AMB Property Corporation(R) , a leading global developer and owner of industrial real estate, today reported results for the second quarter and first six months of 2007.

Funds from operations per fully diluted share and unit ("FFOPS") was $0.74 for the second quarter of 2007, as compared to $0.87 for the same quarter in 2006. The current quarter results include $0.27 per share of development profits, as compared to $0.48 per share in the second quarter of 2006. FFOPS results in the second quarter exceeded the high end of the company's previous guidance by $0.07 per share, primarily due to the better than expected performance of the operating portfolio and the timing of development gains. FFOPS for the six months ended June 30, 2007 was $1.32, as compared to $1.39 for the same period in 2006.

Net income available to common stockholders per fully diluted share ("EPS") for the second quarter of 2007 was $1.10, as compared to $0.80 for the same quarter in 2006. EPS for the six months ended June 30, 2007 was $1.35 as compared to $1.06 for the same period in 2006. The increases for the quarter and year-to-date were due primarily to the gain on the contribution of operating properties to the company's Europe Fund I, which was formed in the second quarter of 2007.

OWNED AND MANAGED PORTFOLIO OPERATING RESULTS

AMB's operating portfolio occupancy at June 30, 2007 was 96.1%, up 80 basis points from March 31, 2007 and 90 basis points from June 30, 2006. Benefiting from occupancy gains and rising rents in many of the company's markets, cash-basis same store net operating income ("SSNOI") in the second quarter of 2007 increased 5.8% over the same period in 2006. In the second quarter of 2007, rents on lease renewals and rollovers in AMB's operating portfolio increased 2.0%, as compared to a decline of 0.9% in the second quarter of 2006.

"Global trade continues to expand at more than three times world GDP. Many of our customers are reconfiguring their distribution networks to improve efficiencies, driving the demand for new facilities in our target markets. Our solid performance in the quarter reflects this dynamic," said Hamid R. Moghadam, AMB chairman and CEO. "Our operating portfolio grew by nearly 8.0 million square feet in the quarter, and at the same time, our occupancy level improved and is on target to meet our annual forecast. Market rents continue to rise in many of our markets, resulting in our portfolio's fourth consecutive quarter of positive rent growth on rollover. Importantly, conversations with our customers point to continued growth in both sea container traffic and air cargo volumes for the remainder of 2007, which puts us in a good position for the balance of the year."

INVESTMENT ACTIVITY

New development starts in the quarter totaled approximately 3.2 million square feet in nine projects in North America and Asia, and one value-added conversion project in San Francisco, with an estimated total investment of $265 million. At quarter end, AMB's development pipeline totaled 15.7 million square feet in 41 projects globally and five value-added conversion projects in California, with an estimated total investment of $1.5 billion.

The company's development business includes contributions of stabilized properties to affiliated private capital funds or sale of projects to third parties. During the second quarter, AMB contributed or sold nine development projects totaling 1.3 million square feet for a gross sale price of $159 million.

During the quarter, AMB acquired 5.4 million square feet of industrial distribution space in 23 properties at a total acquisition cost of approximately $495 million, $478 million of which was acquired for four of the company's co-investment funds: AMB Alliance Fund III, AMB Japan Fund I, AMB Europe Fund I and AMB-SGP Mexico. The acquisitions during the quarter expanded the company's presence in several of its target markets in North America, Europe and Asia, and included entry into the company's fifth Mexico target market, Tijuana.

"We have spent the past several years building a global platform with local-market development, acquisition and management teams focused on understanding and meeting our customers' rapidly evolving real estate requirements. During the second quarter, we deployed a record level of capital, highlighting the ability of our regional teams to source attractive investment opportunities and to meet customer needs," added Mr. Moghadam. "Further, our proven track record in making quality investments allows us to continue to grow our private capital franchise, boosting returns on invested capital and providing us with an important source of recurring income-benefiting both our private capital and public equity investors."

As previously announced, AMB formed AMB Europe Fund I during the quarter with an initial contribution of 4.2 million square feet of operating properties and 0.5 million square feet of development properties. This open- end co-investment fund, with a current gross asset value of approximately $719 million, is the company's 10th active fund and the 11th fund formed since AMB's 1997 initial public offering. The fund targets investments of distribution facilities in many major European metropolitan areas with dynamic and diverse economies tied to global trade, including markets in Belgium, France, Germany, Italy, the Netherlands, Spain, the United Kingdom and Central/Eastern Europe.

Additions and Promotions of Company Officers

During the quarter, Peter Schuijlenburg joined AMB as vice president, general manager for the company's business in Germany. Mr. Schuijlenburg is located in AMB's Frankfurt office. The company announced the following officer promotions during the quarter: Bobby Bransfield was promoted to senior vice president, and Ken Kwan, Mary Lang, Jason Leong, Rowena Manlapaz and David Mims were promoted to vice president.

Supplemental Earnings Measure

AMB reports FFOPS 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 and FFOPS is provided in the attached tables and published in AMB's quarterly supplemental analyst package, available on the company's website at http://www.amb.com/.

The company believes that net income, as defined by GAAP, is the most appropriate earnings measure. However, the company considers cash-basis 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, 2005. In deriving SSNOI, the company defines NOI as rental revenues (as calculated in accordance with GAAP), including reimbursements, less straight-line rents, amortization of lease intangibles, and property operating expenses, which excludes depreciation, amortization, general and administrative expenses and interest expense. The company considers SSNOI to be an appropriate and useful supplemental performance measure because it reflects the operating performance of the real estate portfolio excluding effects of non-cash adjustments and 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 company's operating performance with that of 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 AMB's liquidity or operating performance. SSNOI also does not reflect general and administrative expenses, interest expense, 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. Reconciliation from net income to SSNOI is published in the company's quarterly supplemental analyst package, available on the company's website at http://www.amb.com/.

"Owned and managed" is defined by the company as assets in which the company has at least a 10% ownership interest, is the property or asset manager, and which it intends to hold for the long-term.

Conference Call and Supplemental Information

The company will host a conference call to discuss its second quarter 2007 results on Wednesday, July 18, 2007 at 1:00 PM EDT. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing 877 447 8218 (from the U.S. and Canada) or +1 706 643 7823 (from all other countries) and using reservation code 5562755. A webcast can be accessed through a link titled "Q2 2007 Earnings Conference Call" located on the home page of the company's website at http://www.amb.com/.

If you are unable to listen to the live conference call, a telephone and webcast replay will be available after 3:00 PM EDT on Wednesday, July 18, 2007 until 8:00 PM EDT on Friday, August 17, 2007. The telephone replay can be accessed by dialing 800 642 1687 (from the U.S. and Canada) or +1 706 645 9291 (from all other countries) and using reservation code 5562755. The webcast replay can be accessed through the link on the company's website at http://www.amb.com/.

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

AMB Property Corporation(R) is a leading global developer and owner of industrial real estate, focused on major hub and gateway distribution markets throughout North America, Europe and Asia. As of June 30, 2007, AMB owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 136.7 million square feet (12.7 million square meters) in 44 markets within 13 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 http://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 demand for our product, occupancy levels and rental rate growth, growth in sea container traffic and air cargo volumes, development, value-added conversion, redevelopment and renovation projects (including our ability to lease such projects, square feet at stabilization or completion, costs and total investment amounts), and our ability to grow our private capital business and returns on invested capital and source investment opportunities, and our ability to accomplish future business plans (such as expansion into additional markets) and to meet our forecasts and business goals, 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 press release 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, risks related to our obligations in the event of certain defaults under joint venture and other debt, risks related to debt and equity security financings (including dilution risk), 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, risks related to our tax structuring, failure to maintain our current credit agency ratings, environmental uncertainties, risks related to natural disasters, financial market fluctuations, changes in general economic conditions or in the real estate sector, changes in real estate and zoning laws, a downturn in the U.S., California or global economy, risks related to doing business internationally and global expansion, 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 and certain other matters discussed under the heading "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended December 31, 2006.

                       CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)


                                                  June 30,     December 31,
                                                    2007           2006
  Assets
  Investments in real estate:
    Total investments in properties              $6,406,982    $6,575,733
    Accumulated depreciation                       (854,227)     (789,693)
      Net investments in properties (1)           5,552,755     5,786,040
    Investments in unconsolidated joint
     ventures                                       349,534       274,381
    Properties held for contribution,
     net                                            245,632       154,036
    Properties held for divestiture, net             45,146        20,916
      Net investments in real estate              6,193,067     6,235,373
  Cash and cash equivalents and
   restricted cash                                  251,052       195,878
  Accounts receivable, net                          166,449       133,998
  Other assets                                      148,696       148,263
       Total assets                              $6,759,264    $6,713,512

  Liabilities and stockholders' equity
  Secured debt                                   $1,340,702     1,395,354
  Unsecured senior debt                           1,057,498     1,101,874
  Unsecured credit facilities                       562,184       852,033
  Other debt                                         85,110        88,154
  Accounts payable and other liabilities            278,921       271,880
      Total liabilities                           3,324,415     3,709,295
  Minority interests:
    Joint venture partners                          535,280       555,201
    Preferred unitholders                            77,563       180,298
    Limited partnership unitholders                 109,921       102,061
      Total minority interests                      722,764       837,560
  Stockholders' equity:
  Common equity                                   2,488,673     1,943,240
  Preferred equity                                  223,412       223,417
      Total stockholders' equity                  2,712,085     2,166,657
       Total liabilities and
        stockholders' equity                     $6,759,264    $6,713,512

(1) Includes AMB's 100% ownership interest in Park One, a 19.9 acre land parcel leased to a parking lot operator in the Los Angeles market immediately adjacent to LAX, for approximately $76 million.

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

                                    For the                  For the
                                Quarters Ended           Six Months Ended
                                    June 30,                 June 30,
                                 2007        2006        2007        2006
  Revenues
  Rental revenues (2)          $162,914    $170,974    $324,996    $342,276
  Private capital income          8,518       4,943      14,443      10,049
    Total revenues              171,432     175,917     339,439     352,325
  Costs and expenses
  Property operating costs
   (3)                          (43,304)    (43,589)    (87,551)    (87,732)
  Depreciation and
   amortization                 (41,483)    (44,500)    (82,504)    (87,254)
  Impairment losses                   -      (5,394)       (257)     (5,394)
  General and
   administrative               (30,260)    (25,142)    (60,114)    (47,997)
  Other expenses (4)             (1,139)        296      (2,051)       (241)
  Fund costs                       (277)       (479)       (518)     (1,093)
    Total costs and
     expenses                  (116,463)   (118,808)   (232,995)   (229,711)
  Other income and expenses
  Equity in earnings of
   unconsolidated joint
   ventures (5)                   1,748       8,278       3,861      10,366
  Other income (4)                6,472       2,258      11,979       5,765
  Gains from sale or
   contribution of real
   estate interests, net         74,707           -      74,843           -
  Development profits, net
   of taxes                      28,996      45,698      41,188      46,372
  Interest expense,
   including amortization       (33,369)    (44,310)    (67,951)    (83,704)
    Total other income and
     expenses                    78,554      11,924      63,920     (21,201)
       Income from
        operations before
        minority interests      133,523      69,033     170,364     101,413
  Minority interests' share
   of income:
    Joint venture partners'
     share of income             (8,067)     (8,895)    (15,260)    (17,297)
    Joint venture partners'
     and limited
     partnership
     unitholders' share of
     development profits         (2,574)     (1,619)     (3,136)     (1,651)
    Preferred unitholders        (1,480)     (4,024)     (5,179)     (9,025)
    Limited partnership
     unitholders                 (4,001)       (341)     (4,495)     (1,068)
       Total minority
        interests' share of
        income                  (16,122)    (14,879)    (28,070)    (29,041)
       Income from
        continuing
        operations              117,401      54,154     142,294      72,372
  Discontinued operations:
    Income attributable to
     discontinued
     operations, net of
     minority interests             484       4,126       1,238       6,471
    Gains from disposition
     of real estate, net of
     minority interests             384      17,073         419      24,087
       Total discontinued
        operations                  868      21,199       1,657      30,558
         Net income             118,269      75,353     143,951     102,930
  Preferred stock dividends      (3,952)     (3,095)     (7,904)     (6,191)
  Preferred unit redemption
   (issuance costs)
   discount                      (2,927)         77      (2,927)     (1,020)
  Net income available to
   common stockholders         $111,390     $72,335    $133,120     $95,719
  Net income per common
   share (diluted)                $1.10       $0.80       $1.35       $1.06
  Weighted average common
   shares (diluted)         101,361,013  90,135,659  98,305,299  90,147,493

(1) Effective October 1, 2006, AMB deconsolidated AMB Alliance Fund III on a prospective basis.

(2) Pro forma rental revenues for the quarter and six months ended June, 2006 would have been $152,676 and $308,402, respectively, if AMB Institutional Alliance Fund III had been deconsolidated as of January 1, 2006.

(3) Pro forma property operating costs for the quarter and six months ended June 30, 2006 would have been $39,188 and $79,278, respectively, if AMB Institutional Alliance Fund III had been deconsolidated as of January 1, 2006.

(4) Includes changes in liabilities and assets associated with AMB's deferred compensation plan.

(5) Includes gains on sale of operating properties of $0.0 million and $7.7 million, for the quarters ended June 30, 2007 and 2006, respectively. Includes gains on sale of operating properties of $0.0 million and $8.3 million, for the six months ended June 30, 2007 and 2006, respectively.

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

                                    For the                  For the
                                Quarters Ended           Six Months Ended
                                    June 30,                 June 30,
                                2007         2006        2007         2006
  Net income available to
   common stockholders        $111,390     $72,335     $133,120     $95,719
  Gains from sale or
   contribution of real
   estate, net of minority
   interests                   (75,091)    (17,073)     (75,262)    (24,087)
  Depreciation and
   amortization:
   Total depreciation and
    amortization                41,483      44,500       82,504      87,254
   Discontinued operations'
    depreciation                     4         (62)           8         452
   Non-real estate
    depreciation                (1,401)     (1,068)      (2,578)     (2,068)
  Adjustments to derive
   FFO from consolidated
   JVs:
   Joint venture partners'
    minority interests (Net
    income)                      8,067       8,895       15,260      17,297
   Limited partnership
    unitholders' minority
    interests (Net income)       4,001         341        4,495       1,068
   Limited partnership
    unitholders' minority
    interests (Development
    profits)                     1,251       2,208        1,801       2,240
   Discontinued operations'
    minority interests (Net
    income (loss))                  25         209           (4)        463
   FFO attributable to
    minority interests         (15,312)    (21,748)     (31,616)    (42,183)
  Adjustments to derive
   FFO from unconsolidated
   JVs:
   AMB's share of net
    income                      (1,748)     (8,278)      (3,861)    (10,366)
   AMB's share of FFO            5,805       2,096       11,480       5,305
    Funds from operations      $78,474     $82,355     $135,347    $131,094
    FFO per common share and
     unit (diluted)              $0.74       $0.87        $1.32       $1.39
    Weighted average common
     share and unit
     (diluted)             105,806,524  94,520,866  102,866,432  94,534,263

  Estimated FFO by
   business line (1)
  Capital Partners FFO per
   common share and unit
   (diluted) (1)                 $0.05       $0.02        $0.07       $0.04
  % of reported FFO               6.7%        2.3%         5.3%        2.9%
  Development FFO per
   common share and unit
   (diluted) (1)                 $0.24       $0.48        $0.36       $0.48
  % of reported FFO              32.4%       55.1%        27.4%       34.6%
  Real estate operations
   FFO per common share
   and unit (diluted) (1)        $0.45       $0.37        $0.89       $0.87
  % of reported FFO              60.9%       42.6%        67.3%       62.5%
  Total FFO per common
   share and unit
   (diluted)                     $0.74       $0.87        $1.32       $1.39

(1) Funds From Operations and Funds from Operations per Share and Unit. 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 the National Association of Real Estate Investment Trusts, or NAREIT, and funds from operations per fully diluted share and unit, or FFOPS, to be useful supplemental measures 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. FFOPS is FFO per share of fully diluted weighted average company common stock share and partnership unit. Further, the company does not adjust FFO or FFOPS to eliminate the effects of non-recurring charges. The company believes that FFO and FFOPS, as defined by NAREIT, are meaningful supplemental measures 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 and FFOPS as supplemental measures of operating performance for real estate investment trusts that exclude historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. The company believes that the use of FFO and FFOPS, 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 and FFOPS to be useful measures 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 and FFOPS 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 and FFOPS are relevant and widely used measures of operating performance of real estate investment trusts, they do not represent cash flow from operations or net income as defined by GAAP and should not be considered as alternatives to those measures in evaluating the company's liquidity or operating performance. FFO and FFOPS also do not consider the costs associated with capital expenditures related to the company's real estate assets nor are FFO or FFOPS necessarily indicative of cash available to fund the company's future cash requirements. Further, the company's computation of FFO and FFOPS may not be comparable to FFO or FFOPS reported by other real estate investment trusts that do not define the terms in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the company does. Estimated FFO by Business Line is FFO generated by the Company's Capital Partners, development and real estate operations business lines. Estimated Capital Partners and Development FFO was determined by reducing Capital Partner Income and Development Profits, net of taxes by their respective estimated share of general and administrative expenses. Capital Partners and Developments estimated allocation of total general and administrative expenses was based on their respective percentage of actual direct general and administrative expenses incurred. Estimated Real Estate Operations FFO represents total Company FFO less estimated FFO attributable to Capital Partners and Development. Management believes estimated FFO by business line is a useful supplemental measure of its operating performance because it helps the investing public compare the operating performance of a company's respective business lines to other companies' comparable business lines. Further, AMB's computation of FFO by business line may not be comparable to that reported by other real estate investment trusts as they may use different methodologies in computing such measures.

First Call Analyst:
FCMN Contact: [email protected]

SOURCE: AMB Property Corp.

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

Media contact & resources

Jennifer Nelson

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

Corporate Profile

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