AMB Property Corporation , a leading global developer and owner of industrial real estate, today reported results for the second quarter and first six months of 2006.

For the quarter ended June 30, 2006, funds from operations per fully diluted share and unit ("FFOPS") was $0.87, as compared to $0.55 for the second quarter of 2005. For the six months ended June 30, 2006, FFOPS was $1.39, as compared to $1.09 for the same period in 2005. The quarter and year-to-date FFOPS results exceeded the high end of the company's previous guidance by $0.14 per share, primarily as a result of better than expected profitability on the assets sold or contributed during the quarter of $0.49 per share, partially offset by $0.06 per share of impairment charges.

Net income available to common stockholders per share ("EPS") for the second quarter of 2006 was $0.80, as compared to $0.45 for the second quarter of 2005, primarily due to increased levels of development profits and gains from dispositions of operating properties. EPS for the six months ended June 30, 2006, was $1.06 as compared to $0.97 for the same period in 2005.

Operating Results

AMB's industrial operating portfolio occupancy was 95.4% at June 30, 2006, up 70 basis points from March 31, 2006, and 90 basis points from June 30, 2005. Cash-basis same store net operating income in the second quarter of 2006 increased 3.0% over the same period in 2005. When the effects of lease termination fees are excluded from this metric, the increase was 2.9%. The increase was due, in part, to a higher average occupancy rate in the same store portfolio. In the second quarter, rents on lease renewals and rollovers in AMB's operating portfolio declined 0.9% -- the lowest quarterly decline since the second quarter of 2002 -- as compared to an 11.5% decline in the prior quarter and a 14.6% decline in the second quarter of 2005.

Hamid R. Moghadam, AMB chairman and CEO, said, "AMB's global platform is producing meaningful results for our customers and shareholders. Our strong quarterly results reflect the continuing improvement of nearly all our global target markets and demonstrate AMB's significant value creation abilities. In fact, the second quarter was the most profitable quarter ever for our development business, with the notable contribution of AMB Ohta Distribution Center in central Tokyo."

Investment Activity

New development and renovation starts in the quarter totaled more than 2.0 million square feet in four projects in the U.S., Japan and China with an estimated total investment of $134.6 million. Included is a 1.0 million square foot, three-building project in Shanghai, China, that is fully pre-committed. AMB's industrial development and renovation pipeline totals 47 projects of approximately 14.2 million square feet globally with an estimated total investment of $1.1 billion scheduled for delivery through the second quarter of 2008. Deliveries slated though the end of 2006 are 78% preleased or under contract for sale.

AMB placed three industrial development projects into operations during the second quarter of 2006. The buildings, located in the U.S. distribution markets of Washington D.C. and Los Angeles, total approximately 451,000 square feet and were completed for an aggregate investment of $52.5 million.

The company's development business includes projects for sale to third parties, or contribution of stabilized properties to affiliated private capital funds. During the second quarter, AMB contributed AMB Ohta Distribution Center, a 790,000 square foot industrial facility located in Tokyo, to its AMB Japan Fund I, and Encino Distribution Center, a 581,000 square foot industrial facility located in Mexico City, to its Mexico fund, AMB-SGP Mexico.

During the second quarter, AMB acquired approximately 2.5 million square feet of distribution facilities in 27 buildings at a total acquisition cost of approximately $246.8 million. The acquisitions expand the company's presence in four North American target markets and in Paris, France.

AMB's president, W. Blake Baird, commented, "The second quarter was a watershed for our global platform. Our operating portfolio outside the U.S. now accounts for more than 10% of our annual revenue, on track to meet our goal of 15% by the end of 2007. In Tokyo, we contributed to our Japan Fund the largest development in the company's history. In Shanghai, we began a 1.0 million square foot development for a target global customer, and our development pipeline, including what could be developed from our land bank not yet under construction, exceeds $2.5 billion."

In the second quarter, AMB completed opportunistic sales of eight operating buildings that no longer fit the company's strategy. In the aggregate, the buildings comprised approximately 531,000 square feet and represented approximately $37.1 million in gross disposition proceeds.

Organizational Update

With the post-quarter acquisition of the 50% of AMB BlackPine that the company did not previously own, AMB has combined the operations of AMB BlackPine with its wholly-owned Japanese subsidiary, AMB Property Japan, creating a unified platform from which AMB will continue to develop, lease, acquire and operate industrial real estate in Japan. The newly integrated entity will operate as AMB Property Japan, with a combined workforce in Tokyo, Osaka, and Nagoya of 47 persons, 43 of whom are Japanese nationals.

Promotions and Addition of Company Officers

The company announced eight officer promotions effective July 1, 2006. In North America, Jim McGill has been promoted to senior vice president, and Al Kalmbach, Will O'Donnell, and Marc Sances have been promoted to vice president. In Europe, Arthur Tielens has been promoted to senior vice president, and Paul Van Riemsdijk has been promoted to vice president. In Asia, Fritz Wyler has been promoted to senior vice president, and Richard Xia has been promoted to vice president.

Commenting on these promotions, Mr. Moghadam said, "We believe our global customers will benefit from the talents and ongoing contributions of these proven officers. I'm proud of their accomplishments and commitment to helping create superior total returns for our investors and enduring excellence for AMB."

In addition, Anthony Chiarello has joined AMB, in its New Jersey office, as senior vice president, Customer Development. Mr. Chiarello most recently served as president of Hudd Distribution Services, Inc., a Maersk Logistics company. Previously, he was president of Maersk Logistics USA Inc.

Supplemental Earnings Measures

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's 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 www.amb.com.

The company believes that net income, as defined by GAAP, is the most appropriate earnings measure. However, the company considers same store net operating income (SSNOI) to be a useful supplemental measure of its operating performance. Properties that are considered part of the same store pool include all properties that were owned as of the end of both the current and prior year reporting periods and exclude development properties for both the current and prior reporting periods. The same store pool is set annually and excludes properties purchased and developments stabilized after December 31, 2004. The same store pool includes the Park One parking lot in Los Angeles, California. In deriving SSNOI, the company defines NOI as rental revenues (as calculated in accordance with GAAP), including reimbursements, less straight- line rents, property operating expenses and real estate taxes. The company excludes straight-line rents in calculating SSNOI because the company believes it provides a better measure of actual cash basis rental growth for a year- over-year comparison. In addition, the company believes that SSNOI helps the investing public compare the operating performance of a company's real estate as compared to other companies. While SSNOI 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 our liquidity or operating performance. SSNOI also does not reflect general and administrative expenses, interest expenses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact its results from operations. Further, the company's computation of SSNOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SSNOI.

Conference Call and Supplemental Information

The company will host a conference call to discuss the quarterly results on Wednesday, July 12, 2006 at 1:00 p.m. EDT/10:00 a.m. PDT. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing 1 877 447 8218 (from the U.S. and Canada) or +1 706 643 7823 (from all other countries) and entering reservation code 2323595. A webcast can be accessed through a link titled "Q2 2006 Earnings Conference Call" located on the home page of the company's website at www.amb.com. If you are unable to listen to the live conference call, a telephone and webcast replay will be available after 12:00 p.m. PDT on Wednesday, July 12, 2006 until 5:00 p.m. PDT on Wednesday, August 9, 2006. The telephone replay can be accessed by dialing 1 800 642 1687 (U.S. and Canada) or +1 706 645 9291 (all other countries), with the reservation code 2323595 or by webcast through the link on the company's website at www.amb.com.

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, July 18, 2006 by 5:00 p.m. PDT.

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

AMB Property Corporation(R) 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 June 30, 2006, AMB owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 122 million square feet (11 million square meters) and 1,094 buildings in 41 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 www.amb.com or by contacting the Investor Relations department at +1 415 394 9000.

Some of the information included in this press release contains forward- looking statements, such as those related to total expected investments in acquisitions and developments; size and timing of deliveries and total investments in development projects; 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, re-financing risks, difficulties in identifying properties to acquire and in effecting acquisitions, our failure to successfully integrate acquired properties and operations, our failure to divest properties on advantageous terms 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, changes in general economic conditions or in the real estate sector, changes in real estate and zoning laws or other local, state and federal regulatory requirements, a downturn in the U.S., California, or the global economy, risks related to doing business internationally, losses in excess of our insurance coverage, unknown liabilities acquired in connection with acquired properties or otherwise 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, various market conditions and fluctuations and those other risk factors discussed under the heading "Risk Factors" and elsewhere in our most recent annual report on Form 10-K for the year ended December 31, 2005.

                         CONSOLIDATED BALANCE SHEETS
                            (dollars in thousands)


                                                       As of
                                          June 30,   March 31,  December 31,
                                            2006        2006        2005
  Assets
  Investments in real estate:
    Total investments in properties      $7,376,322  $6,913,524  $6,798,294
    Accumulated depreciation               (774,528)   (736,760)   (697,388)
      Net investments in properties       6,601,794   6,176,764   6,100,906
    Investments in unconsolidated joint
     ventures                               123,107     118,472     118,653
    Properties held for contribution,
     net                                     71,981     266,311      32,755
    Properties held for divestiture, net     46,857      31,201      17,936
      Net investments in real estate      6,843,739   6,592,748   6,270,250
  Cash and cash equivalents                 231,912     168,007     267,233
  Mortgages and loans receivable             18,816      21,589      21,621
  Accounts receivable, net                  127,528     148,907     178,682
  Other assets                              114,371     112,312      64,953
       Total assets                      $7,336,366  $7,043,563  $6,802,739

  Liabilities and Stockholders' Equity
  Secured debt                           $1,824,468  $1,917,805  $1,912,526
  Unsecured senior debt                   1,051,249     950,937     975,000
  Unsecured credit facilities               909,952     734,110     490,072
  Other debt                                 88,217      63,543      23,963
  Accounts payable and other liabilities    254,223     249,149     263,744
      Total liabilities                   4,128,109   3,915,544   3,665,305
  Minority interests:
    Joint venture partners                  950,209     899,658     853,643
    Preferred unitholders                   189,964     200,986     278,378
    Limited partnership unitholders          89,717      87,973      89,114
      Total minority interests            1,229,890   1,188,617   1,221,135
      Stockholders' equity:
      Common equity                       1,803,036   1,764,071   1,740,751
      Preferred equity                      175,331     175,331     175,548
      Total stockholders' equity          1,978,367   1,939,402   1,916,299
       Total liabilities and
        stockholders' equity             $7,336,366  $7,043,563  $6,802,739


                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except share data)


                                For the Quarters       For the Six Months
                                  Ended June 30,           Ended June 30,
                                2006        2005        2006        2005
  Revenues
  Rental revenues              $175,330    $154,370    $351,234    $307,204
  Private capital income          4,943       3,438      10,049       6,756
    Total revenues              180,273     157,808     361,283     313,960
  Costs and expenses
  Property operating costs      (44,883)    (39,916)    (90,400)    (79,500)
  Depreciation and
   amortization                 (44,088)    (37,764)    (87,162)    (72,636)
  Impairment losses              (5,394)         --      (5,394)         --
  General and administrative    (25,144)    (20,111)    (47,998)    (38,060)
  Other expenses (1)                296         792        (241)       (738)
  Fund costs                       (479)       (380)     (1,093)       (744)
    Total costs and expenses   (119,692)    (97,379)   (232,288)   (191,678)
  Other income and expenses
  Equity in earnings of
   unconsolidated joint
   ventures (2)                   8,278       7,188      10,366       8,430
  Other income (1)                1,933       1,667       4,998       1,804
  Gains from dispositions of
   real estate, net                  --      17,622          --      18,923
  Development profits, net
   of taxes                      45,698       1,975      46,372      19,924
  Interest expense,
   including amortization       (44,075)    (37,186)    (83,800)    (74,011)
    Total other income and
     expenses                    11,834      (8,734)    (22,064)    (24,930)
       Income from
        operations before
        minority interests       72,415      51,695     106,931      97,352
  Minority interests' share
   of income:
    Joint venture partners'
     share of income             (9,060)     (8,893)    (17,731)    (18,242)
    Joint venture partners'
     share of development
     profits                     (1,619)       (284)     (1,651)    (10,120)
    Preferred unitholders        (4,024)     (5,368)     (9,025)    (10,736)
    Limited partnership
     unitholders                   (495)       (849)     (1,311)     (1,379)
       Total minority
        interests' share of
        income                  (15,198)    (15,394)    (29,718)    (40,477)
       Income from
        continuing
        operations               57,217      36,301      77,213      56,875
  Discontinued operations:
    Income (loss)
     attributable to
     discontinued
     operations, net of
     minority interests           1,063        (882)      1,630      (2,634)
    Gain from disposition of
     real estate, net of
     minority interests          17,073       5,370      24,087      33,315
       Total discontinued
        operations               18,136       4,488      25,717      30,681
         Net income              75,353      40,789     102,930      87,556
  Preferred stock dividends      (3,095)     (1,783)     (6,191)     (3,566)
  Preferred unit redemption
   discount/(issuance costs)         77          --      (1,020)         --
  Net income available to
   common stockholders          $72,335     $39,006     $95,719     $83,990
  Net income per common
   share (diluted)                $0.80       $0.45       $1.06       $0.97
  Weighted average common
   shares (diluted)          90,135,659  87,076,011  90,147,493  86,845,858

  (1) Includes changes in liabilities and assets associated with the
      Company's deferred compensation plan.
  (2) Includes gains on sale of operating assets of $7.7 million,
      $8.3 million, $4.8 million and $5.0 million, respectively, for the
      three and six months ended June 30, 2006 and 2005.


              CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (1)
                  (dollars in thousands, except share data)


                                 For the Quarters        For the Six Months
                                   Ended June 30,          Ended June 30,
                                 2006        2005        2006        2005
  Net income                    $75,353     $40,789    $102,930     $87,556
  Gains from disposition of
   real estate, net of
   minority interests           (17,073)    (22,992)    (24,087)    (52,238)
  Depreciation and
   amortization:
    Total depreciation and
     amortization                44,088      37,764      87,162      72,636
    Discontinued operations'
     depreciation                   350       7,166         544      16,416
    Non-real estate
     depreciation                (1,068)       (802)     (2,068)     (1,547)
  Adjustments to derive FFO
   from consolidated JVs:
    Joint venture partners'
     minority interests (Net
     income)                      9,060       8,893      17,731      18,242
    Limited partnership
     unitholders' minority
     interests (Net income)         495         849       1,311       1,379
    Limited partnership
     unitholders' minority
     interests (Development
     profits)                     2,208          94       2,240         552
    Discontinued operations'
     minority interests (Net
     income)                       (110)      2,025        (214)      4,180
    FFO attributable to
     minority interests         (21,748)    (24,103)    (42,183)    (47,690)
  Adjustments to derive FFO
   from unconsolidated JVs:
    AMB's share of net
     income                      (8,278)     (7,188)    (10,366)     (8,430)
    AMB's share of FFO            2,096       4,469       5,305       7,216
    AMB's share of
     development profits,
     net                             --       5,441          --       5,441
  Preferred stock dividends      (3,095)     (1,783)     (6,191)     (3,566)
  Preferred unit redemption
   discount (issuance costs)         77          --      (1,020)         --
      Funds from operations     $82,355     $50,622    $131,094    $100,147

      FFO per common share
       and unit (diluted)         $0.87       $0.55       $1.39       $1.09

      Weighted average
       common shares and
       units (diluted)       94,520,866  91,795,834  94,534,263  91,566,987

  (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.

SOURCE: AMB Property Corporation

CONTACT: Margan S. Mitchell, Vice President, Corporate Communications of
AMB Property Corporation, +1-415-733-9477, or fax, +1-415-477-2177, or
[email protected]

Media contact & resources

Jennifer Nelson

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

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