AmREIT Reports Third Quarter Results and Fourth Quarter Dividend

HOUSTON--(BUSINESS WIRE)--

AmREIT, Inc. (NYSE: AMRE) (“AmREIT” or the “Company”), today announced financial results for the third quarter ended September 30, 2013 and dividends for the fourth quarter ended December 31, 2013.

Third Quarter and Year-to-Date Highlights:

Financial Results

• Core Funds from Operations ("Core FFO") available to common stockholders for the third quarter of 2013 was $4.5 million, or $0.24 per share, compared to $3.7 million, or $0.26 per share for the comparable period in 2012. For the nine months ended September 30, 2013, Core FFO was $12.9 million, or $0.76 per share, compared to $11.1 million, or $0.88 per share for the comparable nine month period in 2012.
• FFO available to common stockholders for the third quarter of 2013 was $4.8 million, or $0.26 per share, compared to $3.4 million, or $0.23 per share for the comparable period in 2012. For the nine months ended September 30, 2013, FFO was $13.0 million, or $0.76 per share, compared to $10.7 million, or $0.85 per share for the comparable nine month period in 2012. Included in FFO for the three months ended September 30, 2013 was a $799,000 gain from the sale of a non-core, single-tenant asset, $171,000 in acquisition costs related to the Woodlake Square acquisition in September 2013 and a $279,000 one-time charge recorded in connection with our acquisition of the Preston Royal Village fee interest in July 2013. Included in FFO for the nine months ended September 30, 2013, were the aforementioned third quarter items plus $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture with Goldman Sachs in March 2013 and $126,000 in acquisition costs related to the Fountain Oaks purchase in June 2013.
• Net income available to common stockholders for the third quarter of 2013 was $1.3 million, or $0.06 per share, compared to $1.0 million, or $0.07 per share, for the same period in 2012. Included in net income for the three months ended September 30, 2013 was a $799,000 gain from the sale of a non-core, single-tenant asset, $171,000 in acquisition costs related to the Woodlake Square acquisition in September 2013 and a $279,000 one-time charge recorded in connection with our acquisition of the Preston Royal Village fee interest in July 2013. For the nine months ended September 30, 2013, net income was $10.6 million, or $0.62 per share, compared to $3.7 million, or $0.29 per share for the comparable nine month period in 2012. Included in net income for the nine months ended September 30, 2013 were the aforementioned third quarter items plus a $7.7 million gain on sale related to the sale of AmREIT's MacArthur Park Property into the joint venture with Goldman Sachs in March 2013, $164,000 in acquisition costs (our 30% portion) recorded by the MacArthur Park joint venture and an additional $126,000 in acquisition costs related to the Fountain Oaks purchase in June 2013.

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

Portfolio Results

• In the third quarter of 2013, excluding our redevelopment properties (Uptown Park – Baker site and The Courtyard on Post Oak), same-store net operating income (“NOI”) increased 1.8% over the same period in the prior year. Both of these properties are in ‘lease down' and in the early stages of redevelopment. Including those two redevelopment properties, same-store NOI increased 0.8% over the same period in the prior year. For the nine months ended September 30, 2013, same-store NOI, excluding redevelopment properties, increased 2.9% and, including the two redevelopment properties, increased 1.6% over the same period in the prior year. Although we believe that market rates for these spaces are today at a 30% premium to their historically contracted rates, we believe that the redevelopment opportunities that we have on these two Irreplaceable Corners provide more meaningful growth in NOI and value for stockholders over the mid-term that more than outweighs the short term impact.
• With the recent acquisitions of Fountain Oaks and Woodlake Square, which were 89% and 88% occupied respectively, portfolio occupancy as of September 30, 2013 was 94.2%, a decrease of approximately 250 basis points as compared to portfolio occupancy of 96.7% as of December 31, 2012. Additionally, we have initiated vacancies at The Courtyard on Post Oak and at the Uptown Park – Baker site in preparation for their anticipated redevelopments which has put pressure on our occupancy in the short term. On a leased basis, which includes leases that have been executed but where rent has not yet commenced, the portfolio was 95.2% leased as of September 30, 2013. We anticipate rent commencement on these signed leases during the remainder of 2013.
• During the third quarter of 2013, AmREIT signed 13 leases for 19,293 square feet of gross leasable area, including both new and renewal leases. Of these, 8 leases for 8,108 square feet were renewals or replacements of expiring leases which were deemed to be comparable leases. Cash leasing spreads, which is the new leasing rate per square foot compared to the expiring leasing rate per square foot on comparable leases, increased 11.1%. On a GAAP basis, which includes the effects of straight-line rent, leasing spreads increased 16.4%. For the nine months ended September 30, 2013, AmREIT signed 50 leases for 111,806 square feet of gross leasable area, including both new and renewal leases. Of these, 38 leases, or 87,082 square feet, were comparable leases. Cash leasing spreads increased 10.7%. On a GAAP basis, leasing spreads increased 17.5%.

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

Dividends

• AmREIT also announced today that the Company's Board of Directors has approved a regular quarterly cash dividend of $0.20 per share. The dividend will be paid on December 31, 2013 to all common stockholders of record at the close of business on December 20, 2013.

Acquisitions and Dispositions

• On September 18, 2013, AmREIT completed the previously announced acquisition of Woodlake Square Shopping Center, a 160,761 square foot Randalls (Safeway parent company) and Walgreens-anchored shopping center in Houston Texas. Average household incomes within a one-mile radius of Woodlake Square are $69,595, and there are 82,692 households within a three-mile radius of the property. Daytime employment within a three-mile radius is 126,883. Woodlake Square was acquired from a joint venture, the partners of which were one of our Advised Funds and AEW Value Investors II, L.P., a value-added real estate fund managed by AEW Capital Management. The asset was 90% owned by AEW Capital Management, 6% by AmREIT Monthly Income & Growth Fund IV, Ltd., 3% by AmREIT Monthly Income & Growth Fund III, Ltd., and 1% by AmREIT. We managed the joint venture and the property. Woodlake Square was acquired for approximately $41.6 million, funded by a $23.0 million new first mortgage with a 4.3% fixed interest rate and a 10-year term, and the balance of $18.6 million in cash.
• On July 17, 2013, AmREIT completed the acquisition of the fee simple title to Preston Royal Village NEC. This acquisition served to unite the leasehold interest purchased on December 12, 2012 with the underlying land. Average household incomes within a one-mile radius of Preston Royal Village are $279,562 and there are 42,163 households within a three-mile radius. The Preston Royal Village NEC land was purchased for approximately $15.0 million in cash.
• On June 25, 2013, AmREIT completed the acquisition of Fountain Oaks Shopping Center, a 160,600 square foot Kroger-anchored shopping center in the north Buckhead submarket of Atlanta, Georgia. Average household incomes within a one-mile radius of Fountain Oaks are $96,771, and there are 31,887 households within a three-mile radius of the property. Fountain Oaks was acquired for approximately $27.7 million, is unencumbered, and was funded with borrowings under AmREIT's unsecured revolving credit facility.
• On March 26, 2013, AmREIT entered into a joint venture agreement with Goldman Sachs pursuant to which AmREIT contributed equity in its MacArthur Park property to a single-purpose entity in exchange for a 30% interest in the joint venture, and Goldman Sachs contributed cash for a 70% interest in the joint venture. The joint venture entity concurrently purchased the contiguous property to the north known as MacArthur Park Phase I, excluding a Target store, for approximately $25.5 million and placed mortgage financing on the combined property of $43.9 million. Upon closing the transaction, AmREIT received net cash proceeds of approximately $35.6 million, which it used to repay borrowings under its unsecured revolving credit facility. AmREIT will continue to manage and lease MacArthur Park on behalf of the joint venture and will retain a right of first offer to acquire the project in the future, after a lock-out period.

Equity Offering

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

"Our team delivered another solid quarter in every area of our business," said Kerr Taylor, Chairman & Chief Executive Officer of AmREIT. "Our Irreplaceable Corner TM portfolio showed its strength through cash and GAAP leasing spreads of 10.9% and 16.4%, respectively. Through our joint venture pipeline and local relationships, we acquired approximately $60 million of top tier properties within our dense and affluent core markets. And, we moved closer to transforming one of our seven re-development sites within Uptown Park into an iconic high-rise, residential tower."

Guidance

• AmREIT maintains its full year Core FFO and revises its FFO guidance upward to contemplate the gains on sale related to two of its single-tenant properties:

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

• During the third quarter, AmREIT sold Sunbelt Rentals, a non-core, single-tenant location owned by its taxable REIT subsidiary, resulting in a gain of approximately $799,000. Additionally, the Company has a binding earnest money contract to sell its CVS build-to-suit, also owned through its taxable REIT subsidiary, located at Loop 610 and Ella in Houston, Texas. The CVS is expected to close in November, simultaneous with the rent commencement, at an estimated gain of approximately $2 million.

Conference Call

AmREIT will hold its quarterly conference call to discuss the results of its year to date and third quarter of 2013 on Wednesday, November 6, 2013, at 10:00 a.m. Central Standard Time (11:00 a.m. Eastern Standard Time). To participate in the quarterly conference call, please call 1-888-317-6016 approximately 10 minutes before the scheduled start time. The conference call will be recorded and a replay of the call will be available via webcast shortly after the call concludes.

The conference call will also be webcast live at www.amreit.com and can be accessed under the Investors tab of the Company's website. A telephonic replay of the conference call will be available for 14 days following the conference call. To access the telephonic replay of the conference call, dial 1-877-344-7529 and enter passcode 10033647.

Supplemental Financial Information

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

Non-GAAP Financial Disclosure

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

Funds From Operations (FFO)

AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. NAREIT defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and impairment charges on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT recommends that extraordinary items not be considered in arriving at FFO. AmREIT calculates FFO in accordance with this definition.

Most industry analysts and equity REITs, including AmREIT, consider FFO to be an appropriate supplemental non-GAAP financial measure of operating performance because, by excluding gains or losses on dispositions, impairment charges and depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company's real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself.

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

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

				Updated Projected 2013 Range
				High			Low
Net income				$ 0.90			$ 0.85
Gain on sale – investment				(0.43)			(0.43)
Depreciation and amortization				0.61			0.61
Depreciation and amortization for non-consolidated affiliates				0.04			0.04
FFO available to stockholders				$ 1.12			$ 1.07
Gains on sale – resale				(0.16)			(0.16)
Acquisition costs				0.06			0.06
Write off of below market ground lease				0.01			0.01
Core FFO available to stockholders				$1.03			$0.98

Net Operating Income (NOI)

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

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

About AmREIT

AmREIT believes it has one of the highest quality grocery and drugstore anchored retail portfolios in the REIT sector. AmREIT's 29 year-old established platform has localized acquisition, operation and redevelopment expertise in the most densely populated and affluent submarkets of five of the top markets in the U.S.: Houston, Dallas, San Antonio, Austin and Atlanta. Texas is one of the best performing economies in the country and 92% of AmREIT's income for the year ended December 31, 2012 was generated by its properties located in this market. AmREIT's management team has in-depth knowledge and extensive relationship advantages within its markets. AmREIT's portfolio was 94.2% occupied as of September 30, 2013, and its top five tenants include Kroger, Landry's, CVS/Pharmacy, H-E-B and Publix. AmREIT also has access to an acquisition pipeline through its Advised Funds, which include value add joint ventures with leading institutional investors who partner with the company as local experts. AmREIT's common stock is traded on the New York Stock Exchange under the symbol “AMRE.” For more information, please visit www.amreit.com.

Forward-Looking Statements

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

Investor Contact

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

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
		September 30, 2013				December 31, 2012
		(unaudited)
ASSETS
Real estate investments at cost:
Land		$	184,284					$	147,460
Buildings			225,956						222,679
Tenant improvements			14,832						17,386
			425,072						387,525
Less accumulated depreciation and amortization			(35,724	)					(39,820	)
			389,348						347,705
Acquired lease intangibles, net			17,173						15,976
Investments in Advised Funds			16,159						7,953
Net real estate investments			422,680						371,634
Cash and cash equivalents			3,422						2,992
Tenant and accounts receivable, net			5,229						5,566
Accounts receivable - related party, net			1,045						821
Notes receivable, net			4,230						2,731
Notes receivable - related party, net			2,916						6,748
Deferred costs, net			3,330						3,696
Other assets			2,931						3,206
TOTAL ASSETS		$	445,783					$	397,394
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable		$	200,271					$	218,579
Accounts payable and other liabilities			10,667						9,593
Acquired below-market lease intangibles, net			8,127						3,507
TOTAL LIABILITIES			219,065						231,679
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued			-						-
Class A common stock, $0.01 par value, 0 and 100,000,000 shares authorized as of September 30, 2013, and December 31, 2012, 0 and 11,657,563 shares issued and outstanding as of September 30, 2013, and December 31, 2012, respectively			-						117
Common stock, $0.01 par value, 1,000,000,000 and 900,000,000 shares authorized as of September 30, 2013, and December 31, 2012, 19,628,037 and 16,123,288 shares issued and outstanding as of September 30, 2013, and December 31, 2012, respectively			196						45
Capital in excess of par value			306,125						245,403
Accumulated distributions in excess of earnings			(79,603	)					(79,850	)
TOTAL STOCKHOLDERS' EQUITY			226,718						165,715
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	445,783					$	397,394

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(unaudited)
		Three months ended September 30,			Nine months ended September 30,
		2013			2012			2013			2012
Revenues:
Rental income from operating leases		$	10,552			$	9,020			$	31,451			$	26,826
Advisory services income - related party			1,069				957				2,784				2,973
Total revenues			11,621				9,977				34,235				29,799
Expenses:
General and administrative			2,161				1,773				6,191				4,836
Property expense			3,294				2,418				9,137				6,913
Legal and professional			290				223				796				669
Real estate commissions			150				129				254				268
Acquisition costs			171				-				297				-
Depreciation and amortization			2,897				2,210				8,922				6,545
Impairment recovery - notes receivable			-				(214)				-				(443)
Total expenses			8,963				6,539				25,597				18,788
Operating income			2,658				3,438				8,638				11,011
Other income (expense):
Gain on sale of real estate acquired for investment			-				-				7,696				-
Interest and other income			184				125				451				362
Interest and other income - related party			71				236				180				393
Loss from Advised Funds			(111)				(26)				(67)				(128)
State income tax expense			(14)				(16)				(29)				(21)
Interest expense			(2,335)				(2,763)				(7,095)				(7,992)
Income from continuing operations			453				994				9,774				3,625
Income from discontinued operations, net of taxes			13				29				69				101
Gain on sale of real estate acquired for resale, net of taxes			799				-				799				-
Income from discontinued operations			812				29				868				101
Net income		$	1,265			$	1,023			$	10,642			$	3,726
Net income per share of common stock - basic and diluted
Income before discontinued operations		$	0.02			$	0.07			$	0.57			$	0.28
Income from discontinued operations			0.04				-				0.05				0.01
Net income per share of common stock - basic and diluted		$	0.06			$	0.07			$	0.62			$	0.29
Weighted average shares of common stock used to
compute net income per share, basic and diluted			18,356				14,051				16,528				12,294
Distributions per share of common stock		$	0.20			$	0.20			$	0.60			$	0.60

Summary of Operating Results (in thousands except per share data):

		Three months ended September 30,			Nine months ended September 30,
Funds from operations ("FFO")		2013		2012			2013		2012
Net income		$	1,265			$	1,023				$	10,642			$	3,726
Add:
Depreciation of real estate assets - from operations			2,872				2,186					8,882				6,505
Depreciation of real estate assets - from discontinued operations			14				18					14				18
Depreciation of real estate assets for nonconsolidated affiliates			673				153					1,118				466
Less:
Gain on sale of real estate acquired for investment			-				-					(7,696	)			-
Total FFO available to stockholders		$	4,824			$	3,380				$	12,960			$	10,715
Total FFO per share		$	0.26			$	0.23				$	0.76			$	0.85
Core funds from operations ("Core FFO")
Total FFO available to stockholders		$	4,824			$	3,380				$	12,960			$	10,715
Add:
Acquisition costs			171				-					297				-
Acquisition costs of nonconsolidated affiliates			-				-					164				-
Write off of below market ground lease			279				-					279				-
Write off of deferred financing costs			-				362					-				362
Less:
Gain on sale of real estate acquired for resale			(799	)			-					(799	)			-
Total Core FFO available to stockholders		$	4,475			$	3,742				$	12,901			$	11,077
Total Core FFO per share		$	0.24			$	0.26				$	0.76			$	0.88
Adjusted funds from operations ("AFFO")
Total Core FFO available to stockholders		$	4,475			$	3,742				$	12,901			$	11,077
Add:
Depreciation of non-real estate assets			13				12					40				40
Amortization of deferred financing costs			99				98					299				288
Stock-based compensation			299				268					918				555
Less:
Straight-line rent and above/below market rent			(183	)			(94	)				(645	)			(271	)
Bad debt recoveries related to straight-line rent			(113	)			-					(164	)			(97	)
Amortization of above-market debt			(27	)			(30	)				(85	)			(92	)
Impairment recoveries - notes receivable			-				(214	)				-				(443	)
Maintenance capital expenditures			(78	)			(77	)				(78	)			(107	)
Straight-line rent and above/below market rent - discontinued operations			(1	)			(2	)				(7	)			(2	)
Total AFFO available to stockholders		$	4,484			$	3,703				$	13,179			$	10,948
Total AFFO per share		$	0.24			$	0.26				$	0.77			$	0.87
Weighted average shares outstanding(1)			18,916				14,491					17,083				12,591
Dividends
Regular common dividends per share		$	0.20			$	0.20				$	0.60			$	0.60
Payout ratio - Core FFO			83.3	%			76.9	%				78.9	%			68.2	%

__________

(1)

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

		Three months ended September 30,			Nine months ended September 30,
		2013		2012			2013		2012
Weighted average shares used to compute net income per share, basic and diluted		18,356		14,051			16,528		12,294
Weighted average shares of restricted common stock outstanding		560		440			555		297
Weighted average shares outstanding		18,916		14,491			17,083		12,591

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

		Three months ended September 30,
		2013		2012		Change $		Change %
Same store properties (26 properties)
Rental income (1)		$	4,310			$	4,208			$	102			2.4		%
Recovery income (1)			1,395				1,240				155			12.5		%
Percentage rent (1)			68				66				2			3.0		%
Less:
Property expenses			1,479				1,294				(185	)		(14.3	)	%
Same store NOI, excluding redevelopment properties			4,294				4,220				74			1.8		%
Same store occupancy at end of period(2)			98.1	%			98.5	%			n/a			(0.4	)	%
Redevelopment properties (2 properties)
Rental income (1)		$	1,457			$	1,476			$	(19	)		(1.3	)	%
Recovery income (1)			683				683				-			-
Percentage rent (1)			44				36				8			22.2		%
Less:
Property expenses			741				721				(20	)		(2.8	)	%
Redevelopment properties NOI			1,443				1,474				(31	)		(2.1	)	%
Redevelopment properties occupancy at end of period(2)			86.3	%			94.7	%			n/a			(8.4	)	%
Same Store NOI, including redevelopment properties			5,737				5,694				43			0.8		%
Non-same store properties (5 properties)
Rental income (1)			1,797				929				868			93.4		%
Recovery income (1)			574				288				286			99.3		%
Percentage rent (1)			41				-				41			*
Less:
Property expenses			909				403				(506	)		(125.6	)	%
Non-same store net operating income			1,503				814				689			84.6		%
Non-same store occupancy at end of period(2)			91.2	%			92.7	%			n/a			(1.5	)	%
Total net operating income			7,240				6,508				732			11.2		%
Other revenues			1,507				1,412				95			6.7		%
Less other expenses			8,294				6,926				(1,368	)		(19.8	)	%
Income (loss) from continuing operations			453				994				(541	)		(54.4	)	%
Income from discontinued operations			812				29				783			*
Net income		$	1,265			$	1,023			$	242			23.7		%

__________

(1)			Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the three months ended September 30, 2013 and 2012, rental income from operating leases was $10,552 and $9,020, respectively.
(2)			Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage.
*			Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful.

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

		Nine months ended September 30,
		2013		2012		Change $		Change%
Same store properties (26 properties)
Rental income (1)		$	12,870			$	12,668			$	202			1.6		%
Recovery income (1)			4,098				3,605				493			13.7		%
Percentage rent (1)			58				100				(42	)		(42.0	)	%
Less:
Property expenses			4,027				3,746				(281	)		(7.5	)	%
Same store NOI, excluding redevelopment properties			12,999				12,627				372			2.9		%
Same store occupancy at end of period(2)			98.1	%			98.5	%			n/a			(0.4	)	%
Redevelopment properties (2 properties)
Rental income (1)		$	4,372			$	4,513			$	(141	)		(3.1	)	%
Recovery income (1)			2,122				2,011				111			5.5
Percentage rent (1)			83				35				48			137.1		%
Less:
Property expenses			2,285				2,171				(114	)		(5.3	)	%
Redevelopment properties NOI			4,292				4,388				(96	)		(2.2	)	%
Redevelopment properties occupancy at end of period(2)			86.3	%			94.7	%			n/a			(8.4	)	%
Same Store NOI, including redevelopment properties			17,291				17,015				276			1.6		%
Non-same store properties (5 properties)
Rental income (1)			5,216				2,717				2,499			92.0		%
Recovery income (1)			1,926				906				1,020			112.6		%
Percentage rent (1)			61				-				61			*
Less:
Property expenses			2,710				1,093				(1,617	)		(147.9	)	%
Non-same store net operating income			4,493				2,530				1,963			77.6		%
Non-same store occupancy at end of period(2)			91.2	%			92.7	%			n/a			(1.2	)	%
Total net operating income			21,784				19,545				2,239			11.5		%
Other revenues			11,756				3,999				7,757			194.0		%
Less other expenses			23,766				19,919				(3,847	)		(19.3	)	%
Income (loss) from continuing operations			9,774				3,625				6,149			169.6		%
Income from discontinued operations			868				101				767			*
Net income		$	10,642			$	3,726			$	242			6.5		%

__________

(1)			Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the nine months ended September 30, 2013 and 2012, rental income from operating leases was $31,451 and $26,826, respectively.
(2)			Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013 or 2012, divided by (ii) total GLA as of such dates, expressed as a percentage.
*			Percentage change not shown as there is no prior year amount, or such amount is immaterial, and the percentage change is not meaningful.

Summary of Capital Expenditures (in thousands):

		Three months ended September 30,		Nine months ended September 30,
		2013		2012		2013		2012
Non-maintenance capital expenditures:
Tenant improvements and leasing commissions		$	586		$	424		$	1,452		$	2,575
Development, redevelopment and expansion			766			74			1,622			479
Total non-maintenance capital expenditures			1,352			498			3,074			3,054
Maintenance capital expenditures			78			77			78			107
Total capital expenditures		$	1,430		$	575		$	3,152		$	3,161

Rental Income from Operating Leases (in thousands):

		Three months ended September 30,		Nine months ended September 30,
		2013		2012		2013		2012
Base minimum rent		$	7,564		$	6,613		$	22,459		$	19,899
Straight-line rent adjustments			87			46			333			121
Amortization of above/below market rent			96			48			312			150
Percentage rent			153			102			202			134
Recovery income			2,652			2,211			8,145			6,522
Rental income from operating leases		$	10,552		$	9,020		$	31,451		$	26,826

Advisory Services Income – Related Party (in thousands):

		Three months ended September 30,		Nine months ended September 30,
		2013		2012		2013		2012
Leasing commission income		$	310		$	318		$	591		$	634
Brokerage commission income			-			-			33			291
Property management fee income			425			310			1,222			917
Development fee income			124			110			281			488
Asset management fee income			155			155			466			466
Construction management fee income			55			64			191			177
Advisory services income - related party		$	1,069		$	957		$	2,784		$	2,973
Interest and other income - related party		$	71		$	236		$	180		$	393
Reimbursements of administrative costs		$	223		$	231		$	626		$	641

Capitalization Data (in thousands, except per share and percent data):

		September 30, 2013			December 31, 2012
Equity capitalization -
Common shares outstanding			19,628					16,123
NYSE closing price(1)		$	17.35				$	17.15
Total equity capitalization		$	340,546				$	276,509
Debt capitalization -
Variable rate line of credit		$	-				$	33,500
Fixed rate mortgage loans			200,271					185,079
Total debt capitalization		$	200,271				$	218,579
Total capitalization		$	540,817				$	495,088
Debt statistics -
Total debt to total capitalization			37.0	%				44.1	%
Ratio of EBITDA to combined fixed charges(2)			3.33		(3)			2.18

__________

(1)			Represents the last reported price per share of our common stock on the New York Stock Exchange on the applicable date.
(2)			Fixed charges consist of interest expense and scheduled principal payments on borrowed funds (including capitalized interest, but excluding amortization of debt premium). Both EBITDA and fixed charges are calculated for the nine months ended September 30, 2013, and December 31, 2012.
(3)			EBITDA includes a gain of $7.7 million on the sale of real estate held for investment. Excluding this gain, the ratio of EBITDA to combined fixed charges is 2.37.

Outstanding Debt and Terms:

AmREIT
Debt Information
(in thousands)
Description		Amount Outstanding 9/30/13		Interest Rate		Annual Debt Service		Maturity Date		% of total		Weighted average rate maturing
Property Mortgages:
500 Lamar		$	1,560		6.00	%		$	94		2/1/2015
Uptown Park			49,000		5.37	%			2,631		6/1/2015
2015 Maturities			50,560								25.28	%		5.39	%
Plaza in the Park			23,250		3.45	%			802		1/1/2016
Market at Lake Houston			15,675		5.75	%			901		1/1/2016
Cinco Ranch			9,750		3.45	%			336		1/1/2016
Southbank - Riverwalk			20,000		5.91	%			1,182		6/1/2016
2016 Maturities			68,675								34.33	%		4.69	%
Bakery Square			1,703		8.00	%			136		2/10/2017
2017 Maturities			1,703								0.85	%		8.00	%
Alpharetta Commons			12,072		4.54	%			548		8/1/2018
2018 Maturities			12,072								6.03	%		4.54	%
Preston Royal Northwest			23,087		3.21	%			741		1/1/2020
2020 Maturities			23,087								11.54	%		3.21	%
Brookwood Village			7,197		5.40	%			389		2/10/2022
Uptown Plaza - Dallas			13,744		4.25	%			584		8/10/2022
2022 Maturities			20,941								10.47	%		4.65	%
Woodlake Square			23,000		4.30	%			989		10/1/2023
2023 Maturities			23,000								11.50	%		4.30	%
Corporate debt:
$75.0 million Facility(1)			-		((1))		$	263		8/1/2015		0.00	%		((1))
Total Maturities(2)		$	200,038
Fixed-rate debt:
Weighted average fixed rate				4.67	%
Weighted average years to maturity				4.3

__________

(1)			The $75.0 million Facility bears interest at LIBOR plus a margin of 205 basis points to 275 basis points, depending on our leverage, and carries a fee equal to 0.35% of the unused portion of the total amount available under the facility. Annual debt service assumes the amount outstanding and interest rates as of September 30, 2013, remain constant.
(2)			Total maturities above are $233 less than total debt as reported in our consolidated balance sheets as of September 30, 2013, due to the premium recorded on above-market debt assumed in conjunction with certain of our property acquisitions.

Interest Expense Detail (in thousands):

		Three months ended September 30,		Nine months ended September 30,
		2013		2012		2013		2012
Fixed-rate debt interest expense		$	2,153			$	2,221			$	6,423			$	6,869
Variable-rate debt interest expense			61				79				304				532
$75 million Facility unused fee			50				43				154				43
Amortization of deferred loan costs			98				88				299				278
Write off of deferred financing costs			-				362				-				362
Amortization of above market debt			(27	)			(30	)			(85	)			(92	)
Total interest expense		$	2,335			$	2,763			$	7,095			$	7,992

Wholly-Owned Property and Tenant Information:

Property		Property Location		Year Built / Renovated		GLA		Percent Occupied(1)		Percent Leased(2)		Annualized Base Rent(3)		Annualized Base Rent per Leased Square Foot(4)		Average Net Effective Annualized Base Rent per Leased Square Foot(5)		Key Tenants
Neighborhood and Community Shopping Centers
Uptown Park		Houston, TX		1999/2005		169,112		90.8	%		93.0	%		$	5,475,669		$	35.65		$	35.75		Champps, McCormick & Schmicks (owned by Landry's)
Plaza in the Park		Houston, TX		1999/2009		144,054		98.6	%		98.6	%			2,823,966			19.88			19.63		Kroger
Preston Royal East		Dallas, TX		1956		107,914		91.5	%		93.4	%			2,535,619			25.67			26.91		Bank of America, Starbucks, FedEx Office
Preston Royal West		Dallas, TX		1959		122,564		96.2	%		99.5	%			2,386,467			20.24			21.90		Tom Thumb, Barnes & Noble, Spec's
Woodlake Square		Houston, TX		1970/2011		161,388		89.5	%		89.5	%			2,385,208			16.52			16.80		Randalls, Walgreens, Jos. A. Bank, Five Guys
Fountain Oaks		Atlanta, GA		1988		160,598		88.7	%		88.7	%			1,866,951			13.10			13.60		Kroger
Southbank		San Antonio, TX		1995		46,673		100.0	%		100.0	%			1,701,675			36.46			37.82		Hard Rock Café
The Market at Lake Houston		Houston, TX		2000		101,799		100.0	%		100.0	%			1,621,043			15.92			16.00		H-E-B, Five Guys
Uptown Plaza - Dallas		Dallas, TX		2006		33,840		93.4	%		93.4	%			1,372,605			43.42			44.06		Morton's (owned by Landry's), Wells Fargo
Alpharetta Commons		Atlanta, GA		1997		94,544		98.7	%		98.7	%			1,340,611			14.36			14.49		Publix
Cinco Ranch		Houston, TX		2001		97,297		100.0	%		100.0	%			1,325,296			13.62			13.68		Kroger
Uptown Plaza - Houston		Houston, TX		2002		28,000		100.0	%		100.0	%			1,315,746			46.99			46.10		CVS/pharmacy, The Grotto (owned by Landry's)
Bakery Square		Houston, TX		1996		34,614		100.0	%		100.0	%			989,111			28.56			27.92		Walgreens, Boston Market
Brookwood Village		Atlanta, GA		1941/2000		28,774		87.9	%		90.0	%			653,259			25.82			26.47		CVS/pharmacy, Subway
The Courtyard on Post Oak		Houston, TX		1994		13,597		29.5	%		29.5	%			260,845			65.00			61.41		Verizon
Woodlands Plaza		Houston, TX		1997/2003		20,018		75.1	%		97.5	%			414,469			27.56			25.81		FedEx Office, Freebirds World Burrito
Terrace Shops		Houston, TX		2000		16,395		91.3	%		100.0	%			456,682			30.50			31.34		Starbucks
Sugarland Plaza		Houston, TX		1998/2001		16,750		100.0	%		100.0	%			408,188			24.37			23.45		Memorial Hermann
500 Lamar		Austin, TX		1998		12,795		100.0	%		100.0	%			416,217			32.53			32.78		Title Nine Sports
Neighborhood and Community Shopping Centers Subtotal/Weighted Average				1,410,726		93.7	%		94.8	%		$	29,749,627		$	22.51		$	22.85
Single Tenant (Ground Leases)(6)
CVS/Pharmacy		Houston, TX		2003		13,824		100.0	%		100.0	%		$	327,167		$	23.67		$	23.67		CVS/pharmacy
Jared The Galleria of Jewelry		Houston, TX		2012		6,057		100.0	%		100.0	%			180,000			29.72			34.48		Jared The Galleria of Jewelry
Citibank		San Antonio, TX		2005		4,439		100.0	%		100.0	%			160,000			36.04			36.04		Citibank
Landry's Seafood		Houston, TX		1995		13,497		100.0	%		100.0	%			155,677			11.53			12.18		Landry's Seafood
T.G.I. Friday's(7)		Hanover, MD		2003		6,802		100.0	%		100.0	%			148,458			21.83			23.44		T.G.I. Friday's
Bank of America		Houston, TX		1994		4,251		100.0	%		100.0	%			129,275			30.41			28.78		Bank of America
Macaroni Grill		Houston, TX		1994		7,825		100.0	%		100.0	%			96,000			12.27			12.05		Macaroni Grill
T.G.I. Friday's		Houston, TX		1994		6,543		100.0	%		100.0	%			96,000			14.67			14.41		T.G.I. Friday's
Smokey Bones		Atlanta, GA		1998		6,867		100.0	%		100.0	%			94,922			13.82			13.82		Smokey Bones
Single Tenant (Ground Leases) Subtotal/Weighted Average						70,105		100.0	%		100.0	%		$	1,387,499		$	19.79		$	20.34
Single Tenant (Fee Simple)(8)
The Container Store		Houston, TX		2011		25,083		100.0	%		100.0	%		$	425,323		$	16.96		$	17.86		The Container Store
T.G.I. Friday's		Houston, TX		1982		8,500		100.0	%		100.0	%			215,000			25.29			25.90		T.G.I. Friday's
Golden Corral(7)		Houston, TX		1992		12,000		100.0	%		100.0	%			210,450			17.54			17.54		Golden Corral
Golden Corral(7)		Houston, TX		1993		12,000		100.0	%		100.0	%			208,941			17.41			17.41		Golden Corral
Single Tenant (Fee Simple) Subtotal/Weighted Average						57,583		100.0	%		100.0	%		$	1,059,714		$	18.40		$	18.89
Portfolio Total/Weighted Average						1,538,414		94.2	%		95.2	%		$	32,196,840		$	22.22		$	22.57

__________

(1)			Percent occupied is calculated as (i) GLA under commenced leases as of September 30, 2013, divided by (ii) total GLA, expressed as a percentage.
(2)			Percent leased is calculated as (i) GLA under signed leases as of September 30, 2013, divided by (ii) total GLA, expressed as a percentage.
(3)			Annualized base rent is calculated by multiplying (i) monthly base rent as of September 30, 2013, for leases that had commenced as of such date, by (ii) 12.
(4)			Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent, by (ii) GLA under commenced leases as of September 30, 2013.
(5)			Average net effective annualized base rent per leased square foot represents (i) the contractual base rent for commenced leases as of September 30, 2013, calculated on a straight line basis to amortize free rent periods, abatements and contractual rent increases, but without subtracting tenant improvement allowances and leasing commissions, divided by (ii) GLA under commenced leases as of September 30, 2013.
(6)			For single-tenant ground leases, we own and lease the land to the tenant. The tenant owns the building during the term of the lease and is responsible for all expenses relating to the property. Upon expiration or termination of the lease, ownership of the building will revert to us as owner of the land. The weighted average remaining term of our ground leases is 7.3 years.
(7)			The tenants at these properties have rights of first refusal to purchase the property.
(8)			For single-tenant fee simple properties, we own the land and the building, and the tenant is responsible for all expenses relating to the property. The weighted average remaining term of our fee simple leases is 6.2 years.

Redevelopment Table:

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

						Revised
Property		Location		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 Pad		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		$	0.3 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
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		-		5,000		N/A		Build-to-suit with CVS/pharmacy.		D		8 - 9%			$	5 million		$	4.3 million		2013		2013 [5]
		Total		32,797		61,500		840,000						10%	[6]		$	21-31.5 million		$	4.7 million

__________

[1]			Redevelopment represents significant construction and refurbishment at operating properties. Development represents initial construction, primarily from unimproved land.
[2]			Expected ROI (return on investment) for redevelopment projects generally reflects only the deal specific cash, unleveraged incremental property net operating income (NOI) generated by the redevelopment and is calculated as incremental NOI divided by incremental cost. Incremental property NOI is the NOI generated by the redevelopment after deducting rent being paid or management's estimate of rent to be paid for the redevelopment space and any other space taken out of service to accommodate the redevelopment.   For development projects, expected return on investment reflects the deal specific cash, unleveraged property NOI generated by the development and is calculated as NOI divided by cost.   Expected return on investment for development and redevelopment projects does not include peripheral impacts, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property.
[3]			Amounts include construction costs, anticipated tenant improvements and lease-up costs, including anticipated commissions that will be borne by the Company.
[4]			Stabilization is reached when the property achieves targeted occupancy, typically 95%.
[5]			This property is under contract to be sold at a 5.5% cap rate.
[6]			Represents the weighted average expected return on investment for all properties.

Summary of Top 25 Tenants:

Rank				Tenant Name				Year to Date Base Rent				Year to Date Annualized Base Rent as a Percentage of Portfolio Annualized Base Rent				Tenant GLA				Percentage of Total GLA
1				Kroger				$ 1,468,651				6.08%				267,097				17.36%
2				Landry's				938,840				3.89%				38,819				2.52%
3				CVS/pharmacy				916,679				3.80%				37,485				2.44%
4				H-E-B				832,302				3.45%				80,641				5.24%
5				Publix				585,702				2.43%				65,146				4.23%
6				Bank of America				386,070				1.60%				14,129				0.92%
7				Barnes & Noble				380,807				1.58%				48,600				3.16%
8				Hard Rock Cafe				372,619				1.54%				15,752				1.02%
9				T.G.I. Friday's				355,411				1.47%				21,845				1.42%
10				Tom Thumb				353,990				1.47%				29,779				1.94%
11				Jared				335,991				1.39%				6,057				0.39%
12				Champps Americana				316,752				1.31%				11,384				0.74%
13				Golden Corral				307,420				1.27%				24,000				1.56%
14				Paesanos				304,938				1.26%				8,017				0.52%
15				The County Line				267,647				1.11%				4,614				0.30%
16				Dougherty's Pharmacy				252,917				1.05%				12,093				0.79%
17				Tasting Room				247,944				1.03%				2,000				0.13%
18				Verizon Wireless				227,587				0.94%				5,513				0.36%
19				Walgreens				223,965				0.93%				15,120				0.98%
20				Spec's Family Partners, Ltd.				217,331				0.90%				9,918				0.64%
21				River Oaks Imaging & Diagnostic, L.P.				201,375				0.83%				10,750				0.70%
22				Howl At The Moon Saloon				193,131				0.80%				7,055				0.46%
23				Potbelly				188,490				0.78%				5,458				0.35%
24				Buca Di Beppo				187,344				0.78%				7,573				0.49%
25				M. Penner				176,099				0.73%				6,500				0.42%

Retail Leasing Summary for Comparable Leases⁽¹⁾:

		For the three months ended September 30,		For the nine months ended September 30,		For the year ended December 31,
Expirations		2013			2012			2013			2012			2012			2011			2010			2009			2008
Number of leases			8				14				39				31				44				53				50				34				22
GLA			12,365				50,690				90,445				116,523				180,245				187,605				224,578				110,693				75,601
New Leases(1)
Number of leases			3				2				9				4				5				7				11				8				4
GLA			4,942				5,999				16,819				11,412				12,997				14,231				17,737				15,471				7,328
Expiring annualized base rent per square foot		$	29.46			$	25.37			$	26.08			$	27.14			$	27.22			$	28.36			$	31.07			$	28.31			$	23.52
New annualized base rent per square foot		$	33.80			$	37.00			$	32.52			$	35.70			$	34.84			$	30.85			$	31.44			$	29.64			$	21.70
% Change (Cash)			14.7	%			45.8	%			24.7	%			31.5	%			28.0	%			8.8	%			1.2	%			4.7	%			-7.7	%
Renewals(2)
Number of leases			5				11				29				24				30				38				39				24				13
GLA			3,166				34,511				70,263				93,031				115,501				143,324				140,236				86,462				22,464
Expiring annualized base rent per square foot		$	29.85			$	29.43			$	24.69			$	22.33			$	23.91			$	24.92			$	26.12			$	25.62			$	27.05
New annualized base rent per square foot		$	31.51			$	29.32			$	26.47			$	23.33			$	25.27			$	25.74			$	27.32			$	26.85			$	31.53
% Change (Cash)			5.6	%			-0.4	%			7.2	%			4.5	%			5.7	%			3.3	%			4.6	%			4.8	%			16.6	%
Combined
Number of leases			8				13				38				28				35				45				50				32				17
GLA			8,108				40,510				87,082				104,443				128,498				157,555				157,973				101,933				29,792
Expiring annualized base rent per square foot		$	29.61			$	28.83			$	24.96			$	22.86			$	24.24			$	25.23			$	26.68			$	26.03			$	26.18
New annualized base rent per square foot		$	32.91			$	30.46			$	27.63			$	24.68			$	26.24			$	26.20			$	27.78			$	27.27			$	29.11
% Change (Cash)			11.1	%			5.6	%			10.7	%			8.0	%			8.2	%			3.8	%			4.1	%			4.8	%			11.2	%

__________

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

Lease Expiration Table:

		Anchor Tenants (>20,000 square feet)		Shop Space Tenants (≤20,000 square feet)		Total
Year		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		-		-		-			$	-		89,277		8.5	%		$	-		89,277		5.8	%		$	-
2013		-		-		-				-		49,572		4.7	%			21.83		49,572		3.2	%			21.83
2014		-		-		-				-		143,420		13.7	%			26.48		143,420		9.3	%			26.48
2015		26,147		Barnes & Noble		5.3	%			18.64		144,879		13.8	%			29.19		171,026		11.1	%			27.58
2016		-		-		-				-		149,306		14.2	%			28.80		149,306		9.7	%			28.80
2017		145,787		H-E-B, Publix		29.8	%			12.97		92,346		8.8	%			28.50		238,133		15.5	%			18.99
2018		-		-		0.0	%			-		119,445		11.4	%			24.42		119,445		7.8	%			24.42
2019		-		-		-				-		28,233		2.7	%			28.27		28,233		1.8	%			28.27
2020		-		-		-				-		38,431		3.7	%			28.85		38,431		2.5	%			28.85
2021		81,217		Kroger		16.6	%			12.83		24,468		2.3	%			29.56		105,685		6.9	%			16.70
2022		25,083		The Container Store		5.1	%			16.96		45,795		4.4	%			30.27		70,878		4.6	%			25.56
2023 +		211,516		Kroger, Tom Thumb, Randalls		43.2	%			8.26		123,492		11.8	%			29.39		335,008		21.8	%			16.05
Total / Weighted Avg		489,750							11.42		1,048,664					27.73		1,538,414					22.22

__________

(1)			ABR per square foot is calculated by multiplying (i) the monthly base rent as of September 30, 2013, for leases expiring during the applicable period by (ii) 12 and then dividing the result by GLA for such leases.

Lease Distribution Table:

GLA Range		Number of Expiring Leases		Percentage of Leases		Total GLA		Total Occupied GLA		Percent Occupied		Percentage of Occupied GLA		Annualized Base Rent(1)		Percentage of ABR		ABR Per Occupied Square Foot(2)
2,500 or less		196		60.1	%		324,039		281,859		87.0	%		19.5	%		$	8,046,372		25.0	%		28.55
2,501 - 5,000		72		22.1	%		270,586		250,915		92.7	%		17.3	%			7,385,169		22.9	%		29.43
5,001 - 10,000		35		10.7	%		272,506		245,080		89.9	%		16.9	%			6,853,224		21.3	%		27.96
10,000 - 20,000		14		4.3	%		181,533		181,533		100.0	%		12.5	%			4,318,647		13.4	%		23.79
greater than 20,000		9		2.8	%		489,750		489,750		100.0	%		33.8	%			5,593,428		17.4	%		11.42
Total portfolio		326		100.0	%		1,538,414		1,449,137		94.2	%		100.0	%		$	32,196,840		100.0	%		22.22

__________

(1)			Annualized base rent is calculated by multiplying (i) the monthly base rent as of September 30, 2013, for leases in the applicable GLA range that had commenced as of such date by (ii) 12.
(2)			ABR per leased square foot is calculated by dividing (i) ABR for leases in the applicable GLA range by (ii) total leased GLA for leases in the applicable GLA range.

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

Of our Investments in Advised Funds, only our investments in MacArthur Park and Shadow Creek Ranch (which represent 52.4% and 34.4%, respectively of our Investments in Advised Funds balance as of September 30, 2013) comprise greater than 10% of the balance. The table below presents the NOI, debt and property data for these two investments.

		MacArthur Park					Shadow Creek Ranch
Year acquired		2013					2009
Percent owned		30.0%					10.0%
For the three months ended September 30, 2013:
Revenues		$	1,942					$	2,581
Expenses			689						805
NOI		$	1,253					$	1,776
For the nine months ended September 30, 2013:
Revenues		$	3,849	(1)				$	7,603
Expenses			1,270	(1)					2,301
NOI		$	2,579	(1)				$	5,302
As of September 30, 2013:
Real estate at cost		$	85,051					$	113,142
Mortgage obligation		$	43,900					$	62,709
Debt maturity			04/01/2023						03/01/2015
GLA			406,102						613,109
Percent occupied			84.4%						97.8%
Grocery anchor		Kroger					H.E.B.
Other principal tenants		Michael's					Academy
		TJ Maxx					Burlington Coat Factory
		Ulta					Hobby Lobby
		Office Depot					Ashley Furniture

__________

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

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

			Nine months ended September 30, 2013
Loss from Advised Funds			$	(67	)
Depreciation of real estate assets				1,118
FFO from Advised Funds				1,051
Acquisition costs				164
Core FFO from Advised Funds				1,215
Interest expense				638
Other GAAP and non-recurring adjustments				(350	)
NOI from Advised Funds			$	1,503		*

__________

*			As of September 30, 2013, only six months of operations are included for the MacArthur Park joint venture as it began operations on March 26, 2013.

Definitions

ABR			Annualized base rent.
Adjusted FFO			Core FFO (as defined below) adjusted to exclude non-cash income and expenses that are included in the NAREIT definition of FFO (defined below). There can be no assurance that AFFO presented by AmREIT is comparable to similarly titled measures of other REITs. AFFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.
Advised Funds			Collectively, our varying minority ownership interests in four high net worth investment funds, one institutional joint venture with Goldman Sachs, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV.
Core FFO			FFO in accordance with NAREIT's definition, adjusted to exclude items that management believes do not reflect our ongoing operations, such as acquisition expenses, non-recurring asset write-offs and recoveries, expensed issuance costs and gains on the sale of real estate held for resale. Management believes that such items therefore affect the comparability of our period-over-period performance with similar REITs.
EBITDA			Earnings before interest, income taxes, depreciation and amortization. Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income. We define EBITDA as GAAP net income, plus interest expense, state or federal income taxes and depreciation and amortization. Management believes that EBITDA provides useful information to the investment community about our operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of our overall financial performance since it does not reflect depreciation and amortization, interest expense, provision for income taxes, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, our EBITDA may not be comparable to other REITs. Below is a reconciliation of net income to EBITDA:

											Nine months ended
											September 30,			December 31,
											2013			2012
									Net income		$	10,642			$	3,203
									Interest expense			7,095				7,617
									State income taxes			29				20
									Depreciation and amortization			8,922				6,639
									Depreciation and amortization - discontinued operations			14				18
									EBITDA		$	26,702			$	17,497

FFO			Funds from operations, as defined by NAREIT, which includes net income (loss) computed in accordance with GAAP, excluding gains, losses or impairments on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for similar items recorded by our Advised Funds.
GLA			Gross leasable area.
NAREIT			National Association of Real Estate Investment Trusts.
NOI			Net operating income, defined as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense). Below for a reconciliation of net income to NOI:

		Three months ended September 30,		Nine months ended September 30,
		2013		2012		2013		2012
Net income		$	1,265			$	1,023			$	10,642			$	3,726
Adjustments to add/(deduct):
Amortization of straight-line rents and above/below-market rents(1)			(183	)			(94	)			(644	)			(271	)
Advisory services income - related party			(1,069	)			(957	)			(2,784	)			(2,973	)
Gain on sale of real estate acquired for investment			-				-				(7,696	)			-
Interest and other income			(184	)			(125	)			(451	)			(362	)
Interest and other income - related party			(71	)			(236	)			(180	)			(393	)
Straight-line rent bad debt recoveries(2)			(114	)			-				(164	)			(97	)
Write off of below market ground lease(2)			279				-				279				-
General and administrative			2,161				1,773				6,191				4,836
Legal and professional			290				223				796				669
Real estate commissions			150				129				254				268
Acquisition costs			171				-				297				-
Depreciation and amortization			2,897				2,210				8,922				6,545
Impairment recovery - notes receivable			-				(214	)			-				(443	)
Loss (income) from Advised Funds			111				26				67				128
State income tax expense (benefit)			14				16				29				21
Interest expense			2,335				2,763				7,095				7,992
Income from discontinued operations			(812	)			(29	)			(868	)			(101	)
Net operating income		$	7,240			$	6,508			$	21,785			$	19,545

__________

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