Item 2. Properties
ITEM 2. PROPERTIES
Our Portfolio
As of December 31, 2020, our operating portfolio was comprised of 28 office, retail, multifamily and mixed-use properties with an aggregate of approximately 6.6 million rentable square feet of office and retail space (including mixed-use retail space), 2,112 residential units (including 122 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2020, we owned land at three of our properties that we classified as held for development and construction in progress.
Retail and Office Portfolios
Property Location Year Built/
Renovated Number
of
Buildings Net
Rentable
Square
Feet Percentage
Leased Annualized
Base Rent Annualized
Base Rent
Per Leased
Square
Foot
OFFICE PROPERTIES
La Jolla Commons (1)
San Diego, CA 2008/2014 2 724,186 98.0 % $ 39,961,852 $ 56.31
Torrey Reserve Campus San Diego, CA 1996-2000/2014-2016 14 521,678 85.0 % 22,113,241 49.87
Torrey Point
San Diego, CA 2017 2 92,195 94.6 3,246,011 37.22
Solana Beach Corporate Centre
Solana Beach, CA 1982/2005 4 212,614 93.0 8,689,159 43.94
The Landmark at One Market (2)
San Francisco, CA 1917/2000 1 422,426 100.0 37,345,312 88.41
One Beach Street San Francisco, CA 1924/1972/1987/1992 1 100,270 15.4 950,488 61.55
First & Main Portland, OR 2010 1 360,314 93.0 10,442,975 31.16
Lloyd District Portfolio Portland, OR 1940-2015 3 515,929 99.8 16,454,913 31.96
City Center Bellevue Bellevue, WA 1987 1 497,666 96.5 23,679,927 49.31
Subtotal / Weighted Average Office Portfolio (3)
29 3,447,278 93.0 % $ 162,883,878 $ 50.81
RETAIL PROPERTIES
Carmel Country Plaza San Diego, CA 1991 9 78,098 89.4 % $ 3,731,651 $ 53.45
Carmel Mountain Plaza (4)
San Diego, CA 1994/2014 15 528,416 95.0 13,373,531 26.64
South Bay Marketplace (4)
San Diego, CA 1997 9 132,877 94.4 1,914,333 15.26
Gateway Marketplace San Diego, CA 1997/2016 3 127,861 100.0 2,483,725 19.43
Lomas Santa Fe Plaza Solana Beach, CA 1972/1997 9 208,030 94.7 5,907,553 29.99
Solana Beach Towne Centre Solana Beach, CA 1973/2000/2004 12 246,730 94.4 6,250,003 26.83
Del Monte Center (4)
Monterey, CA 1967/1984/2006 16 673,155 81.7 8,403,833 15.28
Geary Marketplace Walnut Creek, CA 2012 3 35,159 100.0 1,187,924 33.79
The Shops at Kalakaua Honolulu, HI 1971/2006 3 11,671 100.0 1,894,936 162.36
Waikele Center Waipahu, HI 1993/2008 9 418,047 100.0 11,524,589 27.57
Alamo Quarry Market (4)
San Antonio, TX 1997/1999 16 588,148 85.5 12,461,757 24.78
Hassalo on Eighth - Retail (5)
Portland, OR 2015 3 44,236 71.0 940,668 29.95
Subtotal / Weighted Average Retail Portfolio (1)
107 3,092,428 90.7 % $ 70,074,503 $ 24.98
Total / Weighted Average Retail and Office Portfolio (1)
136 6,539,706 91.9 % $ 232,958,381 $ 38.76
Mixed-Use Portfolio
Retail Portion Location Year Built/
Renovated Number
of
Buildings Net
Rentable
Square
Feet Percent
Leased Annualized
Base Rent Annualized
Base Rent
Per Leased
Square
Foot
Waikiki Beach Walk—Retail (6)
Honolulu, HI 2006 3 96,707 89.2 % $ 9,411,407 $ 109.10
Hotel Portion Location Year Built/
Renovated Number
of
Buildings Units Average
Occupancy Average
Daily Rate Revenue
per
Available
Room
Waikiki Beach Walk—Embassy Suites TM
Honolulu, HI 2008/2020 2 369 51.3 % $ 248.52 $ 127.42
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Multifamily Portfolio
Property Location Year Built/
Renovated Number
of
Buildings Units Percentage
Leased Annualized
Base Rent Average Monthly Base Rent per Leased Unit
Loma Palisades San Diego, CA 1958/2001-2008 80 548 95.3 % $ 14,420,472 $ 2,301
Imperial Beach Gardens Imperial Beach, CA 1959/2008 26 160 94.4 3,920,016 2,163
Mariner’s Point Imperial Beach, CA 1986 8 88 96.6 1,860,348 1,824
Santa Fe Park RV Resort (7)
San Diego, CA 1971/2007-2008 1 126 77.8 1,250,460 1,063
Pacific Ridge Apartments San Diego, CA 2013 3 533 93.1 18,171,132 3,052
Hassalo on Eighth - Multifamily (5)
Portland, OR 2015 3 657 71.2 9,278,952 1,653
Total / Weighted Average Multifamily 121 2,112 86.2 % $ 48,901,380 $ 2,238
(1) The annualized base rent for La Jolla Commons has been adjusted for this presentation to reflect that the contractual triple net leases were instead structured as modified gross leases, by adding the contractual annualized triple net base rent of $29,797,416 to our estimate of annual triple net operating expenses of $10,164,436 for an estimated annualized base rent on a modified gross lease basis of $39,961,852 for La Jolla Commons.
(2) This property contains 422,426 net rentable square feet consisting of The Landmark at One Market (378,206 net rentable square feet) as well as a separate long-term leasehold interest in approximately 44,220 net rentable square feet of space located in an adjacent six-story leasehold known as the Annex. We currently lease the Annex from an affiliate of the Paramount Group pursuant to a long-term master lease effective through June 30, 2026, which we have the option to extend until 2031 pursuant to one five-year extension option.
(3) Lease data for signed but not commenced leases as of December 31, 2020 is in the following table:
Leased Square Feet Annualized Base Pro Forma Annualized
Under Signed But Annualized Rent per Base Rent per
Not Commenced Leases (a) Base Rent (b) Leased Square Foot (b) Leased Square Foot (c)
Office Portfolio $ 32,253 $ 1,897,001 $ 58.82 $ 51.40
Retail Portfolio 4,403 148,793 $ 33.79 $ 25.04
Total Retail and Office Portfolio $ 36,656 $ 2,045,794 $ 55.81 $ 39.10
(a) Office portfolio leases signed but not commenced of 32,253 square feet are expected to commence during the first quarter of 2021. Retail portfolio leases signed but not commenced of 505 and 3,898 square feet are expected to commence during the first and second quarters of 2021, respectively.
(b) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for signed but not commenced leases as of December 31, 2020 by 12. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. The foregoing notwithstanding, the annualized base rent for signed but not commenced leases as of December 31, 2020 at La Jolla Commons has been adjusted for this presentation to reflect that the contractual triple net leases were instead structured as modified gross leases. Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage for signed by not commenced leases.
(c) Pro forma annualized base rent is calculated by dividing annualized base rent for commenced leases and for signed but not commenced leases as of December 31, 2020, by square footage under lease as of December 31, 2020.
(4) Net rentable square feet at certain of our retail properties includes square footage leased pursuant to ground leases, as described in the following table:
Property Number of Ground Leases Square Footage Leased Pursuant to Ground Leases Aggregate Annualized Base Rent
Carmel Mountain Plaza 5 17,607 $ 741,962
South Bay Marketplace 1 2,824 $ 102,276
Del Monte Center 1 212,500 $ 96,000
Alamo Quarry Market 3 20,694 $ 385,506
(5) The Hassalo on Eighth property is comprised of three multifamily buildings, each with a ground floor retail component: Velomor, Aster Tower and Elwood.
(6) Waikiki Beach Walk-Retail contains 96,707 net rentable square feet consisting of 94,093 net rentable square feet that we own in fee and approximately 2,614 net rentable square feet of space in which we have a subleasehold interest pursuant to a sublease from First Hawaiian Bank effective through December 31, 2021.
(7) The Santa Fe Park RV Resort is subject to seasonal variation, with higher rates of occupancy occurring during the summer months. The number of units at the Santa Fe Park RV Resort includes 122 RV spaces and four apartments.
In the tables above:
• The net rentable square feet for each of our retail properties and the retail portion of our mixed-use property is the sum of (1) the square footages of existing leases, plus (2) for available space, the field-verified square footage. The net rentable square feet for each of our office properties is the sum of (1) the square footages of existing
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leases, plus (2) for available space, management's estimate of net rentable square feet based, in part, on past leases. The net rentable square feet included in such office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 2010 measurement guidelines. Net rentable square footage may be adjusted from the prior period to reflect re-measurement of leased space at the properties.
• Percentage leased for each of our retail and office properties and the retail portion of the mixed-use property is calculated as square footage under leases as of December 31, 2020, divided by net rentable square feet, expressed as a percentage. The square footage under lease includes leases which may not have commenced as of December 31, 2020. Percentage leased for our multifamily properties is calculated as total units rented as of December 31, 2020, divided by total units available, expressed as a percentage.
• Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents, before abatements) for the month ended December 31, 2020, by 12. Annualized base rent per leased square foot is calculated by dividing annualized base rent, by square footage under lease as of December 31, 2020. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Total abatements for leases in effect as of December 31, 2020 for our retail and office portfolio equaled approximately $19.0 million for the year ended December 31, 2020. Total abatements for leases in effect as of December 31, 2020 for our mixed-use portfolio equaled approximately $0.9 million for the year ended December 31, 2020. Total abatements for leases in effect as of December 31, 2020 for our multifamily portfolio equaled approximately $0.8 million for the year ended December 31, 2020.
• Units represent the total number of units available for sale/rent at December 31, 2020.
• Average occupancy represents the percentage of available units that were sold during the 12-month period ended December 31, 2020, and is calculated by dividing the number of units sold by the product of the total number of units and the total number of days in the period. Average daily rate represents the average rate paid for the units sold and is calculated by dividing the total room revenue (i.e., excluding food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services) for the 12-month period ended December 31, 2020, by the number of units sold. Revenue per available room, or RevPAR, represents the total unit revenue per total available units for the 12-month period ended December 31, 2020 and is calculated by multiplying average occupancy by the average daily rate. RevPAR does not include food and beverage revenues or other hotel operations revenues such as telephone, parking and other guest services.
• Average monthly base rent per leased unit represents the average monthly base rent per leased units as of December 31, 2020.
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Tenant Diversification
At December 31, 2020, our operating portfolio had approximately 752 leases with office and retail tenants, of which 6 expired on December 31, 2020 and there were 6 that had not yet commenced as of such date. Our residential properties had 1,722 leases with residential tenants at December 31, 2020, excluding Santa Fe Park RV Resort. The retail portion of our mixed-use property had approximately 64 leases with retailers. Only one tenant or affiliated group of tenants accounted for more than 10.0% of our annualized base rent as of December 31, 2020 for our office, retail and retail portion of our mixed-use property portfolio. The following table sets forth information regarding the 25 tenants with the greatest annualized base rent for our combined retail, office and retail portion of our mixed-use property portfolios as of December 31, 2020.
Tenant Property(ies) Lease
Expiration Total Leased
Square Feet Rentable
Square
Feet as a
Percentage
of Total Annualized
Base Rent (1)
Annualized
Base Rent
as a
Percentage
of Total
Google LLC The Landmark at One Market 12/31/2029 253,198 3.8 % $ 24,178,824 10.0 %
LPL Holdings, Inc. La Jolla Commons 4/30/2029 421,001 6.3 18,143,812 7.5
Autodesk, Inc. The Landmark at One Market 12/31/2022
12/31/2023 138,615 2.1 12,273,512 5.1
Smartsheet, Inc. City Center Bellevue 12/31/2026
4/30/2029 124,217 1.9 6,572,101 2.7
VMware, Inc. City Center Bellevue 11/30/2022
5/31/2025
9/30/2027 109,985 1.7 5,579,954 2.3
Illumina, Inc. La Jolla Commons 10/31/2027 73,176 1.1 4,302,751 1.8
Lowe's Waikele Center 5/31/2028 155,000 2.3 3,720,000 1.5
Clearesult Operating, LLC First & Main 4/30/2025 101,848 1.5 2,902,976 1.2
State of Oregon: Department of Environmental Quality Lloyd District Portfolio 10/31/2031 87,787 1.3 2,766,541 1.1
Genentech, Inc. Lloyd District Portfolio 10/31/2026 66,852 1.0 2,203,442 0.9
Internal Revenue Service (2)
First & Main 8/31/2030 63,648 1.0 2,200,553 0.9
Nordstrom Rack Carmel Mountain Plaza,
Alamo Quarry Market 9/30/2022
10/31/2022 69,047 1.0 2,189,648 0.9
Quiksilver Waikiki Beach Walk 12/31/2021 8,365 0.1 2,175,177 0.9
Sprouts Farmers Market Solana Beach Towne Centre,
Carmel Mountain Plaza,
Geary Marketplace 6/30/2024
3/31/2025
9/30/2032 71,431 1.1 2,121,187 0.9
Veterans Benefits Administration (2)
First & Main 8/31/2030 74,885 1.1 2,009,451 0.8
California Bank & Trust Torrey Reserve Campus 2/29/2024 34,731 0.5 1,917,767 0.8
WeWork Lloyd District Portfolio 1/31/2032 55,395 0.8 1,883,430 0.8
Industrious City Center Bellevue 3/31/2034 37,166 0.6 1,833,468 0.8
Perkins Coie, LLP Torrey Reserve Campus 12/31/2028 36,980 0.6 1,805,438 0.7
Marshalls Solana Beach Towne Centre,
Carmel Mountain Plaza 1/31/2025
1/31/2029 68,055 1.0 1,728,228 0.7
Troutman Sanders, LLP Torrey Reserve Campus
First & Main 3/31/2025
4/30/2025 33,812 0.5 1,695,429 0.7
MEI Pharma, Inc. Torrey Reserve Campus 3/31/2028 32,775 0.5 1,474,875 0.6
Vons Lomas Santa Fe Plaza 12/31/2022 49,895 0.8 1,399,205 0.6
At Home Stores Carmel Mountain Plaza 7/31/2029 107,870 1.6 1,384,552 0.6
Cisco Systems, Inc. City Center Bellevue 2/28/2023 29,415 0.4 1,341,874 0.6
TOTAL 2,305,149 34.6 % $ 109,804,195 45.4 %
* Data withheld at tenant’s request.
(1) Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents before abatements) for the month ended December 31, 2020 for the applicable lease(s) by (ii) 12.
(2) The earliest option termination date under this lease is August 31, 2028.
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Geographic Diversification
Our properties are located in Southern California, Northern California, Oregon, Washington, Texas and Hawaii. The following table shows the number of properties, the net rentable square feet and the percentage of total portfolio net rentable square footage in each region as of December 31, 2020. Our six multifamily properties are excluded from the table below and are located in Southern California and Portland, Oregon. The hotel portion of our mixed-use property is also excluded and is located in Hawaii.
Region Number of Properties Net Rentable Square Feet Percentage of Net Rentable Square Feet (1)
Southern California 10 2,872,685 43.3 %
Northern California 4 1,231,010 18.5
Oregon 3 920,479 13.9
Washington 1 497,666 7.5
Texas 1 588,148 8.9
Hawaii (2)
3 526,425 7.9
Total 22 6,636,413 100.0 %
(1) Percentage of Net Rentable Square Feet is calculated based on the total net rentable square feet available in our retail portfolio, office portfolio and the retail portion of our mixed-use portfolio.
(2) Includes the retail portion related to the mixed-use property.
Segment Diversification
The following table sets forth information regarding the total property operating income for each of our segments for the year ended December 31, 2020 (dollars in thousands).
Segment Number of Properties Property Operating Income Percentage of Property Operating Income
Office 9 $ 130,130 58.2 %
Retail 12 60,906 27.3
Mixed-Use 1 28,253 12.6
Multifamily 6 4,165 1.9
Total 28 $ 223,454 100.0 %
Lease Expirations
The following table sets forth a summary schedule of the lease expirations for leases in place as of December 31, 2020, plus available space, for each of the ten calendar years beginning January 1, 2021 at the properties in our retail portfolio, office portfolio and the retail portion of our mixed-use portfolio. The square footage of available space includes the space from 6 leases that terminated on December 31, 2020. In 2021, we expect a similar level of leasing activity for new and expiring leases compared to prior years with overall positive increases in rental income. However, changes in rental income associated with individual signed leases on comparable spaces may be positive or negative, and we can provide no assurance that the rents on new leases will continue to increase at the above disclosed levels, if at all.
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The lease expirations for our multifamily portfolio and the hotel portion of our mixed-use portfolio are excluded from this table because multifamily unit leases generally have lease terms ranging from seven to 15 months, with a majority having 12-month lease terms, and because rooms in the hotel are rented on a nightly basis. The information set forth in the table assumes that tenants do not exercise any renewal options.
Year of Lease Expiration Square
Footage of
Expiring
Leases Percentage
of Portfolio
Net
Rentable
Square
Feet Annualized Base
Rent (1)
Percentage
of Portfolio
Annualized
Base Rent Annualized Base Rent Per Leased Square Foot (2)
Available 540,119 8.1 % $ — — % $ —
Month to Month 45,437 0.7 1,125,338 0.5 24.77
2021 329,507 5.0 17,075,850 7.4 51.82
2022 707,206 10.7 27,743,291 11.9 39.23
2023 566,734 8.5 23,025,741 9.9 40.63
2024 659,439 9.9 23,863,295 10.3 36.19
2025 630,399 9.5 22,158,482 9.5 35.15
2026 490,605 7.4 17,313,063 7.5 35.29
2027 322,692 4.9 13,905,325 6.0 43.09
2028 712,361 10.7 15,900,916 6.8 22.32
2029 935,874 14.1 50,072,627 21.6 53.50
2030 236,661 3.6 7,173,274 3.1 30.31
Thereafter 422,723 6.4 12,848,149 5.5 30.39
Signed Leases Not Commenced 36,656 0.6 — — —
Total: 6,636,413 100.0 % $ 232,205,351 100.0 % $ 34.99
(1) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 2020 for the leases expiring during the applicable period, by 12.
(2) Annualized base rent per leased square foot is calculated by dividing annualized base rent for leases expiring during the applicable period by square footage under such expiring leases.