AMB Property Corporation(R) , a leading global developer and owner of industrial real estate, today reported results for the quarter and nine-month period ended September 30, 2006.

Funds from operations per fully diluted share and unit ("FFOPS") was $0.72 for the third quarter of 2006, as compared to $0.50 for the same quarter in 2005. FFOPS for the year-to-date period was $2.10, as compared to $1.59 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 $0.08 per share, primarily as a result of better than expected profitability on development projects sold or contributed during the quarter.

Net income available to common stockholders per fully diluted share and unit ("EPS") was $0.33 for the third quarter of 2006, as compared to $0.31 for the same quarter in 2005. EPS for the year-to-date period was $1.39 as compared to $1.27 for the same period in 2005.

Operating Results

AMB's industrial operating portfolio occupancy was 95.9% at September 30, 2006, up 50 basis points from June 30, 2006, and 130 basis points from September 30, 2005. Benefiting from occupancy gains and rising rents in many of the company's markets, cash-basis same store net operating income in the third quarter of 2006 increased 5.8% over the same period in 2005. When the effects of lease termination fees are excluded from this metric, the increase was 5.5%. In the third quarter, rents on lease renewal and rollover in AMB's operating portfolio increased 9.9%, as compared to declines of 0.9% in the prior quarter and 7.6% in the third quarter of 2005.

Hamid R. Moghadam, AMB chairman and CEO, said, "Our performance in the third quarter was solid. Occupancy reached its highest level since the third quarter of 2001, and rents on renewals entered positive territory for the first time since the first quarter of 2002. We're pleased with the continued demand for industrial product, especially in our Asia markets, and preliminary data provided by Torto Wheaton Research indicates positive absorption and availability figures for industrial space in the U.S. during the third quarter. While there are signs of moderating growth in both the U.S. and Europe, we believe that our portfolio is well positioned and, at this time, there is sustained customer demand for our industrial facilities globally."

Investment Activity

New development and renovation starts in the quarter totaled approximately 2.8 million square feet in eight projects in North America, Europe and Asia, with an estimated total investment of $251.2 million. AMB's industrial development and renovation pipeline totals approximately 13.4 million square feet in 45 projects globally, with an estimated total investment of $1.2 billion scheduled for delivery through 2008. Deliveries slated through the end of 2006 are 66% preleased or under contract for sale.

During the third quarter, AMB stabilized and completed nine development projects in North America, Europe and Asia. Two projects totaling approximately 181,000 square feet and representing an aggregate investment of $13.0 million were placed in operations, and seven projects totaling approximately 2.7 million square feet and representing an aggregate investment of $199.1 million were made available for sale or contribution.

The company's development business includes contribution of stabilized properties to affiliated private capital funds or sale of projects to third parties. During the third quarter, AMB contributed AMB Narita Distribution Center 1, Buildings A & B, comprising 668,000 square feet in Tokyo, to its Japan Fund I. The company sold three development properties to third parties consisting of a 699,000 square foot industrial facility in Los Angeles and two industrial buildings totaling approximately 67,000 square feet in Miami.

During the third quarter, AMB acquired approximately 1.3 million square feet of distribution facilities in ten buildings at a total acquisition cost of $115.6 million. The acquisitions expanded the company's presence in the target markets of Chicago, Los Angeles, Minneapolis and Seattle, and included entry into the company's fourth Mexico target market, Queretaro, the country's most geographically central distribution hub.

AMB's president, W. Blake Baird, commented, "Our global development business is providing quality distribution facilities for our customers, attractive investments for our private capital business, and meaningful profits for our shareholders. At quarter end, our pipeline of committed developments stood at $1.2 billion, the highest in our history, with 45 projects in nine countries on three continents."

In the third quarter, AMB completed an opportunistic sale of one operating building that no longer fits the company's strategy. The 74,000 square foot building represented approximately $5.2 million in gross disposition proceeds.

Development Joint Venture Formed

Subsequent to quarter end, AMB entered into a merchant development joint venture with GE Real Estate. The joint venture will have total investment capacity of approximately $500 million to pursue development-for-sale opportunities in U.S. markets other than those AMB identifies as its target markets. GE and AMB have committed $425 million and $75 million of equity, respectively. AMB will earn development fees and is entitled to 45% of the development project profits realized by the venture over a 7.25% unleveraged internal rate of return. AMB expects to contribute several of its land holdings into the venture in the fourth quarter.

Addition of Company Officers

During the quarter, three officers joined the company: Dale Valicenti joined the Boston office as senior vice president, director of acquisitions; John Morgan joined the Atlanta office as vice president, development; and Francois Rispe joined in Paris as vice president, director of project development.

Supplemental Earnings Measures

AMB reports funds 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. 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 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 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. Reconciliation from net income to SSNOI is published in the company's quarterly supplemental analyst package, available on the company's website at www.amb.com.

Conference Call and Supplemental Information

The company will host a conference call to discuss the quarterly results on Wednesday, October 18, 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 877 447 8218 (from the U.S. and Canada) or +1 706 643 7823 (from all other countries) and entering reservation code 6774681. A webcast can be accessed through a link titled "Q3 2006 Earnings Conference Call" located on the home page of the company's website at www.amb.com. A telephone and webcast replay will be available after 12:00 p.m. PDT on Wednesday, October 18, 2006 until 5:00 p.m. PST on Thursday, November 16, 2006. The telephone replay can be accessed by dialing 800 642 1687 (U.S. and Canada) or +1 706 645 9291 (all other countries), with the reservation code 6774681 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, October 24, 2006 by 5:00 p.m. PDT.

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 September 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 124.8 million square feet (11.6 million square meters) and 1,109 buildings in 42 markets within 11 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
                           September 30,  June 30,   March 31,  December 31,
                               2006         2006        2006         2005
  Assets
  Investments in real
   estate:
    Total investments in
     properties              $7,553,031  $7,376,322  $6,913,524  $6,798,294
    Accumulated depreciation   (821,545)   (774,528)   (736,760)   (697,388)
      Net investments in
       properties             6,731,486   6,601,794   6,176,764   6,100,906
    Investments in
     unconsolidated joint
     ventures                   116,856     123,107     118,472     118,653
    Properties held for
     contribution, net          184,365      71,981     266,311      32,755
    Properties held for
     divestiture, net            63,402      46,857      31,201      17,936
      Net investments in
       real estate            7,096,109   6,843,739   6,592,748   6,270,250
  Cash and cash equivalents     184,230     231,912     168,007     267,233
  Mortgages and loans
   receivable                    18,782      18,816      21,589      21,621
  Accounts receivable, net      143,594     127,528     148,907     178,682
  Other assets                  135,646     114,371     112,312      64,953
       Total assets          $7,578,361  $7,336,366  $7,043,563  $6,802,739

  Liabilities and
   stockholders' equity
  Secured debt               $1,874,887  $1,829,968  $1,917,805  $1,912,526
  Unsecured senior debt       1,226,561   1,051,249     950,937     975,000
  Unsecured credit
   facilities                   801,656     904,452     734,110     490,072
  Other debt                     79,894      88,217      63,543      23,963
  Accounts payable and other
   liabilities                  297,358     254,223     249,149     263,744
      Total liabilities       4,280,356   4,128,109   3,915,544   3,665,305
  Minority interests:
    Joint venture partners      977,452     950,209     899,658     853,643
    Preferred unitholders       180,298     190,198     200,986     278,378
    Limited partnership
     unitholders                 79,733      89,705      87,973      89,114
      Total minority
       interests              1,237,483   1,230,112   1,188,617   1,221,135
  Stockholders' equity:
  Common equity               1,836,928   1,802,814   1,764,071   1,740,751
  Preferred equity              223,594     175,331     175,331     175,548
      Total stockholders'
       equity                 2,060,522   1,978,145   1,939,402   1,916,299
       Total liabilities and
        stockholders'
        equity               $7,578,361  $7,336,366  $7,043,563  $6,802,739


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


                                For the Quarters        For the Nine Months
                                     Ended                     Ended
                                  September 30,             September 30,
                                 2006        2005        2006         2005
  Revenues
  Rental revenues              $180,205    $154,312    $531,439    $461,516
  Private capital income (1)      7,490       5,764      17,539      12,520
    Total revenues              187,695     160,076     548,978     474,036
  Costs and expenses
  Property operating costs      (45,992)    (39,842)   (135,888)   (119,344)
  Depreciation and
   amortization                 (48,761)    (40,494)   (136,160)   (121,279)
  Impairment losses                   -           -      (5,394)          -
  General and administrative    (25,851)    (16,815)    (73,850)    (54,876)
  Other expenses (2)               (893)     (2,925)     (1,134)     (3,663)
  Fund costs                       (495)       (329)     (1,588)     (1,073)
    Total costs and expenses   (121,992)   (100,405)   (354,014)   (300,235)
  Other income and expenses
  Equity in earnings of
   unconsolidated joint
   ventures (3)                   2,239       1,529      12,605       9,959
  Other income (2)                2,643       2,964       7,641       4,769
  Gains from dispositions of
   real estate, net                   -           -           -      18,923
  Development profits, net
   of taxes                      23,517         398      69,889      20,322
  Interest expense,
   including amortization       (44,535)    (37,305)   (129,627)   (111,320)
    Total other income and
     expenses                   (16,136)    (32,414)    (39,492)    (57,347)
       Income from
        operations before
        minority interests       49,567      27,257     155,472     116,454
  Minority interests' share
   of income:
    Joint venture partners'
     share of income            (12,317)     (8,806)    (30,145)    (27,039)
    Joint venture partners'
     and limited partnership
     unitholders' share of
     development profits         (1,150)        (21)     (2,735)    (10,136)
    Preferred unitholders        (3,791)     (5,368)    (12,816)    (16,104)
    Limited partnership
     unitholders                   (108)       (528)     (1,469)     (1,505)
       Total minority
        interests' share of
        income                  (17,366)    (14,723)    (47,165)    (54,784)
       Income from
        continuing
        operations               32,201      12,534     108,307      61,670
  Discontinued operations:
    Income attributable to
     discontinued
     operations, net of
     minority interests             973       2,204       3,675       7,281
    Gain from disposition of
     real estate, net of
     minority interests             213      14,330      24,335      47,673
       Total discontinued
        operations                1,186      16,534      28,010      54,954
         Net income              33,387      29,068     136,317     116,624
  Preferred stock dividends      (3,440)     (1,783)     (9,631)     (5,349)
  Preferred unit redemption
   discount/(issuance costs)         16           -      (1,004)          -
  Net income available to
   common stockholders          $29,963     $27,285    $125,682    $111,275
  Net income per common
   share (diluted)                $0.33       $0.31       $1.39       $1.27
  Weighted average common
   shares (diluted)          91,058,029  88,373,479  90,458,810  87,424,751


  (1) Includes incentive distributions for 2006 of $2.1 million from the
      sale of AMB Institutional Alliance Fund I in 2005 which had been
      deferred.
  (2) Includes changes in liabilities and assets associated with the
      Company's deferred compensation plan.
  (3) Includes gains on sale of operating properties of $0.0 million, $8.3
      million, $0.1 million and $5.1 million, respectively, for the three
      and nine months ended September 30, 2006 and 2005.


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

                                  For the Quarters      For the Nine Months
                                       Ended                  Ended
                                   September 30,           September 30,
                                  2006        2005        2006        2005
  Net income                    $33,387     $29,068    $136,317    $116,624
  Gains from disposition of
   real estate, net of
   minority interests              (213)    (14,330)    (24,335)    (66,596)
  Depreciation and
   amortization:
    Total depreciation and
     amortization                48,761      40,494     136,160     121,279
    Discontinued operations'
     depreciation                   (37)      4,216         270      12,483
    Non-real estate
     depreciation                (1,001)       (892)     (3,069)     (2,439)
  Adjustments to derive FFO
   from consolidated JVs:
    Joint venture partners'
     minority interests (Net
     income)                     12,317       8,806      30,145      27,039
    Limited partnership
     unitholders' minority
     interests (Net income)         108         528       1,469       1,505
    Limited partnership
     unitholders' minority
     interests (Development
     profits)                     1,086          16       3,260         568
    Discontinued operations'
     minority interests (Net
     income)                        (18)      2,226        (278)      6,850
    FFO attributable to
     minority interests         (24,471)    (24,944)    (66,654)    (72,634)
  Adjustments to derive FFO
   from unconsolidated JVs:
    AMB's share of net
     income                      (2,239)     (1,529)    (12,605)     (9,959)
    AMB's share of FFO            4,030       4,592       9,335      11,808
    AMB's share of
     development profits,
     net                              -           -           -       5,441
  Preferred stock dividends      (3,440)     (1,783)     (9,631)     (5,349)
  Preferred unit redemption
   discount (issuance costs)         16           -      (1,004)          -
      Funds from operations     $68,286     $46,468    $199,380    $146,620

      FFO per common share
       and unit (diluted)         $0.72       $0.50       $2.10       $1.59

      Weighted average
       common shares and
       units (diluted)       95,117,597  93,034,016  94,734,736  92,121,224


(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.

First Call Analyst:
FCMN Contact: [email protected]

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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