AmREIT Reports Second Quarter Results and Declares September 2014 Dividend

  AmREIT Reports Second Quarter Results and Declares September 2014 Dividend

Business Wire

HOUSTON -- July 29, 2014

AmREIT, Inc. (NYSE: AMRE) (“AmREIT” or the “Company”) today announced
financial results for the second quarter ended June 30, 2014 and declared
dividends for the third quarter ending September 30, 2014.

First Quarter and Year To Date Highlights:

Financial Results

  *Core Funds from Operations ("Core FFO") available to common stockholders
    for the second quarter of 2014 was $4.6 million, or $0.24 per share,
    compared to $4.1 million, or $0.25 per share, for the comparable period in
    2013. For the six months ended June 30, 2014, Core FFO was $9.2 million,
    or $0.47 per share, compared to $8.4 million, or $0.52 per share, for the
    comparable period in 2013. Weighted average shares outstanding for the
    three and six months ended June 30, 2014, were 19.68 and 19.66 million,
    respectively, compared to 16.17 and 16.15 million, respectively, for the
    same period in 2013.
  *FFO available to common stockholders for the second quarter of 2014 was
    $4.4 million, or $0.22 per share, compared to $4.0 million, or $0.25 per
    share, for the comparable period in 2013. For the six months ended June
    30, 2014, FFO was $9.0 million, or $0.46 per share, compared to $8.1
    million or $0.50 per share for the comparable six month period in 2013.
    Included in FFO for the three and six months ended June 30, 2014 was
    $224,000 of acquisition costs related to the acquisitions of Lantern Lane
    Shopping Center and our acquisition of town house units within the
    Inverness Townhomes. Included in FFO for the three and six months ended
    June 30, 2013 was $126,000 of acquisitions costs related to the
    acquisition of Fountain Oaks Shopping Center and $164,000 of acquisition
    costs related to the MacArthur Park joint venture with Goldman Sachs.
  *Net income available to common stockholders for the second quarter of 2014
    was $1.1 million, or $0.05 per share, compared to $981,000, or $0.06 per
    share, for the same period in 2013. For the six months ended June 30,
    2014, net income was $2.3 million, or $0.11 per share, compared to $9.4
    million, or $0.59 per share for the comparable six month period in 2013.
    Included in net income for the six months ended June 30, 2013 was a $7.7
    million gain related to the sale of MacArthur Park and Pads into the joint
    venture with Goldman Sachs.

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 are
attached to this press release.

Portfolio Results

  *During the third quarter of 2013, AmREIT began the process of terminating
    leases or relocating tenants occupying a portion of its Uptown Park
    property known as the “Baker Site”, and its Courtyard at Post Oak property
    at Post Oak and San Felipe in Houston, in order to prepare those sites for
    vertical re-development. In the second quarter of 2014, excluding
    redevelopment properties (Uptown Park and Courtyard on Post Oak),
    same-store net operating income (“NOI”) increased 2.7% over the same
    period in the prior year. For the six months ended June 30, 2014,
    same-store NOI increased 2.9% over the same period in the prior year.
    Including those two redevelopment properties, same-store NOI decreased
    0.4% over the same three month period in the prior year and increased 0.9%
    over the same six month period in the prior year. While the Company’s
    same-store NOI growth rate in the short term has been negatively affected
    by redevelopments, AmREIT believes that the re-development of these sites
    will provide longer term same-store NOI growth.
  *Portfolio occupancy as of June 30, 2014, was 93.8%, which was down 0.40%
    when compared to portfolio occupancy of 94.2% as of December 31, 2013. The
    Company has initiated vacancies at Courtyard on Post Oak and at the Uptown
    Park – Baker Site in preparation for their anticipated redevelopments.
    Excluding these re-developments, portfolio occupancy was 94.6% as of June
    30, 2014, compared to 95.1% as of December 31, 2013. 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 June 30, 2014, as compared
    to 94.8% as of December 31, 2013. The Company anticipates rent
    commencement on these signed leases over the next 90 days.
  *During the second quarter of 2014, AmREIT signed 22 leases for 70,313
    square feet of GLA, including both new and renewal leases. Of these, 19
    leases for 46,619 square feet were renewals or replacements of expiring
    leases that 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 18.6%. On a
    GAAP basis, which includes the effects of straight-line rent, leasing
    spreads increased 27.2%.
  *For the six months ended June 30, 2014, AmREIT signed 46 leases for
    144,963 square feet of GLA, including both new and renewal leases. Of
    these, 37 leases for 96,048 square feet were renewals or replacements of
    expiring leases that 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
    15.2%. On a GAAP basis, which includes the effects of straight-line rent,
    leasing spreads increased 21.8%.

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.

Acquisitions

  *On June 24, 2014, AmREIT acquired Lantern Lane Shopping Center, an 81,567
    square foot Fresh Market and CVS/Pharmacy anchored shopping center in the
    Memorial Villages submarket of Houston, Texas from one of its affiliates,
    AmREIT Monthly Income & Growth Fund III, Ltd. Average household incomes
    within a one-mile radius of Lantern Lane are over $163,000, and there are
    approximately 62,000 households and over 95,800 daytime employment within
    a three-mile radius of the property. Lantern Lane was acquired for
    approximately $22.7 million, is unencumbered, and was funded with cash on
    hand and borrowings under AmREIT’s unsecured revolving credit facility.
  *On July 3, 2014, AmREIT entered into a contract to acquire Tuxedo
    Festival, a 54,310 square foot shopping center located at Roswell and
    Piedmont in the prestigious Buckhead submarket of Atlanta, Georgia.
    Average household incomes within a one-mile radius of Tuxedo Festival are
    over $137,000 and there are approximately 48,000 households and over
    109,000 daytime employment within a three-mile radius of the property.
    Tuxedo Festival is scheduled to close during the third quarter for
    approximately $27.9 million.

Redevelopment Initiatives

  *On July 25, 2014, the Omnibus Agreement with Crimson Real Estate Advisors,
    LP with respect to 1.12 acres on the northwest portion of the Uptown Park
    property, known as the “Baker Site” expired and was terminated. When we
    successfully negotiated with Champps to release to us the development
    rights of their parking lot contiguous to the Baker Site, we were able to
    return to our original vision of developing a lower profile residential
    project by expanding the building’s footprint. While we no longer expect
    to enter into a ground lease with respect to the Baker site, we believe
    this more appropriately sized project, which we are calling The Palazzi at
    Uptown Park, will be the finest for-rent multifamily project of its type
    in our market. We now will be able to increase the size of the retail
    square footage, making the north end of Uptown Park a more prominent
    place-making experience that is essential to long term value creation in
    projects of this kind. The project is anticipated to include approximately
    200 residential units and approximately 40,000 square feet of retail.
    Total project costs are estimated to be approximately $80 million and
    construction is anticipated to begin in 2015. A rendering of our master
    plan and The Palazzi at Uptown Park can be found in our corporate
    presentation.
  *AmREIT has entered into a letter of intent with a regional multi-family
    developer to develop a 40-story, 356-unit residential tower with two
    stories of retail with respect to 1.58 acres at the northwest corner of
    Post Oak and San Felipe, known as The Courtyard at Post Oak. AmREIT is
    currently negotiating a joint venture with the developer as co-sponsors
    whereby we will seek an institutional equity partner. AmREIT will retain
    ownership of the 1.58 acres and ground lease the site to the anticipated
    venture. Total project costs are estimated be approximately $142 million
    and construction could begin within the next 12 months.
  *During the quarter, AmREIT acquired a 20.3% ownership interest in the
    Inverness Townhomes. Subsequent to the quarter, AmREIT has entered into a
    letter of intent with Trammell Crow Company to form a Limited Liability
    Company (“LLC”) to purchase the entire Inverness Townhome site and to form
    a venture for the development of approximately 560,000 square feet of
    office space and 16,000 square feet of retail space. The site is
    approximately 2.9 acres and is located at the northwest corner of Post Oak
    Blvd and Uptown Park Blvd. It is anticipated that AmREIT will be a 5%
    co-developer member, Trammell Crow Company will be a 5% co-developer
    member and an institutional investor will be a 90% Investor Member. Total
    project costs are estimated to be in excess of $225 million. Construction
    could begin within the next 12-15 months.
  *We are in exclusive negotiations with a four-star hotel flag and a hotel
    development partner for a mixed use development project at the southeast
    corner of Uptown Park, located at the corner of Loop 610 and Post Oak
    Blvd. The anticipated development could include 243 hotel rooms, 234
    residential units and up to 20,000 square feet of ground floor retail.
    Total project costs are estimated to be approximately $204 million.
    Construction could begin within the next 18 months.
  *In February 2014, AmREIT was informed by Kroger, Inc. that Kroger had
    approved a 30,000 square foot expansion of its store at AmREIT’s Fountain
    Oaks property. On June 30, 2014, the City of Sandy Springs indicated that
    the anticipated Kroger expansion would be permitted. Kroger intends to
    expand the existing 60,000 square foot store by approximately 30,000
    square feet to 90,000 square feet with a contribution from AmREIT of $6.7
    million. AmREIT will receive an 8.25% return on the incremental capital
    and will receive a new 20-year lease with Kroger. Construction is expected
    to begin within the next 12 months.

Advised Funds Activity

  *AmREIT Monthly Income & Growth Fund IV, Ltd. has negotiated a development
    partnership with The Dinerstein Group to develop a planned 378 unit
    multifamily project consisting of 16 stories of residential over a 5 story
    parking garage. Estimated costs are $101 million and the project is
    anticipated to commence construction in 2015.

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 September 30, 2014 to all common stockholders of
    record at the close of business on September 19, 2014.

“We are pleased with our second quarter results, which demonstrate the success
of our proven strategy to acquire, redevelop, and operate high-quality
commercial properties in premier locations in the most desirable growth
markets in the country,” said Kerr Taylor, Chairman and Chief Executive
Officer of AmREIT. “While we are changing our approach to the Baker Site, I am
very excited about the direction we are headed and the potential for
significant value that our local sharpshooter team can create for stockholders
as we develop the multi-family and retail project at The Palazzi at Uptown
Park. Our team is also executing effectively on the numerous opportunities in
our portfolio to drive occupancy levels and leverage our strong balance sheet
to expand the business.”

2014 Full Year Guidance

  *Full year and quarterly 2014 Core FFO and FFO guidance per share remains
    as follows:

                   Projected 2014 Range
                   High        Low
3Q2014              0.26        0.25
4Q2014              0.34        0.33
                              
Full Year Core FFO  $1.06       $1.02
                              
3Q2014              0.24        0.23
4Q2014              0.33        0.32
                              
Full Year FFO       $1.02       $0.98

In arriving at the above unchanged full year guidance, we have made
adjustments to eliminate the ground lease income from The Baker Site at Uptown
Park in the fourth quarter, have increased development fees by $300,000 in
conjunction with our development activities at Cambridge and Holcombe in the
Advised Funds and have accelerated our acquisition assumptions due to the
anticipated earlier acquisition of Tuxedo Festival. Additionally, full year
and quarterly 2014 FFO guidance do not reflect any expenses that may be
incurred in connection with the evaluation of strategic alternatives, which
would have no impact on our Core FFO.

Conference Call

AmREIT will hold its quarterly conference call to discuss the results of its
second quarter and year to date 2014 on Wednesday, July 30, 2014, at 10:00
a.m. Central Standard Time (11:00 a.m. Eastern Standard Time). To participate
in the quarterly conference call, please call 1-877-504-2267 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 10048772.

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 website 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. The National Association of Real Estate Investment Trusts
(“NAREIT”) defines FFO as net income (loss) determined 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 from sales of property and
impairment charges on properties held for investment and by excluding real
estate related depreciation and amortization, 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 use 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:

                                                         Projected 2014 Range
                                                          High        Low
Net income                                                $ 0.58       $ 0.54
Gain on sale – investment                                 (0.20)       (0.20)
Depreciation and amortization                             0.56         0.56
Depreciation and amortization for non-consolidated        0.08         0.08
affiliates
FFO available to stockholders                             $ 1.02       $ 0.98
Acquisition costs                                         0.04         0.04
Core FFO available to stockholders                        $1.06        $1.02

The above projected 2014 range for Core FFO and FFO guidance does not reflect
any expenses that may be incurred in connection with the evaluation of
strategic alternatives.

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, The Irreplaceable Corner™ Company, is an equity real estate investment
trust that specializes in the acquisition, operation, redevelopment, and
vertical densification of retail and mixed-use properties located in highly
affluent, urban submarkets. The company’s existing properties are
strategically concentrated in five of the top metropolitan markets in the
southern U.S.: Houston, Dallas, San Antonio, Austin and Atlanta. The company
is internally-advised and fully integrated with significant local market
experience and relationships. AmREIT's portfolio was 95.2% leased as of June
30, 2014, and its top five tenants include Kroger, Landry's, CVS/Pharmacy,
H-E-B, and Safeway. AmREIT also has preferential access to a substantial
acquisition pipeline through its value-add joint ventures, which often include
major institutional investors who partner with the company as local experts.
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 2014
Core FFO and FFO financial projections , redevelopment projects and NOI
growth. These forward-looking statements are based on current expectations,
forecasts and assumptions that involve risks and uncertainties that could
cause actual outcomes and results to differ materially. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, you can identify
forward-looking statements by the use of forward-looking terminology such as
"may," "will," "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," or "potential" or the negative of these
words and phrases or similar words or phrases, which are predictions of or
indicate future events or trends and which do not relate solely to historical
matters. Many factors may materially affect the actual results, including
demand for our properties, changes in rental and occupancy rates, changes in
property operating costs, interest rate fluctuations, changes in plans and
timing related to potential development projects and the anticipated costs and
potential revenues associated therewith, and changes in local and general
economic conditions. While forward-looking statements reflect AmREIT’s good
faith beliefs, assumptions and expectations, they are not guarantees of future
performance. Furthermore, AmREIT disclaims any obligation to publicly update
or revise any forward-looking statement to reflect changes in underlying
assumptions or factors, of new information, data or methods, future events or
other changes. For a further discussion of these and other factors that could
impact AmREIT’s future results, performance or transactions, see the section
entitled "Risk Factors" in AmREIT’s Annual Report on Form 10-K for the year
ended December 31, 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)
                                                                  
                                                    June 30,      December 31,
                                                    2014          2013
                                                    (unaudited)
ASSETS
Real estate investments at cost:
Land                                                $ 195,086     $  181,749
Buildings                                             238,288        224,472
Tenant improvements                                  15,910       14,992  
                                                      449,284        421,213
Less accumulated depreciation and amortization       (40,881 )     (37,356 )
                                                      408,403        383,857
                                                                  
Acquired lease intangibles, net                       16,160         15,849
Investments in Advised Funds                         15,534       15,689  
Net real estate investments                           440,097        415,395
                                                                  
Cash and cash equivalents                             4,884          14,297
Tenant and accounts receivable, net                   5,505          6,467
Accounts receivable - related party, net              1,057          693
Notes receivable, net                                 353            4,333
Notes receivable - related party, net                 744            689
Deferred costs, net                                   3,754          3,214
Other assets                                         3,158        1,493   
TOTAL ASSETS                                        $ 459,552    $  446,581 
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable                                       $ 219,286     $  199,851
Accounts payable and other liabilities                8,955          11,582
Acquired below-market lease intangibles, net         8,897        7,881   
TOTAL LIABILITIES                                     237,138        219,314
                                                                  
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000          -              -
shares authorized, none issued
Common stock, $0.01 par value, 1,000,000,000
shares authorized as of June 30, 2014 and
December 31, 2013, 19,685,084 and 19,628,037          197            196
shares issued and outstanding as of June 30, 2014
and December 31, 2013.
Capital in excess of par value                        307,138        306,423
Accumulated distributions in excess of earnings      (84,921 )     (79,352 )
TOTAL STOCKHOLDERS' EQUITY                           222,414      227,267 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 459,552    $  446,581 

                                                  
AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(unaudited)
                                                                 
                       Three months ended June 30,   Six months ended June 30,
                       2014             2013         2014           2013
                                                                    
Revenues:
Rental income from     $  11,672        $ 9,863         23,567        20,899
operating leases
Advisory services
income - related          869             872           1,615         1,715
party
Real estate fee          -             -           100         -      
income
Total revenues            12,541          10,735        25,282        22,614
                                                                    
Expenses:
General and               2,005           2,069         4,113         4,030
administrative
Property expense          3,459           2,660         7,188         5,843
Legal and                 315             258           695           506
professional
Real estate               74              52            129           104
commissions
Acquisition costs         224             126           224           126
Depreciation and         3,090         2,732       6,216       6,025  
amortization
Total expenses           9,167         7,897       18,565      16,634 
                                                                    
Operating income          3,374           2,838         6,717         5,980
                                                                    
Other income
(expense):
Gain on sale of real
estate acquired for       -               -             -             7,696
investment
Interest and other        59              154           170           267
income
Interest and other
income - related          12              53            22            109
party
Income from Advised       181             192           368           44
Funds
State income tax          (12     )       (17    )      (24     )     (15    )
expense
Interest expense         (2,484  )      (2,267 )     (4,951  )    (4,760 )
                                                                    
Income from
continuing                1,130           953           2,302         9,321
operations
                                                                    
Income from
discontinued             -             28          -           56     
operations
                                                                    
Net income             $  1,130        $ 981       $  2,302      $ 9,377  
                                                                    
Net income per share
of common stock -
basic and diluted
Income from
continuing             $  0.05          $ 0.06       $  0.11        $ 0.59
operations
Income from
discontinued             -             -           -           -      
operations
Net income per share   $  0.05         $ 0.06      $  0.11       $ 0.59   
                                                                    
Weighted average
shares of common
stock used to            19,104        15,609      19,092      15,600 
compute net income
per share, basic and
diluted
                                                                    
Distributions per
share of common        $  0.20         $ 0.20      $  0.40       $ 0.40   
stock

                     
Summary of Operating Results (in thousands except per share data):
                                                  
                       Three months ended June 30,   Six months ended June 30,
Funds from             2014           2013          2014          2013
operations ("FFO")
Net income             $  1,130        $  981        $  2,302       $ 9,377
Add:
Depreciation of real
estate assets - from      3,082           2,718         6,199         5,998

operations
Depreciation of real
estate assets - from
                          -               6             -             12
discontinued
operations
Depreciation of real
estate assets for
                          343             292           611           445
nonconsolidated
affiliates
Less:
Gain on sale of real
estate acquired for       -               -             -             (7,696 )

investment
Gain on sale of
asset by investment       (145   )        -             (145   )      -
in JV
                                                                 
Total FFO available    $  4,410       $  3,997     $  8,967      $ 8,136  
to stockholders
                                                                    
Total FFO per share    $  0.22        $  0.25      $  0.46       $ 0.50   
                                                                    
Core funds from
operations ("Core
FFO")
Total FFO available    $  4,410        $  3,997      $  8,967       $ 8,136
to stockholders
Add:
Acquisition costs         224             126           224           126
Acquisition costs of
nonconsolidated           -               -             -             164
affiliates
                                                                 
Total Core FFO
available to           $  4,634       $  4,123     $  9,191      $ 8,426  
stockholders
                                                                    
Total Core FFO per     $  0.24        $  0.25      $  0.47       $ 0.52   
share
                                                                    
Dividends
Regular common         $  0.20         $  0.20       $  0.40        $ 0.40
dividends per share
Payout ratio - Core       83.3   %        80.0   %      85.1   %      76.9   %
FFO

_____________

      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
(1)  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 June 30,   Six months ended June
                                                         30,
                           2014            2013         2014        2013
Weighted average
shares used to compute
net
income per share,          19,104           15,609       19,092       15,600
basic and diluted
Weighted average
shares of restricted
common
stock outstanding          574              563          567          552
Weighted average           19,678           16,172       19,659       16,152
shares outstanding
                                                                      

Same Store Property Analysis (in thousands except for number of properties,
percentages and per share data):

                                                              
                            Three months ended June
                            30,
                            2014           2013        Change $    Change%
Same store properties
(28 properties)
     Rental income ^(1)     $  5,673        $ 5,536     $ 137       2.5      %
     Recovery income           1,899          1,720       179       10.4     %
     ^(1)
     Percentage rent           16             11          5         45.5     %
     ^(1)
Less:
     Property expenses        2,093        1,917     (176  )   (9.2   ) %
                                                                             
        Same store NOI,
        excluding
        redevelopment         5,495        5,350     145      2.7      %

        properties
                                                                             
Same store occupancy,
excluding redevelopment
     properties, at end        96.9   %       96.3  %     n/a       0.6      %
     of period^(2)
                                                                             
Redevelopment
properties (2
properties)
     Rental income ^(1)        2,108          2,184       (76   )   (3.5   ) %
Less:
     Property expenses        810          714       (96   )   (13.4  ) %
        Redevelopment         1,298        1,470     (172  )   (11.7  ) %
        properties NOI
                                                                             
        Same Store NOI,
        including
        redevelopment         6,793        6,820     (27   )   (0.4   ) %

        properties^(2)
                                                                             
Redevelopment
properties occupancy at        87.3   %       89.8  %     n/a       (2.5   ) %
end of period
                                                                             
Non-same store
properties (3
properties)
     Rental income ^(1)        1,703          210         1,493     711.0    %
Less:
     Property expenses        561          88        (473  )   (537.5 ) %
        Non-same store
        net operating         1,142        122       1,020    836.1    %
        income
                                                                             
Total net operating            7,935          6,942       993       14.3     %
income
                                                                             
Other revenues                 1,396          1,477       (81   )   (5.5   ) %
                                                                             
Less other expenses           8,201        7,466     (735  )   (9.8   ) %
                                                                             
Income (loss) from             1,130          953         177       18.6     %
continuing operations
Income from                   -            28        (28   )   (100.0 ) %
discontinued operations
Net income                  $  1,130       $ 981      $ 149      15.2     %

_____________

      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
(1)  non-same store properties and amortization of straight-line rents and
      above/below market rents. For the three months ended June 30, 2014 and
      2013, rental income from operating leases was $11,672 and $9,863,
      respectively.
      For a definition and reconciliation of NOI and a statement disclosing
      the reasons why our management believes that presentation of NOI
(2)   provides useful information to investors and, to the extent material,
      any additional purposes for which our management uses NOI, see “Net
      Operating Income” below.
      

Same Store Property Analysis (in thousands except for number of properties,
percentages and per share data):
                                                              
                            Six months ended June
                            30,
                            2014         2013         Change $     Change %
Same store properties
(28 properties)
     Rental income ^(1)     $  11,330     $ 11,082     $ 248        2.2      %
     Recovery income           3,956        3,538        418        11.8     %
     ^(1)
     Percentage rent           53           46           7          15.2     %
     ^(1)
Less:
     Property expenses        4,298      3,932      (366   )   (9.3   ) %
                                                                             
        Same store NOI,
        excluding
        redevelopment         11,041     10,734     307       2.9      %

        properties
                                                                             
Same store occupancy,
excluding redevelopment
     properties, at end        96.9   %     96.3   %     n/a        0.6      %
     of period^(2)
                                                                             
Redevelopment
properties (2
properties)
     Rental income ^(1)        4,282        4,358        (76    )   (1.7   ) %
Less:
     Property expenses        1,648      1,544      (104   )   (6.7   ) %
        Redevelopment         2,634      2,814      (180   )   (6.4   ) %
        properties NOI
                                                                             
        Same Store NOI,
        including
        redevelopment         13,675     13,548     127       0.9      %

        properties^(2)
                                                                             
Redevelopment
properties occupancy at        87.3   %     89.8   %     n/a        (2.5   ) %
end of period
                                                                             
Non-same store
properties (4
properties)
     Rental income ^(1)        3,369        1,410        1,959      138.9    %
Less:
     Property expenses        1,239      413        (826   )   (200.0 ) %
        Non-same store
        net operating         2,130      997        1,133     113.6    %
        income
                                                                             
Total net operating            15,805       14,545       1,260      8.7      %
income
                                                                             
Other revenues                 2,852        10,301       (7,449 )   (72.3  ) %
                                                                             
Less other expenses           16,355     15,525     (830   )   (5.3   ) %
                                                                             
Income (loss) from             2,302        9,321        (7,019 )   (75.3  ) %
continuing operations
Income from                   -          56         (56    )   (100.0 ) %
discontinued operations
Net income                  $  2,302     $ 9,377     $ (7,075 )   (75.5  ) %

_____________

      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
(1)  non-same store properties and amortization of straight-line rents and
      above/below market rents. For the six months ended June 30, 2014 and
      2013, rental income from operating leases was $23,567 and $20,899,
      respectively.
      For a definition and reconciliation of NOI and a statement disclosing
      the reasons why our management believes that presentation of NOI
(2)   provides useful information to investors and, to the extent material,
      any additional purposes for which our management uses NOI, see “Net
      Operating Income” below.


Summary of Capital Expenditures (in thousands):
                                                    
                              Three months ended June   Six months ended June
                              30,                       30,
                              2014         2013        2014        2013
Non-maintenance capital
expenditures:
Tenant improvements - new     $   11        $  3        $  67        $  80
leases
Tenant improvements -             150          164         773          414
renewals
Leasing commissions               266          206         440          329
Development, redevelopment       293         830        514         856
and expansion
  Total non-maintenance           720          1,203       1,794        1,679
  capital expenditures
                                                                     
Maintenance capital              -           -          41          -
expenditures
Total capital expenditures    $   720       $  1,203    $  1,835     $  1,679

                                                  
Rental Income from Operating Leases (in thousands):
                                                     
                       Three months ended June 30,   Six months ended June 30,
                       2014            2013         2014          2013
Base minimum rent      $   8,246        $   7,005    $   16,435     $  14,878
Straight-line rent         79               98           168           253
adjustments
Amortization of
above/below market         111              108          323           216
rent
Percentage rent            7                15           37            49
Lease termination          85               -            85            -
income
Recovery income           3,144           2,637       6,519        5,503
Rental income from     $   11,672       $   9,863    $   23,567     $  20,899
operating leases

                                                             
Advisory Services Income – Related Party (in thousands):
                                                                     
                           Three months ended June   Six months ended June 30,
                           30,
                           2014          2013        2014            2013
Leasing commission         $   238       $   138     $   344         $  280
income
Brokerage commission           -             33          -              33
income
Property management            417           433         830            797
fee income
Development fee income         5             36          11             157
Asset management fee           191           156         383            311
income
Construction                  18           76         47            137
management fee income
Advisory services          $   869       $   872     $   1,615       $  1,715
income - related party
                                                                     
Interest and other         $   12        $   53      $   22          $  109
income - related party
                                                                     
Reimbursements of          $   230       $   211     $   452         $  403
administrative costs


Capitalization Data (in thousands, except per share and percent data):
                                   
                                     June 30, 2014      December 31, 2013
Equity capitalization -
Common shares outstanding               19,685              19,628
NYSE closing price^(1)               $  18.30          $   16.80     
Total equity capitalization          $  360,236        $   329,750   
                                                                          
Debt capitalization -
Variable rate line of credit         $  20,500          $   -
Fixed rate mortgage loans              198,633           199,851   
Total debt capitalization^(2)        $  219,133        $   199,851   
                                                                          
Total capitalization                 $  579,369        $   529,601   
                                                                          
Debt statistics -
Total debt to total capitalization      37.8     %          37.7      %
Ratio of EBITDA to combined fixed       2.51                3.03          ^(4)
charges^(3)
Total debt to EBITDA^(3)                7.03       ^(5)     5.49          ^(6)

_____________

(1)  Represents the last reported price per share of our common stock on the
      New York Stock Exchange on the applicable date.
      Total debt capitalization above is $153 less than total debt as reported
(2)   in our consolidated balance sheets as of June 30, 2014, due to the
      premium recorded on above-market debt assumed in conjunction with
      certain of our property acquisitions.
      Fixed charges consist of interest expense and scheduled principal
      payments on borrowed funds (including capitalized interest, but
      excluding amortization of debt premium). For the purpose of calculating
      the ratio of EBITDA to combined fixed charges, both EBITDA and fixed
(3)   charges are calculated for the six months ended June 30, 2014 and
      December 31, 2013. For the purpose of calculating total debt to EBITDA
      as of June 30, 2014 and December 31, 2013, EBITDA is calculated for the
      twelve month periods ended June 30, 2014 and December 31, 2013,
      respectively.
      EBITDA for the twelve months ended December 31, 2013 includes gains of
(4)   $10.8 million on the sale of real estate. Excluding these gains, the
      ratio of EBITDA to combined fixed charges is 2.47.
      EBITDA for the twelve months ended June 30, 2014 includes gains of $3.1
(5)   million on the sale of real estate. Excluding these gains, the ratio of
      total debt to EBITDA is 7.80.
      EBITDA for the twelve months ended December 31, 2013 includes gains of
(6)   $10.8 million on the sale of real estate. Excluding these gains, the
      ratio of total debt to EBITDA is 7.19.

                                                 
Reconciliation of net income to EBITDA (in thousands):
                                                     
                         Six months ended            Twelve months ended
                         June 30,     December 31,   June 30,    December 31,
                         2014         2013           2014         2013
Net income               $  2,302     $   5,442      $  7,744     $   14,819
Interest expense            4,951         4,843         9,794         9,603
State income taxes          24            15            39            30
Depreciation and            6,216         5,920         12,136        11,945
amortization
Adjustments for            1,085        388          1,473        2,203
Advised Funds
EBITDA                   $  14,578    $   16,608     $  31,186    $   38,600

                                                                          
Outstanding Debt and Terms:
                                                                              
AmREIT
Debt Information
(in thousands)
                                     
              Amount                       Annual                             Weighted
Description  Outstanding     Interest   Debt        Maturity   % of     average
              6/30/14          Rate        Service      Date        total     rate
                                                                              maturing
Property
Mortgages:
                                                                              
500 Lamar     $  1,487         6.00  %     $ 89         2/1/2015
Uptown Park     49,000        5.37  %       2,631      6/1/2015
2015             50,487                                             23.04 %   5.39  %
Maturities
                                                                              
Plaza in         23,102        3.45  %       797        1/1/2016
the Park
Market at
Lake             15,675        5.75  %       901        1/1/2016
Houston
Cinco Ranch      9,688         3.45  %       334        1/1/2016
Southbank -     20,000        5.91  %       1,182      6/1/2016
Riverwalk
2016             68,465                                             31.24 %   4.70  %
Maturities
                                                                              
Bakery          1,368         8.00  %       109        2/10/2017
Square
2017             1,368                                              0.62  %   8.00  %
Maturities
                                                                              
Alpharetta      11,908        4.54  %       541        8/1/2018
Commons
2018             11,908                                             5.43  %   4.54  %
Maturities
                                                                              
Preston
Royal           22,727        3.21  %       730        1/1/2020
Northwest
2020             22,727                                             10.37 %   3.21  %
Maturities
                                                                              
Brookwood        7,119         5.40  %       384        2/10/2022
Village
Uptown
Plaza -         13,559        4.25  %       576        8/10/2022
Dallas
2022             20,678                                             9.44  %   4.65  %
Maturities
                                                                              
Woodlake        23,000        4.30  %       989        10/1/2023
Square
2023             23,000                                             10.50 %   4.30  %
Maturities
                                                                              
Corporate
debt:
                                                                              
$75.0
million          20,500       2.21  %^(1) $ 263   ^(1) 8/1/2015    9.36  %   
Facility
              
Total         $  219,133  ^(2) 
Maturities
                                                                              
Fixed-rate
debt:
Weighted
average                        4.66  %
fixed rate
Weighted
average                        4.1
years to
maturity

____________

      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
(1)  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 June 30, 2014, remain constant.
      Total maturities above are $153 less than total debt as reported in our
(2)   consolidated balance sheets as of June 30, 2014, 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 June 30,   Six months ended June 30,
                       2014           2013          2014           2013
Fixed-rate debt        $  2,334        $  2,105      $  4,657        $ 4,271
interest expense
Variable-rate debt        8               25            8              243
interest expense
$75 million Facility      66              67            133            104
unused fee
Amortization of           102             98            205            200
deferred loan costs
Amortization of          (26    )       (28    )     (52    )      (58   )
above market debt
Total interest         $  2,484       $  2,267     $  4,951       $ 4,760 
expense
                                                                             

Wholly-Owned Property and Tenant Information as of June 30, 2014:
                                                                                             
                                                                                   Average
                                                                                   Net
                    Year                                                   ABR per Effective
Property           Built /   GLA       Percent     Percent   ABR(3)       Leased  ABR         Key Tenants
                    Renovated           Occupied(1) Leased(2)              Square  per
                                                                           Foot(4) Leased
                                                                                   Square
                                                                                   Foot(5)
Houston, TX
                                                                                                 The Tasting
                                                                                                 Room,
Uptown Park         1999/2005 169,112   91.9    %   91.9   %  $ 5,630,801  $ 36.22 $  36.87      McCormick &
                                                                                                 Schmicks
                                                                                                 (owned by
                                                                                                 Landry's)
Plaza in the Park   1999/2009 144,054   100.0   %   100.0  %    2,896,419    20.11    20.12      Kroger
                                                                                                 Randalls,
Woodlake Square     1970/2011 156,888   92.6    %   100.0  %    2,476,095    17.05    17.73      Walgreens,
                                                                                                 Jos. A. Bank,
                                                                                                 Five Guys
The Market at       2000      101,799   100.0   %   100.0  %    1,625,451    15.97    16.00      H-E-B, Five
Lake Houston                                                                                     Guys
Cinco Ranch         2001      97,297    94.0    %   98.6   %    1,210,326    13.23    14.07      Kroger
Lantern Lane        1962      81,567    100.0   %   100.0  %    1,680,609    20.60    20.60      Fresh Market
                                                                                                 CVS/pharmacy,
Uptown Plaza -      2002      28,000    94.3    %   94.3   %    1,256,546    47.60    47.32      The Grotto
Houston                                                                                          (owned by
                                                                                                 Landry's)
Bakery Square       1996      34,614    97.0    %   97.0   %    954,636      28.44    28.50      Walgreens,
                                                                                                 Boston Market
                                                                                                 FedEx Office,
Woodlands Plaza     1997/2003 19,517    100.0   %   100.0  %    553,971      28.38    28.71      Freebirds
                                                                                                 World Burrito
Terrace Shops       2000      16,395    100.0   %   100.0  %    487,838      29.76    30.78      Starbucks
The Container       2011      25,083    100.0   %   100.0  %    425,323      16.96    17.86      The Container
Store^(6)                                                                                        Store
Sugar Land Plaza    1998/2001 16,750    100.0   %   100.0  %    408,188      24.37    23.45      Memorial
                                                                                                 Hermann
CVS/Pharmacy^(7)    2003      13,824    100.0   %   100.0  %    327,167      23.67    23.67      CVS/pharmacy
The Courtyard on    1994      13,597    29.4    %   29.4   %    260,845      65.26    58.06      Verizon
Post Oak
T.G.I.              1982      8,500     100.0   %   100.0  %    215,000      25.29    25.90      T.G.I.
Friday's^(6)                                                                                     Friday's
Golden              1992      12,000    100.0   %   100.0  %    210,450      17.54    17.54      Golden Corral
Corral^(6)(8)
Golden              1993      12,000    100.0   %   100.0  %    208,941      17.41    17.41      Golden Corral
Corral^(6)(8)
Jared The                                                                                        Jared The
Galleria of         2012      6,057     100.0   %   100.0  %    180,000      29.72    34.48      Galleria of
Jewelry^(7)                                                                                      Jewelry
Landry's            1995      13,497    100.0   %   100.0  %    155,677      11.53    12.18      Landry's
Seafood^(7)                                                                                      Seafood
Bank of             1994      4,251     100.0   %   100.0  %    129,275      30.41    28.78      Bank of
America^(7)                                                                                      America
Macaroni            1994      7,825     100.0   %   100.0  %    96,000       12.27    12.82      Macaroni
Grill^(6)                                                                                        Grill
T.G.I.              1994      6,543     100.0   %   100.0  %   96,000      14.67   15.43      T.G.I.
Friday's^(7)                                                                                     Friday's
Houston
Subtotal/Weighted             989,170   95.6    %   97.5   %  $ 21,485,557 $ 22.72 $  21.28
Average
                                                                                                 
Dallas, TX
                                                                                                 Bank of
Preston Royal       1956      107,914   87.2    %   91.8   %  $ 2,484,319  $ 26.40 $  27.18      America,
East                                                                                             Starbucks,
                                                                                                 FedEx Office
Preston Royal                                                                                    Tom Thumb,
West                1959      122,564   98.4    %   98.4   %    2,662,820    22.07    22.63      Barnes &
                                                                                                 Noble, Spec's
                                                                                                 Morton's
Uptown Plaza -      2006      33,840    89.0    %   89.0   %   1,279,235   42.49   46.74      (owned by
Dallas                                                                                           Landry's),
                                                                                                 Wells Fargo
Dallas
Subtotal/Weighted             264,318   92.6    %   94.5   %  $ 6,426,373  $ 26.25 $  27.34
Average
                                                                                                 
Atlanta, GA
Fountain Oaks       1988      160,598   79.3    %   79.3   %  $ 1,753,126  $ 13.77 $  13.86      Kroger
Alpharetta          1997      94,544    98.7    %   98.7   %    1,351,509    14.48    14.49      Publix
Commons
Brookwood Village   1941/2000 28,774    90.0    %   90.0   %    704,354      27.18    27.22      CVS/pharmacy,
                                                                                                 Subway
Smokey Bones^(7)    1998      6,867     100.0   %   100.0  %   106,787     15.55   15.55      Smokey Bones
Atlanta
Subtotal/Weighted             290,783   87.2    %   87.2   %  $ 3,915,776  $ 15.45 $  15.50
Average
                                                                                                 
Other
Southbank           1995      46,673    100.0   %   100.0  %  $ 1,787,848  $ 38.31 $  38.35      Hard Rock
                                                                                                 Café
500 Lamar           1998      12,795    100.0   %   100.0  %    429,856      33.60    31.35      Title Nine
                                                                                                 Sports
T.G.I.              2003      6,802     100.0   %   100.0  %    163,304      24.01    23.44      T.G.I.
Friday's^(7)(8)                                                                                  Friday's
Citibank^(7)        2005      4,439     100.0   %   100.0  %   160,000     36.04   36.04      Citibank
Other
Subtotal/Weighted             70,709    100.0   %   100.0  %  $ 2,541,008  $ 35.94 $  35.50
Average
                                                                                                 
Portfolio
Total/Weighted                1,614,980 93.8    %   95.2   %  $ 34,368,714 $ 22.69 $  21.96
Average(9)

_______________

(1)  Percent occupied is calculated as (i) GLA under commenced leases as of
      June 30, 2014, divided by (ii) total GLA, expressed as a percentage.
(2)   Percent leased is calculated as (i) GLA under signed leases as of June
      30, 2014, divided by (ii) total GLA, expressed as a percentage.
(3)   ABR is calculated by multiplying (i) monthly base rent as of June 30,
      2014, for leases that had commenced as of such date, by (ii) 12.
(4)   ABR per leased square foot is calculated by dividing (i) ABR, by (ii)
      GLA under commenced leases as of June 30, 2014.
      Average net effective ABR per leased square foot represents (i) the
      contractual base rent for commenced leases as of June 30, 2014,
(5)   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 June 30, 2014.
      These leases represent single-tenant fee simple properties in which we
(6)   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 6.8 years.
      These leases represent single-tenant ground leases in which we own and
      lease the land to the tenant. The tenant owns the building during the
(7)   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 3.6 years.
(8)   The tenants at these properties have rights of first refusal to purchase
      the property.
(9)   Percent occupied, excluding our redevelopment properties of Uptown Park
      and The Courtyard on Post Oak, was 94.6% as of June 30, 2014.

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                                                                                       
                                                                       Redevelopment   Expected     AmREIT                Anticipated    Anticipated
Property   Location  Current  Owned    Non-Owned  Opportunity    /              ROI         Projected  Costs    Construction  Stabilization
                       GLA       GLA       GLA                         Development     ^[2]         Costs       to Date   Completion     Date
                                                                       ^[1]                         ^[3]                                 ^[4]
                                                                                    
                                                       We anticipate
                                                       developing an
                                                       approximate
Uptown                                                 200-unit
Park -      Houston,                                   multi-family                    7 -          $75 - 85    $0.6
Baker       TX         12,200    272,550   N/A         tower with      R               10%          million     million   2017           2019
Site                                                   approximately
                                                       40,000 square
                                                       feet of
                                                       ground floor
                                                       retail
                                                                                                                                         
                                                       We anticipate
                                                       executing a
                                                       ground lease
                                                       with a
                                                       co-developer
                                                       who will own
Uptown                                                 the
Park -      Houston,                                   residential                     11 -         $15 - 20
Southeast   TX         -         20,000    581,000     and             D               13%          million     $ -       2017           2018
Corner                                                 hospitality
                                                       improvements
                                                       above our
                                                       retail that
                                                       will be owned
                                                       in a
                                                       condominium
                                                       interest
                                                                                                                                         
                                                       We anticipate
                                                       executing a
                                                       ground lease
                                                       with a
                                                       co-developer
                                                       who will own
The         Houston,                                   the                             19 -         $8 - 10     $0.1
Courtyard   TX         13,597    18,200    356,000     residential     R               21%          million     million   2017           2018
                                                       improvements
                                                       above our
                                                       retail that
                                                       will be owned
                                                       in a
                                                       condominium
                                                       interest
                                                                                                                                         
                                                       We anticipate
                                                       co-developing
                                                       a mixed use
                                                       project with
                                                       office and
                                                       retail. We
Inverness   Houston,   -         16,560    560,000     plan to         D               12 -         $7 - 8      $ -       2017           2018
Townhomes   TX                                         master lease                    14%          million
                                                       the retail
                                                       portion of
                                                       the project
                                                       from the
                                                       venture for
                                                       50 years
                                                                                                                                         
                                                       Kroger lease
                                                       option allows
                                                       expansion of
Fountain                                               space from
Oaks -      Atlanta,                                   58,000 square                                $6.5 -
Kroger      GA         160,598   190,598   N/A         feet of GLA     R               8.25%        7.5         $ -       2015           2015
Box                                                    to 88,000                                    million
                                                       square feet
                                                       of GLA along
                                                       with a fresh
                                                       20-year term
                                                                                                                                         
                                                       Development
                                                       of a retail
Woodlake                                               pad and
Square      Houston,   7,000     11,500    N/A         redevelopment   D/R             6 -          $1 - 1.5    $0.1      2014           2014
Pad Sites   TX                                         of an                           10%          million     million
                                                       existing
                                                       outparcel
                                                       building
                                                                       
                                                                                                         
                                                                                                    $112.5 -    $0.8
            Total      193,395  529,408  1,497,000                                   10%   ^[5]   132.0      million
                                                                                                    million

___________

      Redevelopment represents significant construction and refurbishment at
[1]  operating properties. Development represents initial construction,
      primarily from unimproved land.
      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
[2]   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.
      Amounts include construction costs, anticipated tenant improvements and
[3]   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]   Represents the weighted average expected return on investment for all
      properties.
      

Summary of Top 25 Tenants:                                   
                      
                                         Year to
                                         Date Base
                                         Rent
                           Year to       as a                       Percentage
                           Date          Percentage     Tenant      of
                                         of
Rank   Tenant Name     Base Rent   Portfolio    GLA       Total GLA
                                         Base Rent
1        Kroger            $             6.39%          203,724     12.61%
                           1,061,919
2        Landry's          625,893       3.77%          38,819      2.40%
3        CVS/pharmacy      611,119       3.68%          37,485      2.32%
4        H-E-B             554,868       3.34%          80,641      4.99%
5        Safeway           453,354       2.73%          89,809      5.56%
6        Publix            390,468       2.35%          65,146      4.03%
7        Walgreens         315,310       1.90%          30,240      1.87%
8        Bank of           256,559       1.54%          8,129       0.50%
         America
9        Hard Rock         248,412       1.50%          15,752      0.98%
         Cafe
10       Barnes &          243,750       1.47%          26,147      1.62%
         Noble
11       T.G.I.            235,376       1.42%          6,802       0.42%
         Friday's
12       The Container     223,994       1.35%          25,019      1.55%
         Store
13       Champps           209,696       1.26%          11,384      0.70%
         Americana
14       Golden Corral     208,867       1.26%          24,000      1.49%
15       Paesanos          203,292       1.22%          8,017       0.50%
16       Tasting Room      194,531       1.17%          8,966       0.56%
17       The County        185,873       1.12%          10,614      0.66%
         Line
18       Dougherty's       167,544       1.01%          12,093      0.75%
         Pharmacy
         Spec's Family
19       Partners,         144,284       0.87%          9,918       0.61%
         Ltd.
20       Verizon           134,250       0.81%          5,513       0.34%
         Wireless
         River Oaks
21       Imaging &         128,754       0.78%          10,750      0.67%
         Diagnostic,
         L.P.
22       Howl At The       126,726       0.76%          7,055       0.44%
         Moon Saloon
23       Potbelly          125,660       0.76%          5,458       0.34%
24       Buca Di Beppo     124,896       0.75%          7,573       0.47%
25       Chico's FAS,      118,954       0.72%          6,670       0.41%
         Inc
                                                                    

Retail Leasing Summary for Comparable Leases^(1):
                                                                           
                     For the three months            For the six months ended
                     ended
                     June 30,                        June 30,                         For the year ended December 31,
Expirations          2014         2013             2014          2013             2013          2012          2011
Number of              22             19               43              31               50              44              53
leases
GLA                    70,062         54,171           126,106         78,080           133,796         180,245         187,605
New
Leases^(1)
Number of              5              2                9               6                10              5               7
leases
GLA                    11,821         3,410            19,211          11,877           19,419          12,997          14,231
Expiring ABR
per square           $ 28.01        $ 27.25          $ 29.99         $ 24.67          $ 25.67         $ 27.22         $ 28.36
foot
Weighted
average
annual TIs           $ 0.19         $ 2.76           $ 0.30          $ 1.17           $ 1.35          $ -             $ 0.68
per square
foot -
expiring
New ABR per          $ 42.49        $ 28.47          $ 41.73         $ 31.99          $ 31.65         $ 34.84         $ 30.85
square foot
Weighted
average
annual TIs           $ 4.08         $ 1.17           $ 3.72          $ 2.10           $ 1.88          $ 3.09          $ 1.60
per square
foot - new
% Change               51.7   %       4.5    %         39.1    %       29.7   %         23.3    %       28.0    %       8.8     %
(Cash)
Renewals^(2)
Number of              14             15               28              24               36              30              38
leases
GLA                    34,798         48,090           76,837          67,097           94,572          115,501         143,324
Expiring ABR
per square           $ 30.22        $ 23.26          $ 26.45         $ 24.45          $ 26.27         $ 23.91         $ 24.92
foot
New ABR per          $ 32.69        $ 25.01          $ 28.68         $ 26.23          $ 28.40         $ 25.27         $ 25.74
square foot
% Change               8.2    %       7.5    %         8.4     %       7.3    %         8.1     %       5.7     %       3.3     %
(Cash)
Combined
Number of              19             17               37              30               46              35              45
leases
GLA                    46,619         51,500           96,048          78,974           113,991         128,498         157,555
Expiring ABR
per square           $ 29.66        $ 23.52          $ 27.16         $ 24.48          $ 26.17         $ 24.24         $ 25.23
foot
New ABR per          $ 35.17        $ 25.24          $ 31.29         $ 27.09          $ 28.94         $ 26.24         $ 26.20
square foot
% Change               18.6   %       7.3    %         15.2    %       10.5   %         10.6    %       8.2     %       3.8     %
(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.

                                                                                                       
Lease Expiration Table:
                                                                                                                 
           Anchor Tenants (>20,000 square feet)         Shop Space Tenants (≤20,000       Total
                                                        square feet)
           Expiring               % of GLA   ABR Per    Expiring    % of GLA   ABR Per    Expiring    % of GLA   ABR Per
Year       GLA        Tenant      Expiring   Square     GLA         Expiring  Square     GLA         Expiring   Square
                                             Foot^(1)                          Foot^(1)                          Foot^(1)
Vacant     -                      -          $  -       100,174     9.1   %    $  -       100,174     6.2   %    $  -
2014       -                      -             -       72,653      6.6   %       27.35   72,653      4.5   %       27.35
2015       26,147     Barnes &    5.1   %       18.64   147,742     13.4  %       29.59   173,889     10.8  %       27.95
                      Noble
2016       -                      -             -       161,072     14.6  %       28.74   161,072     10.0  %       28.74
2017       145,787    H-E-B,      28.5  %       12.97   94,194      8.5   %       28.00   239,981     14.9  %       18.87
                      Publix
2018       -                      -             -       145,899     13.2  %       26.36   145,899     9.0   %       26.36
2019       -                      -             -       94,871      8.6   %       27.26   94,871      5.9   %       27.26
2020       -                      -             -       48,518      4.4   %       29.91   48,518      3.0   %       29.91
2021       81,217     Kroger      15.9  %       12.83   28,945      2.6   %       28.63   110,162     6.8   %       16.98
                      The
2022       25,083     Container   4.9   %       16.96   61,440      5.6   %       28.33   86,523      5.4   %       25.03
                      Store
2023       122,507    Kroger      24.0  %       8.83    32,677      3.0   %       35.56   155,184     9.6   %       14.46
2024 +     110,459    Safeway     21.6  %       10.06   115,595     10.4  %       26.72   226,054     13.9  %       18.58
Total /
Weighted   511,200                              11.81   1,103,780                 28.23   1,614,980                 22.69
Avg

_____________

      ABR per square foot is calculated by multiplying (i) the monthly base
(1)  rent as of June 30, 2014, for leases expiring during the applicable
      period by (ii) 12 and then dividing the result by GLA for such leases.

                                                                                                      
Lease Distribution Table:
                                                                                                                
            Number     Percentage               Total                  Percentage                  Percentage   ABR Per
GLA Range   of         of           Total GLA   Occupied    Percent    of           ABR^(1)        of           Occupied
            Expiring   Leases                   GLA         Occupied   Occupied                    ABR          Square
            Leases                                                     GLA                                      Foot^(2)
                                                                                                                
2,500 or    210        60.2    %    326,807     291,363     89.2   %   19.2    %    $ 8,606,877    25.0    %    29.54
less
2,501 -     77         22.1    %    295,103     269,304     91.3   %   17.8    %      7,873,462    22.9    %    29.24
5,000
5,001 -     38         10.9    %    288,453     265,833     92.2   %   17.5    %      7,483,693    21.8    %    28.15
10,000
10,001 -    14         4.0     %    193,417     177,106     91.6   %   11.7    %      4,365,947    12.7    %    24.65
20,000
greater
than        10         2.8     %    511,200     511,200     100.0  %   33.8    %     6,038,735    17.6    %    11.81
20,000
Total       349        100.0   %    1,614,980   1,514,806   93.8   %   100.0   %    $ 34,368,714   100.0   %    22.69
portfolio

_____________

      ABR is calculated by multiplying (i) the monthly base rent as of June
(1)  30, 2014, for leases in the applicable GLA range that had commenced as
      of such date by (ii) 12.
      ABR per leased square foot is calculated by dividing (i) ABR for leases
(2)   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 54.9% and 35.1%, respectively of our
Investments in Advised Funds balance as of June 30, 2014, comprise greater
than 10% of the balance. The table below presents the NOI, debt and property
data for these two investments.

                                                  
                                   MacArthur Park    Shadow Creek
                                                     Ranch
Year acquired                        2013                    2009
Percent owned                        30.0       %            10.0            %
                                                                             
For the three months ended June
30, 2014:
                                                                             
Revenues                           $ 1,867           $       2,705
Expenses                            636                   875             
NOI                                $ 1,231           $       1,830
                                                                             
For the six months ended June
30, 2014:
                                                                             
Revenues                           $ 3,778           $       5,265
Expenses                            1,253                 1,626           
NOI                                $ 2,525           $       3,639
                                                                             
As of June 30, 2014:
                                                                             
Real estate at cost                $ 82,790          $       113,279
Mortgage obligation                $ 43,900          $       61,996
Debt maturity                        04/01/2023              03/01/2015
                                                                             
GLA                                  406,102                 613,109
Percent occupied                     86.3       %            97.7            %
Grocery anchor                     Kroger            H.E.B.
Other principal tenants            Michael's         Academy
                                   TJ Maxx           Burlington Coat Factory
                                   Ulta              Hobby Lobby
                                   Office Depot      Ashley Furniture
                                                                             

Reconciliation of income from Advised Funds to NOI from Advised Funds (in
thousands):

                                         Six months ended
                                         June 30, 2014
Income from Advised Funds                $           368
Depreciation of real estate assets                   611
Gain on sale of assets by JV                        (145           )
FFO from Advised Funds                               834
Acquisition costs                                   -              
Core FFO from Advised Funds                          834
Interest expense                                     474
Other GAAP and non-recurring adjustments            (72            )
NOI from Advised Funds                   $           1,236          


Definitions

ABR            Annualized base rent.
                
                Collectively, our varying minority ownership interests in four
                high net worth investment funds, one institutional joint
Advised Funds   venture with Goldman Sachs, one institutional joint venture
                with J.P. Morgan Investment Management and one joint venture
                with two of our high net worth investment funds, MIG III and
                MIG IV.
                
                FFO in accordance with NAREIT’s definition, adjusted to
                exclude items that management believes do not reflect our
                ongoing operations, such as acquisition expenses,
Core FFO        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.
                
                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
EBITDA          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.
                
                Funds from operations, as defined by NAREIT, which includes
                net income (loss) computed in accordance with GAAP, excluding
FFO             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.
                
                Net operating income, defined as operating revenues (rental
                income, tenant recovery income, percentage rent, excluding
                straight-line rental income and amortization of acquired
NOI             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:

<td class="bwpadl*Story too large*
                                                   
                           Three months ended June         Six months ended June 30,
                           30,
                           2014         2013            2014          2013
                                                                            
Net income                 $ 1,130         $ 981           $ 2,302          $ 9,377
Adjustments to
add/(deduct):
Amortization of
straight-line
rents and                    (190  )         (206  )         (491   )         (469   )
above/below-market
rents^(1)
Advisory services
income - related             (868  )         (872  )         (1,615 )         (1,715 )
party
Real estate fee              -               -               (100   )         -
income
Gain on sale of
real estate
acquired for
investment                   -               -               -                (7,696 )
Lease termination            (84   )         -               (84    )         -
income
Interest and other           (61   )         (154  )         (172   )         (268   )
income
Interest and other
income - related             (12   )         (53   )         (22    )         (109   )
party
Straight-line rent
bad debt                     (4    )         (55   )         3                (41    )
recoveries^(2)
General and                  2,005           2,069           4,113            4,030
administrative
Legal and                    316             258             695              506
professional
Real estate                  74
commissions

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