Related Party Transactions (Notes)

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

At Torrey Reserve Campus, we leased space to ICW, an entity owned and controlled by Ernest Rady. Our lease agreement with ICW expired on December 31, 2016. Rental revenue recognized on the leases of $2.2 million, $2.2 million and $2.2 million for the years ended December 31, 2016, 2015 and 2014, respectively, is included in rental income. Additionally, on July 1, 2014, we entered into a workers' compensation insurance policy with ICW. The policy premium is approximately $0.4 million for the period July 1, 2014 through July 1, 2015. We renewed this policy with ICW on July 1, 2015 and the premium is approximately $0.2 million for the period July 1, 2015 through July 1, 2016. We renewed this policy with ICW on July 1, 2016 and the premium is approximately $0.2 million for the period July 1, 2016 through July 1, 2017.

During the fourth quarter of 2016, we signed a lease agreement with American Assets, Inc., an entity owned and controlled by Ernest Rady, for space at Torrey Reserve Campus. Rent commences on January 1, 2017 for an initial lease term of five years at an average annual rental rate of $0.1 million. Rental revenue recognized on the lease will be included in rental income.

On occasion, the company utilizes aircraft services provided by AAI Aviation, Inc. ("AAIA"), an entity owned and controlled by Ernest Rady. For the years ending December 31, 2016, 2015 and 2014, we incurred approximately $0.2 million, $0.2 million and $0.1 million, respectively, of expenses related to aircraft services of AAIA or reimbursement to Mr. Rady (or his trust) for use of the aircraft owned by AAIA. These expenses are recorded as general and administrative expenses in our consolidated statements of comprehensive income.

On March 9, 2015, we entered into a common stock Purchase Agreement with EIC, an entity owned and controlled by Ernest Rady. The Purchase Agreement provided for the sale by us to EIC, in a private placement, of 200,000 shares of common stock at a price of $40.54 per share, resulting in gross proceeds to us of approximately $8.1 million. The price per share paid by EIC was equal to the closing price of a share of our common stock on the New York Stock Exchange on the date of the Purchase Agreement.

On September 12, 2014, the company entered into a common stock Purchase Agreement with ICW. The Purchase Agreement provides for the sale by the company to ICW, in a private placement, of 400,000 shares of common stock at a price of $33.76 per share, resulting in gross proceeds to the company of approximately $13.5 million. See Note 10.

As of December 31, 2016, Mr. Rady and his affiliates owned approximately 10.4% of our outstanding common stock and 23.4% of our outstanding common units, which together represent an approximate 33.7% beneficial interest in our company on a fully diluted basis.

The Waikiki Beach Walk entities have a 47.7% investment in WBW CHP LLC, an entity that was formed to, among other things, construct a chilled water plant to provide air conditioning to the property and other adjacent facilities. The operating expenses of WBW CHP LLC are recovered through reimbursements from its members, and reimbursements to WBW CHP LLC of $0.9 million, $1.0 million and $1.1 million were made for the years ended December 31, 2016, 2015 and 2014 and included in rental expenses on the statements of income.