measures of other REITs. FFO and Core FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.
Projected FFO and Core FFO are calculated in a method consistent with historical FFO and Core FFO, and AmREIT considers projected FFO and Core FFO to be an appropriate supplemental measure when compared with projected earnings per share. A reconciliation of the projected FFO and Core FFO to projected earnings per share is provided below:
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Updated |
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High |
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Low |
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Net income |
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$0.90 |
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$0.85 |
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Gain on sale – investment |
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(0.43 |
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(0.43 |
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Depreciation and amortization |
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0.61 |
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0.61 |
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Depreciation and amortization for non-consolidated affiliates |
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0.04 |
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0.04 |
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FFO available to stockholders |
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$1.12 |
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$1.07 |
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Gains on sale – resale |
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(0.16 |
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(0.16 |
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Acquisition costs |
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0.6 |
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0.6 |
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Write off of below market ground lease |
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0.01 |
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0.01 |
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Core FFO available to stockholders |
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$1.03 |
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$0.98 |
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Net Operating Income (NOI)
AmREIT believes that NOI is a useful measure of its operating performance. AmREIT defines NOI as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense). Other REITs may use different methodologies for calculating NOI, and accordingly, AmREIT’s NOI may not be comparable to other REITs.
AmREIT believes that reporting NOI provides an operating perspective not immediately apparent from GAAP operating income, GAAP net income, FFO or Core FFO. AmREIT uses NOI to evaluate its performance on a property-by-property basis because NOI allows it to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on its operating results. However, NOI should only be used as a supplemental measure of AmREIT’s financial performance.
About AmREIT
AmREIT believes it has one of the highest quality grocery and drugstore anchored retail portfolios in the REIT sector. AmREIT’s 29 year-old established platform has localized acquisition, operation and redevelopment expertise in the most densely populated and affluent submarkets of five of the top markets in the U.S.: Houston, Dallas, San Antonio, Austin and Atlanta. Texas is one of the best performing economies in the country and 92% of AmREIT’s income for the year ended December 31, 2012 was generated by its properties located in this market. AmREIT’s management team has in-depth knowledge and extensive relationship advantages within its markets. AmREIT’s portfolio was 94.2% occupied as of September 30, 2013, and its top five tenants include Kroger, Landry’s, CVS/Pharmacy, H-E-B and Publix. AmREIT also has access to an acquisition pipeline through its Advised Funds, which include value add joint ventures with leading institutional investors who partner with the company as local experts. AmREIT’s common stock is traded on the New York Stock Exchange under the symbol “AMRE.” For more information, please visit www.amreit.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including statements related to full year 2013 Core FFO and FFO financial projections stated herein. These forward-looking statements 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 AmREIT’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, AmREIT 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. For a further discussion of these and other factors that could impact AmREIT’s future results, performance or transactions, see the section entitled “Risk Factors” in AmREIT’s final prospectus supplement dated July 16, 2013, filed with the Securities and Exchange Commission on July 16, 2013 and other risks described in documents subsequently filed by AmREIT from time to time with the Securities and Exchange Commission.
Investor Contact
For more information, call Chad Braun, Chief Operating Officer and Chief Financial Officer of AmREIT, at (713) 850-1400. AmREIT is online at www.amreit.com.
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AmREIT,
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
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September
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December
31, |
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(unaudited) |
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ASSETS |
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Real estate investments at cost: |
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Land |
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184,284 |
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147,460 |
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Buildings |
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225,956 |
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222,679 |
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Tenant improvements |
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14,832 |
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17,386 |
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425,072 |
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387,525 |
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Less accumulated depreciation and amortization |
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(35,724 |
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(39,820 |
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389,348 |
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347,705 |
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Acquired lease intangibles, net |
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17,173 |
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15,976 |
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Investments in Advised Funds |
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16,159 |
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7,953 |
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Net real estate investments |
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422,680 |
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371,634 |
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Cash and cash equivalents |
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3,422 |
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2,992 |
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Tenant and accounts receivable, net |
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5,229 |
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5,566 |
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Accounts receivable - related party, net |
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1,045 |
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821 |
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Notes receivable, net |
|
4,230 |
|
2,731 |
||||
|
Notes receivable - related party, net |
|
2,916 |
|
6,748 |
||||
|
Deferred costs, net |
|
3,330 |
|
3,696 |
||||
|
Other assets |
|
2,931 |
|
|
3,206 |
|
||
|
TOTAL ASSETS |
$ |
445,783 |
|
$ |
397,394 |
|
||
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
|
Liabilities: |
|
|
|
|
||||
|
Notes payable |
$ |
200,271 |
$ |
218,579 |
||||
|
Accounts payable and other liabilities |
|
10,667 |
|
9,593 |
||||
|
Acquired below-market lease intangibles, net |
|
8,127 |
|
|
3,507 |
|
||
|
TOTAL LIABILITIES |
|
219,065 |
|
231,679 |
||||
|
|
|
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
|
||||
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued |
|
- |
|
- |
||||
|
Class A common stock, $0.01 par value, 0 and 100,000,000 shares authorized as of September 30, 2013, and December 31, 2012, 0 and 11,657,563 shares issued and outstanding as of September 30, 2013, and December 31, 2012, respectively |
|
- |
|
117 |
||||
|
Common stock, $0.01 par value, 1,000,000,000 and 900,000,000 shares authorized as of September 30, 2013, and December 31, 2012, 19,628,037 and 16,123,288 shares issued and outstanding as of September 30, 2013, and December 31, 2012, respectively |
|
196 |
|
45 |
||||
|
Capital in excess of par value |
|
306,125 |
|
245,403 |
||||
|
Accumulated distributions in excess of earnings |
|
(79,603 |
) |
|
(79,850 |
) |
||
|
TOTAL STOCKHOLDERS’ EQUITY |
|
226,718 |
|
|
165,715 |
|
||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
445,783 |
|
$ |
397,394 |
|
||
10
AmREIT,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|||||||||||
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Revenues: |
|
|
|
|
||||||||||||
|
Rental income from operating leases |
$ |
10,552 |
$ |
9,020 |
$ |
31,451 |
$ |
26,826 |
||||||||
|
Advisory services income - related party |
|
1,069 |
|
|
957 |
|
|
2,784 |
|
|
2,973 |
|
||||
|
Total revenues |
|
11,621 |
|
9,977 |
|
34,235 |
|
29,799 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
||||||||
|
General and administrative |
|
2,161 |
|
1,773 |
|
6,191 |
|
4,836 |
||||||||
|
Property expense |
|
3,294 |
|
2,418 |
|
9,137 |
|
6,913 |
||||||||
|
Legal and professional |
|
290 |
|
223 |
|
796 |
|
669 |
||||||||
|
Real estate commissions |
|
150 |
|
129 |
|
254 |
|
268 |
||||||||
|
Acquisition costs |
|
171 |
|
- |
|
297 |
|
- |
||||||||
|
Depreciation and amortization |
|
2,897 |
|
2,210 |
|
8,922 |
|
6,545 |
||||||||
|
Impairment recovery - notes receivable |
|
- |
|
|
(214 |
) |
|
- |
|
|
(443 |
) |
||||
|
Total expenses |
|
8,963 |
|
|
6,539 |
|
|
25,597 |
|
|
18,788 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating income |
|
2,658 |
|
3,438 |
|
8,638 |
|
11,011 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
|
Gain on sale of real estate acquired for investment |
|
- |
|
- |
|
7,696 |
|
- |
||||||||
|
Interest and other income |
|
184 |
|
125 |
|
451 |
|
362 |
||||||||
|
Interest and other income - related party |
|
71 |
|
236 |
|
180 |
|
393 |
||||||||
|
Loss from Advised Funds |
|
(111 |
) |
|
(26 |
) |
|
(67 |
) |
|
(128 |
) |
||||
|
State income tax expense |
|
(14 |
) |
|
(16 |
) |
|
(29 |
) |
|
(21 |
) |
||||
|
Interest expense |
|
(2,335 |
) |
|
(2,763 |
) |
|
(7,095 |
) |
|
(7,992 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations |
|
453 |
|
994 |
|
9,774 |
|
3,625 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income from discontinued operations, net of taxes |
|
13 |
|
29 |
|
69 |
|
101 |
||||||||
|
Gain on sale of real estate acquired for resale, net of taxes |
|
799 |
|
|
- |
|
|
799 |
|
|
- |
|
||||
|
Income from discontinued operations |
|
812 |
|
|
29 |
|
|
868 |
|
|
101 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income |
$ |
1,265 |
|
$ |
1,023 |
|
$ |
10,642 |
|
$ |
3,726 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per share of common stock - basic and diluted |
|
|
|
|
|
|
|
|
||||||||
|
Income before discontinued operations |
$ |
0.02 |
$ |
0.07 |
$ |
0.57 |
$ |
0.28 |
||||||||
|
Income from discontinued operations |
|
0.04 |
|
|
- |
|
|
0.05 |
|
|
0.01 |
|
||||
|
Net income per share of common stock - basic and diluted |
$ |
0.06 |
$ |
0.07 |
$ |
0.62 |
$ |
0.29 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares of common stock used to compute net income per share, basic and diluted |
|
18,356 |
|
|
14,051 |
|
|
16,528 |
|
|
12,294 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Distributions per share of common stock |
$ |
0.20 |
|
$ |
0.20 |
|
$ |
0.60 |
|
$ |
0.60 |
|
||||
11
Summary of Operating Results (in thousands except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
||||||||||||
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
||||||
|
Net income |
$ |
1,265 |
$ |
1,023 |
$ |
10,642 |
$ |
3,726 |
||||||||
|
Add: |
|
|
|
|
|
|
|
|||||||||
|
Depreciation of real estate assets - from operations |
|
2,872 |
|
2,186 |
|
8,882 |
6,505 |
|||||||||
|
Depreciation of real estate assets - from discontinued operations |
|
14 |
|
18 |
|
14 |
18 |
|||||||||
|
Depreciation of real estate assets for nonconsolidated affiliates |
|
673 |
|
153 |
|
1,118 |
466 |
|||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Gain on sale of real estate acquired for investment |
|
- |
|
|
- |
|
|
(7,696 |
) |
|
- |
|
||||
|
Total FFO available to stockholders |
$ |
4,824 |
|
$ |
3,380 |
|
$ |
12,960 |
|
$ |
10,715 |
|
||||
|
Total FFO per share |
$ |
0.26 |
|
$ |
0.23 |
|
$ |
0.76 |
|
$ |
0.85 |
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
||||||||||
|
Total FFO available to stockholders |
$ |
4,824 |
$ |
3,380 |
$ |
12,960 |
$ |
10,715 |
||||||||
|
Add: |
|
|
|
|
|
|
|
|||||||||
|
Acquisition costs |
|
171 |
|
- |
|
297 |
- |
|||||||||
|
Acquisition costs of nonconsolidated affiliates |
|
- |
|
- |
|
164 |
- |
|||||||||
|
Write off of below market ground lease |
|
279 |
|
- |
|
279 |
- |
|||||||||
|
Write off of deferred financing costs |
|
- |
|
362 |
|
- |
362 |
|||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Gain on sale of real estate acquired for resale |
|
(799 |
) |
|
- |
|
|
(799 |
) |
|
- |
|
||||
|
Total Core FFO available to stockholders |
$ |
4,475 |
|
$ |
3,742 |
|
$ |
12,901 |
|
$ |
11,077 |
|
||||
|
Total Core FFO per share |
$ |
0.24 |
|
$ |
0.26 |
|
$ |
0.76 |
|
$ |
0.88 |
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
||||||||||
|
Total Core FFO available to stockholders |
$ |
4,475 |
$ |
3,742 |
$ |
12,901 |
$ |
11,077 |
||||||||
|
Add: |
|
|
|
|
|
|
|
|||||||||
|
Depreciation of non-real estate assets |
|
13 |
|
12 |
|
40 |
40 |
|||||||||
|
Amortization of deferred financing costs |
|
99 |
|
98 |
|
299 |
288 |
|||||||||
|
Stock-based compensation |
|
299 |
|
268 |
|
918 |
555 |
|||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Straight-line rent and above/below market rent |
|
(183 |
) |
|
(94 |
) |
|
(645 |
) |
(271 |
) |
|||||
|
Bad debt recoveries related to straight-line rent |
|
(113 |
) |
|
- |
|
(164 |
) |
(97 |
) |
||||||
|
Amortization of above-market debt |
|
(27 |
) |
|
(30 |
) |
|
(85 |
) |
(92 |
) |
|||||
|
Impairment recoveries - notes receivable |
|
- |
|
(214 |
) |
|
- |
(443 |
) |
|||||||
|
Maintenance capital expenditures |
|
(78 |
) |
|
(77 |
) |
|
(78 |
) |
(107 |
) |
|||||
|
Straight-line rent and above/below market rent - discontinued operations |
|
(1 |
) |
|
(2 |
) |
|
(7 |
) |
|
(2 |
) |
||||
|
Total AFFO available to stockholders |
$ |
4,484 |
|
$ |
3,703 |
|
$ |
13,179 |
|
$ |
10,948 |
|
||||
|
Total AFFO per share |
$ |
0.24 |
|
$ |
0.26 |
|
$ |
0.77 |
|
$ |
0.87 |
|
||||
|
Weighted average shares outstanding(1) |
|
18,916 |
|
|
14,491 |
|
|
17,083 |
|
|
12,591 |
|
||||
|
Dividends |
|
|
|
|
|
|
|
|||||||||
|
Regular common dividends per share |
$ |
0.20 |
$ |
0.20 |
$ |
0.60 |
$ |
0.60 |
||||||||
|
Payout ratio - Core FFO |
|
83.3 |
% |
|
76.9 |
% |
78.9 |
% |
|
68.2 |
% |
|||||
|
|
|
|
|
|
(1) |
Weighted average shares outstanding reflects the weighted average of all shares of common stock outstanding during the period including our non-vested shares. Weighted average shares of common stock outstanding used to compute net income per share under GAAP pursuant to the “two class method” includes only vested shares of common stock. Our reconciliation of weighted average shares used to compute net income per share, basic and diluted, on our consolidated statements of operations to weighted average shares used to compute our FFO per share metrics above is as follows: |
||
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|||||||||||||
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
||||||
|
Weighted average shares used to compute net income per share, basic and diluted |
18,356 |
14,051 |
16,528 |
12,294 |
||||||||||||
|
Weighted average shares of restricted common stock outstanding |
|
560 |
|
|
440 |
|
|
555 |
|
|
297 |
|
||||
|
Weighted average shares outstanding |
|
18,916 |
|
|
14,491 |
|
|
17,083 |
|
|
12,591 |
|
||||
13
Same Store Property Analysis (in thousands except for number of properties, percentages and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
|
|
|
|
|
||||||||
|
|
2013 |
|
|
2012 |
|
|
Change $ |
|
|
Change % |
|
|||||
|
Same store properties (26 properties) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Rental income (1) |
$ |
4,310 |
$ |
4,208 |
$ |
102 |
2.4 |
% |
||||||||
|
Recovery income (1) |
|
1,395 |
|
1,240 |
|
155 |
12.5 |
% |
||||||||
|
Percentage rent (1) |
|
68 |
|
66 |
|
2 |
3.0 |
% |
||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
1,479 |
|
|
1,294 |
|
|
(185 |
) |
|
(14.3 |
)% |
||||
|
Same store NOI, excluding redevelopment properties |
|
4,294 |
|
|
4,220 |
|
|
74 |
|
|
1.8 |
% |
||||
|
Same store occupancy at end of period(2) |
|
98.1 |
% |
|
98.5 |
% |
|
n/a |
(0.4 |
)% |
||||||
|
Redevelopment properties (2 properties) |
|
|
|
|
|
|
|
|||||||||
|
Rental income (1) |
$ |
1,457 |
$ |
1,476 |
$ |
(19 |
) |
(1.3 |
)% |
|||||||
|
Recovery income (1) |
|
683 |
|
683 |
|
- |
- |
|||||||||
|
Percentage rent (1) |
|
44 |
|
36 |
|
8 |
22.2 |
% |
||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
741 |
|
|
721 |
|
|
(20 |
) |
|
(2.8 |
)% |
||||
|
Redevelopment properties NOI |
|
1,443 |
|
|
1,474 |
|
|
(31 |
) |
|
(2.1 |
)% |
||||
|
Redevelopment properties occupancy at end of period(2) |
|
86.3 |
% |
|
94.7 |
% |
|
n/a |
(8.4 |
)% |
||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Same Store NOI, including redevelopment properties |
|
5,737 |
|
|
5,694 |
|
|
43 |
|
|
0.8 |
% |
||||
|
Non-same store properties (5 properties) |
|
|
|
|
|
|
|
|||||||||
|
Rental income (1) |
|
1,797 |
|
929 |
|
868 |
93.4 |
% |
||||||||
|
Recovery income (1) |
|
574 |
|
288 |
|
286 |
99.3 |
% |
||||||||
|
Percentage rent (1) |
|
41 |
|
- |
|
41 |
* |
|||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
909 |
|
|
403 |
|
|
(506 |
) |
|
(125.6 |
)% |
||||
|
Non-same store net operating income |
|
1,503 |
|
|
814 |
|
|
689 |
|
|
84.6 |
% |
||||
|
Non-same store occupancy at end of period(2) |
|
91.2 |
% |
|
92.7 |
% |
|
n/a |
(1.5 |
)% |
||||||
|
Total net operating income |
|
7,240 |
|
6,508 |
|
732 |
11.2 |
% |
||||||||
|
Other revenues |
|
1,507 |
|
1,412 |
|
95 |
6.7 |
% |
||||||||
|
Less other expenses |
|
8,294 |
|
|
6,926 |
|
|
(1,368 |
) |
|
(19.8 |
)% |
||||
|
Income (loss) from continuing operations |
|
453 |
|
994 |
|
(541 |
) |
(54.4 |
)% |
|||||||
|
Income from discontinued operations |
|
812 |
|
|
29 |
|
|
783 |
|
|
* |
|
||||
|
Net income |
$ |
1,265 |
|
$ |
1,023 |
|
$ |
242 |
|
|
23.7 |
% |
||||
|
|
|
|
|
|
(1) |
Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the three months ended September 30, 2013 and 2012, rental income from operating leases was $10,552 and $9,020, respectively. |
||
|
|
|||
|
(2) |
Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage. |
||
|
|
|||
|
* |
Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful. |
||
14
Same Store Property Analysis, continued (in thousands except for number of properties, percentages and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, |
|
|
|
|
||||||||||||
|
|
|
2013 |
|
|
2012 |
|
|
Change $ |
|
|
Change % |
|
||||
|
Same store properties (26 properties) |
|
|
|
|
||||||||||||
|
Rental income (1) |
$ |
12,870 |
$ |
12,668 |
$ |
202 |
1.6 |
% |
||||||||
|
Recovery income (1) |
|
4,098 |
|
3,605 |
|
493 |
13.7 |
% |
||||||||
|
Percentage rent (1) |
|
58 |
|
100 |
|
(42 |
) |
(42.0 |
)% |
|||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
4,027 |
|
|
3,746 |
|
|
(281 |
) |
|
(7.5 |
)% |
||||
|
Same store NOI, excluding redevelopment properties |
|
12,999 |
|
|
12,627 |
|
|
372 |
|
|
2.9 |
% |
||||
|
Same store occupancy at end of period(2) |
|
98.1 |
% |
|
98.5 |
% |
|
n/a |
(0.4 |
)% |
||||||
|
Redevelopment properties (2 properties) |
|
|
|
|
|
|
|
|||||||||
|
Rental income (1) |
$ |
4,372 |
$ |
4,513 |
$ |
(141 |
) |
(3.1 |
)% |
|||||||
|
Recovery income (1) |
|
2,122 |
|
2,011 |
|
111 |
5.5 |
|||||||||
|
Percentage rent (1) |
|
83 |
|
35 |
|
48 |
137.1 |
% |
||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
2,285 |
|
|
2,171 |
|
|
(114 |
) |
|
(5.3 |
)% |
||||
|
Redevelopment properties NOI |
|
4,292 |
|
|
4,388 |
|
|
(96 |
) |
|
(2.2 |
)% |
||||
|
Redevelopment properties occupancy at end of period(2) |
|
86.3 |
% |
|
94.7 |
% |
|
n/a |
(8.4 |
)% |
||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Same Store NOI, including redevelopment properties |
|
17,291 |
|
|
17,015 |
|
|
276 |
|
|
1.6 |
% |
||||
|
Non-same store properties (5 properties) |
|
|
|
|
|
|
|
|||||||||
|
Rental income (1) |
|
5,216 |
|
2,717 |
|
2,499 |
92.0 |
% |
||||||||
|
Recovery income (1) |
|
1,926 |
|
906 |
|
1,020 |
112.6 |
% |
||||||||
|
Percentage rent (1) |
|
61 |
|
- |
|
61 |
* |
|||||||||
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Property expenses |
|
2,710 |
|
|
1,093 |
|
|
(1,617 |
) |
|
(147.9 |
)% |
||||
|
Non-same store net operating income |
|
4,493 |
|
|
2,530 |
|
|
1,963 |
|
|
77.6 |
% |
||||
|
Non-same store occupancy at end of period(2) |
|
91.2 |
% |
|
92.7 |
% |
|
n/a |
(1.2 |
)% |
||||||
|
Total net operating income |
|
21,784 |
|
19,545 |
|
2,239 |
11.5 |
% |
||||||||
|
Other revenues |
|
11,756 |
|
3,999 |
|
7,757 |
194.0 |
% |
||||||||
|
Less other expenses |
|
23,766 |
|
|
19,919 |
|
|
(3,847 |
) |
|
(19.3 |
)% |
||||
|
Income (loss) from continuing operations |
|
9,774 |
|
3,625 |
|
6,149 |
169.6 |
% |
||||||||
|
Income from discontinued operations |
|
868 |
|
|
101 |
|
|
767 |
|
|
* |
|
||||
|
Net income |
$ |
10,642 |
|
$ |
3,726 |
|
$ |
242 |
|
|
6.5 |
% |
||||
|
|
|
|
|
|
(1) |
Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the nine months ended September 30, 2013 and 2012, rental income from operating leases was $31,451 and $26,826, respectively. |
||
|
|
|||
|
(2) |
Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage. |
||
|
|
|||
|
* |
Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful. |
||
15
Summary of Capital Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||||
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
||||||
|
Non-maintenance capital expenditures: |
|
|
|
|
||||||||||||
|
Tenant improvements and leasing commissions |
$ |
586 |
$ |
424 |
$ |
1,452 |
$ |
2,575 |
||||||||
|
Development, redevelopment and expansion |
|
766 |
|
|
74 |
|
|
1,622 |
|
|
479 |
|
||||
|
Total non-maintenance capital expenditures |
|
1,352 |
|
498 |
|
3,074 |
|
3,054 |
||||||||
|
Maintenance capital expenditures |
|
78 |
|
|
77 |
|
|
78 |
|
|
107 |
|
||||
|
Total capital expenditures |
$ |
1,430 |
|
$ |
575 |
|
$ |
3,152 |
|
$ |
3,161 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|||||||||||
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|||||
|
Base minimum rent |
$ |
7,564 |
$ |
6,613 |
$ |
22,459 |
$ |
19,899 |
||||||||
|
Straight-line rent adjustments |
|
87 |
|
46 |
|
333 |
|
121 |
||||||||
|
Amortization of above/below market rent |
|
96 |
|
48 |
|
312 |
|
150 |
||||||||
|
Percentage rent |
|
153 |
|
102 |
|
202 |
|
134 |
||||||||
|
Recovery income |
|
2,652 |
|
|
2,211 |
|
|
8,145 |
|
|
6,522 |
|
||||
|
Rental income from operating leases |
$ |
10,552 |
|
$ |
9,020 |
|
$ |
31,451 |
|
$ |
26,826 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|||||||||||
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|||||
|
Leasing commission income |
$ |
310 |
$ |
318 |
$ |
591 |
$ |
634 |
||||||||
|
Brokerage commission income |
|
- |
|
- |
|
33 |
|
291 |
||||||||
|
Property management fee income |
|
425 |
|
310 |
|
1,222 |
|
917 |
||||||||
|
Development fee income |
|
124 |
|
110 |
|
281 |
|
488 |
||||||||
|
Asset management fee income |
|
155 |
|
155 |
|
466 |
|
466 |
||||||||
|
Construction management fee income |
|
55 |
|
|
64 |
|
|
191 |
|
|
177 |
|
||||
|
Advisory services income - related party |
$ |
1,069 |
|
$ |
957 |
|
$ |
2,784 |
|
$ |
2,973 |
|
||||
|
Interest and other income - related party |
$ |
71 |
$ |
236 |
$ |
180 |
$ |
393 |
||||||||
|
Reimbursements of administrative costs |
$ |
223 |
$ |
231 |
$ |
626 |
$ |
641 |
||||||||
16
Capitalization Data (in thousands, except per share and percent data):
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2013 |
|
|
December 31, 2012 |
|
||
|
|
|
|||||||
|
Common shares outstanding |
19,628 |
16,123 |
||||||
|
NYSE closing price(1) |
$ |
17.35 |
|
$ |
17.15 |
|
||
|
Total equity capitalization |
$ |
340,546 |
|
$ |
276,509 |
|
||
|
|
||||||||
|
|
|
|
|
|||||
|
Variable rate line of credit |
$ |
- |
$ |
33,500 |
||||
|
Fixed rate mortgage loans |
|
200,271 |
|
|
185,079 |
|
||
|
Total debt capitalization |
$ |
200,271 |
|
$ |
218,579 |
|
||
|
|
|
|
|
|||||
|
Total capitalization |
$ |
540,817 |
|
$ |
495,088 |
|
||
|
|
||||||||
|
|
|
|
|
|||||
|
Total debt to total capitalization |
|
37.0 |
% |
|
44.1 |
% |
||
|
Ratio of EBITDA to combined fixed charges(2) |
|
3.33 |
(3) |
|
2.18 |
|||
|
|
|
|
|
|
(1) |
Represents the last reported price per share of our common stock on the New York Stock Exchange on the applicable date. |
||
|
|
|||
|
(2) |
Fixed charges consist of interest expense and scheduled principal payments on borrowed funds (including capitalized interest, but excluding amortization of debt premium). Both EBITDA and fixed charges are calculated for the nine months ended September 30, 2013, and December 31, 2012. |
||
|
|
|||
|
(3) |
EBITDA includes a gain of $7.7 million on the sale of real estate held for investment. Excluding this gain, the ratio of EBITDA to combined fixed charges is 2.37. |
||
17
AmREIT
Debt Information
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Amount |
|
|
Interest Rate |
|
Annual
Debt |
|
Maturity |
|
% of total |
|
Weighted |
|
||||||
|
Property Mortgages: |
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
500 Lamar |
$ |
1,560 |
6.00 |
% |
$ |
94 |
2/1/2015 |
|
|
|||||||||||
|
Uptown Park |
|
49,000 |
|
5.37 |
% |
|
2,631 |
6/1/2015 |
|
|
||||||||||
|
2015 Maturities |
|
50,560 |
|
|
|
|
25.28 |
% |
5.39 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Plaza in the Park |
|
23,250 |
3.45 |
% |
|
802 |
1/1/2016 |
|
|
|||||||||||
|
Market at Lake Houston |
|
15,675 |
5.75 |
% |
|
901 |
1/1/2016 |
|
|
|||||||||||
|
Cinco Ranch |
|
9,750 |
3.45 |
% |
|
336 |
1/1/2016 |
|
|
|||||||||||
|
Southbank - Riverwalk |
|
20,000 |
|
5.91 |
% |
|
1,182 |
6/1/2016 |
|
|
||||||||||
|
2016 Maturities |
|
68,675 |
|
|
|
|
34.33 |
% |
4.69 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Bakery Square |
|
1,703 |
|
8.00 |
% |
|
136 |
2/10/2017 |
|
|
||||||||||
|
2017 Maturities |
|
1,703 |
|
|
|
|
0.85 |
% |
8.00 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Alpharetta Commons |
|
12,072 |
|
4.54 |
% |
|
548 |
8/1/2018 |
|
|
||||||||||
|
2018 Maturities |
|
12,072 |
|
|
|
|
6.03 |
% |
4.54 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Preston Royal Northwest |
|
23,087 |
|
3.21 |
% |
|
741 |
1/1/2020 |
|
|
||||||||||
|
2020 Maturities |
|
23,087 |
|
|
|
|
11.54 |
% |
3.21 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Brookwood Village |
|
7,197 |
5.40 |
% |
|
389 |
2/10/2022 |
|
|
|||||||||||
|
Uptown Plaza - Dallas |
|
13,744 |
|
4.25 |
% |
|
584 |
8/10/2022 |
|
|
||||||||||
|
2022 Maturities |
|
20,941 |
|
|
|
|
10.47 |
% |
4.65 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Woodlake Square |
|
23,000 |
|
4.30 |
% |
|
989 |
10/1/2023 |
|
|
||||||||||
|
2023 Maturities |
|
23,000 |
|
|
|
|
11.50 |
% |
4.30 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Corporate debt: |
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
$75.0 million Facility(1) |
|
- |
|
(1) |
$ |
263 |
8/1/2015 |
0.00 |
% |
(1) |
||||||||||
|
Total Maturities(2) |
$ |
200,038 |
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed-rate debt: |
|
|
|
|
|
|
|
|
||||||||||||
|
Weighted average fixed rate |
4.67 |
% |
|
|
|
|
|
|||||||||||||
|
Weighted average years to maturity |
4.3 |
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
(1) |
The $75.0 million Facility bears interest at LIBOR plus a margin of 205 basis points to 275 basis points, depending on our leverage, and carries a fee equal to 0.35% of the unused portion of the total amount available under the facility. Annual debt service assumes the amount outstanding and interest rates as of September 30, 2013, remain constant. |
||
|
|
|||
|
(2) |
Total maturities above are $233 less than total debt as reported in our consolidated balance sheets as of September 30, 2013, due to the premium recorded on above-market debt assumed in conjunction with certain of our property acquisitions. |
||
18
Interest Expense Detail (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|||||||||||
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
||||
|
Fixed-rate debt interest expense |
$ |
2,153 |
$ |
2,221 |
$ |
6,423 |
$ |
6,869 |
||||||||
|
Variable-rate debt interest expense |
|
61 |
|
79 |
|
304 |
|
532 |
||||||||
|
$75 million Facility unused fee |
|
50 |
|
43 |
|
154 |
|
43 |
||||||||
|
Amortization of deferred loan costs |
|
98 |
|
88 |
|
299 |
|
278 |
||||||||
|
Write off of deferred financing costs |
|
- |
|
362 |
|
- |
|
362 |
||||||||
|
Amortization of above market debt |
|
(27 |
) |
|
(30 |
) |
|
(85 |
) |
|
(92 |
) |
||||
|
Total interest expense |
$ |
2,335 |
|
$ |
2,763 |
|
$ |
7,095 |
|
$ |
7,992 |
|
||||
19
Wholly-Owned Property and Tenant Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property |
|
Property |
|
Year
Built / |
|
|
GLA |
|
|
Percent |
|
|
Percent |
|
|
Annualized
Base |
|
|
Annualized |
|
|
Average
Net |
|
Key Tenants |
|
|
|
Neighborhood
and Community |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Uptown Park |
|
Houston, TX |
|
1999/2005 |
|
|
169,112 |
|
|
90.8 |
% |
|
93.0 |
% |
$ |
5,475,669 |
|
$ |
35.65 |
|
$ |
35.75 |
|
|
Champps, McCormick & Schmicks (owned by Landry’s) |
|
|
Plaza in the Park |
|
Houston, TX |
|
1999/2009 |
|
|
144,054 |
|
|
98.6 |
% |
|
98.6 |
% |
|
2,823,966 |
|
|
19.88 |
|
|
19.63 |
|
|
Kroger |
|
|
Preston Royal East |
|
Dallas, TX |
|
1956 |
|
|
107,914 |
|
|
91.5 |
% |
|
93.4 |
% |
|
2,535,619 |
|
|
25.67 |
|
|
26.91 |
|
|
Bank of America, Starbucks, FedEx Office |
|
|
Preston Royal West |
|
Dallas, TX |
|
1959 |
|
|
122,564 |
|
|
96.2 |
% |
|
99.5 |
% |
|
2,386,467 |
|
|
20.24 |
|
|
21.90 |
|
|
Tom Thumb, Barnes & Noble, Spec’s |
|
|
Woodlake Square |
|
Houston, TX |
|
1970/2011 |
|
|
161,388 |
|
|
89.5 |
% |
|
89.5 |
% |
|
2,385,208 |
|
|
16.52 |
|
|
16.80 |
|
|
Randalls, Walgreens, Jos. A. Bank, Five Guys |
|
|
Fountain Oaks |
|
Atlanta, GA |
|
1988 |
|
|
160,598 |
|
|
88.7 |
% |
|
88.7 |
% |
|
1,866,951 |
|
|
13.10 |
|
|
13.60 |
|
|
Kroger |
|
|
Southbank |
|
San Antonio, TX |
|
1995 |
|
|
46,673 |
|
|
100.0 |
% |
|
100.0 |
% |
|
1,701,675 |
|
|
36.46 |
|
|
37.82 |
|
|
Hard Rock Café |
|
|
The Market at Lake Houston |
|
Houston, TX |
|
2000 |
|
|
101,799 |
|
|
100.0 |
% |
|
100.0 |
% |
|
1,621,043 |
|
|
15.92 |
|
|
16.00 |
|
|
H-E-B, Five Guys |
|
|
Uptown Plaza - Dallas |
|
Dallas, TX |
|
2006 |
|
|
33,840 |
|
|
93.4 |
% |
|
93.4 |
% |
|
1,372,605 |
|
|
43.42 |
|
|
44.06 |
|
|
Morton’s (owned by Landry’s), Wells Fargo |
|
|
Alpharetta Commons |
|
Atlanta, GA |
|
1997 |
|
|
94,544 |
|
|
98.7 |
% |
|
98.7 |
% |
|
1,340,611 |
|
|
14.36 |
|
|
14.49 |
|
|
Publix |
|
|
Cinco Ranch |
|
Houston, TX |
|
2001 |
|
|
97,297 |
|
|
100.0 |
% |
|
100.0 |
% |
|
1,325,296 |
|
|
13.62 |
|
|
13.68 |
|
|
Kroger |
|
|
Uptown Plaza - Houston |
|
Houston, TX |
|
2002 |
|
|
28,000 |
|
|
100.0 |
% |
|
100.0 |
% |
|
1,315,746 |
|
|
46.99 |
|
|
46.10 |
|
|
CVS/pharmacy, The Grotto (owned by Landry’s) |
|
|
Bakery Square |
|
Houston, TX |
|
1996 |
|
|
34,614 |
|
|
100.0 |
% |
|
100.0 |
% |
|
989,111 |
|
|
28.56 |
|
|
27.92 |
|
|
Walgreens, Boston Market |
|
|
Brookwood Village |
|
Atlanta, GA |
|
1941/2000 |
|
|
28,774 |
|
|
87.9 |
% |
|
90.0 |
% |
|
653,259 |
|
|
25.82 |
|
|
26.47 |
|
|
CVS/pharmacy, Subway |
|
|
The Courtyard on Post Oak |
|
Houston, TX |
|
1994 |
|
|
13,597 |
|
|
29.5 |
% |
|
29.5 |
% |
|
260,845 |
|
|
65.00 |
|
|
61.41 |
|
|
Verizon |
|
|
Woodlands Plaza |
|
Houston, TX |
|
1997/2003 |
|
|
20,018 |
|
|
75.1 |
% |
|
97.5 |
% |
|
414,469 |
|
|
27.56 |
|
|
25.81 |
|
|
FedEx Office, Freebirds World Burrito |
|
|
Terrace Shops |
|
Houston, TX |
|
2000 |
|
|
16,395 |
|
|
91.3 |
% |
|
100.0 |
% |
|
456,682 |
|
|
30.50 |
|
|
31.34 |
|
|
Starbucks |
|
|
Sugarland Plaza |
|
Houston, TX |
|
1998/2001 |
|
|
16,750 |
|
|
100.0 |
% |
|
100.0 |
% |
|
408,188 |
|
|
24.37 |
|
|
23.45 |
|
|
Memorial Hermann |
|
|
500 Lamar |
|
Austin, TX |
|
1998 |
|
|
12,795 |
|
|
100.0 |
% |
|
100.0 |
% |
|
416,217 |
|
|
32.53 |
|
|
32.78 |
|
|
Title Nine Sports |
|
|
Neighborhood
and Community |
|
|
|
|
1,410,726 |
|
|
93.7 |
% |
|
94.8 |
% |
$ |
29,749,627 |
|
$ |
22.51 |
|
$ |
22.85 |
|
|
|
|
||
|
|
||||||||||||||||||||||||||
|
Single Tenant (Ground Leases)(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
CVS/Pharmacy |
|
Houston, TX |
|
2003 |
|
|
13,824 |
|
|
100.0 |
% |
|
100.0 |
% |
$ |
327,167 |
|
$ |
23.67 |
|
$ |
23.67 |
|
|
CVS/pharmacy |
|
|
Jared The Galleria of Jewelry |
|
Houston, TX |
|
2012 |
|
|
6,057 |
|
|
100.0 |
% |
|
100.0 |
% |
|
180,000 |
|
|
29.72 |
|
|
34.48 |
|
|
Jared The Galleria of Jewelry |
|
|
Citibank |
|
San Antonio, TX |
|
2005 |
|
|
4,439 |
|
|
100.0 |
% |
|
100.0 |
% |
|
160,000 |
|
|
36.04 |
|
|
36.04 |
|
|
Citibank |
|
|
Landry’s Seafood |
|
Houston, TX |
|
1995 |
|
|
13,497 |
|
|
100.0 |
% |
|
100.0 |
% |
|
155,677 |
|
|
11.53 |
|
|
12.18 |
|
|
Landry’s Seafood |
|
|
T.G.I. Friday’s(7) |
|
Hanover, MD |
|
2003 |
|
|
6,802 |
|
|
100.0 |
% |
|
100.0 |
% |
|
148,458 |
|
|
21.83 |
|
|
23.44 |
|
|
T.G.I. Friday’s |
|
|
Bank of America |
|
Houston, TX |
|
1994 |
|
|
4,251 |
|
|
100.0 |
% |
|
100.0 |
% |
|
129,275 |
|
|
30.41 |
|
|
28.78 |
|
|
Bank of America |
|
|
Macaroni Grill |
|
Houston, TX |
|
1994 |
|
|
7,825 |
|
|
100.0 |
% |
|
100.0 |
% |
|
96,000 |
|
|
12.27 |
|
|
12.05 |
|
|
Macaroni Grill |
|
|
T.G.I. Friday’s |
|
Houston, TX |
|
1994 |
|
|
6,543 |
|
|
100.0 |
% |
|
100.0 |
% |
|
96,000 |
|
|
14.67 |
|
|
14.41 |
|
|
T.G.I. Friday’s |
|
|
Smokey Bones |
|
Atlanta, GA |
|
1998 |
|
|
6,867 |
|
|
100.0 |
% |
|
100.0 |
% |
|
94,922 |
|
|
13.82 |
|
|
13.82 |
|
|
Smokey Bones |
|
|
Single
Tenant (Ground Leases) |
|
|
|
|
70,105 |
|
|
100.0 |
% |
|
100.0 |
% |
$ |
1,387,499 |
|
$ |
19.79 |
|
$ |
20.34 |
|
|
|
|
||
|
Single Tenant (Fee Simple)(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
The Container Store |
|
Houston, TX |
|
2011 |
|
|
25,083 |
|
|
100.0 |
% |
|
100.0 |
% |
$ |
425,323 |
|
$ |
16.96 |
|
$ |
17.86 |
|
|
The Container Store |
|
|
T.G.I. Friday’s |
|
Houston, TX |
|
1982 |
|
|
8,500 |
|
|
100.0 |
% |
|
100.0 |
% |
|
215,000 |
|
|
25.29 |
|
|
25.90 |
|
|
T.G.I. Friday’s |
|
|
Golden Corral(7) |
|
Houston, TX |
|
1992 |
|
|
12,000 |
|
|
100.0 |
% |
|
100.0 |
% |
|
210,450 |
|
|
17.54 |
|
|
17.54 |
|
|
Golden Corral |
|
|
Golden Corral(7) |
|
Houston, TX |
|
1993 |
|
|
12,000 |
|
|
100.0 |
% |
|
100.0 |
% |
|
208,941 |
|
|
17.41 |
|
|
17.41 |
|
|
Golden Corral |
|
|
Single Tenant (Fee Simple) Subtotal/Weighted Average |
|
|
|
|
57,583 |
|
|
100.0 |
% |
|
100.0 |
% |
$ |
1,059,714 |
|
$ |
18.40 |
|
$ |
18.89 |
|
|
|
|
||
|
Portfolio Total/Weighted Average |
|
|
|
|
|
1,538,414 |
|
|
94.2 |
% |
|
95.2 |
% |
$ |
32,196,840 |
|
$ |
22.22 |
|
$ |
22.57 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013, divided by (ii) total GLA, expressed as a percentage. |
||
|
|
|||
|
(2) |
Percent leased is calculated as (i) GLA under signed leases as of September 30, 2013, divided by (ii) total GLA, expressed as a percentage. |
||
|
|
|||
|
(3) |
Annualized base rent is calculated by multiplying (i) monthly base rent as of September 30, 2013, for leases that had commenced as of such date, by (ii) 12. |
||
20
|
|
|
|
|
(4) |
Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent, by (ii) GLA under commenced leases as of September 30, 2013. |
|
|
|
||
|
(5) |
Average net effective annualized base rent per leased square foot represents (i) the contractual base rent for commenced leases as of September 30, 2013, calculated on a straight line basis to amortize free rent periods, abatements and contractual rent increases, but without subtracting tenant improvement allowances and leasing commissions, divided by (ii) GLA under commenced leases as of September 30, 2013. |
|
|
|
||
|
(6) |
For single-tenant ground leases, we own and lease the land to the tenant. The tenant owns the building during the term of the lease and is responsible for all expenses relating to the property. Upon expiration or termination of the lease, ownership of the building will revert to us as owner of the land. The weighted average remaining term of our ground leases is 7.3 years. |
|
|
|
||
|
(7) |
The tenants at these properties have rights of first refusal to purchase the property. |
|
|
|
||
|
(8) |
For single-tenant fee simple properties, we own the land and the building, and the tenant is responsible for all expenses relating to the property. The weighted average remaining term of our fee simple leases is 6.2 years. |
21
There is no guaranty that we will ultimately complete any or all of these opportunities, that the expected return on investment or projected costs will be the amounts shown or that stabilization will occur as anticipated. Such amounts and dates represent management’s best estimate, which is based on current information and may change over time.
| Revised | Redevelopment
/ Development [1] |
AmREIT Projected Costs [3] |
Costs
to Date |
Anticipated Construction Completion |
Anticipated Stabilization Date [4] | ||||||||
| Property | Location | Current GLA |
Owned GLA |
Non-Owned GLA |
Opportunity | Expected ROI [2] | |||||||
| Uptown
Park - Baker Pad |
Houston, TX | 12,200 | 30,000 | 360,000 | We anticipate executing a ground lease with an experienced luxury multi-family developer who will co-develop and own the multi-family improvements. We will own the retail improvements in a condominium interest. | R | 8 - 12% | $10-15 million | $0.3 million | 2016 | 2017 | ||
| The Courtyard | Houston, TX | 13,597 | 15,000 | 480,000 | Similar to the Uptown Park opportunity, we anticipate executing a ground lease with a co-developer who will own the improvements above our retail which we would own in a condominium interest. | R | 8 - 12% | $5-10 million | $0.1 million | 2016 | 2017 | ||
| Woodlake
Square Pad Sites |
Houston, TX | 7,000 | 11,500 | N/A | Development of a retail pad and redevelopment of an existing outparcel building | D/R | 6 - 10% | $1-1.5 million | $ - | 2014 | 2014 | ||
| 610 & Ella [5] | Houston, TX | - | 5,000 | N/A | Build-to-suit with CVS/pharmacy. | D | 8 - 9% | $5 million | $4.3 million | 2013 | 2013 [5] | ||
| Total | 32,797 | 61,500 | 840,000 | 10% [6] | $21-31.5 million | $4.7 million | |||||||
|
|
|
|
|
|
[1] |
Redevelopment represents significant construction and refurbishment at operating properties. Development represents initial construction, primarily from unimproved land. |
||
|
[2] |
Expected ROI (return on investment) for redevelopment projects generally reflects only the deal specific cash, unleveraged incremental property net operating income (NOI) generated by the redevelopment and is calculated as incremental NOI divided by incremental cost. Incremental property NOI is the NOI generated by the redevelopment after deducting rent being paid or management’s estimate of rent to be paid for the redevelopment space and any other space taken out of service to accommodate the redevelopment. For development projects, expected return on investment reflects the deal specific cash, unleveraged property NOI generated by the development and is calculated as NOI divided by cost. Expected return on investment for development and redevelopment projects does not include peripheral impacts, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property. |
||
|
[3] |
Amounts include construction costs, anticipated tenant improvements and lease-up costs, including anticipated commissions that will be borne by the Company. |
||
|
[4] |
Stabilization is reached when the property achieves targeted occupancy, typically 95%. |
||
|
[5] |
This property is under contract to be sold at a 5.5% cap rate. |
||
|
[6] |
Represents the weighted average expected return on investment for all properties |
||
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Rank |
Tenant Name |
Year
to Date |
|
Year
to Date Annualized |
|
Tenant GLA |
|
Percentage
of |
|||||||
|
1 |
Kroger |
$ |
1,468,651 |
6.08 |
% |
267,097 |
17.36 |
% |
|||||||
|
2 |
Landry’s |
938,840 |
3.89 |
% |
38,819 |
2.52 |
% |
||||||||
|
3 |
CVS/pharmacy |
916,679 |
3.80 |
% |
37,485 |
2.44 |
% |
||||||||
|
4 |
H-E-B |
832,302 |
3.45 |
% |
80,641 |
5.24 |
% |
||||||||
|
5 |
Publix |
585,702 |
2.43 |
% |
65,146 |
4.23 |
% |
||||||||
|
6 |
Bank of America |
386,070 |
1.60 |
% |
14,129 |
0.92 |
% |
||||||||
|
7 |
Barnes & Noble |
380,807 |
1.58 |
% |
48,600 |
3.16 |
% |
||||||||
|
8 |
Hard Rock Cafe |
372,619 |
1.54 |
% |
15,752 |
1.02 |
% |
||||||||
|
9 |
TGI Fridays |
355,411 |
1.47 |
% |
21,845 |
1.42 |
% |
||||||||
|
10 |
Tom Thumb |
353,990 |
1.47 |
% |
29,779 |
1.94 |
% |
||||||||
|
11 |
Jared |
335,991 |
1.39 |
% |
6,057 |
0.39 |
% |
||||||||
|
12 |
Champps Americana |
316,752 |
1.31 |
% |
11,384 |
0.74 |
% |
||||||||
|
13 |
Golden Corral |
307,420 |
1.27 |
% |
24,000 |
1.56 |
% |
||||||||
|
14 |
Paesanos |
304,938 |
1.26 |
% |
8,017 |
0.52 |
% |
||||||||
|
15 |
The County Line |
267,647 |
1.11 |
% |
4,614 |
0.30 |
% |
||||||||
|
16 |
Dougherty’s Pharmacy |
252,917 |
1.05 |
% |
12,093 |
0.79 |
% |
||||||||
|
17 |
Tasting Room |
247,944 |
1.03 |
% |
2,000 |
0.13 |
% |
||||||||
|
18 |
Verizon Wireless |
227,587 |
0.94 |
% |
5,513 |
0.36 |
% |
||||||||
|
19 |
Walgreens |
223,965 |
0.93 |
% |
15,120 |
0.98 |
% |
||||||||
|
20 |
Spec’s Family Partners, Ltd. |
217,331 |
0.90 |
% |
9,918 |
0.64 |
% |
||||||||
|
21 |
River Oaks Imaging & Diagnostic, L.P. |
201,375 |
0.83 |
% |
10,750 |
0.70 |
% |
||||||||
|
22 |
Howl At The Moon Saloon |
193,131 |
0.80 |
% |
7,055 |
0.46 |
% |
||||||||
|
23 |
Potbelly |
188,490 |
0.78 |
% |
5,458 |
0.35 |
% |
||||||||
|
24 |
Buca Di Beppo |
187,344 |
0.78 |
% |
7,573 |
0.49 |
% |
||||||||
|
25 |
M. Penner |
176,099 |
0.73 |
% |
6,500 |
0.42 |
% |
||||||||
23
Retail Leasing Summary for Comparable Leases(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the three months |
|
For
the nine months |
|
For the year ended December 31, |
|
|||||||||||||||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
|||||||||
|
Expirations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of leases |
|
|
8 |
|
|
14 |
|
|
39 |
|
|
31 |
|
|
44 |
|
|
53 |
|
|
50 |
|
|
34 |
|
|
22 |
|
|
GLA |
|
|
12,365 |
|
|
50,690 |
|
|
90,445 |
|
|
116,523 |
|
|
180,245 |
|
|
187,605 |
|
|
224,578 |
|
|
110,693 |
|
|
75,601 |
|
|
New Leases(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of leases |
|
|
3 |
|
|
2 |
|
|
9 |
|
|
4 |
|
|
5 |
|
|
7 |
|
|
11 |
|
|
8 |
|
|
4 |
|
|
GLA |
|
|
4,942 |
|
|
5,999 |
|
|
16,819 |
|
|
11,412 |
|
|
12,997 |
|
|
14,231 |
|
|
17,737 |
|
|
15,471 |
|
|
7,328 |
|
|
Expiring annualized base rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per square foot |
|
$ |
29.46 |
|
$ |
25.37 |
|
$ |
26.08 |
|
$ |
27.14 |
|
$ |
27.22 |
|
$ |
28.36 |
|
$ |
31.07 |
|
$ |
28.31 |
|
$ |
23.52 |
|
|
New annualized base rent per |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
square foot |
|
$ |
33.80 |
|
$ |
37.00 |
|
$ |
32.52 |
|
$ |
35.70 |
|
$ |
34.84 |
|
$ |
30.85 |
|
$ |
31.44 |
|
$ |
29.64 |
|
$ |
21.70 |
|
|
% Change (Cash) |
|
|
14.7 |
% |
|
45.8 |
% |
|
24.7 |
% |
|
31.5 |
% |
|
28.0 |
% |
|
8.8 |
% |
|
1.2 |
% |
|
4.7 |
% |
|
-7.7 |
% |
|
Renewals(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of leases |
|
|
5 |
|
|
11 |
|
|
29 |
|
|
24 |
|
|
30 |
|
|
38 |
|
|
39 |
|
|
24 |
|
|
13 |
|
|
GLA |
|
|
3,166 |
|
|
34,511 |
|
|
70,263 |
|
|
93,031 |
|
|
115,501 |
|
|
143,324 |
|
|
140,236 |
|
|
86,462 |
|
|
22,464 |
|
|
Expiring annualized base rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per square foot |
|
$ |
29.85 |
|
$ |
29.43 |
|
$ |
24.69 |
|
$ |
22.33 |
|
$ |
23.91 |
|
$ |
24.92 |
|
$ |
26.12 |
|
$ |
25.62 |
|
$ |
27.05 |
|
|
New annualized base rent per |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
square foot |
|
$ |
31.51 |
|
$ |
29.32 |
|
$ |
26.47 |
|
$ |
23.33 |
|
$ |
25.27 |
|
$ |
25.74 |
|
$ |
27.32 |
|
$ |
26.85 |
|
$ |
31.53 |
|
|
% Change (Cash) |
|
|
5.6 |
% |
|
-0.4 |
% |
|
7.2 |
% |
|
4.5 |
% |
|
5.7 |
% |
|
3.3 |
% |
|
4.6 |
% |
|
4.8 |
% |
|
16.6 |
% |
|
Combined |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of leases |
|
|
8 |
|
|
13 |
|
|
38 |
|
|
28 |
|
|
35 |
|
|
45 |
|
|
50 |
|
|
32 |
|
|
17 |
|
|
GLA |
|
|
8,108 |
|
|
40,510 |
|
|
87,082 |
|
|
104,443 |
|
|
128,498 |
|
|
157,555 |
|
|
157,973 |
|
|
101,933 |
|
|
29,792 |
|
|
Expiring annualized base rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per square foot |
|
$ |
29.61 |
|
$ |
28.83 |
|
$ |
24.96 |
|
$ |
22.86 |
|
$ |
24.24 |
|
$ |
25.23 |
|
$ |
26.68 |
|
$ |
26.03 |
|
$ |
26.18 |
|
|
New annualized base rent per |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
square foot |
|
$ |
32.91 |
|
$ |
30.46 |
|
$ |
27.63 |
|
$ |
24.68 |
|
$ |
26.24 |
|
$ |
26.20 |
|
$ |
27.78 |
|
$ |
27.27 |
|
$ |
29.11 |
|
|
% Change (Cash) |
|
|
11.1 |
% |
|
5.6 |
% |
|
10.7 |
% |
|
8.0 |
% |
|
8.2 |
% |
|
3.8 |
% |
|
4.1 |
% |
|
4.8 |
% |
|
11.2 |
% |
|
|
|
|
|
|
(1) |
Comparable leases are defined as renewals or new leases for a space that was not vacant for more than 12 consecutive months prior to lease signing. |
||
|
(2) |
Represents existing tenants that, upon expiration of their leases, enter into new leases for the same space. |
||
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anchor Tenants (>20,000 square feet) |
|
|
Shop Space Tenants (<20,000 square feet) |
|
|
Total |
|
||||||||||||||||||||||||
|
Year |
|
Expiring |
|
|
Tenant |
|
|
%
of GLA |
|
|
|
ABR
Per |
|
|
Expiring |
|
|
%
of GLA |
|
|
|
ABR
Per |
|
|
Expiring |
|
|
%
of GLA |
|
|
|
ABR
Per |
|
|
Vacant |
|
- |
|
|
- |
|
|
- |
|
|
$ |
- |
|
|
89,277 |
|
|
8.5 |
% |
|
$ |
- |
|
|
89,277 |
|
|
5.8 |
% |
|
$ |
- |
|
|
2013 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
49,572 |
|
|
4.7 |
% |
|
|
21.83 |
|
|
49,572 |
|
|
3.2 |
% |
|
|
21.83 |
|
|
2014 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
143,420 |
|
|
13.7 |
% |
|
|
26.48 |
|
|
143,420 |
|
|
9.3 |
% |
|
|
26.48 |
|
|
2015 |
|
26,147 |
|
|
Barnes & Noble |
|
|
5.3 |
% |
|
|
18.64 |
|
|
144,879 |
|
|
13.8 |
% |
|
|
29.19 |
|
|
171,026 |
|
|
11.1 |
% |
|
|
27.58 |
|
|
2016 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
149,306 |
|
|
14.2 |
% |
|
|
28.80 |
|
|
149,306 |
|
|
9.7 |
% |
|
|
28.80 |
|
|
2017 |
|
145,787 |
|
|
H-E-B, Publix |
|
|
29.8 |
% |
|
|
12.97 |
|
|
92,346 |
|
|
8.8 |
% |
|
|
28.50 |
|
|
238,133 |
|
|
15.5 |
% |
|
|
18.99 |
|
|
2018 |
|
- |
|
|
- |
|
|
0.0 |
% |
|
|
- |
|
|
119,445 |
|
|
11.4 |
% |
|
|
24.42 |
|
|
119,445 |
|
|
7.8 |
% |
|
|
24.42 |
|
|
2019 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
28,233 |
|
|
2.7 |
% |
|
|
28.27 |
|
|
28,233 |
|
|
1.8 |
% |
|
|
28.27 |
|
|
2020 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
38,431 |
|
|
3.7 |
% |
|
|
28.85 |
|
|
38,431 |
|
|
2.5 |
% |
|
|
28.85 |
|
|
2021 |
|
81,217 |
|
|
Kroger |
|
|
16.6 |
% |
|
|
12.83 |
|
|
24,468 |
|
|
2.3 |
% |
|
|
29.56 |
|
|
105,685 |
|
|
6.9 |
% |
|
|
16.70 |
|
|
2022 |
|
25,083 |
|
|
The Container Store |
|
|
5.1 |
% |
|
|
16.96 |
|
|
45,795 |
|
|
4.4 |
% |
|
|
30.27 |
|
|
70,878 |
|
|
4.6 |
% |
|
|
25.56 |
|
|
2023 + |
|
211,516 |
|
|
Kroger, Tom Thumb, Randalls |
|
|
43.2 |
% |
|
|
8.26 |
|
|
123,492 |
|
|
11.8 |
% |
|
|
29.39 |
|
|
335,008 |
|
|
21.8 |
% |
|
|
16.05 |
|
|
Total / Weighted Avg |
|
489,750 |
|
|
|
|
|
|
|
|
|
11.42 |
|
|
1,048,664 |
|
|
|
|
|
|
27.73 |
|
|
1,538,414 |
|
|
|
|
|
|
22.22 |
|
|
|
|
|
|
|
(1) |
ABR per square foot is calculated by multiplying (i) the monthly base rent as of September 30, 2013, for leases expiring during the applicable period by (ii) 12 and then dividing the result by GLA for such leases. |
||
Lease Distribution Table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA Range |
Number
of |
|
|
Percentage |
|
|
Total GLA |
|
|
Total |
|
|
Percent |
|
|
Percentage |
|
|
Annualized
Base |
|
|
Percentage |
|
|
ABR
Per |
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
2,500 or less |
196 |
60.1 |
% |
324,039 |
281,859 |
87.0 |
% |
19.5 |
% |
$ |
8,046,372 |
25.0 |
% |
28.55 |
||||||||||||||||||||||
|
2,501 - 5,000 |
72 |
22.1 |
% |
270,586 |
250,915 |
92.7 |
% |
17.3 |
% |
|
7,385,169 |
22.9 |
% |
29.43 |
||||||||||||||||||||||
|
5,001 - 10,000 |
35 |
10.7 |
% |
272,506 |
245,080 |
89.9 |
% |
16.9 |
% |
|
6,853,224 |
21.3 |
% |
27.96 |
||||||||||||||||||||||
|
10,000 - 20,000 |
14 |
4.3 |
% |
181,533 |
181,533 |
100.0 |
% |
12.5 |
% |
|
4,318,647 |
13.4 |
% |
23.79 |
||||||||||||||||||||||
|
greater than 20,000 |
9 |
2.8 |
% |
489,750 |
489,750 |
100.0 |
% |
33.8 |
% |
|
5,593,428 |
17.4 |
% |
11.42 |
||||||||||||||||||||||
|
Total portfolio |
326 |
100.0 |
% |
1,538,414 |
1,449,137 |
94.2 |
% |
100.0 |
% |
$ |
32,196,840 |
100.0 |
% |
22.22 |
||||||||||||||||||||||
|
|
|
|
|
|
(1) |
Annualized base rent is calculated by multiplying (i) the monthly base rent as of September 30, 2013, for leases in the applicable GLA range that had commenced as of such date by (ii) 12. |
||
|
(2) |
ABR per leased square foot is calculated by dividing (i) ABR for leases in the applicable GLA range by (ii) total leased GLA for leases in the applicable GLA range. |
||
25
Significant Investments Table (in thousands, except percent and GLA data):
Of our Investments in Advised Funds, only our investments in MacArthur Park and Shadow Creek Ranch (which represent 52.4% and 34.4%, respectively of our Investments in Advised Funds balance as of September 30, 2013) comprise greater than 10% of the balance. The table below presents the NOI, debt and property data for these two investments.
|
|
|
|
|
|
|
|
|
|
|
MacArthur Park |
|
|
Shadow
Creek |
|||||
|
Year acquired |
2013 |
|
|
|
2009 |
|||
|
Percent owned |
30.0% |
|
|
|
10.0% |
|||
|
|
|
|||||||
|
For the three months ended September 30, 2013: |
|
|
||||||
|
|
|
|||||||
|
Revenues |
$ |
1,942 |
$ |
2,581 |
||||
|
Expenses |
|
689 |
|
805 |
||||
|
NOI |
$ |
1,253 |
$ |
1,776 |
||||
|
|
|
|
|
|||||
|
For the nine months ended September 30, 2013: |
|
|
|
|
||||
|
|
|
|
|
|||||
|
Revenues |
$ |
3,849 |
|
(1) |
$ |
7,603 |
||
|
Expenses |
|
1,270 |
|
(1) |
|
2,301 |
||
|
NOI |
$ |
2,579 |
|
(1) |
$ |
5,302 |
||
|
|
|
|
|
|||||
|
As of September 30, 2013: |
|
|
|
|
||||
|
|
|
|
|
|||||
|
Real estate at cost |
$ |
85,051 |
$ |
113,142 |
||||
|
Mortgage obligation |
$ |
43,900 |
$ |
62,709 |
||||
|
Debt maturity |
|
04/01/2023 |
|
03/01/2015 |
||||
|
|
|
|
|
|||||
|
GLA |
|
406,102 |
|
613,109 |
||||
|
Percent occupied |
|
84.4 |
% |
|
97.8 |
% |
||
|
Grocery anchor |
|
Kroger |
|
H.E.B. |
||||
|
Other principal tenants |
|
Michael’s |
|
Academy |
||||
|
|
TJ Maxx |
|
Burlington Coat Factory |
|||||
|
|
Ulta |
|
Hobby Lobby |
|||||
|
|
Office Depot |
|
Ashley Furniture |
|||||
|
|
|
|
|
|
(1) |
MacArthur Park, which was a wholly-owned AmREIT property, was contributed to a joint venture with Goldman Sachs on March 26, 2013. The table above excludes revenues, expenses and NOI of $1.1 million, $308,000, and $770,000, respectively, related to MacArthur Park for the 2013 period prior to contribution to the joint venture. Such amounts are included in our Statement of Operations and NOI reconciliation included herein. |
||
Reconciliation of income from Advised Funds to NOI from Advised Funds (in thousands):
|
|
|
|
|
|
|
|
Nine
months ended |
|||||
|
Loss from Advised Funds |
$ |
(67 |
) |
||
|
Depreciation of real estate assets |
|
1,118 |
|||
|
FFO from Advised Funds |
|
1,051 |
|||
|
Acquisition costs |
|
164 |
|||
|
Core FFO from Advised Funds |
|
1,215 |
|||
|
Interest expense |
|
638 |
|||
|
Other GAAP and non-recurring adjustments |
|
(350 |
) |
||
|
NOI from Advised Funds |
$ |
1,503 |
* |
||
|
|
|
|
|
|
* |
As of September 30, 2013, only six months of operations are included for the MacArthur Park joint venture as it began operations on March 26, 2013. |
||
26
|
|
|
|
ABR |
Annualized base rent. |
|
|
|
|
Adjusted FFO |
Core FFO (as defined below) adjusted to exclude non-cash income and expenses that are included in the NAREIT definition of FFO (defined below). There can be no assurance that AFFO presented by AmREIT is comparable to similarly titled measures of other REITs. AFFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. |
|
|
|
|
Advised Funds |
Collectively, our varying minority ownership interests in four high net worth investment funds, one institutional joint venture with Goldman Sachs, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV. |
|
|
|
|
Core FFO |
FFO in accordance with NAREIT’s definition, adjusted to exclude items that management believes do not reflect our ongoing operations, such as acquisition expenses, non-recurring asset write-offs and recoveries, expensed issuance costs and gains on the sale of real estate held for resale. Management believes that such items therefore affect the comparability of our period-over-period performance with similar REITs. |
|
|
|
|
EBITDA |
Earnings before interest, income taxes, depreciation and amortization. Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income. We define EBITDA as GAAP net income, plus interest expense, state or federal income taxes and depreciation and amortization. Management believes that EBITDA provides useful information to the investment community about our operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of our overall financial performance since it does not reflect depreciation and amortization, interest expense, provision for income taxes, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, our EBITDA may not be comparable to other REITs. Below is a reconciliation of net income to EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|||||
|
|
|
September
30, |
|
|
December
31, |
|||
|
Net income |
$ |
10,642 |
$ |
3,203 |
||||
|
Interest expense |
|
7,095 |
|
7,617 |
||||
|
State income taxes |
|
29 |
|
20 |
||||
|
Depreciation and amortization |
|
8,922 |
|
6,639 |
||||
|
Depreciation and amortization - discontinued operations |
|
14 |
|
18 |
||||
|
EBITDA |
$ |
26,702 |
$ |
17,497 |
||||
|
|
|
|
FFO |
Funds from operations, as defined by NAREIT, which includes net income (loss) computed in accordance with GAAP, excluding gains, losses or impairments on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for similar items recorded by our Advised Funds. |
|
|
|
|
GLA |
Gross leasable area. |
|
|
|
|
NAREIT |
National Association of Real Estate Investment Trusts. |
|
|
|
|
NOI |
Net operating income, defined as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense). Below for a reconciliation of net income to NOI: |
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|||||||||||||
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|||||||
|
|
|
|
|
|||||||||||||
|
Net income |
$ |
1,265 |
$ |
1,023 |
$ |
10,642 |
$ |
3,726 |
||||||||
|
Adjustments to add/(deduct): |
|
|
|
|
|
|
|
|
||||||||
|
Amortization of straight-line rents and above/below-market rents(1) |
|
(183 |
) |
|
(94 |
) |
|
(644 |
) |
|
(271 |
) |
||||
|
Advisory services income - related party |
|
(1,069 |
) |
|
(957 |
) |
|
(2,784 |
) |
|
(2,973 |
) |
||||
|
Gain on sale of real estate acquired for investment |
|
- |
|
- |
|
(7,696 |
) |
|
- |
|||||||
|
Interest and other income |
|
(184 |
) |
|
(125 |
) |
|
(451 |
) |
|
(362 |
) |
||||
|
Interest and other income - related party |
|
(71 |
) |
|
(236 |
) |
|
(180 |
) |
|
(393 |
) |
||||
|
Straight-line rent bad debt recoveries(2) |
|
(114 |
) |
|
- |
|
(164 |
) |
|
(97 |
) |
|||||
|
Write off of below market ground lease(2) |
|
279 |
|
- |
|
279 |
|
- |
||||||||
|
General and administrative |
|
2,161 |
|
1,773 |
|
6,191 |
|
4,836 |
||||||||
|
Legal and professional |
|
290 |
|
223 |
|
796 |
|
669 |
||||||||
|
Real estate commissions |
|
150 |
|
129 |
|
254 |
|
268 |
||||||||
|
Acquisition costs |
|
171 |
|
- |
|
297 |
|
- |
||||||||
|
Depreciation and amortization |
|
2,897 |
|
2,210 |
|
8,922 |
|
6,545 |
||||||||
|
Impairment recovery - notes receivable |
|
- |
|
(214 |
) |
|
- |
|
(443 |
) |
||||||
|
Loss (income) from Advised Funds |
|
111 |
|
26 |
|
67 |
|
128 |
||||||||
|
State income tax expense (benefit) |
|
14 |
|
16 |
|
29 |
|
21 |
||||||||
|
Interest expense |
|
2,335 |
|
2,763 |
|
7,095 |
|
7,992 |
||||||||
|
Income from discontinued operations |
|
(812 |
) |
|
(29 |
) |
|
(868 |
) |
|
(101 |
) |
||||
|
Net operating income |
$ |
7,240 |
$ |
6,508 |
$ |
21,785 |
$ |
19,545 |
||||||||
|
|
|
|
|
(1) |
Included in rental income from operating leases as presented on our consolidated statements of operations. |
|
|
(2) |
Included in property expense on our consolidated statements of operations. |
|
28