Item 2. Properties
ITEM 2. PROPERTIES
Our Portfolio
As of December 31, 2023, our operating portfolio was comprised of 31 office, retail, multifamily and mixed-use properties with an aggregate of approximately 7.2 million rentable square feet of office and retail space (including mixed-use retail space), 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2023, we owned land at three of our properties that we classified as held for development or construction in progress.
Retail and Office Portfolios
Property Location Year Built/
Renovated Number
of
Buildings Net
Rentable
Square
Feet Percentage
Leased Annualized
Base Rent (1)
Annualized
Base Rent
Per Leased
Square
Foot
OFFICE PROPERTIES
La Jolla Commons San Diego, CA 2008/2014 2 724,654 99.3 % $ 46,251,701 $ 64.28
Torrey Reserve Campus San Diego, CA 1996-2000/2014-2016/2021 14 547,035 92.2 26,721,473 52.98
Torrey Point
San Diego, CA 2017 2 94,854 100.0 5,780,415 60.94
Solana Crossing Solana Beach, CA 1982/2005 4 224,009 88.3 9,150,509 46.26
The Landmark at One Market (2)
San Francisco, CA 1917/2000 1 422,426 100.0 41,072,918 97.23
One Beach Street San Francisco, CA 1924/1972/1987/1992 1 100,270 — — —
First & Main Portland, OR 2010 1 362,633 90.7 10,969,495 33.35
Lloyd Portfolio Portland, OR 1940-2015 3 549,959 79.4 15,287,045 35.01
City Center Bellevue Bellevue, WA 1987 1 498,606 85.7 25,454,376 59.57
Eastgate Office Park Bellevue, WA 1985 4 281,204 55.4 6,475,463 41.57
Corporate Campus East III Bellevue, WA 1986 4 159,578 85.0 6,253,631 46.10
Bel-Spring 520 Bellevue, WA 1983 2 93,295 73.1 2,989,023 43.83
Subtotal / Weighted Average Office Portfolio (3)
39 4,058,523 86.0 % $ 196,406,049 $ 56.27
RETAIL PROPERTIES
Carmel Country Plaza San Diego, CA 1991 9 78,098 89.8 % $ 3,962,827 $ 56.51
Carmel Mountain Plaza (4)
San Diego, CA 1994/2014 15 528,416 98.8 14,205,182 27.21
South Bay Marketplace (4)
San Diego, CA 1997 9 132,877 97.8 2,454,484 18.89
Gateway Marketplace San Diego, CA 1997/2016 3 127,861 100.0 2,583,099 20.20
Lomas Santa Fe Plaza Solana Beach, CA 1972/1997 9 208,297 98.0 6,661,157 32.63
Solana Beach Towne Centre Solana Beach, CA 1973/2000/2004 12 246,651 96.5 6,847,560 28.77
Del Monte Center (4)
Monterey, CA 1967/1984/2006 16 673,155 82.4 9,449,635 17.04
Geary Marketplace Walnut Creek, CA 2012 3 35,159 96.7 1,230,114 36.18
The Shops at Kalakaua Honolulu, HI 1971/2006 3 11,671 77.7 1,105,775 121.94
Waikele Center Waipahu, HI 1993/2008 9 418,047 99.7 12,838,467 30.80
Alamo Quarry Market (4)
San Antonio, TX 1997/1999 16 588,148 98.5 14,813,996 25.57
Hassalo on Eighth - Retail (5)
Portland, OR 2015 3 44,236 65.5 968,470 33.42
Subtotal / Weighted Average Retail Portfolio (1)
107 3,092,616 94.3 % $ 77,120,766 $ 26.44
Total / Weighted Average Retail and Office Portfolio (1)
146 7,151,139 89.6 % $ 273,526,815 $ 42.69
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 Honolulu, HI 2006 3 93,925 95.1 % $ 9,545,747 $ 106.87
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 2008/2014/2020 2 369 85.2 % $ 373.50 $ 318.38
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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 - 2008/2021 80 548 94.7 % $ 17,026,908 $ 2,734
Imperial Beach Gardens Imperial Beach, CA 1959/2008 26 160 92.5 4,703,988 2,649
Mariner’s Point Imperial Beach, CA 1986 8 88 87.5 2,288,280 2,476
Santa Fe Park RV Resort (6)
San Diego, CA 1971/2007-2008 1 124 84.7 1,521,684 1,207
Pacific Ridge Apartments San Diego, CA 2013 3 533 94.0 23,798,100 3,958
Hassalo on Eighth - Multifamily (5)
Portland, OR 2015 3 657 91.0 11,873,343 1,655
Total / Weighted Average Multifamily 121 2,110 92.3 % $ 61,212,303 $ 2,619
(1) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) under commenced leases for the month ended December 31, 2023 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:
a. 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 $35,743,797 to our estimate of annual triple net operating expenses of $10,507,904 for an estimated annualized base rent on a modified gross lease basis of $46,251,701 for La Jolla Commons.
b. The annualized base rent for Eastgate Office Park 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 $4,656,039 to our estimate of annual triple net operating expenses of $1,819,424 for an estimated annualized base rent on a modified gross lease basis of $6,475,463 for Eastgate Office Park.
c. The annualized base rent for Corporate Campus East III 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 $4,508,259 to our estimate of annual triple net operating expenses of $1,745,372 for an estimated annualized base rent on a modified gross lease basis of $6,253,631 for Corporate Campus East III.
d. The annualized base rent for Bel-Spring 520 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 $2,140,936 to our estimate of annual triple net operating expenses of $848,087 for an estimated annualized base rent on a modified gross lease basis of $2,989,023 for Bel-Spring 520.
(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 remaining five-year extension option.
(3) Lease data for signed but not commenced leases as of December 31, 2023 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 $ 14,214 $ 687,781 $ 48.39 $ 56.37
Retail Portfolio 31,501 748,980 $ 23.78 $ 26.71
Total Retail and Office Portfolio $ 45,715 $ 1,436,761 $ 31.43 $ 42.87
(a) Office portfolio leases signed but not commenced of 7,016 and 7,198 square feet are expected to commence during the first and second quarters of 2024, respectively. Retail portfolio leases signed but not commenced of 3,264, 1,200, and 27,037 square feet are expected to commence during the first, second and third quarters of 2024, 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, 2023 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. 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, 2023, by square footage under lease as of December 31, 2023.
(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 $ 974,581
South Bay Marketplace 1 2,824 $ 114,552
Del Monte Center 1 212,500 $ 96,000
Alamo Quarry Market 3 20,694 $ 423,455
(5) The Hassalo on Eighth property is comprised of three multifamily buildings, each with a ground floor retail component: Velomor, Aster Tower and Elwood.
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(6) 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 120 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 (a) the square footages of existing leases, plus (b) 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, 2023, 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, 2023. Percentage leased for our multifamily properties is calculated as total units rented as of December 31, 2023, 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, 2023, 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, 2023. 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, 2023 for our retail and office portfolio equaled approximately $7.1 million for the year ended December 31, 2023. Total abatements for leases in effect as of December 31, 2023 for our mixed-use portfolio equaled approximately $0.1 million for the year ended December 31, 2023. Total abatements for leases in effect as of December 31, 2023 for our multifamily portfolio equaled approximately $0.5 million for the year ended December 31, 2023.
• Units represent the total number of units available for sale or rent at December 31, 2023.
• Average occupancy represents the percentage of available units that were sold during the 12-month period ended December 31, 2023, 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, 2023, 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, 2023 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, 2023.
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Tenant Diversification
At December 31, 2023, our operating portfolio had approximately 796 leases with office and retail tenants, of which 6 expired on December 31, 2023 and 9 had not yet commenced as of such date. Our residential properties had 1,843 leases with residential tenants at December 31, 2023, excluding Santa Fe Park RV Resort. The retail portion of our mixed-use property had approximately 63 leases with retailers. Only one tenant or affiliated group of tenants accounted for more than 9.3% of our annualized base rent as of December 31, 2023 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 office, retail and retail portion of our mixed-use property portfolios as of December 31, 2023.
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 3.5 % $ 26,420,853 9.3 %
LPL Holdings, Inc. La Jolla Commons 4/30/2029 421,001 5.8 19,886,757 7.0
Autodesk, Inc. The Landmark at One Market 12/31/2027
12/31/2028 138,615 1.9 13,670,631 4.8
Smartsheet, Inc. City Center Bellevue 12/31/2026
4/30/2029 123,041 1.7 6,998,327 2.5
Illumina, Inc. La Jolla Commons 10/31/2027 73,176 1.0 4,770,535 1.7
VMware, Inc City Center Bellevue 3/31/2028 75,000 1.0 4,559,084 1.6
Lowe's Waikele Center 5/31/2028 155,000 2.1 4,092,000 1.4
Clearesult Operating, LLC First & Main 4/30/2025 101,848 1.4 3,483,504 1.2
Industrious City Center Bellevue 4/30/2033
3/31/2034 55,256 0.8 3,205,289 1.1
State of Oregon: Department of Environmental Quality Lloyd Portfolio 10/31/2031 87,787 1.2 3,023,074 1.1
Top technology tenant (2) La Jolla Commons 8/31/2030 40,800 0.6 2,521,440 0.9
Genentech, Inc Lloyd Portfolio 10/31/2026 66,852 0.9 2,407,761 0.9
MEI Pharma, Inc. Torrey Reserve Campus 11/30/2029 45,088 0.6 2,334,532 0.8
PIMCO Solana Crossing
La Jolla Commons
5/12/2024
3/31/2034 38,302 0.5 2,304,262 0.8
Internal Revenue Service First & Main 8/31/2030 63,648 0.9 2,189,700 0.8
Sprouts Farmers Market Carmel Mountain Plaza,
Solana Beach Towne Centre,
Geary Marketplace 3/31/2025
6/30/2029
9/30/2032 71,431 1.0 2,121,187 0.8
California Bank & Trust Torrey Reserve Campus 2/29/2024
2/28/2034 34,731 0.5 2,095,596 0.7
WeWork Lloyd Portfolio 1/31/2032 55,395 0.8 2,058,075 0.7
Veterans Benefits Administration First & Main 8/31/2030 73,001 1.0 1,997,006 0.7
Perkins Coie, LLP Torrey Reserve Campus 12/31/2028 36,980 0.5 1,972,850 0.7
Troutman Sanders, LLP Torrey Reserve,
First & Main 3/31/2025
4/30/2025 33,812 0.5 1,852,641 0.7
Nordstrom Rack Carmel Mountain Plaza,
Alamo Quarry Market 9/30/2027
10/31/2027 69,047 1.0 1,804,269 0.6
Marshalls Solana Beach Towne Centre,
Carmel Mountain Plaza 1/31/2025
1/31/2029 68,055 0.9 1,728,228 0.6
US Bank La Jolla Commons,
Lomas Sante Fe Plaza 8/31/2027 40,858 0.6 1,701,942 0.6
Banner Corporation Corporate Campus East III 10/31/2027 46,572 0.6 1,630,020 0.6
TOTAL 2,268,494 31.3 % $ 120,829,563 42.6 %
(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, 2023 for the applicable lease(s) by (ii) 12.
(2) Name withheld at tenant's request.
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Geographic Diversification
Our properties are located in Southern California, Northern California, Washington, Oregon, 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, 2023. 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 2,912,752 40.2 %
Northern California 4 1,231,010 17.0
Washington 4 1,032,683 14.3
Oregon 3 956,828 13.2
Texas 1 588,148 8.1
Hawaii (2)
3 523,643 7.2
Total 25 7,245,064 100.0 %
(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, 2023 (dollars in thousands).
Segment Number of Properties Property Operating Income Percentage of Property Operating Income
Office 12 $ 146,517 52.8 %
Retail 12 73,327 26.5 %
Mixed-Use 1 33,805 12.2 %
Multifamily 6 23,558 8.5 %
Total 31 $ 277,207 100.0 %
Lease Expirations
The following table sets forth a summary schedule of the lease expirations for leases in place as of December 31, 2023, plus available space, for each of the ten calendar years beginning January 1, 2024 at the properties in our retail portfolio, office portfolio and the retail portion of our mixed-use portfolio. The square footage of available space excludes the space from 6 leases that terminated on December 31, 2023. In 2024, 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 fifteen months, with a majority having twelve-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 749,153 10.2 % $ — — % $ —
Month to Month 87,179 1.2 1,190,762 0.4 13.66
2024 511,728 7.1 23,470,529 8.8 45.87
2025 648,514 9.0 23,958,594 8.9 36.94
2026 699,555 9.7 28,413,457 10.6 40.62
2027 865,844 12.0 36,508,531 13.6 42.17
2028 1,142,216 15.8 40,323,290 15.0 35.30
2029 1,231,670 17.0 64,575,137 24.1 52.43
2030 320,141 4.4 13,160,821 4.9 41.11
2031 327,884 4.5 12,399,549 4.6 37.82
2032 210,502 2.9 6,828,363 2.5 32.44
2033 116,966 1.6 6,103,288 2.3 52.18
Thereafter 286,961 4.0 11,219,456 4.3 39.10
Signed Leases Not Commenced 46,751 0.6 — — —
Total: 7,245,064 100.0 % $ 268,151,777 100.0 % $ 37.01
(1) Annualized base rent is calculated by multiplying base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 2023 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.