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AmREIT Reports Fourth Quarter Results and Announces 2013 Guidance


Attachment:

  AmREIT Reports Fourth Quarter Results and Announces 2013 Guidance

Business Wire

HOUSTON -- February 19, 2013

AmREIT, Inc. (NYSE:AMRE) (“AmREIT” or the “Company”), today announced
financial results for the quarter and year ended December 31, 2012 and its
2013 guidance.

Fourth Quarter and Year-to-Date Highlights:

Financial Results

  * Core Funds from Operations ("Core FFO") available to common stockholders
    for the fourth quarter of 2012 was $3.9 million, or $0.24 per share,
    compared to $4.5 million, or $0.39 per share for the comparable period in
    2011. For the twelve months ended December 31, 2012, Core FFO was $14.6
    million, or $1.08 per share, compared to $13.8 million, or $1.19 per
    share, for the comparable period in 2011.
  * FFO available to common stockholders for the fourth quarter of 2012 was
    $3.2 million, or $0.20 per share, compared to $3.6 million, or $0.31 per
    share for the comparable period in 2011. For the twelve months ended
    December 31, 2012, FFO was $13.9 million, or $1.03 per share, compared to
    $13.1 million, or $1.13 per share, for the comparable period in 2011.
  * Net income available to common stockholders for the fourth quarter of 2012
    was $734,000, or $0.04 per share, compared to $1.2 million, or $0.11 per
    share, for the same period in 2011. For the twelve months ended December
    31, 2012, net income was $4.5 million, or $0.32 per share, compared to
    $4.2 million, or $0.36 per share, for the same period in 2011. Net income
    for the three and twelve months ended December 31, 2011 was positively
    impacted by a gain on sale of approximately $417,000.

FFO and Core FFO are non-GAAP supplemental earnings measures that AmREIT
consider meaningful in measuring its operating performance. A reconciliation
of FFO and Core FFO to net income is attached to this press release.

Portfolio Results

  * In the fourth quarter of 2012, same-store net operating income (“NOI”)
    increased 3.2% over the prior year period. For the twelve months ended
    December 31, 2012, same-store NOI increased 3.0%, compared with the same
    period in 2011. From January 1, 2010 through December 31, 2012, AmREIT has
    experienced an average annual increase in same-store NOI of 3.2%.
  * Portfolio occupancy as of December 31, 2012 was 96.7%, an increase of
    approximately 80 basis points as compared to portfolio occupancy of 95.9%
    as of December 31, 2011.
  * During the fourth quarter of 2012, AmREIT signed eight leases for 30,373
    square feet of gross leasable area, including both new and renewal leases,
    and cash leasing spreads (i.e. new leasing rate per square foot compared
    to the expiring leasing rate per square foot) increased 9.1% for renewals
    and increased 3.2% for new comparable leases. On a GAAP basis (which
    includes the effects of straight-line rent), leasing spreads increased
    11.8% on renewals and 8.0% on new comparable leases.
  * For the twelve months ended December 31, 2012, AmREIT signed 39 leases for
    145,828 square feet of gross leasable area, including both new and renewal
    leases, and cash leasing spreads increased 5.7% on renewals and 28.0% on
    new comparable leases. On a GAAP basis, leasing spreads increased 10.5% on
    renewals and 36.6% on new leases.

NOI is a non-GAAP supplemental earnings measure that AmREIT considers
meaningful in measuring its operating performance. Further explanation and a
reconciliation of NOI to net income is 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 March 29, 2013 to all common stockholders of
    record on March 19, 2013.

Acquisitions and Dispositions

  * On December 12, 2012 AmREIT purchased Preston Royal Village Shopping
    Center, located at the northeast and northwest corners of Preston and
    Royal in the highly affluent Preston Hollow submarket of Dallas, Texas.
    Preston Royal Village Shopping Center is an approximately 230,000 square
    foot grocery-anchored shopping center that is 97% leased and occupied. The
    northwest corner of Preston and Royal is anchored by Tom Thumb (Safeway)
    and includes tenants such as Chico's, Barnes & Noble, Pinkberry and
    Dougherty's Pharmacy (an original tenant of the shopping center). The
    northeast corner of Preston and Royal is unanchored and includes tenants
    such as Bank of America, Starbucks, Omaha Steaks, Einstein Bagels, and
    Fed-Ex/Kinko's. The shopping center was acquired for a total of $66.9
    million, including closing costs and prorations. The property was funded
    through a $31.2 million draw against our unsecured credit facility, $12.3
    million in cash, and mortgage financing of $23.4 million secured mortgage
    with a 3.21% interest rate.
  * On January 24, 2013, we entered into an agreement with Goldman Sachs to
    form a joint venture through our contribution to a newly-organized single
    purpose entity of our MacArthur Park property as well as the acquisition
    by the joint venture of the contiguous property to the east (“MacArthur
    Park Phase I”), excluding Target. Goldman Sachs will contribute cash for a
    70% interest in the joint venture. The joint venture would concurrently
    purchase MacArthur Park Phase I, currently owned by Farmers New World Life
    Insurance Company, for approximately $26.2 million and place mortgage
    financing on the entire combined property of approximately $43.9 million.
    The joint venture will fully repay the MacArthur Park debt of
    approximately $8.8 million, including a $2.2 million defeasance penalty.
    At the conclusion of this transaction, AmREIT will hold a 30% ownership in
    the joint venture and receive net cash proceeds of approximately $35.4
    million which would be used to repay borrowings under our unsecured credit
    facility. We expect this transaction to close in March 2013; however,
    closing is subject to customary closing conditions and we can make no
    assurances of when or if this joint venture will actually be formed and
    capitalized. 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.

"AmREIT's strategy of creating value on 'Irreplaceable Corners^TM' within our
affluent, dense sub-markets was again advanced through our activities this
past quarter," said H. Kerr Taylor, Chairman and Chief Executive Officer of
AmREIT. "The off market acquisition of our Preston Royal Shopping Centers
brought into our portfolio what we believe are two of the highest quality
projects in the Dallas marketplace. The anticipated acquisition of the
remainder of the MacArthur Park Project and our joint venture with Goldman
Sachs are solid steps forward as they are expected to grow our platform,
increase fee income and allow us to recycle capital."

Guidance

  * Full year 2013 Core FFO and FFO guidance per share is as follows:

                                 Projected 2013 Range
                                 High           Low
                  Core FFO       $1.07          $1.02
                  FFO            $0.98          $0.93

  * Our full year 2013 Core FFO and FFO guidance is supported by the following
    assumptions:

       * Same-Store NOI growth target of 3.0% to 4.0%;
       * Average occupancy of 96.8% to 97.1%;
       * Portfolio growth through acquisitions of $100 million;
       * Platform growth of $40 million (off balance sheet through advised
         funds), excluding the MacArthur Park joint venture;
       * Redeployment of cash received from the MacArthur Park joint venture;
       * Redeployment of cash received from the sale of 3-5 single tenant
         properties, targeted for the second half of the year;
       * Recurring Advised Fund real estate fee income of $2.2 million (asset
         management and property management fees);
       * Transactional Advised Fund real estate fee income of $1.1 million
         (leasing, development, construction and brokerage fees); and
       * Annual G&A run rate of $7.8 million.

Other Activities

  * AmREIT will hold its Annual Meeting of Stockholders at 10:00 AM CST on
    April 18, 2013.

  * At the Annual Meeting of Stockholders, stockholders will be asked to vote,
    among other items, on two charter amendments that, when taken together,
    will have the effect of converting all of our issued and unissued Class A
    common stock into Class B common stock, on a one-for-one basis, after
    which all of AmREIT’s common stock would be listed on the New York Stock
    Exchange and freely tradable.

"Our 2012 financial results combined with our 2013 financial guidance reflect
the sector-leading quality of our portfolio and are tracking the growth and
operational goals that we have previously established," said Chad C. Braun,
Chief Operating and Financial Officer of AmREIT. "The combination of
additional capital resources created through the joint venture with Goldman
Sachs and additional public float generated by the exchange of our Class A
common stock into our NYSE-listed Class B common stock during 2013 should
provide for a balance sheet that is poised for growth and allow us to execute
upon our growth strategy during 2013."

Conference Call

AmREIT will hold its quarterly conference call to discuss the results of its
fourth quarter of 2012 Wednesday, February 20, 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 10023750.

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.

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
core portfolio was 96.7% occupied as of December 31, 2012, 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 value add joint ventures,
including two leading institutional investors who partner with the company as
local experts. AmREIT's Class B 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 and the underlying assumptions of such
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 dated July 26, 2012, filed with the Securities and Exchange
Commission on July 27, 2012 and other risks described in documents
subsequently filed by AmREIT from time to time with the Securities and
Exchange Commission.

Additional Information related to the 2013 Annual Meeting of Stockholders

In connection with its 2013 Annual Meeting of Stockholders, the Company will
file a proxy statement and other documents regarding the 2013 Annual Meeting
(the “2013 Proxy Statement”) with the Securities and Exchange Commission (the
“SEC”) and will mail the 2013 Proxy Statement and a proxy card to each
stockholder of record entitled to vote at the 2013 Annual Meeting.
STOCKHOLDERS ARE ENCOURAGED TO READ THE 2013 PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain the
documents free of charge at the SEC’s website, www.sec.gov, and from AmREIT 
at its website, www.amreit.com, or 8 Greenway Plaza, Suite 1000, Houston,
Texas 77046, Attention: Corporate Secretary.

Participants in Solicitation

The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in connection with the 2013 Annual
Meeting. Information concerning the Company’s participants is set forth in
AmREIT’s final prospectus dated July 26, 2012, filed with the SEC on July 27,
2012. Additional information regarding the interests of participants of the
Company in the solicitation of proxies in respect of the 2013 Annual Meeting
of Stockholders and other relevant materials will be included in the 2013
Proxy Statement to be filed with the SEC in connection with the 2013 Annual
Meeting.

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.

                  (Financial and Operating Tables to Follow)

                                                                   
Operating Results

(Unaudited)

(in thousands, except share and per share data)
                                                       
                          Three Months Ended          Twelve Months Ended
                          December 31,                December 31,
Revenues:                 2012         2011           2012          2011
Rental income from        $ 10,463     $ 8,885        $ 37,438      $ 32,995
operating leases
Advisory services           897          858            3,870         3,789
income – related party
Lease termination fee       -            22             -             131     
income
Total revenues              11,360       9,765          41,308        36,915
                                                                     
Expenses:
General and                 1,927        1,854          6,733         6,049
administrative
Property expense            3,099        1,857          9,891         7,770
Legal and professional      242          157            919           945
Real estate commissions     119          50             387           342
Acquisition costs           687          7              687           229
Depreciation and            2,321        2,186          8,884         8,257
amortization
Impairment recovery -       -            (1,071 )       (443    )     (1,071 )
notes receivable
Total expenses              8,395        5,040          27,058        22,521  
                                                                     
Operating income            2,965        4,725          14,250        14,394
                                                                     
Other income (expense):
Interest and other          123          110            485           493
income
Interest and other          69           135            462           319
income – related party
Loss from Advised Funds     (110   )     (60    )       (238    )     (384   )
Income tax expense          (54    )     (74    )       (248    )     (262   )
Interest expense            (2,259 )     (2,705 )       (10,251 )     (9,971 )
Issuance costs              -            (914   )       -             (914   )
                                                                     
Income from continuing      734          1,217          4,460         3,675
operations
                                                                     
Income from
discontinued                -            3              -             148
operations, net of tax
Gain on sale of real
estate acquired for         -            -              -             417     
resale
Income from                 -            3              -             565     
discontinued operations
                                                                     
Net income                $ 734        $ 1,220        $ 4,460       $ 4,240   

                                                                   
(in thousands, except share and per share data)
                                                                     
                                  Three Months Ended     Twelve Months Ended
                                  December 31,           December 31,
                                  2012       2011        2012       2011
Reconciliation of Net Income to
Funds From Operations (FFO):
Net income                        $  734     $ 1,220     $ 4,460    $ 4,240
Depreciation – from operations       2,309     2,169       8,832      8,181
Depreciation – from                  -         -           -          13
discontinued operations
                                                                              
Depreciation of real estate
assets for non-consolidated          156       170         622        628     
affiliates
FFO                               $  3,199   $ 3,559     $ 13,914   $ 13,062  
                                                                     
Acquisition costs                    687       7           687        229
Issuance costs                       -         914         -          914
Gain on sale of real estate          -         -           -          (417   )
acquired for resale
Core FFO                          $  3,886   $ 4,480     $ 14,601   $ 13,788  

                                                                   
                            Three Months Ended         Twelve Months Ended
                            December 31,               December 31,
                            2012        2011           2012         2011
Reconciliation of Net
Income to Net Operating
Income (NOI):
Net income                  $ 734       $ 1,220        $ 4,460      $ 4,240
Adjustments to
add/(deduct):
Amortization of
straight-line rents and       (158  )     (114   )       (430   )     (36    )
above/below-market rents
^(1)
Lease termination fee         -           (22    )       -            (131   )
income
Advisory services income      (897  )     (858   )       (3,870 )     (3,789 )
- related party
Interest and other income     (123  )     (110   )       (485   )     (493   )
Interest and other income     (69   )     (135   )       (462   )     (319   )
- related party
Straight-line rent bad        9           -              (90    )     (205   )
debt recoveries ^(2)
General and                   1,927       1,854          6,733        6,049
administrative
Legal and professional        242         157            919          945
Real estate commissions       119         50             387          342
Acquisition costs             687         7              687          229
Depreciation and              2,321       2,186          8,884        8,257
amortization
Impairment recovery -         -           (1,071 )       (443   )     (1,071 )
notes receivable
Loss from Advised Funds       110         60             238          384
State income tax expense      54          74             248          262
Interest expense              2,259       2,705          10,251       9,971
Stock issuance costs          -           914            -            914
Income from discontinued      -           (3     )       -            (565   )
operations
Net operating income        $ 7,215     $ 6,914        $ 27,027     $ 24,984  

(1)   Included in rental income from operating leases on our consolidated
      statements of operations.
 
(2)   Included in property expense on our consolidated statement of
      operations.

                     Three Months Ended            Twelve Months Ended
                     December 31,                  December 31,
                     2012           2011           2012           2011
Basic and
Diluted Per                                                      
Share Data:
Income before
discontinued         $ 0.04         $ 0.11         $ 0.32         $ 0.31
operations
Income from
discontinued         $ -            $ -            $ -            $ 0.05
operations
Net income           $ 0.04         $ 0.11         $ 0.32         $ 0.36
                                                                     
FFO                  $ 0.20         $ 0.31         $ 1.03         $ 1.13
Core FFO             $ 0.24         $ 0.39         $ 1.08         $ 1.19
                                                                     
Distributions
per share of         $ 0.20         $ 0.20         $ 0.80         $ 0.80
common stock
                                                                   
Share Data:

Weighted average
shares used to         15,580,000     11,391,000     13,120,000     11,384,000
compute net
income per
share, basic and
diluted
                                                                   
Weighted average
restricted             543,000        207,000        359,000        207,000
shares
Weighted average
shares used to         16,123,000     11,599,000     13,479,000     11,591,000
compute FFO per
share

                                                              
Market Capitalization
Table:
                                                                
Common Stock                  Number of        Price^(1)       Market
Outstanding (12/31/12)        Shares                           Capitalization
Class A common stock
(assuming a price per         11,657,563       $  17.15        $  199,927,205
share equal to Class B
price)
Class B common stock          4,465,725        $  17.15        $  76,587,183
Total                         16,123,288                       $  276,514,388

(1)   Represents the last reported price per share of the Class B common stock
      on the New York Stock Exchange on December 31, 2012.

                                                                    
Balance Sheet Highlights

(in thousands)

(Unaudited)
                                                     December 31,
                                                     2012            2011
Real estate investments before accumulated           $ 387,525       $ 325,033
depreciation
Net real estate investments                            371,634         309,629
Total assets                                           397,394         330,610
Notes payable                                          218,579         201,658
Total liabilities                                      231,679         211,686
Total stockholders’ equity                           $ 165,715       $ 118,924

                        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. The National Association of Real Estate Investment Trusts
(“NAREIT”) defines FFO as net income computed in accordance with generally
accepted accounting principles (“GAAP”), excluding gains or losses from sales
of property, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. AmREIT
calculates its FFO in accordance with this definition. Management considers
FFO to be an appropriate supplemental measure of operating performance
because, by excluding gains or losses on dispositions and excluding
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. FFO is not defined by GAAP and should not be
considered as an alternative to net income as an indication of our operating
performance or to net cash provided by operating activities as a measure of
our liquidity. FFO as disclosed by other REITs may not be comparable to
AmREIT’s calculation.

Additionally, AmREIT considers Core FFO, which adjusts reported FFO for items
that do not reflect ongoing property operations, such as acquisition expense,
write off of deferred financing costs, and expensed issuance costs, to be a
meaningful performance measurement.

Projected FFO is calculated in a method consistent with historical FFO, and
AmREIT considers projected FFO to be an appropriate supplemental measure when
compared with projected earnings per share. A reconciliation of the projected
FFO to projected earnings per share is provided below:

                                                         
                                                          Projected 2013 Range
                                                          High          Low
Net income                                                $  0.26       $ 0.21
Depreciation and amortization                                0.68         0.68
Depreciation and amortization for non-consolidated           0.04         0.04
affiliates
FFO                                                       $  0.98       $ 0.93
Acquisition costs                                            0.09         0.09
Core FFO                                                  $  1.07       $ 1.02

Net Operating Income (NOI)

AmREIT believes that NOI is a useful measure of 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 uses NOI to evaluate its performance on a property-by-property
basis because NOI allows the company to evaluate the impact that factors such
as lease structure, lease rates and tenant base, which vary by property, have
on operating results. However, NOI should only be used as a supplemental
measure of AmREIT’s financial performance.

Same Store Property Analysis:

Comparison of the three months ended December 31, 2012, to the three months
ended December 31, 2011

Below are the results of operations for the three months ended December 31,
2012 and 2011 (in thousands, except for per share amounts, percentages and
number of properties). In the comparative tables presented below, increases in
revenues/income or decreases in expenses (favorable variances) are shown
without parentheses while decreases in revenues/income or increases in
expenses (unfavorable variances) are shown with parentheses. For purposes of
comparing our results of operations for the periods presented below, all of
our properties in the “same store” reporting group were owned since January 1,
2011.

                                                                  
                      Three months ended December
                      31,
                      2012            2011          Change $       Change%  
Same store
properties (26
properties)
Rental income         $  6,699        $  6,537      $ 162          2.5       %
^(1)
Recovery income          2,911           1,857        1,054        56.8      %
^(1)
Percentage rent          497             330          167          50.6      %
^(1)
Less:
Property                 3,017           1,854        (1,163 )     (62.7   ) %
expenses
Same store net
operating                7,090           6,870        220          3.2       %
income
                                                                              
Non-same store
properties (6
properties)
Rental income            182             44           138          313.6     %
^(1)
Recovery income          17              -            17           *
^(1)
Less:
Property                 74              -            (74    )     *
expenses
Non-same store
net operating            125             44           81           184.1     %
income
Total net
operating                7,215           6,914        301          4.4       %
income
                                                                              
Other revenues
(see further             1,246           1,242        4            0.3       %
detail below):
                                                                              
Less other
expenses (see            7,727           6,939        (788   )     (11.4   ) %
further detail
below):
                                                                              
Income (loss)
from continuing          734             1,217        (483   )     (39.7   ) %
operations
Income from
discontinued             -               3            (3     )     *
operations
Net income            $  734          $  1,220      $ (486   )     (39.8   ) %
                                                                              
Other data
Funds from            $  3,199        $  3,559      $ (360   )     (10.1   ) %
operations
Number of
properties at            32              29           n/a          *
end of period
Percent leased
at end of                96.7   %        95.9   %     n/a          0.8       %
period^(2)
Distributions         $  0.20         $  0.20       $ -            *
per share

     
      Rental income from operating leases is comprised of rental income,
      recovery income and percentage rent from same store properties, rental
(1)   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 December 31, 2012 and 2011, rental income from
      operating leases was $10,463 and $8,885, respectively.
       
      Percent leased is calculated as (i) GLA under commenced leases as of
(2)   December 31, 2012 or 2011, 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.
       

Other Revenues (in thousands)

                          Three months ended December               
                          31,
                          2012            2011          Change $     Change%
Amortization of
straight-line rents       $   157         $   117       $  40        34.2   %
and above/below
market rents^(1)
Advisory services
income - related
party:
Real estate fee
income - related              676             574          102       17.8   %
party
Asset management
fee income -                  155             231          (76 )     (32.9  )%
related party
Construction
management fee                66              53           13        24.5   %
income - related
party
Total advisory
services income -             897             858          39        4.5    %
related party
Lease termination             -               22           (22 )     (100.0 )%
and other income
Interest and other            123             110          13        11.8   %
income
Interest and other
income - related              69              135          (66 )     (48.9  )%
party
Total other               $   1,246       $   1,242     $  4         0.3    %
revenues

     
(1)   Included in rental income from operating leases as presented on our
      consolidated statements of operations.
       

Other Expenses (in thousands)

                        Three months ended                         
                        December 31,
                        2012         2011            Change $       Change%
Straight-line bad
debt                    $  7         $  3            $ (4     )     133.3    %
recoveries^(1)
General and                1,927        1,854          (73    )     (3.9   ) %
administrative
Legal and                  242          157            (85    )     (54.1  ) %
professional
Real estate                119          50             (69    )     (138.0 ) %
commissions
Acquisition costs          687          7              (680   )     *
Depreciation and           2,321        2,186          (135   )     (6.2   ) %
amortization
Impairment
recovery - notes           -            (1,071  )      (1,071 )     100.0    %
receivable
Loss from Advised          110          60             (50    )     (83.3  ) %
Funds
State income               54           74             20           27.0     %
taxes
Interest expense           2,260        2,705          445          16.5     %
Issuance costs             -            914            914          100.0    %
Total other             $  7,727     $  6,939        $ (788   )     (11.4  ) %
expenses

     
(1)   Included in property expense on our consolidated statements of
      operations.
       
*     Percentage change not shown as there is no prior year amount, or such
      amount is immaterial, and the percentage change is not meaningful.
       

Comparison of the year ended December 31, 2012, to the year ended December 31,
2011

Below are the results of operations for the year ended December 31, 2012 and
2011 (in thousands, except for per share amounts, percentages and number of
properties). In the comparative tables presented below, increases in
revenues/income or decreases in expenses (favorable variances) are shown
without parentheses while decreases in revenues/income or increases in
expenses (unfavorable variances) are shown with parentheses. For purposes of
comparing our results of operations for the periods presented below, all of
our properties in the “same store” reporting group were owned since January 1,
2011.

                         Year ended December 31,                   
                         2012         2011           Change $       Change %
Same store
properties (25
properties)
Rental income ^(1)       $ 22,993     $ 22,300       $ 693          3.1      %
Recovery income ^(1)       8,274        6,911          1,363        19.7     %
Percentage rent ^(1)       631          425            206          48.5     %
Less:
Property expenses          8,699        7,121          (1,578 )     (22.2  ) %
Same store net             23,199       22,515         684          3.0      %
operating income
                                                                              
Non-same store
properties (6
properties)
Rental income ^(1)         3,914        2,498          1,416        56.7     %
Recovery income ^(1)       1,196        825            371          45.0     %
Less:
Property expenses          1,282        854            (428   )     (50.1  ) %
Non-same store net         3,828        2,469          1,359        55.0     %
operating income
Total net operating        27,027       24,984         2,043        8.2      %
income
                                                                              
Other revenues (see
further detail             5,247        4,768          479          10.0     %
below):
                                                                              
Less other expenses
(see further detail        27,814       26,077         (1,737 )     (6.7   ) %
below):
                                                                              
Income (loss) from
continuing                 4,460        3,675          785          21.4     %
operations
Income from
discontinued               -            565            (565   )     (100.0 ) %
operations
Net income               $ 4,460      $ 4,240        $ 220          5.2      %
                                                                              
Other data
Funds from               $ 13,914     $ 13,062       $ 852          6.5      %
operations
Number of properties       32           29             n/a          *
at end of period
Percent leased at          96.7   %     95.9   %       n/a          0.8      %
end of period^(2)
Distributions per        $ 0.80       $ 0.80         $ -            *
share

     
      Rental income from operating leases is comprised of rental income,
      recovery income and percentage rent from same store properties, rental
(1)   income and recovery income from non-same store properties and
      amortization of straight-line rents and above/below market rents. For
      the years ended December 31, 2012 and 2011, rental income from operating
      leases was $37,438 and $32,995, respectively.
       
      Percent leased is calculated as (i) GLA under commenced leases as of
(2)   December 31, 2012 or 2011, 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.
       

Other Revenues (in thousands)

                           Year ended December 31,                 
                           2012          2011          Change $     Change%
Amortization of
straight-line rents        $   430       $  36         $ 394        *
and above/below
market rents^(1)
Advisory services
income - related
party:
Real estate fee
income - related               3,005        2,491        514        20.6     %
party
Asset management fee
income - related               622          1,064        (442 )     (41.5  ) %
party
Construction
management fee                 243          234          9          3.8      %
income - related
party
Total advisory
services income -              3,870        3,789        81         2.1      %
related party
Lease termination              -            131          (131 )     (100.0 ) %
fee income
Interest and other             485          493          (8   )     (1.6   ) %
income
Interest and other
income - related               462          319          143        44.8     %
party
Total other revenues       $   5,247     $  4,768      $ 479        10.0     %
                                                                              

(1)   Included in rental income from operating leases as presented on our
      consolidated statements of operations.
       
*     Percentage change not shown as there is no prior year amount, or such
      amount is immaterial, and the percentage change is not meaningful.
       

Other Expenses (in thousands)

                         Year ended December 31,                   
                         2012         2011           Change $       Change%
Straight-line bad        $ (90    )   $ (205   )     $ (115   )     (56.1  ) %
debt recoveries^(1)
General and                6,733        6,049          (684   )     (11.3  ) %
administrative
Legal and                  919          945            26           2.8      %
professional
Real estate                387          342            (45    )     (13.2  ) %
commissions
Acquisition costs          687          229            (458   )     (200.0 ) %
Depreciation and           8,884        8,257          (627   )     (7.6   ) %
amortization
Impairment recovery        (443   )     (1,071 )       (628   )     58.6     %
- notes receivable
Loss from Advised          238          384            146          38.0     %
Funds
State income taxes         248          262            14           5.3      %
Interest expense^(2)       10,251       9,971          (280   )     (2.8   ) %
Issuance costs             -            914            914          100.0    %
Total other expenses     $ 27,814     $ 26,077       $ (1,737 )     (6.7   ) %

     
(1)   Included in property expense on our consolidated statements of
      operations.
       
      Includes $362 of unamortized loan acquisition fees written off during
(2)   the year ended December 31, 2012, in connection with the repayment of
      loans using proceeds from our initial public offering in 2012 and
      refinance of our Uptown Plaza Dallas debt.
       

Comparison of the year ended December 31, 2011, to the year ended December 31,
2010

Below are the results of operations for the years ended December 31, 2011 and
2010 (in thousands, except for per share amounts, percentages and number of
properties). In the comparative tables presented below, increases in
revenues/income or decreases in expenses (favorable variances) are shown
without parentheses while decreases in revenues/income or increases in
expenses (unfavorable variances) are shown with parentheses. For purposes of
comparing our results of operations for the periods presented below, all of
our properties in the “same store” reporting group were owned since January 1,
2010.

                                                                   
                         Year ended December 31,
                         2011         2010           Change $       Change %
Same store
properties (25
properties)
Rental income ^(1)       $ 22,090     $ 21,675       $ 415          1.9      %
Recovery income            6,737        6,674          63           0.9      %
^(1)
Percentage rent            425          555            (130   )     (23.4  ) %
^(1)
Less:
Property expenses          6,943        7,829          886          11.3     %
Same store net             22,309       21,075         1,234        5.9      %
operating income
                                                                              
Non-same store
properties (4
properties)
Rental income ^(1)         2,708        22             2,686        *
Recovery income            999          7              992          *
^(1)
Less:
Property expenses          1,032        4              (1,028 )     *
Non-same store net         2,675        25             2,650        *
operating income
Total net                  24,984       21,100         3,884        18.4     %
operating income
                                                                              
Other revenues
(see further               4,768        10,548         (5,780 )     (54.8  ) %
detail below):
                                                                              
Less other
expenses (see              26,077       31,725         5,648        17.8     %
further detail
below):
                                                                              
Income (loss) from
continuing                 3,675        (77    )       3,752        *
operations
Income from
discontinued               565          6,382          (5,817 )     (91.1  ) %
operations
Net income                 4,240        6,305          (2,065 )     (32.8  ) %
Net loss
attributable to            -            (173   )       173          100.0    %
non-controlling
interest
Net income
attributable to          $ 4,240      $ 6,132        $ (1,892 )     (30.9  ) %
AmREIT
stockholders
                                                                              
Other data
Funds from               $ 13,062     $ 13,821       $ (759   )     (5.5   ) %
operations
Number of
properties at end          29           28             n/a          *
of period
Percent leased at          95.9   %     92.2   %       n/a          3.7      %
end of period^(2)
Distributions per        $ 0.80       $ 0.90         $ (0.10  )     *
share
                                                                              

     
      Rental income from operating leases is comprised of rental income,
      recovery income and percentage rent from same store properties, rental
(1)   income and recovery income from non-same store properties and
      amortization of straight-line rents and above/below market rents. For
      the years ended December 31, 2011 and 2010, rental income from operating
      leases was $32,995 and $29,155, respectively.
       
      Percent leased is calculated as (i) GLA under commenced leases as of
(2)   December 31, 2011 or 2010, 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.
       

Other Revenues (in thousands)

                         Year ended December 31,                   
                         2011         2010           Change $       Change %
Amortization of
straight-line rents      $  36        $  222         $ (186   )     (83.8  ) %
and above/below
market rents^(1)
Advisory services
income - related
party:
Real estate fee
income - related            2,491        2,375         116          4.9      %
party
Asset management fee
income - related            1,064        1,480         (416   )     (28.1  ) %
party
Construction
management fee              234          349           (115   )     (33.0  ) %
income - related
party
Total advisory
services income -           3,789        4,204         (415   )     (9.9   ) %
related party
Lease termination           131          15            116          *
fee income
Interest and other          493          459           34           7.4      %
income
Interest and other
income - related            319          274           45           16.4     %
party
Gain on debt                -            5,374         (5,374 )     (100.0 ) %
extinguishment
Total other revenues     $  4,768     $  10,548      $ (5,780 )     (54.8  ) %
                                                                              

(1)   Included in rental income from operating leases as presented on our
      consolidated statements of operations.
       
*     Percentage change not shown as there is no prior year amount, or such
      amount is immaterial, and the percentage change is not meaningful.
       

Other Expenses (in thousands)

                               Year ended December 31,             
                               2011          2010        Change $   Change %  
Straight-line bad debt         $ (205)       $ 481       $ 686      (142.6)  %
recoveries^(1)
General and administrative     6,049         5,944       (105)      (1.8)    %
Legal and professional         945           1,165       220        18.9     %
Real estate commissions        342           191         (151)      (79.1)   %
Acquisition costs              229           12          (217)      *
Depreciation and amortization  8,257         6,634       (1,623)    (24.5)   %
Impairment - properties        -             2,268       2,268      100.0    %
Impairment (recovery) - notes  (1,071)       1,800       2,871      159.5    %
receivable
Loss from Advised Funds        384           1,186       802        67.6     %
Income tax expense for taxable -             1,245       1,245      100.0    %
REIT subsidiary
State income taxes             262           270         8          3.0      %
Interest expense               9,971         9,541       (430)      (4.5)    %
Issuance costs                 914           -           (914)      *
Debt prepayment penalties      -             988         988        100.0    %
Total other expenses           $ 26,077      $ 31,725    $ 5,648    17.8     %

     
(1)   Included in property expense on our consolidated statements of
      operations.
       
*     Percentage change not shown as there is no prior year amount, or such
      amount is immaterial, and the percentage change is not meaningful.

 
Advisory Services Income – Related Party (in thousands):
                                                                   
                               Three months ended       Twelve months ended
                               December 31,             December 31,
                               2012       2011          2012         2011
Leasing commission income      $  315     $  229        $  1,240     $  1,103
Property management fee           345        328           1,261        1,216
income
Development fee income            16         17            504          172
Asset management fee              155        231           622          1,064
income
Construction management           66         53            243          234
fee income
Advisory services income -     $  897     $  858        $  3,870     $  3,789
related party
                                                                         
Reimbursements of              $  214     $  330        $  855       $  885
administrative costs

 
Rental Income from Operating Leases (in thousands):
                                                  
                     Three months ended            Twelve months ended
                     December 31,                  December 31,
                     2012          2011            2012          2011
Base minimum         $  6,881      $  6,581        $  26,907     $  24,798
rent
Straight-line           110           65              233           (133    )
rent adjustments
Amortization of
above/below             47            52              197           169
market rent
Percentage rent         497           330             631           425
Recovery income         2,928         1,857           9,470         7,736    
Rental income
from operating       $  10,463     $  8,885        $  37,438     $  32,995
leases

                                                                      
Debt and Market Data (in thousands, except
ratios):
                                                                        
                     December               % of        December       % of
                     31,                                31,
                     2012                   Total       2011           Total
Fixed vs.
variable rate
debt
Variable Rate -      $  33,500              15.3  %     $  19,345      9.6   %
Line of Credit
Fixed Rate -            185,079             84.7  %        141,373     70.1  %
Mortgage Loans
Variable Rate -         -                   0.0   %        40,940      20.3  %
Mortgage Loans
                     $  218,579             100.0 %     $  201,658     100.0 %
                                                                        
Debt statistics
EBITDA               $  23,843                          $  22,743
Ratio of EBITDA
to combined             2.19                               2.08
fixed
charges^(1)
Ratio of Debt to        9.17       ^(2)                    8.87
EBITDA
                                                                        
Reconciliation
of net income to
EBITDA
Net income           $  4,460                           $  4,240
Interest expense        10,251                             9,971
State income            248                                262
taxes
Depreciation and        8,884                              8,257
amortization
Depreciation and
amortization
from                    -                                  13
discontinued
operations
EBITDA               $  23,843                          $  22,743

     
      Fixed charges consist of interest expense and scheduled principal
(1)   payments on borrowed funds (including capitalized interest, but
      excluding amortization of debt premium).
       
      As of December 31, 2012, fixed rate mortgage loans include $23.4 million
(2)   related to the acquisition of Preston Royal West on December 12, 2012.
      The ratio of debt (excluding this loan) to EBITDA is 8.19.

                                                                                     
AmREIT
Debt Information
(in thousands)
                   Amount                       Annual                                Weighted
Description        Outstanding     Interest     Debt        Maturity      % of        average
                   12/31/12        Rate         Service     Date          total       rate
                                                                                      maturing
Property
Mortgages:
                                                                                       
500 Lamar            1,630         6.00  %      $ 98        2/1/2015
Uptown Park          49,000        5.37  %        2,631     6/1/2015
2015                 50,630                                               23.20 %     5.39  %
Maturities
                                                                                       
Plaza in the         23,250        3.45  %        802       1/1/2016
Park
Market at Lake       15,675        5.75  %        901       1/1/2016
Houston
Cinco Ranch          9,750         3.45  %        336       1/1/2016
Southbank -          20,000        5.91  %        1,182     6/1/2016
Riverwalk
2016                 68,675                                               31.46 %     4.69  %
Maturities
                                                                                       
Bakery Square        2,019         8.00  %        162       2/10/2017
2017                 2,019                                                0.93  %     8.00  %
Maturities
                                                                                       
Alpharetta           12,231        4.54  %        555       8/1/2018
Commons
2018                 12,231                                               5.60  %     4.54  %
Maturities
                                                                                       
Preston Royal        23,400        3.21  %        751       1/1/2020
West
MacArthur Pad        6,613         6.17  %        408       7/1/2020
Sites
2020                 30,013                                               13.75 %     3.86  %
Maturities
                                                                                       
Brookwood            7,271         5.40  %        393       2/10/2022
Village
Uptown Plaza -       13,922        4.25  %        592       8/10/2022
Dallas
2022                 21,193                                               9.71  %     4.64  %
Maturities
                                                                                       
Corporate
debt:
                                                                                       
$75.0 million      $ 33,500        ^(1)         $ 906       8/1/2015      0.15        ^(1)   
Facility^(1)
                    
Total                218,261  
Maturities^(2)
                                                                                       
Weighted             4.04    %
average rate

     
      The unsecured credit facility bears interest at LIBOR plus a margin of
      205 basis points to 275 basis points, depending on our leverage, and
(1)   carries a fee equal to 0.35% of the unused portion of the total amount
      available under the facility. Annual debt service assumes current amount
      outstanding as well as current interest rates, remain constant.
 
      Total maturities above are $318 less than total debt as reported in our
(2)   consolidated balance sheets as of December 31, 2012, due to the premium
      recorded on above-market debt assumed in conjunction with certain of our
      property acquisitions.
       

                                                                                                                    
                                                                                                       Average
                                                                                                       Net
                                Year                                       Annualized     ABR per      Effective
Property         Property       Built /       GLA           Percent        Base           Leased       ABR           Key Tenants
                 Location       Renovated                   Leased^(1)     Rent^(2)       Square       per
                                                                                          Foot^(3)     Leased
                                                                                                       Square
                                                                                                       Foot^(4)
Neighborhood and Community Shopping Centers
                                                                                                                     Champps,
                 Houston,                                                  $                                         McCormick &
Uptown Park      TX             1999/2005     169,112       97.0%          5,496,404      $ 33.51      $ 35.04       Schmicks
                                                                                                                     (owned by
                                                                                                                     Landry's)
MacArthur                                                                                                            Kroger,
Park             Dallas, TX     2000          237,351       92.6%          3,721,329      16.92        17.68         Barnes &
                                                                                                                     Noble, GAP
Plaza in the     Houston,       1999/2009     144,054       97.4%          2,761,041      19.69        19.92         Kroger
Park             TX
                                                                                                                     Bank of
Preston          Dallas, TX     1956          107,914       95.8%          2,576,720      24.93        25.13         America,
Royal East                                                                                                           Starbucks,
                                                                                                                     FedEx Office
Preston                                                                                                              Tom Thumb,
Royal West       Dallas, TX     1959          122,564       99.2%          2,447,504      20.12        20.29         Barnes &
                                                                                                                     Noble, Spec's
                 San                                                                                                 Hard Rock
Southbank        Antonio,       1995          46,673        96.0%          1,656,463      36.96        37.30         Café
                 TX
The Market       Houston,                                                                                            H-E-B, Five
at Lake          TX             2000          101,799       100.0%         1,614,750      15.86        15.91         Guys
Houston
                                                                                                                     Morton's
Uptown Plaza     Dallas, TX     2006          33,840        100.0%         1,448,387      42.80        43.64         (owned by
- Dallas                                                                                                             Landry's),
                                                                                                                     Wells Fargo
Alpharetta       Atlanta,       1997          94,544        98.7%          1,324,342      14.19        14.36         Publix
Commons          GA
Cinco Ranch      Houston,       2001          97,297        100.0%         1,310,644      13.47        13.58         Kroger
                 TX
                                                                                                                     CVS/pharmacy,
Uptown Plaza     Houston,       2002          28,000        100.0%         1,315,746      46.99        46.11         The Grotto
- Houston        TX                                                                                                  (owned by
                                                                                                                     Landry's)
Bakery           Houston,       1996          34,614        94.3%          913,061        27.98        28.09         Walgreens,
Square           TX                                                                                                  Boston Market
Brookwood        Atlanta,       1941/2000     28,774        97.9%          710,043        25.21        22.66         CVS/pharmacy,
Village          GA                                                                                                  Subway
Courtyard on     Houston,       1994          13,597        29.5%          260,845        65.00        61.41         Verizon
Post Oak         TX
Woodlands        Houston,       1997/2003     20,018        100.0%         460,229        22.99        24.05         FedEx Office
Plaza            TX
Terrace          Houston,       2000          16,395        91.3%          456,682        30.50        30.19         Starbucks
Shops            TX
Sugar Land       Houston,       1998/2001     16,750        100.0%         402,188        24.01        23.45         Memorial
Plaza            TX                                                                                                  Hermann
500 Lamar        Austin, TX     1998          12,795        100.0%         399,322        31.21        29.52         Title Nine
                                                                                                                     Sports
Neighborhood and Community                    1,326,091     96.3%          $              $ 22.91      $ 23.26
Shopping                                                                   29,275,700
                                                                                                                      
Single
Tenant
(Ground
Leases)^(5)
CVS/Pharmacy     Houston,       2003          13,824        100.0%         $ 327,167      $ 23.67      $ 23.67       CVS/pharmacy
                 TX
Jared The        Houston,                                                                                            Jared The
Galleria of      TX             2012          8,046         100.0%         180,000        22.37        25.96         Galleria of
Jewelry                                                                                                              Jewelry
                 San
Citibank         Antonio,       2005          4,439         100.0%         160,000        36.04        36.04         Citibank
                 TX
Landry's         Houston,       1995          13,497        100.0%         155,677        11.53        12.18         Landry's
Seafood          TX                                                                                                  Seafood
T.G.I.           Hanover,       2003          6,802         100.0%         148,458        21.83        23.44         T.G.I.
Friday's^(6)     MD                                                                                                  Friday's
Bank of          Houston,       1994          4,251         100.0%         129,275        30.41        28.78         Bank of
America          TX                                                                                                  America
Macaroni         Houston,       1994          7,825         100.0%         96,000         12.27        12.05         Macaroni
Grill            TX                                                                                                  Grill
T.G.I.           Houston,       1994          6,543         100.0%         96,000         14.67        14.41         T.G.I.
Friday's         TX                                                                                                  Friday's
Smokey Bones     Atlanta,       1998          6,867         100.0%         94,922         13.82        13.82         Smokey Bones
                 GA
Single Tenant (Ground                         72,094        100.0%         $              $ 19.25      $ 19.78
Leases)                                                                    1,387,499
                                                                                                                      
Single
Tenant (Fee
Simple)^(7)
The              Houston,                                                                                            The Container
Container        TX             2011          25,019        100.0%         $ 425,323      $ 17.00      $ 17.91       Store
Store
T.G.I.           Houston,       1982          8,500         100.0%         215,000        25.29        25.90         T.G.I.
Friday's         TX                                                                                                  Friday's
Golden           Houston,       1992          12,000        100.0%         210,450        17.54        17.54         Golden Corral
Corral^(6)       TX
Golden           Houston,       1993          12,000        100.0%         208,941        17.41        22.16         Golden Corral
Corral^(6)       TX
Sunbelt          Champaign,     2007          12,000        100.0%         140,000        11.67        12.72         Sunbelt
Rentals          IL                                                                                                  Rentals
Single                                                                     $
Tenant (Fee                                   69,519        100.0%         1,199,714      $ 17.26      $ 18.66
Simple)
                                                                                                                      
Portfolio Total/Weighted                      1,467,704     96.7%          $              $ 22.45      $ 22.86
Average                                                                    31,862,913

     
(1)   Percent leased is calculated as (i) GLA under commenced leases as of
      December 31, 2012, divided by (ii) total GLA, expressed as a percentage.
       
      Annualized base rent is calculated by multiplying (i) monthly base rent
(2)   as of December 31, 2012, for leases that had commenced as of such date,
      by (ii) 12.
 
      Annualized base rent per leased square foot is calculated by dividing
(3)   (i) annualized base rent, by (ii) GLA under commenced leases as of
      December 31, 2012.
 
      Average net effective annual base rent per leased square foot represents
      (i) the contractual base rent for commenced leases as of December 31,
(4)   2012, 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 December 31, 2012.
 
      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
(5)   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 8.3 years.
 
(6)   The tenants at these properties have rights of first refusal to purchase
      the property.
 
      For single-tenant fee simple properties, we own the land and the
(7)   building, and the tenant is responsible for all expenses relating to the
      property.  The weighted average remaining term of our fee simple leases
      is 7.2 years.
       

                                                                    
                                          Year to
                                          Date ABR
                          Year to         as a                       Percentage
Rank     Tenant Name      Date            Percentage     Tenant      of Total
                          Base Rent       of             GLA         GLA
                                          Portfolio
                                          Annualized
                                          Base Rent
1        Kroger           $ 2,116,165     13.28   %      207,963     14.17   %
         Landry's
2        Seafood            1,257,286     7.89    %      38,819      2.64    %
         House
3        CVS/pharmacy       1,222,212     7.67    %      37,485      2.55    %
4        H-E-B              1,109,736     6.97    %      80,641      5.49    %
5        Publix             780,936       4.90    %      65,146      4.44    %
6        Hard Rock          496,825       3.12    %      15,752      1.07    %
         Cafe
7        T.G.I.             458,589       2.88    %      21,845      1.49    %
         Friday's
         The
8        Container          447,988       2.81    %      25,019      1.70    %
         Store
9        Golden             426,514       2.68    %      24,000      1.64    %
         Corral
10       Champps            422,336       2.65    %      11,384      0.78    %
         Americana
11       Paesanos           406,583       2.55    %      8,017       0.55    %
12       The County         359,871       2.26    %      10,614      0.72    %
         Line
13       Verizon            303,449       1.90    %      5,513       0.38    %
         Wireless
14       Walgreens          298,621       1.87    %      15,120      1.03    %
15       Bank of            298,349       1.87    %      8,129       0.55    %
         America
16       Ninfa's            284,421       1.79    %      7,606       0.52    %
17       Mattress           274,120       1.72    %      11,000      0.75    %
         Giant
         River Oaks
18       Imaging &          268,500       1.69    %      10,750      0.73    %
         Diagnostic,
         L.P.
19       Howl At The        257,508       1.62    %      7,055       0.48    %
         Moon Saloon
20       Tasting Room       257,504       1.62    %      7,568       0.52    %
21       Potbelly           251,320       1.58    %      5,458       0.37    %
22       Buca Di            249,792       1.57    %      7,573       0.52    %
         Beppo
23       M. Penner          234,798       1.47    %      6,500       0.44    %
24       Longoria           226,063       1.42    %      6,945       0.47    %
         Collection
         Baker, Knapp
25       and Tubbs,         200,625       1.26    %      8,025       0.55    %
         Inc.
                                                                              

                
                 For the year ended December 31,
Expirations      2012          2011          2010          2009          2008         2007
  Number of        44            53            50            34            22           20
  leases
  GLA              180,245       187,605       224,578       110,693       75,601       55,124
New Leases
  Number of        5             7             11            8             4            9
  leases
  GLA              12,997        14,231        17,737        15,471        7,328        13,680
  Expiring
  annualized
  base rent      $ 27.22       $ 28.36       $ 31.07       $ 28.31       $ 23.52      $ 28.73
  per square
  foot
  New
  annualized
  base rent      $ 34.84       $ 30.85       $ 31.44       $ 29.64       $ 21.70      $ 32.82
  per square
  foot
  % Change         28.0    %     8.8     %     1.2     %     4.7     %     -7.7   %     14.2   %
  (Cash)
Renewals^(2)
  Number of        30            38            39            24            13           12
  leases
  GLA              115,501       143,324       140,236       86,462        22,464       43,003
  Expiring
  annualized
  base rent      $ 23.91       $ 24.92       $ 26.12       $ 25.62       $ 27.05      $ 19.88
  per square
  foot
  New
  annualized
  base rent      $ 25.27       $ 25.74       $ 27.32       $ 26.85       $ 31.53      $ 22.79
  per square
  foot
  % Change         5.7     %     3.3     %     4.6     %     4.8     %     16.6   %     14.6   %
  (Cash)
Combined
  Number of        35            45            50            32            17           21
  leases
  GLA              128,498       157,555       157,973       101,933       29,792       56,683
  Expiring
  annualized
  base rent      $ 24.24       $ 25.23       $ 26.68       $ 26.03       $ 26.18      $ 22.02
  per square
  foot
  New
  annualized
  base rent      $ 26.24       $ 26.20       $ 27.78       $ 27.27       $ 29.11      $ 25.21
  per square
  foot
  % Change         8.2     %     3.8     %     4.1     %     4.8     %     11.2   %     14.5   %
  (Cash)

     
      Comparable leases are defined as renewals or new leases for a space that
(1)   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.
       

<t*Story too large*
                                                                               
           Number                    Percent                       Percent
           of           GLA of       of           ABR of           of           ABR Per
Year       Expiring     Expiring     Total        Expiring         Total        Square
           Leases       Leases       GLA          Leases^(1)       ABR          Foot^(2)
                                     Expiring                      Expiring
Vacant     -            48,481       3.3   %      $ -              -            $  -
2013       56           154,350      10.5  %        3,482,089      10.9  %         22.56
2014       52           126,330      8.6   %        3,683,802      11.6  %         29.16
2015       50           179,946      12.2  %        5,000,891      15.7  %         27.79
2016       48           147,876      10.1  %        4,279,417      13.4  %         28.94
2017       33           241,517      16.5  %        4,656,294      14.6  %         19.28
2018       20           81,200       5.5   %        1,913,842      6.0   %         23.57
2019       10           31,493       2.1   %

[TRUNCATED]
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