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  [TRUNCATED]  
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