AmREIT Reports Fourth Quarter and Year End Results, Announces 2014 Guidance, and Declares March 2014 Dividend

HOUSTON--(BUSINESS WIRE)--

AmREIT, Inc. AMRE (“AmREIT” or the “Company”), today announced financial results for the fourth quarter and year ended December 31, 2013, its 2014 guidance and declared dividends for the first quarter ended March 31, 2014.

Fourth Quarter and Year-End Highlights:

Financial Results

• Core Funds from Operations ("Core FFO") available to common stockholders for the fourth quarter of 2013 was $5.1 million, or $0.26 per share, compared to $3.9 million, or $0.24 per share for the comparable period in 2012. For the year ended December 31, 2013, Core FFO was $18.0 million, or $1.02 per share, compared to $15.0 million, or $1.11 per share for the comparable period in 2012. Weighted average shares outstanding in 2013 were 17.7 million, compared to 13.5 million in 2012.
• FFO available to common stockholders for the fourth quarter of 2013 was $7.4 million, or $0.38 per share, compared to $3.2 million, or $0.20 per share for the comparable period in 2012. For the year ended December 31, 2013, FFO was $20.4 million, or $1.15 per share, compared to $13.9 million, or $1.03 per share for the comparable twelve month period in 2012. Included in FFO for the three months ended December 31, 2013 was a $2.3 million gain from the sale of the build-to-suit CVS Pharmacy at Loop 610 & Ella in Houston. Included in FFO for the year ended December 31, 2013 is the aforementioned gain on the CVS project, a $799,000 gain from the sale of a non-core single tenant asset, $173,000 in acquisition costs related to the Woodlake Square acquisition in September 2013, a $279,000 one-time charge recorded in connection with our acquisition of the underlying land at Preston Royal Village in July 2013, $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture with Goldman Sachs in March 2013 and $126,000 in acquisition costs related to the Fountain Oaks acquisition in June 2013.
• Net income available to common stockholders for the fourth quarter of 2013 was $4.2 million, or $0.21 per share, compared to $734,000, or $0.04 per share, for the same period in 2012. For the year ended December 31, 2013, net income available to common stockholders was $14.8 million, or $0.83 per share, compared to $4.5 million, or $0.32 per share. Included in net income for the three months ended December 31, 2013 was a $2.3 million gain from the sale of the build-to-suit CVS at Loop 610 & Ella in Houston. Included in net income for the year ended December 31, 2013 is the aforementioned gain on the CVS project, a $799,000 gain from the sale of a non-core single tenant asset, $173,000 in acquisition costs related to the Woodlake Square acquisition in September 2013, a $279,000 one-time charge recorded in connection with our acquisition of the underlying land at Preston Royal Village in July 2013, $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture with Goldman Sachs in March 2013 and $126,000 in acquisition costs related to the Fountain Oaks acquisition in June 2013.

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

Portfolio Results

• During the third quarter of 2013, we began the process of terminating leases with or relocating tenants occupying a portion of our Uptown Park property which we refer to as the “Baker Site” and our 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 fourth quarter of 2013, excluding our redevelopment properties (Uptown Park – Baker Site and The Courtyard on Post Oak), same-store net operating income (“NOI”) increased 3.0% over the same period in the prior year. Including those two redevelopment properties, same-store NOI increased 0.4% over the same period in the prior year. For the year ended December 31, 2013, same-store NOI, excluding redevelopment properties, increased 3.1% and, including the two redevelopment properties, increased 1.3% over the same period in the prior year. While the same-store NOI in the short term has been negatively impacted by our redevelopments, we believe that the mid-term and long term benefits of re-development of these sites will provide outsized same-store NOI growth. For example, the anticipated ground lease at the Uptown Park – Baker Site, if executed, would represent a 200% increase over the in-place NOI generated by the existing 12,200 square feet of inline retail space.
• With the 2013 acquisitions of Fountain Oaks and Woodlake Square, which were 79% and 93% occupied respectively, portfolio occupancy as of December 31, 2013 was 94.2%, a decrease of approximately 250 basis points as compared to portfolio occupancy of 96.7% as of December 31, 2012. We have initiated vacancies at The Courtyard on Post Oak and at the Uptown Park – Baker Site in preparation for their anticipated redevelopments which has put pressure on our occupancy in the short term. Excluding these redevelopments, our portfolio occupancy was 95.1%. On a leased basis, which includes leases that have been executed but where rent has not yet commenced, the portfolio was 94.8% leased as of December 31, 2013. We anticipate rent commencement on these signed leases over the next 90 days.
• During the fourth quarter of 2013, AmREIT signed 11 leases for 37,890 square feet of gross leasable area, including both new and renewal leases. Of these, 8 leases for 26,909 square feet were renewals or replacements of expiring leases which were deemed to be comparable leases. Cash leasing spreads, which is the new leasing rate per square foot compared to the expiring leasing rate per square foot on comparable leases, increased 10.4%. On a GAAP basis, which includes the effects of straight-line rent, leasing spreads increased 12.8%. For the year ended December 31, 2013, AmREIT signed 61 leases for 149,696 square feet of gross leasable area, including both new and renewal leases. Of these, 46 leases, or 113,991 square feet, were comparable leases. Cash leasing spreads increased 10.6%. On a GAAP basis, leasing spreads increased 16.1%.

NOI and same store NOI are non-GAAP supplemental earnings measures that AmREIT considers meaningful in measuring its operating performance. Further explanation and a reconciliation of NOI and same store NOI to net income are attached to this press release.

Dividends

• AmREIT also announced today that the Company's Board of Directors has approved a regular quarterly cash dividend of $0.20 per share. The dividend will be paid on March 31, 2014 to all common stockholders of record at the close of business on March 21, 2014.

Acquisitions and Dispositions

• On November 12, 2013, AmREIT sold its recently completed build-to-suit CVS property at Loop 610 and Ella in Houston, Texas, and reported a gain on sale of approximately $2.3 million. AmREIT developed the property for approximately $5.2 million, financed through cash and its unsecured credit facility and sold the property at a 5.5% cap rate, or approximately $7.5 million net of expenses. Although not included in Core FFO, this activity is a key component of our business strategy and is a benefit of being a ‘local sharpshooter' within our core markets.
• On September 18, 2013, AmREIT completed the previously announced acquisition of Woodlake Square Shopping Center, a 156,888 square foot Randalls (Safeway parent company) and Walgreens-anchored shopping center in Houston Texas. Average household incomes within a one-mile radius of Woodlake Square are $69,595, and there are 82,692 households within a three-mile radius of the property. Daytime employment within a three-mile radius is 126,883. Woodlake Square was acquired from a joint venture, the partners of which were one of our Advised Funds and AEW Value Investors II, L.P., a value-added real estate fund managed by AEW Capital Management. The asset was 90% owned by AEW Capital Management, 6% by AmREIT Monthly Income & Growth Fund IV, LP., 3% by AmREIT Monthly Income & Growth Fund III, Ltd., and 1% by AmREIT. We managed the joint venture and the property. Woodlake Square was acquired for approximately $41.6 million, funded by a $23.0 million new first mortgage with a 4.3% fixed interest rate and a 10-year term, and the balance of $18.6 million was funded in cash.
• On July 17, 2013, AmREIT completed the acquisition of the underlying land of Preston Royal Village NEC. This acquisition resulted in termination of our ground lease that we acquired in December 2012 and provided us with complete ownership of this property. Average household incomes within a one-mile radius of Preston Royal Village are $279,562 and there are 42,163 households within a three-mile radius. The Preston Royal Village NEC land was purchased for approximately $15.0 million in cash.
• On June 25, 2013, AmREIT completed the acquisition of Fountain Oaks Shopping Center, a 160,600 square foot Kroger-anchored shopping center in the north Buckhead submarket of Atlanta, Georgia. Average household incomes within a one-mile radius of Fountain Oaks are $96,771, and there are 31,887 households within a three-mile radius of the property. Fountain Oaks was acquired for approximately $27.7 million, is unencumbered, and was funded with borrowings under AmREIT's unsecured revolving credit facility.
• On March 26, 2013, AmREIT entered into a joint venture agreement with Goldman Sachs pursuant to which AmREIT contributed equity in its MacArthur Park property to a single-purpose entity in exchange for a 30% interest in the joint venture, and Goldman Sachs contributed cash for a 70% interest in the joint venture. The joint venture entity concurrently purchased the contiguous property to the north known as MacArthur Park Phase I, excluding a Target store, for approximately $25.5 million and placed mortgage financing on the combined property of $43.9 million. Upon closing the transaction, AmREIT received net cash proceeds of approximately $35.6 million, which it used to repay borrowings under its unsecured revolving credit facility. AmREIT continues to manage and lease MacArthur Park on behalf of the joint venture and retains a right of first offer to acquire the project in the future, after expiration of a two-year lock-out period.

Equity Offering

• On June 21, 2013, AmREIT filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") registering the offer and sale, from time to time, of up to $350 million of securities, which was declared effective by the SEC on July 1, 2013.
• On July 19, 2013 AmREIT completed the public underwritten offering of 3,450,000 shares of common stock, including 450,000 shares sold pursuant to the exercise of the underwriter's over-allotment option, at a public offering price of $18.25 per share. The offering generated net proceeds of approximately $60 million, after deducting the underwriting discount and offering expenses. AmREIT used a portion of the net proceeds to repay borrowings under its unsecured revolving credit facility and to acquire the underlying land on our Preston Royal East property. AmREIT used a portion of the remaining proceeds to fund the cash portion of the acquisition of Woodlake Square.

2014 Full Year Guidance

• Full year and quarterly 2014 Core FFO and FFO guidance per share is as follows:

		Projected 2014 Range
		High			Low
1Q2014		$0	.22		$0	.21
2Q2014		0	.24		0	.23
3Q2014		0	.26		0	.25
4Q2014		0	.34		0	.33
Full Year Core FFO		$1	.06		$1	.02
1Q2014		$0	.22		$0	.21
2Q2014		0	.23		0	.22
3Q2014		0	.24		0	.23
4Q2014		0	.33		0	.32
Full Year FFO		$1	.02		$0	.98

• Our 2014 Core FFO and FFO guidance is based on the following assumptions:
  • Same-Store NOI growth target of 2.5% - 3.0%;
  • Average portfolio occupancy of 94.5% - 95.5%;
  • Portfolio growth through acquisitions totaling $50 million;
  • Off balance sheet growth through joint ventures totaling $70 million;
  • Uptown Park Phase I redevelopment:
    • Termination of Baker Furniture lease in September 2014, annual NOI of $200,000
    • Multi-family ground lease of $850,000 annually, commencing in October 2014
  • Disposition of 3-4 single tenant properties, targeted for the second half of the year totaling $14 million to $15 million in proceeds;
  • Recurring Advised Fund real estate fee income of $2.3 million (asset management and property management fees);
  • Transactional Advised Fund real estate fee income of $600,000 (leasing commissions, development and brokerage commissions);
  • Interest income on notes receivable of $125,000;
  • Annual G&A run rate of $8.8 million

Preliminary 2015 Full Year Guidance

Our 2015 preliminary Core FFO and FFO guidance per share is as follows:

		Preliminary 2015 Range
		High			Low
Full Year Core FFO		$1	.13		$1	.10
Full Year FFO		$1	.10		$1	.07

“As we close out 2013, our Irreplaceable Corner^TM portfolio and our experienced management team delivered another solid quarter, and we are well positioned for success in 2014,” said Kerr Taylor, Chairman & Chief Executive Officer of AmREIT. “We are pleased to announce our continued progress towards the groundbreaking of our first redevelopment phase at Uptown Park. Further, we have released on our website the master plan and a brief redevelopment video, which showcase the estimated $1.2 Billion of future redevelopment opportunities at Uptown Park.”

Conference Call

AmREIT will hold its quarterly conference call to discuss the results of its year end and fourth quarter of 2013 on Wednesday, February 19, 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 1-888-317-6016 approximately 10 minutes before the scheduled start time. The conference call will be recorded and a replay of the call will be available via webcast shortly after the call concludes.

The conference call will also be webcast live at www.amreit.com and can be accessed under the Investors tab of the Company's website. A telephonic replay of the conference call will be available for 14 days following the conference call. To access the telephonic replay of the conference call, dial 1-877-344-7529 and enter passcode 10039598.

Supplemental Financial Information

Further details regarding AmREIT's results of operations, properties, and tenants are attached to this press release and can be accessed at the Company's web site at www.amreit.com.

Non-GAAP Financial Disclosure

This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REIT's performance. AmREIT's definitions and calculations of non-GAAP financial measures may differ from those used by other equity REITs, and therefore may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating results, or to net cash provided by operating activities as a measure of our liquidity.

Funds From Operations (FFO)

AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. FFO is computed 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 uses historical cost accounting is insufficient by itself.

Additionally, AmREIT considers Core FFO, which adjusts FFO for items that do not reflect ongoing operations, such as acquisition expenses, non-recurring intangible asset write-offs and recoveries, expensed issuance costs and gains on the sale of real estate held for resale, to be a meaningful performance measurement. The computation of FFO in accordance with NAREIT's definition includes certain items such as acquisition costs, issuance costs, non-recurring asset write-offs and recoveries and gains on sale of real estate held for resale that management believes are not indicative of AmREIT's ongoing results and therefore affect the comparability of our period-over-period performance with the performances of similar REITs. Accordingly, management believes that it is helpful to investors to adjust FFO for such items. There can be no assurance that FFO or Core FFO presented by AmREIT is comparable to similarly titled measures of other REITs. FFO and Core FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.

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

		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 affiliates		0.08		0.08
FFO available to stockholders		$ 1.02		$ 0.98
Acquisition costs		0.04		0.04
Core FFO available to stockholders		$1.06		$1.02

Net Operating Income (NOI)

AmREIT believes that NOI is a useful measure of its operating performance. AmREIT defines NOI as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense). Other REITs may use different methodologies for calculating NOI, and accordingly, AmREIT's NOI may not be comparable to other REITs.

AmREIT believes that reporting NOI provides an operating perspective not immediately apparent from GAAP operating income, GAAP net income, FFO or Core FFO. AmREIT uses NOI to evaluate its performance on a property-by-property basis because NOI allows it to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on its operating results. However, NOI should only be used as a supplemental measure of AmREIT's financial performance.

About AmREIT

AmREIT believes it has one of the highest quality grocery and drugstore anchored retail portfolios in the REIT sector. AmREIT's 29 year-old established platform has localized acquisition, operation and redevelopment expertise in the most densely populated and affluent submarkets of five of the top markets in the U.S.: Houston, Dallas, San Antonio, Austin and Atlanta. Texas is one of the best performing economies in the country and 90.5% of AmREIT's rental income for the year ended December 31, 2013, was generated by its properties located in this market. AmREIT's management team has in-depth knowledge and extensive relationship advantages within its markets. AmREIT's portfolio was 94.2% occupied as of December 31, 2013, and its top five tenants include Kroger, Landry's, CVS/Pharmacy, H-E-B and Publix. AmREIT also has access to an acquisition pipeline through its Advised Funds, which include value add joint ventures with leading institutional investors who partner with the company as local experts. AmREIT's common stock is traded on the New York Stock Exchange under the symbol “AMRE.” For more information, please visit www.amreit.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including statements related to full year 2014 Core FFO and FFO financial projections stated herein. These forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases, which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect AmREIT's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, AmREIT disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact AmREIT's future results, performance or transactions, see the section entitled "Risk Factors" in AmREIT's final prospectus supplement dated July 16, 2013 filed with the Securities and Exchange Commission on July 16, 2013, and other risks described in documents subsequently filed by AmREIT from time to time with the Securities and Exchange Commission.

Investor Contact

For more information, call Chad Braun, Chief Operating Officer and Chief Financial Officer of AmREIT, at (713) 850-1400. AmREIT is online at www.amreit.com.

AmREIT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands except share data)
		December 31, 2013				December 31, 2012
ASSETS
Real estate investments at cost:
Land		$	181,749			$	147,460
Buildings			224,472				222,679
Tenant improvements			14,992				17,386
			421,213				387,525
Less accumulated depreciation and amortization			(37,356	)			(39,820	)
			383,857				347,705
Acquired lease intangibles, net			15,849				15,976
Investments in Advised Funds			15,689				7,953
Net real estate investments			415,395				371,634
Cash and cash equivalents			14,297				2,992
Tenant and accounts receivable, net			6,467				5,566
Accounts receivable - related party, net			693				821
Notes receivable, net			4,333				2,731
Notes receivable - related party, net			689				6,748
Deferred costs, net			3,214				3,696
Other assets			1,493				3,206
TOTAL ASSETS		$	446,581			$	397,394
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable		$	199,851			$	218,579
Accounts payable and other liabilities			11,582				9,593
Acquired below-market lease intangibles, net			7,881				3,507
TOTAL LIABILITIES			219,314				231,679
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued			-				-
Class A common stock, $0.01 par value, 0 and 100,000,000 shares authorized as of December 31, 2013 and 2012, 0 and 11,657,563 shares issued and outstanding as of December 31, 2013, and 2012.			-				117
Common stock, $0.01 par value, 1,000,000,000 and 900,000,000 shares authorized as of December 31, 2013 and 2012, 19,628,037 and 4,465,725 shares issued and outstanding as of December 31, 2013 and 2012.			196				45
Capital in excess of par value			306,423				245,403
Accumulated distributions in excess of earnings			(79,352	)			(79,850	)
TOTAL STOCKHOLDERS' EQUITY			227,267				165,715
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	446,581			$	397,394

AmREIT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data)
		Three months ended December 31,								Year ended December 31,
		2013				2012				2013				2012
Revenues:
Rental income from operating leases		$	12,085			$	10,425			$	43,536			$	37,251
Advisory services income - related party			877				897				3,661				3,870
Total revenues			12,962				11,322				47,197				41,121
Expenses:
General and administrative			2,111				1,937				8,302				6,773
Property expense			3,427				3,154				12,564				10,067
Legal and professional			308				242				1,104				911
Real estate commissions			38				119				292				387
Acquisition costs			2				687				299				687
Depreciation and amortization			3,023				2,316				11,945				8,861
Impairment recovery - notes receivable			-				-				-				(443	)
Total expenses			8,909				8,455				34,506				27,243
Operating income			4,053				2,867				12,691				13,878
Other income (expense):
Gain on sale of real estate acquired for investment			-				-				7,696				-
Interest and other income			158				123				609				485
Interest and other income - related party			7				69				187				462
Income (loss) from Advised Funds			166				(110	)			99				(238	)
State income taxes			(1	)			19				(30	)			(2	)
Interest expense			(2,508	)			(2,258	)			(9,603	)			(10,250	)
Income from continuing operations			1,875				710				11,649				4,335
Income from discontinued operations, net of taxes			12				24				81				125
Gain on sale of real estate acquired for resale, net of taxes			2,290				-				3,089				-
Income from discontinued operations			2,302				24				3,170				125
Net income		$	4,177			$	734			$	14,819			$	4,460
Net income per share of common stock - basic and diluted
Income before discontinued operations		$	0.09			$	0.04			$	0.65			$	0.31
Income from discontinued operations			0.12				0.00				0.18				0.01
Net income		$	0.21			$	0.04			$	0.83			$	0.32
Weighted average shares of common stock used to compute net income per share, basic and diluted			19,068				15,580				17,169				13,120
Distributions per share of common stock		$	0.20			$	0.20			$	0.80			$	0.80

Summary of Operating Results (in thousands except per share data):
		Three months ended December 31,								Year ended December 31,
Funds from operations ("FFO")		2013				2012				2013				2012
Net income		$	4,177			$	734			$	14,819			$	4,460
Add:
Depreciation of real estate assets - from operations			3,015				2,304				11,897				8,809
Depreciation of real estate assets - from discontinued operations			-				5				14				23
Depreciation of real estate assets for nonconsolidated affiliates			198				156				1,316				622
Less:
Gain on sale of real estate acquired for investment			-				-				(7,696	)			-
Total FFO available to stockholders		$	7,390			$	3,199			$	20,350			$	13,914
Total FFO per share		$	0.38			$	0.20			$	1.15			$	1.03
Core funds from operations ("Core FFO")
Total FFO available to stockholders		$	7,390			$	3,199			$	20,350			$	13,914
Add:
Acquisition costs			2				687				299				687
Acquisition costs of nonconsolidated affiliates			-				-				164				-
Write off of below market ground lease			-				-				279				-
Write off of deferred financing costs			-				-				-				362
Less:
Gain on sale of real estate acquired for resale			(2,290	)			-				(3,089	)			-
Total Core FFO available to stockholders		$	5,102			$	3,886			$	18,003			$	14,963
Total Core FFO per share		$	0.26			$	0.24			$	1.02			$	1.11
Adjusted funds from operations ("AFFO")
Total Core FFO available to stockholders		$	5,102			$	3,886			$	18,003			$	14,963
Add:
Depreciation of non-real estate assets			8				12				48				52
Amortization of deferred financing costs			104				96				403				384
Stock-based compensation			293				258				1,211				813
Bad debt expense related to straight-line rent			-				7				-				-
Less:
Straight-line rent and above/below market rent			(288	)			(153	)			(933	)			(424	)
Bad debt recoveries related to straight-line rent			-				-				(164	)			(90	)
Amortization of above-market debt			(27	)			(30	)			(112	)			(122	)
Impairment recoveries - notes receivable			-				-				-				(443	)
Maintenance capital expenditures			(61	)			(14	)			(139	)			(121	)
Straight-line rent and above/below market rent - discontinued operations			-				(4	)			(7	)			(6	)
Total AFFO available to stockholders		$	5,131			$	4,058			$	18,310			$	15,006
Total AFFO per share		$	0.26			$	0.25			$	1.03			$	1.11
Weighted average shares outstanding(1)			19,628				16,123				17,725				13,479
Dividends
Regular common dividends per share		$	0.20			$	0.20			$	0.80			$	0.80
Payout ratio - Core FFO			76.9	%			83.3	%			78.4	%			72.1	%

_____________

(1)

Weighted average shares outstanding reflects the weighted average of all shares of common stock outstanding during the period including our non-vested shares. Weighted average shares of common stock outstanding used to compute net income per share under GAAP pursuant to the “two class method” includes only vested shares of common stock. Our reconciliation of weighted average shares used to compute net income per share, basic and diluted, on our consolidated statements of operations to weighted average shares used to compute our FFO per share metrics above is as follows:

		Three months ended December 31,				Year ended December 31,
		2013		2012		2013		2012
Weighted average shares used to compute net income per share, basic and diluted		19,068		15,580		17,169		13,120
Weighted average shares of restricted common stock outstanding		560		543		556		359
Weighted average shares outstanding		19,628		16,123		17,725		13,479

Same Store Property Analysis (in thousands except for number of properties, percentages and per share data):
		Three months ended December 31,
		2013				2012				Change $				Change%
Same store properties (26 properties)
Rental income (1)		$	4,351			$	4,216			$	135			3.2		%
Recovery income (1)			1,306				1,498				(192	)		(12.8	)	%
Percentage rent (1)			203				193				10			5.2		%
Less:
Property expenses			1,392				1,569				177			11.3		%
Same store NOI, excluding redevelopment properties			4,468				4,338				130			3.0		%
Same store occupancy, excluding redevelopment properties, at end of period(2)			98.4	%			98.6	%			n/a			(0.2	)	%
Redevelopment properties (2 properties)
Rental income (1)		$	1,480			$	1,532			$	(52	)		(3.4	)	%
Recovery income (1)			350				1,166				(816	)		(70.0	)
Percentage rent (1)			173				183				(10	)		(5.5	)	%
Less:
Property expenses			398				1,168				770			65.9		%
Redevelopment properties NOI			1,605				1,713				(108	)		(6.3	)	%
Redevelopment properties occupancy at end of period(2)			87.6	%			92.0	%			n/a			(4.4	)	%
Same Store NOI, including redevelopment properties			6,073				6,051				22			0.4		%
Non-same store properties (4 properties)
Rental income (1)			2,346				1,099				1,247			113.5		%
Recovery income (1)			1,445				264				1,181			*
Percentage rent (1)			144				120				24			20.0		%
Less:
Property expenses			1,637				410				(1,227	)		*
Non-same store net operating income			2,298				1,073				1,225			114.2		%
Non-same store occupancy at end of period(2)			90.1	%			95.1	%			n/a			(5.0	)	%
Total net operating income			8,371				7,124				1,247			17.5		%
Other revenues			1,329				1,243				86			6.9		%
Less other expenses			7,825				7,657				(168	)		(2.2	)	%
Income (loss) from continuing operations			1,875				710				1,165			164.1		%
Income from discontinued operations			2,302				24				2,278			*
Net income		$	4,177			$	734			$	242			33.0		%

_____________

(1)	Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the three months ended December 31, 2013 and 2012, rental income from operating leases was $12,085 and $10,425, respectively.
(2)	Percent occupied is calculated as (i) GLA under commenced leases as of December 31, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage.
*	Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful.

Same Store Property Analysis, continued (in thousands except for number of properties, percentages and per share data):
		Year ended December 31,
		2013				2012				Change $				Change%
Same store properties (26 properties)
Rental income (1)		$	17,220			$	16,884			$	336			2.0		%
Recovery income (1)			5,404				5,104				300			5.9		%
Percentage rent (1)			296				293				3			1.0		%
Less:
Property expenses			5,421				5,315				(106	)		(2.0	)	%
Same store NOI, excluding redevelopment properties			17,499				16,966				533			3.1		%
Same store occupancy, excluding redevelopment
properties, at end of period(2)			98.4	%			98.6	%			n/a			(0.2	)	%
Redevelopment properties (2 properties)
Rental income (1)		$	5,853			$	6,044			$	(191	)		(3.2	)	%
Recovery income (1)			2,472				3,176				(704	)		(22.2	)
Percentage rent (1)			220				218				2			0.9		%
Less:
Property expenses			2,683				3,338				655			19.6		%
Redevelopment properties NOI			5,862				6,100				(238	)		(3.9	)	%
Redevelopment properties occupancy at end of period(2)			87.6	%			92.0	%			n/a			(4.4	)	%
Same Store NOI, including redevelopment properties			23,361				23,066				295			1.3		%
Non-same store properties (5 properties)(3)
Rental income (1)			7,562				3,817				3,745			98.1		%
Recovery income (1)			3,371				1,170				2,201			188.1		%
Percentage rent (1)			205				120				85			70.8		%
Less:
Property expenses			4,345				1,504				(2,841	)		(188.9	)	%
Non-same store net operating income			6,793				3,603				3,190			88.5		%
Non-same store occupancy at end of period(2)			90.1	%			95.1	%			n/a			(5.0	)	%
Total net operating income			30,154				26,669				3,485			13.1		%
Other revenues			13,086				5,242				7,844			149.6		%
Less other expenses			31,591				27,576				(4,015	)		(14.6	)	%
Income (loss) from continuing operations			11,649				4,335				7,314			168.7		%
Income from discontinued operations			3,170				125				3,045			*
Net income		$	14,819			$	4,460			$	242			5.4		%

_____________

(1)	Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the year ended December 31, 2013 and 2012, rental income from operating leases was $43,536 and $37,251, respectively.
(2)	Percent occupied is calculated as (i) GLA under commenced leases as of December 31, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage.
(3)	Included in non-same store properties are the results of operations from the MacArthur Park property prior to its contribution into the MacArthur Park Joint Venture. Our continuing involvement in the operations of the property precludes it from being reported as a discontinued operation.
*	Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful.

Summary of Capital Expenditures (in thousands):
		Three months ended December 31,						Year ended December 31,
		2013			2012			2013			2012
Non-maintenance capital expenditures:
Tenant improvements and leasing commissions		$	370		$	540		$	1,822		$	3,115
Development, redevelopment and expansion			909			112			2,531			591
Total non-maintenance capital expenditures			1,279			652			4,353			3,706
Maintenance capital expenditures			61			14			139			121
Total capital expenditures		$	1,340		$	666		$	4,492		$	3,827

Rental Income from Operating Leases (in thousands):
		Three months ended December 31,						Year ended December 31,
		2013			2012			2013			2012
Base minimum rent		$	8,177		$	6,847		$	30,635		$	26,745
Straight-line rent adjustments			145			110			479			228
Amortization of above/below market rent			142			47			454			197
Percentage rent			520			496			721			631
Recovery income			3,101			2,925			11,247			9,450
Rental income from operating leases		$	12,085		$	10,425		$	43,536		$	37,251

Advisory Services Income – Related Party (in thousands):
		Three months ended December 31,						Year ended December 31,
		2013			2012			2013			2012
Leasing commission income		$	98		$	284		$	689		$	918
Brokerage commission income			127			31			160			322
Property management fee income			406			344			1,628			1,261
Development fee income			49			16			330			504
Asset management fee income			156			156			622			622
Construction management fee income			41			66			232			243
Advisory services income - related party		$	877		$	897		$	3,661		$	3,870
Interest and other income - related party		$	7		$	69		$	187		$	462
Reimbursements of administrative costs		$	255		$	214		$	881		$	855

Capitalization Data (in thousands, except per share and percent data):
		December 31, 2013				December 31, 2012
Equity capitalization -
Common shares outstanding			19,628				16,123
NYSE closing price(1)		$	16.80			$	17.15
Total equity capitalization		$	329,750			$	276,509
Debt capitalization -
Variable rate line of credit		$	-			$	33,500
Fixed rate mortgage loans			199,851				185,079
Total debt capitalization		$	199,851			$	218,579
Total capitalization		$	529,601			$	495,088
Debt statistics -
Total debt to total capitalization			37.7	%			44.1	%
Ratio of EBITDA to combined fixed charges(2)			3.56		(3)		2.25

_____________

(1)	Represents the last reported price per share of our common stock on the New York Stock Exchange on the applicable date.
(2)	Fixed charges consist of interest expense and scheduled principal payments on borrowed funds (including capitalized interest, but excluding amortization of debt premium). Both EBITDA and fixed charges are calculated for the year ended December 31, 2013 and 2012.
(3)	EBITDA includes gains of $10.8 million on the sale of real estate. Excluding these gains, the ratio of EBITDA to combined fixed charges is 2.56.

Outstanding Debt and Terms:
AmREIT Debt Information (in thousands)
Description		Amount Outstanding 12/31/13			Interest Rate			Annual Debt Service			Maturity Date		% of total			Weighted average rate maturing
Property Mortgages:
500 Lamar		$	1,536		6.00	%		$	92		2/1/2015
Uptown Park			49,000		5.37	%			2,631		6/1/2015
2015 Maturities			50,536										25.31	%		5.39	%
Plaza in the Park			23,250		3.45	%			802		1/1/2016
Market at Lake Houston			15,675		5.75	%			901		1/1/2016
Cinco Ranch			9,750		3.45	%			336		1/1/2016
Southbank - Riverwalk			20,000		5.91	%			1,182		6/1/2016
2016 Maturities			68,675										34.40	%		4.69	%
Bakery Square			1,594		8.00	%			128		2/10/2017
2017 Maturities			1,594										0.80	%		8.00	%
Alpharetta Commons			12,019		4.54	%			546		8/1/2018
2018 Maturities			12,019										6.02	%		4.54	%
Preston Royal Northwest			22,968		3.21	%			737		1/1/2020
2020 Maturities			22,968										11.50	%		3.21	%
Brookwood Village			7,171		5.40	%			387		2/10/2022
Uptown Plaza - Dallas			13,683		4.25	%			582		8/10/2022
2022 Maturities			20,854										10.45	%		4.65	%
Woodlake Square			23,000		4.30	%			989		10/1/2023
2023 Maturities			23,000										11.52	%		4.30	%
Corporate debt:
$75.0 million Facility(1)			-		(1)			$	263		8/1/2015		0.00	%		(1)
Total Maturities(2)		$	199,646
Fixed-rate debt:
Weighted average fixed rate					4.67	%
Weighted average years to maturity					4.1

___________

(1)	The $75.0 million Facility bears interest at LIBOR plus a margin of 205 basis points to 275 basis points, depending on our leverage, and carries a fee equal to 0.35% of the unused portion of the total amount available under the facility. Annual debt service assumes the amount outstanding and interest rates as of December 31, 2013, remain constant.
(2)	Total maturities above are $205 less than total debt as reported in our consolidated balance sheets as of December 31, 2013, due to the premium recorded on above-market debt assumed in conjunction with certain of our property acquisitions.

Interest Expense Detail (in thousands):
		Three months ended December 31,								Year ended December 31,
		2013				2012				2013				2012
Fixed-rate debt interest expense		$	2,364			$	2,080			$	8,787			$	8,949
Variable-rate debt interest expense			-				42				304				574
$75 million Facility unused fee			67				60				221				103
Amortization of deferred loan costs			104				106				403				362
Write off of deferred financing costs			-				-				-				384
Amortization of above market debt			(27	)			(30	)			(112	)			(122	)
Total interest expense		$	2,508			$	2,258			$	9,603			$	10,250

Wholly-Owned Property and Tenant Information:
Property		Property Location		Year Built / Renovated		GLA		Percent Occupied(1)				Percent Leased(2)			ABR(3)			ABR per Occupied Square Foot(4)			Average Net Effective ABR per Occupied Square Foot(5)			Key Tenants
Neighborhood and Community Shopping Centers
Uptown Park		Houston, TX		1999/2005		169,112		92.2	%	(9)		92.2	%		$	5,645,574		$	36.19		$	35.64		The Tasting Room, McCormick & Schmicks (owned by Landry's)
Plaza in the Park		Houston, TX		1999/2009		144,054		98.6	%			100.0	%			2,825,066			19.89			19.81		Kroger
Preston Royal East		Dallas, TX		1956		107,914		93.4	%			93.4	%			2,615,087			25.95			26.85		Bank of America, Starbucks, FedEx Office
Preston Royal West		Dallas, TX		1959		122,564		99.0	%			99.0	%			2,492,303			20.54			22.57		Tom Thumb, Barnes & Noble, Spec's
Woodlake Square		Houston, TX		1970/2011		156,888		92.9	%			97.3	%			2,479,969			17.02			17.31		Randalls, Walgreens, Jos. A. Bank, Five Guys
Fountain Oaks		Atlanta, GA		1988		160,598		78.6	%			78.6	%			1,669,090			13.23			15.45		Kroger
Southbank		San Antonio, TX		1995		46,673		100.0	%			100.0	%			1,780,793			38.15			38.35		Hard Rock Café
The Market at Lake Houston		Houston, TX		2000		101,799		100.0	%			100.0	%			1,623,821			15.95			16.00		H-E-B, Five Guys
Uptown Plaza - Dallas		Dallas, TX		2006		33,840		93.4	%			93.4	%			1,317,683			41.69			44.06		Morton's (owned by Landry's), Wells Fargo
Alpharetta Commons		Atlanta, GA		1997		94,544		98.7	%			98.7	%			1,341,315			14.37			14.49		Publix
Cinco Ranch		Houston, TX		2001		97,297		100.0	%			100.0	%			1,326,296			13.63			13.68		Kroger
Uptown Plaza - Houston		Houston, TX		2002		28,000		100.0	%			100.0	%			1,315,746			46.99			46.10		CVS/pharmacy, The Grotto (owned by Landry's)
Bakery Square		Houston, TX		1996		34,614		97.0	%			97.0	%			952,886			28.39			29.62		Walgreens, Boston Market
Brookwood Village		Atlanta, GA		1941/2000		28,774		90.0	%			90.0	%			655,649			25.30			26.27		CVS/pharmacy, Subway
The Courtyard on Post Oak		Houston, TX		1994		13,597		29.5	%	(9)		29.5	%			260,845			65.00			61.41		Verizon
Woodlands Plaza		Houston, TX		1997/2003		19,517		100.0	%			100.0	%			464,431			23.80			28.98		FedEx Office, Freebirds World Burrito
Terrace Shops		Houston, TX		2000		16,395		89.5	%			89.5	%			441,182			30.08			30.95		Starbucks
Sugarland Plaza		Houston, TX		1998/2001		16,750		100.0	%			100.0	%			408,188			24.37			23.45		Memorial Hermann
500 Lamar		Austin, TX		1998		12,795		87.0	%			87.0	%			363,033			32.61			37.68		Title Nine Sports
Neighborhood and Community Shopping Centers Subtotal/Weighted Average						1,405,725		93.6	%			94.3	%		$	29,978,956		$	22.78		$	23.42
Single Tenant (Ground Leases)(6)
CVS/Pharmacy		Houston, TX		2003		13,824		100.0	%			100.0	%		$	327,167		$	23.67		$	23.67		CVS/pharmacy
Jared The Galleria of Jewelry		Houston, TX		2012		6,057		100.0	%			100.0	%			180,000			29.72			34.48		Jared The Galleria of Jewelery
Citibank		San Antonio, TX		2005		4,439		100.0	%			100.0	%			160,000			36.04			36.04		Citibank
Landry's Seafood		Houston, TX		1995		13,497		100.0	%			100.0	%			155,677			11.53			12.18		Landry's Seafood
T.G.I. Friday's(7)		Hanover, MD		2003		6,802		100.0	%			100.0	%			163,304			24.01			23.44		T.G.I. Friday's
Bank of America		Houston, TX		1994		4,251		100.0	%			100.0	%			129,275			30.41			28.78		Bank of America
Macaroni Grill		Houston, TX		1994		7,825		100.0	%			100.0	%			96,000			12.27			12.05		Macaroni Grill
T.G.I. Friday's		Houston, TX		1994		6,543		100.0	%			100.0	%			96,000			14.67			14.41		T.G.I. Friday's
Smokey Bones		Atlanta, GA		1998		6,867		100.0	%			100.0	%			94,922			13.82			13.82		Smokey Bones
Single Tenant (Ground Leases) Subtotal/Weighted Average						70,105		100.0	%			100.0	%		$	1,402,345		$	20.00		$	20.34
Single Tenant (Fee Simple)(8)
The Container Store		Houston, TX		2011		25,083		100.0	%			100.0	%		$	425,323		$	16.96		$	17.86		The Container Store
T.G.I. Friday's		Houston, TX		1982		8,500		100.0	%			100.0	%			215,000			25.29			25.90		T.G.I. Friday's
Golden Corral(7)		Houston, TX		1992		12,000		100.0	%			100.0	%			210,450			17.54			17.54		Golden Corral
Golden Corral(7)		Houston, TX		1993		12,000		100.0	%			100.0	%			208,941			17.41			17.41		Golden Corral
Single Tenant (Fee Simple) Subtotal/Weighted Average						57,583		100.0	%			100.0	%		$	1,059,714		$	18.40		$	18.89
Portfolio Total/Weighted Average						1,533,413		94.2	%	(9)		94.8	%		$	32,441,015		$	22.47		$	23.09

_____________

(1)	Percent occupied is calculated as (i) GLA under commenced leases as of December 31, 2013, divided by (ii) total GLA, expressed as a percentage.
(2)	Percent leased is calculated as (i) GLA under signed leases as of December 31, 2013, divided by (ii) total GLA, expressed as a percentage.
(3)	ABR is calculated by multiplying (i) monthly base rent as of December 31, 2013, 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 December 31, 2013.
(5)	Average net effective ABR per leased square foot represents (i) the contractual base rent for commenced leases as of December 31, 2013, calculated on a straight line basis to amortize free rent periods, abatements and contractual rent increases, but without subtracting tenant improvement allowances and leasing commissions, divided by (ii) GLA under commenced leases as of December 31, 2013.
(6)	For single-tenant ground leases, we own and lease the land to the tenant. The tenant owns the building during the term of the lease and is responsible for all expenses relating to the property. Upon expiration or termination of the lease, ownership of the building will revert to us as owner of the land. The weighted average remaining term of our ground leases is 7.0 years.
(7)	The tenants at these properties have rights of first refusal to purchase the property.
(8)	For single-tenant fee simple properties, we own the land and the building, and the tenant is responsible for all expenses relating to the property. The weighted average remaining term of our fee simple leases is 6.0 years.
(9)	Percent occupied, excluding our redevelopment properties of Uptown Park and The Courtyard on Post Oak, was 95.1% as of December 31, 2013.

Redevelopment Table:

There is no guaranty that we will ultimately complete any or all of these opportunities, that the expected return on investment or projected costs will be the amounts shown or that stabilization will occur as anticipated. Such amounts and dates represent management's best estimate, which is based on current information and may change over time.

						Revised
Property		Location		Current GLA		Owned GLA		Non-Owned GLA		Opportunity		Redevelopment / Development [1]		Expected ROI [2]		AmREIT Projected Costs [3]		Costs to Date		Anticipated Construction Completion		Anticipated Stabilization Date [4]
Uptown Park - Baker Site		Houston, TX		12,200		30,000		360,000		We anticipate executing a ground lease with an experienced luxury multi-family developer who will co-develop and own the multi-family improvements. We will own the retail improvements in a condominium interest.		R		8 - 12%		$10-15 million		$0.4 million		2016		2017
The Courtyard		Houston, TX		13,597		15,000		480,000		Similar to the Uptown Park opportunity, we anticipate executing a ground lease with a co-developer who will own the improvements above our retail which we would own in a condominium interest.		R		8 - 12%		$5-10 million		$0.1 million		2016		2017
Fountain Oaks - Kroger Box		Atlanta, GA		160,598		190,598		N/A		Kroger lease option allows expansion of space from 58,000 square feet of GLA to 88,000 square feet of GLA along with a fresh 20-year lease term.		R		8.25%		$7.5 million		$ -		2015		2015
Woodlake Square Pad Sites		Houston, TX		7,000		11,500		N/A		Development of a retail pad and redevelopment of an existing outparcel building		D/R		6 - 10%		$1-1.5 million		$ -		2014		2014
610 & Ella[5]		Houston, TX		-		12,900		N/A		Build-to-suit with CVS/pharmacy		D		8%		$5.2 million		$5.2 million		2013		2013
		Total		193,395		249,998		840,000						10%	[6]	$28.7-39.2 million		$5.7 million

___________

[1]	Redevelopment represents significant construction and refurbishment at operating properties. Development represents initial construction, primarily from unimproved land.
[2]	Expected ROI (return on investment) for redevelopment projects generally reflects only the deal specific cash, unleveraged incremental property net operating income (NOI) generated by the redevelopment and is calculated as incremental NOI divided by incremental cost. Incremental property NOI is the NOI generated by the redevelopment after deducting rent being paid or management's estimate of rent to be paid for the redevelopment space and any other space taken out of service to accommodate the redevelopment.
	For development projects, expected return on investment reflects the deal specific cash, unleveraged property NOI generated by the development and is calculated as NOI divided by cost.
	Expected return on investment for development and redevelopment projects does not include peripheral impacts, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property.
[3]	Amounts include construction costs, anticipated tenant improvements and lease-up costs, including anticipated commissions that will be borne by the Company.
[4]	Stabilization is reached when the property achieves targeted occupancy, typically 95%.
[5]	Property was sold during 2013 for $7.5 million.
[6]	Represents the weighted average expected return on investment for all properties.

Summary of Top 25 Tenants:
Rank		Tenant Name		Year to Date Base Rent			Year to Date Base Rent as a Percentage of Portfolio Base Rent			Tenant GLA		Percentage of Total GLA
1		Kroger		$	1,999,610		6.43	%		267,097		17.42	%
2		Landry's			1,251,787		4.02	%		38,819		2.53	%
3		CVS/pharmacy			1,240,401		3.99	%		37,485		2.44	%
4		H-E-B			1,109,736		3.57	%		80,641		5.26	%
5		Publix			780,936		2.51	%		65,146		4.25	%
6		Safeway			589,371		1.89	%		89,809		5.86	%
7		Bank of America			514,349		1.65	%		14,129		0.92	%
8		Barnes & Noble			502,682		1.62	%		22,453		1.46	%
9		Hard Rock Cafe			496,825		1.60	%		15,752		1.03	%
10		TGI Fridays			473,881		1.52	%		21,845		1.42	%
11		The Container Store			447,988		1.44	%		25,019		1.63	%
12		Champps Americana			422,336		1.36	%		11,384		0.74	%
13		Golden Corral			412,268		1.33	%		24,000		1.57	%
14		Paesanos			406,583		1.31	%		8,017		0.52	%
15		Walgreens			393,609		1.27	%		15,120		0.99	%
16		The County Line			360,584		1.16	%		10,614		0.69	%
17		Tasting Room			345,209		1.11	%		2,000		0.13	%
18		Dougherty's Pharmacy			336,689		1.08	%		12,093		0.79	%
19		Verizon Wireless			303,449		0.98	%		5,513		0.36	%
20		Spec's Family Partners, Ltd.			289,473		0.93	%		9,918		0.65	%
21		River Oaks Imaging & Diagnostic, L.P.			268,500		0.86	%		10,750		0.70	%
22		Howl At The Moon Saloon			257,508		0.83	%		7,055		0.46	%
23		Potbelly			251,320		0.81	%		5,458		0.36	%
24		Buca Di Beppo			249,792		0.80	%		7,573		0.49	%
25		M. Penner			234,798		0.75	%		6,500		0.42	%

Retail Leasing Summary for Comparable Leases(1):
		For the three months ended December 31,								For the year ended December 31,
Expirations		2013				2012				2013				2012				2011				2010				2009				2008
Number of leases			11				13				50				44				53				50				34				22
GLA			43,351				63,722				133,796				180,245				187,605				224,578				110,693				75,601
New Leases(1)
Number of leases			1				1				10				5				7				11				8				4
GLA			2,600				1,419				19,419				12,997				14,231				17,737				15,471				7,328
Expiring annualized base rent per square foot		$	23.00			$	31.00			$	25.67			$	27.22			$	28.36			$	31.07			$	28.31			$	23.52
New annualized base rent per square foot		$	26.00			$	32.00			$	31.65			$	34.84			$	30.85			$	31.44			$	29.64			$	21.70
% Change (Cash)			13.0	%			3.2	%			23.3	%			28.0	%			8.8	%			1.2	%			4.7	%			-7.7	%
Renewals(2)
Number of leases			7				7				36				30				38				39				24				13
GLA			24,309				28,914				94,572				115,501				143,324				140,236				86,462				22,464
Expiring annualized base rent per square foot		$	30.83			$	23.69			$	26.27			$	23.91			$	24.92			$	26.12			$	25.62			$	27.05
New annualized base rent per square foot		$	33.98			$	25.85			$	28.40			$	25.27			$	25.74			$	27.32			$	26.85			$	31.53
% Change (Cash)			10.2	%			9.1	%			8.1	%			5.7	%			3.3	%			4.6	%			4.8	%			16.6	%
Combined
Number of leases			8				8				46				35				45				50				32				17
GLA			26,909				30,333				113,991				128,498				157,555				157,973				101,933				29,792
Expiring annualized base rent per square foot		$	30.07			$	24.03			$	26.17			$	24.24			$	25.23			$	26.68			$	26.03			$	26.18
New annualized base rent per square foot		$	33.21			$	26.14			$	28.94			$	26.24			$	26.20			$	27.78			$	27.27			$	29.11
% Change (Cash)			10.4	%			8.8	%			10.6	%			8.2	%			3.8	%			4.1	%			4.8	%			11.2	%

___________

(1)	Comparable leases are defined as renewals or new leases for a space that was not vacant for more than 12 consecutive months prior to lease signing.
(2)	Represents existing tenants that, upon expiration of their leases, enter into new leases for the same space.

Lease Expiration Table:
		Anchor Tenants (>20,000 square feet)											Shop Space Tenants (≤20,000 square feet)									Total
Year		Expiring GLA		Tenant		% of GLA Expiring			ABR Per Square Foot(1)				Expiring GLA		% of GLA Expiring			ABR Per Square Foot(1)				Expiring GLA		% of GLA Expiring			ABR Per Square Foot(1)
Vacant		-		-		-			$	-			89,468		8	.6%		$	-			89,468		5	.8%		$	-
2014		-		-		-				-			144,466		13	.8%			26	.73		144,466		9	.4%			26	.73
2015		26,147		Barnes & Noble		5	.3%			18	.64		152,761		14	.6%			29	.72		178,908		11	.7%			28	.10
2016		-		-		-				-			145,898		14	.0%			27	.49		145,898		9	.5%			27	.49
2017		145,787		H-E-B, Publix		29	.8%			12	.97		93,596		9	.0%			28	.38		239,383		15	.6%			18	.99
2018		-		-		-				-			129,038		12	.4%			25	.94		129,038		8	.4%			25	.94
2019		-		-		-				-			46,655		4	.5%			29	.43		46,655		3	.0%			29	.43
2020		-		-		-				-			39,851		3	.8%			28	.72		39,851		2	.6%			28	.72
2021		81,217		Kroger		16	.6%			12	.83		28,945		2	.8%			24	.99		110,162		7	.2%			16	.02
2022		25,083		The Container Store		5	.1%			16	.96		45,795		4	.4%			31	.59		70,878		4	.6%			26	.41
2023		122,507		Kroger		25	.0%			8	.83		31,527		3	.0%			35	.88		154,034		10	.0%			14	.37
2024 +		89,009		Safeway		18	.2%			7	.95		95,663		9	.2%			26	.89		184,672		12	.0%			17	.76
Total / Weighted Avg		489,750								11	.50		1,043,663						28	.09		1,533,413						22	.47

_____________

(1)	ABR per square foot is calculated by multiplying (i) the monthly base rent as of December 31, 2013, for leases expiring during the applicable period by (ii) 12 and then dividing the result by GLA for such leases.

Lease Distribution Table:
GLA Range		Number of Expiring Leases		Percentage of Leases		Total GLA		Total Occupied GLA		Percent Occupied		Percentage of Occupied GLA		ABR(1)		Percentage of ABR		ABR Per Occupied Square Foot(2)
2,500 or less		199		60.5%		325,358		288,501		88.7%		20.0%		$ 8,340,106		25.7%		28.91
2,501 - 5,000		73		22.2%		271,066		255,392		94.2%		17.7%		7,449,706		23.0%		29.17
5,001 - 10,000		35		10.6%		265,706		245,080		92.2%		17.0%		6,901,906		21.3%		28.16
10,000 - 20,000		13		4.0%		181,533		165,222		91.0%		11.4%		4,114,760		12.7%		24.90
greater than 20,000		9		2.7%		489,750		489,750		100.0%		33.9%		5,634,537		17.4%		11.50
Total portfolio		329		100.0%		1,533,413		1,443,945		94.2%		100.0%		$ 32,441,015		100.0%		22.47

_____________

(1)	ABR is calculated by multiplying (i) the monthly base rent as of December 31, 2013, for leases in the applicable GLA range that had commenced as of such date by (ii) 12.
(2)	ABR per leased square foot is calculated by dividing (i) ABR for leases in the applicable GLA range by (ii) total leased GLA for leases in the applicable GLA range.

Significant Investments Table (in thousands, except percent and GLA data):

Of our Investments in Advised Funds, only our investments in MacArthur Park and Shadow Creek Ranch (which represent 54.3% and 35.5%, respectively of our Investments in Advised Funds balance as of December 31, 2013) comprise greater than 10% of the balance. The table below presents the NOI, debt and property data for these two investments.

		MacArthur Park					Shadow Creek Ranch
Year acquired		2013					2009
Percent owned		30.0%					10.0%
For the three months ended December 31, 2013:
Revenues		$	2,105				$	2,606
Expenses			782					792
NOI		$	1,323				$	1,814
For the year ended December 31, 2013:
Revenues		$	5,954		(1)		$	10,210
Expenses			2,051		(1)			3,093
NOI		$	3,903		(1)		$	7,117
As of December 31, 2013:
Real estate at cost		$	81,844				$	113,262
Mortgage obligation		$	43,900				$	62,463
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

_____________

(1)

MacArthur Park, which was a wholly-owned AmREIT property, was contributed to a joint venture with Goldman Sachs on March 26, 2013. The table above excludes revenues, expenses and NOI of $1.1 million, $308,000, and $770,000, respectively, related to MacArthur Park for the 2013 period prior to contribution to the joint venture. Such amounts are included in our Statement of Operations and NOI reconciliation included in the Definitions section below.

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

		Year ended December 31,
Income from Advised Funds		$	99
Depreciation of real estate assets			1,316
FFO from Advised Funds			1,415
Acquisition costs			164
Core FFO from Advised Funds			1,579
Interest expense			887
Other GAAP and non-recurring adjustments			(338	)
NOI from Advised Funds		$	2,128		*

_____________

*	As of December 31, 2013, only nine months of operations are included for the MacArthur Park joint venture as it began operations on March 26, 2013.

Definitions
ABR		Annualized base rent.
Adjusted FFO		Core FFO (as defined below) adjusted to exclude non-cash income and expenses that are included in the NAREIT definition of FFO (defined below).  There can be no assurance that AFFO presented by AmREIT is comparable to similarly titled measures of other REITs. AFFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.
Advised Funds		Collectively, our varying minority ownership interests in four high net worth investment funds, one institutional joint venture with Goldman Sachs, one institutional joint venture with J.P. Morgan Investment Management and one joint venture with two of our high net worth investment funds, MIG III and MIG IV.
Core FFO		FFO in accordance with NAREIT's definition, adjusted to exclude items that management believes do not reflect our ongoing operations, such as acquisition expenses, non-recurring asset write-offs and recoveries, expensed issuance costs and gains on the sale of real estate held for resale. Management believes that such items therefore affect the comparability of our period-over-period performance with similar REITs.
EBITDA		Earnings before interest, income taxes, depreciation and amortization.  Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income. We define EBITDA as GAAP net income, plus interest expense, state or federal income taxes and depreciation and amortization. Management believes that EBITDA provides useful information to the investment community about our operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of our overall financial performance since it does not reflect depreciation and amortization, interest expense, provision for income taxes, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, our EBITDA may not be comparable to other REITs.  Below is a reconciliation of net income to EBITDA:
				Year ended December 31,
				2013			2012
		Net income		$	14,819		$	4,460
		Interest expense			9,603			10,250
		State income taxes			30			2
		Depreciation and amortization			11,945			8,861
		Depreciation and amortization - discontinued operations			14			23
		Adjustments for Advised Funds			2,203			1,148
		EBITDA		$	38,614		$	24,744
FFO		Funds from operations, as defined by NAREIT, which includes net income (loss) computed in accordance with GAAP, excluding gains, losses or impairments on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for similar items  recorded by our Advised Funds.
GLA		Gross leasable area.
NAREIT		National Association of Real Estate Investment Trusts.
NOI		Net operating income, defined as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense).  Below for a reconciliation of net income to NOI:

		Three months ended December 31,								Year ended December 31,
		2013				2012				2013				2012
Net income		$	4,177			$	734			$	14,819			$	4,460
Adjustments to add/(deduct):
Amortization of straight-line rents and above/below-market rents(1)			(287	)			(154	)			(933	)			(425	)
Advisory services income - related party			(877	)			(897	)			(3,661	)			(3,870	)
Gain on sale of real estate acquired for investment			-				-				(7,696	)			-
Interest and other income			(158	)			(123	)			(609	)			(485	)
Interest and other income - related party			(7	)			(69	)			(187	)			(462	)
Straight-line rent bad debt expense (recoveries)(2)			-				7				(164	)			(90	)
Write off of below market ground lease(2)			-				-				279				-
General and administrative			2,111				1,937				8,302				6,773
Legal and professional			308				242				1,104				911
Real estate commissions			38				119				292				387
Acquisition costs			2				687				299				687
Depreciation and amortization			3,023				2,316				11,945				8,861
Impairment recovery - notes receivable			-				-				-				(443	)
Loss (income) from Advised Funds			(166	)			110				(99	)			238
State income tax expense (benefit)			1				(19	)			30				2
Interest expense			2,508				2,258				9,603				10,250
Income from discontinued operations			(2,302	)			(24	)			(3,170	)			(125	)
Net operating income		$	8,371			$	7,124			$	30,154			$	26,669

_____________

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