AMB Property Corporation , a leading global developer and owner of industrial real estate, today reported results for the fourth quarter and full year 2005.

For the quarter ended December 31, 2005, funds from operations per fully diluted share and unit ("FFOPS") was $1.15, as compared to $0.62 for the same period of 2004. For the full year ended December 31, 2005, FFOPS was $2.75, a record for the company, as compared to $2.30 for 2004. The quarterly and full year FFOPS results exceeded the high end of the company's previous guidance, primarily as a result of strong core operations and better than expected gains from the company's development-for-sale business.

Net income available to common stockholders per share ("EPS") for the fourth quarter of 2005 was $1.56, as compared to $0.65 for the fourth quarter of 2004. EPS for the full year ended December 31, 2005, was $2.85, as compared to $1.39 for 2004. The increase in EPS is due to strong core operations, higher profits from the company's development business, and gains on the sale of operating properties including the fourth quarter sale of the assets of AMB Institutional Alliance Fund I.

Operating Results

AMB's industrial operating portfolio was 95.8% leased as of December 31, 2005, up 120 basis points from September 30, 2005, and up 100 basis points from December 31, 2004. Based on preliminary data provided by Torto Wheaton Research, AMB estimates that U.S. industrial vacancy at the end of the fourth quarter was 9.7%, representing a 40 basis point improvement from the prior quarter -- the seventh consecutive quarter of improvement nationally.

Cash-basis same store net operating income increased 5.2% in the fourth quarter of 2005, driven primarily by occupancy gains and lease termination fees. Excluding lease termination fees, same store net operating income during the quarter increased 3.5%. For the full year 2005, same store net operating income increased 0.1%, which can be attributed to occupancy gains offset by lower lease termination fees and decreases in rental rates on leases renewed or rolled over. Excluding lease termination fees, same store net operating income for the full year 2005 increased 0.9%. Rents on lease renewals and rollovers in AMB's same store pool declined 4.6% in the fourth quarter of 2005, an improvement from declines of 7.9% in the prior quarter and 13.6% in the fourth quarter of 2004.

Hamid R. Moghadam, AMB chairman and CEO, said, "Our strong financial results in 2005 benefited from the continuing improvement in real estate fundamentals in most of our global markets, combined with our growing development and private capital businesses. At 95.8%, occupancy in our operating portfolio is at its highest since the third quarter of 2001. On a macro level, demand for U.S. industrial space is robust, as evidenced by a 170 basis points decline in availability for the year, to 9.7%, and our preliminary research indicates near record breaking net absorption during 2005. We believe we are well positioned to take advantage of this environment as we continue to expand our global franchise in 2006."

Investment Activity

During the fourth quarter, AMB placed a development project and a renovation project into operations. The two industrial facilities total approximately 311,000 square feet and were completed for an aggregate investment of approximately $21 million. During 2005, development completed and added to AMB's operating portfolio comprised approximately 2.5 million square feet with a total investment of $138 million.

New development and renovation starts in the quarter totaled approximately 2.4 million square feet in nine projects in North America, Europe, and Asia with an estimated total investment of $187 million. AMB began development on approximately 7.0 million square feet in 2005, the highest level of annual starts in the company's history, with an estimated total investment at completion of $522 million. At year end, AMB's industrial development and renovation pipeline comprised 47 projects totaling approximately 11.9 million square feet in North America, Europe, and Asia. Total investment in the pipeline's development projects is estimated at approximately $1 billion.

During the fourth quarter, AMB acquired 2.1 million square feet of distribution facilities in 15 buildings at a total acquisition cost of approximately $179 million. The acquisitions expand AMB's presence in several strategic North American markets and represent initial investments at the Port of Hamburg and in Shanghai. The transactions bring the company's full year acquisition activity to approximately 6.9 million square feet of distribution facilities and ownership positions in G. Accion and IAT Air Cargo Facilities Income Fund for a total acquisition cost of approximately $604 million.

AMB's president, W. Blake Baird, commented, "The build out of our global platform advanced significantly in 2005, with more than $1 billion of capital deployment split between development starts and acquisitions. In particular during the fourth quarter, we completed our first investment in Shanghai with an acquisition with future expansion potential; we entered Hamburg, Europe's busiest port with a development start and acquisition of three buildings; and we began a build-to-suit development in Tokyo for a global target customer. In addition to our in-process development pipeline, which at year end was approximately $1 billion in nearly 12 million square feet, our land bank can now support an estimated 24 million square feet of future development."

During the quarter, the company generated gross sale proceeds of approximately $114 million from its development-for-sale business. Included in this was the sale of Interstate Crossdock, a 617,000 square foot industrial redevelopment project in northern New Jersey for a gross sale price of approximately $70 million. Full year gross sale proceeds were approximately $208 million on development projects sold or contributed, and AMB's recognized share of net cash gain was approximately $49 million.

Also in the fourth quarter, AMB completed opportunistic sales of seven operating buildings that no longer fit the company's property type or submarket focus. In the aggregate, the seven buildings comprise approximately 0.9 million square feet and represent approximately $56 million in gross disposition proceeds. Additionally, as announced during the quarter, the company sold the properties owned by AMB Institutional Alliance Fund I, comprising 100 operating buildings totaling approximately 5.8 million square feet. The gross disposition proceeds were approximately $618 million. AMB received cash and a distribution of an on-tarmac property, AMB DFW Air Cargo Center I, in exchange for its 21% interest in the fund. AMB also received a net incentive distribution of approximately $26 million in cash.

Private Capital

During 2005, a total of $558 million of third party equity was committed: $420 million for AMB Japan Fund I; $114 million for AMB Institutional Alliance Fund III; and $24 million for AMB Partners II. Subsequent to year end, AMB Institutional Alliance Fund III closed on an additional $63 million of third party equity. Fund III, the company's open-end commingled fund, had its initial closing in the fourth quarter of 2004 and to date has raised approximately $314 million in third party equity. The Fund invests in operating and renovation properties in the United States and had investments in real estate of approximately $750 million at the end of fourth quarter 2005.

Promotions of Company Officers

The company announced five officer promotions effective January 1, 2006. Mike Evans and Ellen Hall have been promoted to senior vice president, and Deborah Briones, Jaime Cannon, and Tatsuya Nagasko have been promoted to vice president.

Commenting on these promotions, Mr. Moghadam said, "AMB has a strong commitment to recognizing and promoting individuals who demonstrate leadership and a high level of contribution and capability. These promotions reflect the confidence we have in each of these officers and recognize them for the contributions they continue to make to the long-term success of our global business."

Supplemental Earnings Measure

AMB reports fund from operations per fully diluted share and unit in accordance with the standards established by the National Association of Real Estate Investment Trusts. Included in the footnotes to the company's attached financial statements is a discussion of why management believes FFOPS is a useful supplemental measure of operating performance, ways in which investors might use FFOPS when assessing the company's financial performance and FFOPS limitations as a measurement tool. Reconciliation from net income to funds from operations is provided in the attached tables and published in AMB's quarterly supplemental analyst package, available on the company's website at

Conference Call and Supplemental Information

The company will host a conference call to discuss the quarterly and full year results on Tuesday, January 24, 2006 at 1:00 PM EST/10:00 AM PST. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing 1-877-447-8218 and using reservation code 3968401. A webcast can be accessed through a link titled "Q4 2005 Earnings Conference Call" located on the home page of the company's website at

If you are unable to listen to the live conference call, a telephone and webcast replay will be available after 12:00 PM PST on Tuesday, January 24, 2006 until 5:00 PM PST on Tuesday, February 21, 2006. The telephone replay can be accessed by dialing 1-800-642-1687 or +1-706-645-9291 and using reservation code 3968401 or by webcast through the link on the company's website at

In addition, the company will post a summary of the guidance given on the call and a supplement detailing the components of net asset value to the Investor Information portion of its website on Tuesday, January 31, 2006 by 5:00 PM PST.

AMB Property Corporation. Local partner to global trade.(TM)

AMB Property Corporation is a leading owner and operator of industrial real estate, focused on major hub and gateway distribution markets throughout North America, Europe and Asia. As of December 31, 2005, AMB owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, or managed buildings, properties and development projects expected to total approximately 115 million square feet (10.7 million square meters) and 1,057 buildings in 42 markets within eleven countries. AMB invests in properties located predominantly in the infill submarkets of its targeted markets. The company's portfolio is comprised of High Throughput Distribution(R) facilities-industrial properties built for speed and located near airports, seaports and ground transportation systems.

AMB's press releases are available on the company website at or by contacting the Investor Relations department at 1-877-285-3111.

Some of the information included in this report contains forward-looking statements, such as those related to the company's interpretation of trends regarding national and portfolio industrial space absorption; the total expected investment in acquisitions; size and timing of deliveries and total investment in development projects; goals regarding amount of non-U.S. investment; and use of private capital funds for planned investment activity which are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future events. The events or circumstances reflected in forward-looking statements might not occur. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "pro forma," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases. You can also identify forward- looking statements by discussions of strategy, plans or intentions. Forward- looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: defaults on or non-renewal of leases by tenants, increased interest rates and operating costs, our failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, our failure to successfully integrate acquired properties and operations, our failure to divest properties we have contracted to sell or to timely reinvest proceeds from any divestitures, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our inability to obtain necessary permits and public opposition to these activities), our failure to qualify and maintain our status as a real estate investment trust, environmental uncertainties, risks related to natural disasters, financial market fluctuations, changes in real estate and zoning laws, risks related to doing business internationally and increases in real property tax rates. Our success also depends upon economic trends generally, including interest rates, income tax laws, governmental regulation, legislation, population changes and certain other matters discussed under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Business Risks" and elsewhere in our most recent annual report for the year ended December 31, 2004 on Form 10-K.

                       CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)

                                                       As of

                                        December 31,   September   June 30,
                                            2005        30, 2005     2005
  Investments in real estate:
    Total investments in properties      $6,798,294  $6,898,824  $6,680,432
    Accumulated depreciation               (697,388)   (721,892)   (683,679)
      Net investments in properties       6,100,906   6,176,932   5,996,753
    Investments in unconsolidated joint
     ventures                               118,653     115,624     121,000
    Properties held for contribution,
     net                                     32,755      80,245          --
    Properties held for divestiture, net     17,936      45,742      75,472
      Net investments in real estate      6,270,250   6,418,543   6,193,225
  Cash and cash equivalents                 267,233     162,437     169,471
  Mortgages and loans receivable             21,621      21,652      21,682
  Accounts receivable, net                  178,682     158,000     173,360
  Other assets                               64,953      75,605      66,633
       Total assets                      $6,802,739  $6,836,237  $6,624,371

  Liabilities and Stockholders' Equity
  Secured debt                           $1,912,526  $2,051,480  $1,843,861
  Unsecured senior debt securities          975,000   1,003,940   1,003,940
  Unsecured debt                             23,963      24,175       8,710
  Unsecured credit facilities               490,072     472,291     549,397
  Accounts payable and other liabilities    263,744     262,425     242,944
      Total liabilities                   3,665,305   3,814,311   3,648,852
  Minority interests:
    Joint venture partners                  853,643     933,262     906,527
    Preferred unitholders                   278,378     278,378     278,378
    Limited partnership unitholders          89,114      86,719      89,601
      Total minority interests            1,221,135   1,298,359   1,274,506
  Stockholders' equity:
  Common equity                           1,740,751   1,620,363   1,597,809
  Preferred equity                          175,548     103,204     103,204
      Total stockholders' equity          1,916,299   1,723,567   1,701,013
      Total liabilities and
       stockholders' equity              $6,802,739  $6,836,237  $6,624,371

                                                       As of

                                           March 31, 2005  December 31, 2004
  Investments in real estate:
    Total investments in properties           $6,608,737        $6,526,144
    Accumulated depreciation                    (652,085)         (615,646)
      Net investments in properties            5,956,652         5,910,498
    Investments in unconsolidated joint
     ventures                                    105,127            55,166
    Properties held for contribution,
     net                                              --                --
    Properties held for divestiture,
     net                                          49,455            87,340
      Net investments in real estate           6,111,234         6,053,004
  Cash and cash equivalents                      215,068           146,593
  Mortgages and loans receivable                  21,710            13,738
  Accounts receivable, net                       135,768           109,028
  Other assets                                    71,304            64,580
       Total assets                           $6,555,084        $6,386,943

  Liabilities and Stockholders' Equity
  Secured debt                                $1,915,702        $1,892,524
  Unsecured senior debt securities             1,003,940         1,003,940
  Unsecured debt                                   8,869             9,028
  Unsecured credit facilities                    422,616           351,699
  Accounts payable and other
   liabilities                                   258,159           262,286
      Total liabilities                        3,609,286         3,519,477
  Minority interests:
    Joint venture partners                       884,188           828,622
    Preferred unitholders                        278,378           278,378
    Limited partnership unitholders               89,377            89,326
      Total minority interests                 1,251,943         1,196,326
  Stockholders' equity:
  Common equity                                1,590,651         1,567,936
  Preferred equity                               103,204           103,204
      Total stockholders' equity               1,693,855         1,671,140
      Total liabilities and
       stockholders' equity                   $6,555,084        $6,386,943

                  (dollars in thousands, except share data)

                             For the Quarters Ended   For the Years Ended
                                  December 31,            December 31,
                                2005        2004        2005        2004
  Rental revenues              $168,926    $151,535    $632,207    $579,534
  Private capital income(1)      31,422       4,818      43,942      12,895
    Total revenues              200,348     156,353     676,149     592,429
  Costs and expenses
  Property operating costs      (43,321)    (38,238)   (163,208)   (148,258)
  Depreciation and
   amortization                 (43,557)    (38,782)   (165,438)   (141,120)
  General and administrative    (20,343)    (13,961)    (77,409)    (58,843)
  Fund costs                       (409)     (1,004)     (1,482)     (1,741)
    Total costs and expenses   (107,630)    (91,985)   (407,537)   (349,962)
       Operating income          92,718      64,368     268,612     242,467
  Other income and expenses
  Equity in earnings of
   unconsolidated joint
   ventures                         811         525      10,770       3,781
  Other income and expenses,
   net                            3,342         509       6,499       3,758
  Gains from dispositions of
   real estate, net                 176       5,219      19,099       5,219
  Development profits, net
   of taxes                      34,489       3,772      54,811       8,528
  Interest expense,
   including amortization       (38,445)    (36,176)   (149,492)   (144,882)
    Total other income and
     expenses                       373     (26,151)    (58,313)   (123,596)
       Income before
        minority interests
        and discontinued
        operations               93,091      38,217     210,299     118,871
  Minority interests' share
   of income:
    Joint venture partners'
     share of income             (9,349)     (7,774)    (36,398)    (29,544)
    Joint venture partners'
     share of development
     profits                     (3,366)        (64)    (13,492)       (958)
    Preferred unitholders        (5,369)     (5,395)    (21,473)    (20,161)
    Limited partnership
     unitholders                 (2,054)       (799)     (3,681)     (2,615)
       Total minority
        interests' share of
        income                  (20,138)    (14,032)    (75,044)    (53,278)
       Income from
        operations               72,953      24,185     135,255      65,593
  Discontinued operations:
    Income attributable to
     operations, net of
     minority interests           2,413       4,069       8,999      17,873
    Gain from disposition of
     real estate, net of
     minority interests          65,817      29,680     113,553      42,005
       Total discontinued
        operations               68,230      33,749     122,552      59,878
        Net income              141,183      57,934     257,807     125,471
  Preferred stock dividends      (2,039)     (1,782)     (7,388)     (7,131)
  Net income available to
   common stockholders         $139,144     $56,152    $250,419    $118,340
  Net income per common
   share (diluted)                $1.56       $0.65       $2.85       $1.39
  Weighted average common
   shares (diluted)          88,981,657  86,263,305  87,873,399  85,368,626

  (1) Includes incentive distributions for 2005 of $26.4 million for the
      sale of AMB Institutional Alliance Fund I which is net of $2.7 million
      which has been deferred.


                  (dollars in thousands, except share data)

                             For the Quarters Ended   For the Years Ended
                                    December 31,            December 31,
                                  2005        2004        2005        2004
  Net income                   $141,183     $57,934    $257,807    $125,471
  Gains from disposition of
   real estate, net of
   minority interests (2)       (65,993)    (34,899)   (132,652)    (47,224)
  Depreciation and
    Total depreciation and
     amortization                43,557      38,782     165,438     141,120
    Discontinued operations'
     depreciation                 2,985       5,837      14,866      26,230
    Non-real estate
     depreciation                  (949)       (363)     (3,388)       (871)
  Adjustments to derive FFO
   from consolidated JVs:
    Joint venture partners'
     minority interests (Net
     income)                      9,349       7,774      36,398      29,544
    Limited partnership
     unitholders' minority
     interests (Net income)       2,054         799       3,681       2,615
    Limited partnership
     unitholders' minority
     interests (Development
     profits)                     1,704         213       2,262         435
    Discontinued operations'
     minority interests (Net
     income)                      1,711       3,075       8,502      13,549
    FFO attributable to
     minority interests         (27,641)    (22,020)   (100,275)    (80,192)
  Adjustments to derive FFO
   from unconsolidated JVs:
    AMB's share of net
     income                        (811)       (525)    (10,770)     (3,781)
    AMB's share of FFO            2,633       1,460      14,441       7,549
    AMB's share of
     development profits,
     net of taxes                    --          --       5,441          --
  Preferred stock dividends      (2,039)     (1,782)     (7,388)     (7,131)
      Funds from operations    $107,743     $56,285    $254,363    $207,314

      FFO per common share
       and unit (diluted)         $1.15       $0.62       $2.75       $2.30

      Weighted average
       common shares and
       units (diluted)       93,422,964  91,003,313  92,508,725  90,120,250

  (1)  Funds From Operations ("FFO"). The Company believes that net income,
       as defined by GAAP, is the most appropriate earnings measure.
       However, the Company considers funds from operations, or FFO, as
       defined by NAREIT, to be a useful supplemental measure of its
       operating performance.  FFO is defined as net income, calculated in
       accordance with GAAP, less gains (or losses) from dispositions of
       real estate held for investment purposes and real estate-related
       depreciation, and adjustments to derive the Company's pro rata share
       of FFO of consolidated and unconsolidated joint ventures. Further,
       the Company does not adjust FFO to eliminate the effects of non-
       recurring charges.  The Company believes that FFO, as defined by
       NAREIT, is a meaningful supplemental measure of its operating
       performance because historical cost accounting for real estate assets
       in accordance with GAAP implicitly assumes that the value of real
       estate assets diminishes predictably over time, as reflected through
       depreciation and amortization expenses.  However, since real estate
       values have historically risen or fallen with market and other
       conditions, many industry investors and analysts have considered
       presentation of operating results for real estate companies that use
       historical cost accounting to be insufficient.  Thus, NAREIT created
       FFO as a supplemental measure of operating performance for real
       estate investment trusts that excludes historical cost depreciation
       and amortization, among other items, from net income, as defined by
       GAAP.  The Company believes that the use of FFO, combined with the
       required GAAP presentations, has been beneficial in improving the
       understanding of operating results of real estate investment trusts
       among the investing public and making comparisons of operating
       results among such companies more meaningful.  The Company considers
       FFO to be a useful measure for reviewing comparative operating and
       financial performance because, by excluding gains or losses related
       to sales of previously depreciated operating real estate assets and
       real estate depreciation and amortization, FFO can help the investing
       public compare the operating performance of a company's real estate
       between periods or as compared to other companies.  While FFO is a
       relevant and widely used measure of operating performance of real
       estate investment trusts, it does not represent cash flow from
       operations or net income as defined by GAAP and should not be
       considered as an alternative to those measures in evaluating the
       Company's liquidity or operating performance.  FFO also does not
       consider the costs associated with capital expenditures related to
       the Company's real estate assets nor is FFO necessarily indicative of
       cash available to fund the Company's future cash requirements.
       Further, the Company's computation of FFO may not be comparable to
       FFO reported by other real estate investment trusts that do not
       define the term in accordance with the current NAREIT definition or
       that interpret the current NAREIT definition differently than the
       Company does.

  (2)  2005 includes accumulated depreciation re-capture of approximately
       $1.1 million associated with the sale of the Interstate Crossdock
       redevelopment project.

SOURCE: AMB Property Corporation

CONTACT: Margan S. Mitchell, Vice President, Corporate Communications,
+1-415-733-9477, or fax, +1-415-477-2177, or [email protected], or Evaleen G.
Andamo, Director, Investor Relations, +1-415-733-9565, or fax,
+1-415-477-2065, or [email protected], both of AMB Property Corporation

Media contact & resources

Jennifer Nelson

SVP, Head of Global Corporate Communications
+1 (415) 733 9409
[email protected]
San Francisco, California USA

Corporate Profile

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