AmREIT Reports Third Quarter Results And Fourth Quarter Dividend

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:

Financial Results
  • 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.
  • 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.
  • 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.

Portfolio Results

  • 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 are today 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.
  • 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. Additionally, 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.
  • 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.

Dividends

  • 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.

Acquisitions and Dispositions
  • 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.
  • 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.
  • 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.
  • 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.

Equity Offering
  • 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.
  • 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."

Guidance

  • 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:
         
            Projected 2013 Range
            High       Low
Core FFO           $1.03       $0.98
FFO           $1.12       $1.07
     
  • 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.

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:
     

UpdatedProjected 2013 Range
 

High
   

Low

Net income

$ 0.90

$ 0.85
Gain on sale – investment (0.43) (0.43)
Depreciation and amortization 0.61 0.61
Depreciation and amortization for non-consolidated affiliates 0.04 0.04
FFO available to stockholders

$ 1.12
$ 1.07
Gains on sale – resale (0.16) (0.16)
Acquisition costs 0.06 0.06
Write off of below market ground lease 0.01 0.01
Core FFO available to stockholders $1.03 $0.98
 

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.
 
AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
       

September 30,2013

December 31,2012
(unaudited)
ASSETS
Real estate investments at cost:
Land $ 184,284 $ 147,460
Buildings 225,956 222,679
Tenant improvements   14,832     17,386  
425,072 387,525
Less accumulated depreciation and amortization   (35,724 )   (39,820 )
389,348 347,705
 
Acquired lease intangibles, net 17,173 15,976
Investments in Advised Funds   16,159     7,953  
Net real estate investments 422,680 371,634
 
Cash and cash equivalents 3,422 2,992
Tenant and accounts receivable, net 5,229 5,566
Accounts receivable - related party, net 1,045 821
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  
 
 
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
 

Summary of Operating Results (in thousands except per share data) :
     
Three months ended September 30, Nine months ended September 30,
Funds from operations ("FFO") 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  
 
Core funds from operations ("Core FFO")
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  
 
Adjusted funds from operations ("AFFO")
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:
     
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
 

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.
 

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.
 

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
 

Rental Income from Operating Leases (in thousands) :
   
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
 

Advisory Services Income – Related Party (in thousands) :
   
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
 

Capitalization Data (in thousands, except per share and percent data) :
   
September 30, 2013 December 31, 2012
Equity capitalization -
Common shares outstanding 19,628 16,123
NYSE closing price(1) $ 17.35   $ 17.15  
Total equity capitalization $ 340,546   $ 276,509  
 
Debt capitalization -
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  
 
Debt statistics -
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.
 

Outstanding Debt and Terms:
 
AmREIT
Debt Information
(in thousands)
 
Description  

AmountOutstanding9/30/13
 

Interest Rate
 

Annual DebtService
 

MaturityDate
  % of total  

Weightedaverage ratematuring
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.
 

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  
 

Wholly-Owned Property and Tenant Information:
Property  

PropertyLocation
 

Year Built /Renovated
  GLA  

PercentOccupied(1)
 

PercentLeased(2)
 

Annualized BaseRent(3)
 

AnnualizedBase Rent perLeased SquareFoot(4)
 

Average NetEffectiveAnnualizedBase Rent perLeased SquareFoot(5)
  Key Tenants
Neighborhood and Community Shopping Centers                  
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 Shopping Centers Subtotal/Weighted Average 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) Subtotal/Weighted Average 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.
 

(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.
 

Redevelopment Table:

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    

 
   

 
 

 
 

 
 

 
Property   Location  

CurrentGLA
 

OwnedGLA
 

Non-OwnedGLA
  Opportunity  

Redevelopment /Development [1]
 

Expected ROI[2]
   

AmREITProjectedCosts [3]
 

Costs toDate
 

AnticipatedConstructionCompletion
 

AnticipatedStabilizationDate [4]
 
Uptown Park - Baker Pad Houston, TX 12,200

30,000

360,000

We anticipate executing a groundlease with an experienced luxurymulti-family developer who willco-develop and own the multi-familyimprovements. We will own theretail improvements in acondominium 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 Parkopportunity, we anticipateexecuting a ground lease with aco-developer who will own theimprovements above our retailwhich we would own in acondominium 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 andredevelopment of an existingoutparcel 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.
 

Summary of Top 25 Tenants:
                             
Rank       Tenant Name      

Year to DateBase Rent
     

Year to Date AnnualizedBase Rent as a Percentageof Portfolio AnnualizedBase Rent
      Tenant GLA      

Percentage ofTotal GLA
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

T.G.I. Friday's
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%
 

Retail Leasing Summary for Comparable Leases (1) :
 
 

For the three monthsended September 30,
 

For the nine monthsended September 30,
  For the year ended December 31,
Expirations

2013
 

2012

2013
 

2012

2012
 

2011
 

2010
 

2009
 

2008
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.
 

Lease Expiration Table:
  Anchor Tenants (>20,000 square feet)   Shop Space Tenants (≤20,000 square feet)   Total
Year

ExpiringGLA
  Tenant  

% of GLAExpiring
 

ABR PerSquare Foot(1)

ExpiringGLA
 

% of GLAExpiring
 

ABR PerSquare Foot(1)

ExpiringGLA
 

% of GLAExpiring
 

ABR PerSquare Foot(1)
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 ofExpiringLeases
 

Percentageof Leases
  Total GLA  

TotalOccupiedGLA
 

PercentOccupied
 

Percentageof OccupiedGLA
 

Annualized BaseRent(1)
 

Percentageof ABR
 

ABR PerOccupiedSquare Foot(2)
 
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.
 

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 CreekRanch
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 endedSeptember 30, 2013
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.
 

Definitions
   
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,
2013 2012
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:
   
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.
 

Copyright Business Wire 2010

More from Press Releases

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

Meet the Real Money Pros: Market Strategies for 2012

Meet the Real Money Pros: Market Strategies for 2012