Real Estate (Notes)

12 Months Ended

Dec. 31, 2020

A summary of our real estate investments is as follows (in thousands):


	Retail		Office		Multifamily		Mixed-Use		Total
December 31, 2020
Land	$	254,016	$	225,238	$	72,668	$	76,635	$	628,557
Buildings	526,522		1,137,711		392,224		128,477		2,184,934
Land improvements	47,425		11,672		7,346		2,606		69,049
Tenant improvements	88,326		186,423		—		1,890		276,639
Furniture, fixtures, and equipment	1,069		3,236		16,480		15,651		36,436
Construction in progress	5,170		43,595		1,831		663		51,259		(1)
	922,528		1,607,875		490,549		225,922		3,246,874
Accumulated depreciation	(314,610)		(290,768)		(100,745)		(48,017)		(754,140)
Net real estate	$	607,918	$	1,317,107	$	389,804	$	177,905	$	2,492,734
December 31, 2019
Land	$	254,016	$	225,238	$	72,668	$	76,635	$	628,557
Buildings	523,645		1,132,990		390,379		126,726		2,173,740
Land improvements	46,335		11,097		7,106		2,606		67,144
Tenant improvements	87,707		151,662		—		2,252		241,621
Furniture, fixtures, and equipment	911		3,065		14,995		7,187		26,158
Construction in progress	6,487		35,397		2,212		7,381		51,477		(1)
	919,101		1,559,449		487,360		222,787		3,188,697
Accumulated depreciation	(294,189)		(241,595)		(86,208)		(43,230)		(665,222)
Net real estate	$	624,912	$	1,317,854	$	401,152	$	179,557	$	2,523,475

(1) Land related to held for development and construction in progress is included in the Held for Development and Construction in Progress classifications on the consolidated balance sheets.

Dispositions

On May 22, 2019, we sold Solana Beach – Highway 101. The property is located in Solana Beach, California and was previously included in our retail segment. The sales price of this property was approximately $9.4 million, less costs to sell, and resulted in net proceeds to us of approximately $9.4 million. Accordingly, we recorded a gain on sale of approximately nil, $0.6 million and nil for the years ended December 31, 2020, 2019, and 2018, respectively.

Property Asset Acquisitions

On June 20, 2019, we acquired La Jolla Commons, consisting of two office towers totaling approximately 724,000 square feet, an entitled development parcel and two parking structures, located in San Diego, California. The acquisition was classified as an asset acquisition with a purchase price of approximately $525 million, less seller credits of (i) approximately $11.5 million for speculative lease-up, (ii) approximately $4.2 million for assumed contractual liabilities (iii) and approximately $1.7 million for closing prorations, excluding closing costs of approximately $0.2 million. The property was acquired with proceeds from an underwritten public offering and borrowings under the company's Second Amended and Restated Credit Facility (defined herein).

The financial information set forth below summarizes the company’s purchase price allocations for La Jolla Commons during the year ended December 31, 2019 (in thousands):


	La Jolla Commons
Land	$	82,759
Building	361,471
Land improvements	1,359
Furniture, fixtures, and equipment	30,822
Total real estate	476,411
Lease intangibles	40,082
Prepaid expenses and other assets	13
Assets acquired	$	516,506
Accounts payable and accrued expenses	$	3,578
Security deposits payable	443
Other liabilities and deferred credits	3,817
Liabilities assumed	$	7,838

The value allocated to lease intangibles is amortized over the related lease term as depreciation and amortization expense in the statement of comprehensive income. The remaining weighted average amortization period as of December 31, 2020, is 7.2 years.

The following table summarizes the operating results for the La Jolla Commons included in the company’s historical consolidated statement of comprehensive income and in the office segment for the period of acquisition through December 31, 2019 (in thousands):


	June 20, 2019 through December 31, 2019
Revenues	$	20,579
Operating expenses	$	18,140
Operating income	$	2,439
Net income attributable to American Assets Trust, Inc.	$	2,650

Pro Forma Financial Information (Unaudited)

The pro forma financial information set forth below is based upon the company’s historical consolidated statements of operations for the year ended December 31, 2019 and 2018, adjusted to give effect to the acquisition of La Jolla Commons, described above, as if such transaction had been completed on January 1, 2018. The pro forma financial information includes adjustments to depreciation expense for acquired property and equipment and adjustments to amortization charges for acquired intangible assets and liabilities. The pro forma financial information set forth below is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2018, nor does it purport to represent the results of future operations (in thousands).


	Year Ended December 31, 2019				Year Ended December 31, 2018
	As Reported		ProForma		As Reported		ProForma
Total revenue	$	366,741	$	383,125	$	330,867	$	365,326
Total operating expenses	$	253,056	$	264,107	$	251,332	$	281,253
Operating income	$	113,685	$	119,018	$	79,535	$	84,073
Net income	$	60,188	$	64,278	$	27,202	$	30,662