Filed pursuant to Rule 424(b)(3)
Registration No. 333-114432
AMREIT
Supplement No. One, Dated August 31, 2004
To Prospectus, Dated June 25, 2004
For up to 17,000,000 Class D Common Shares Offered To The Public
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated June 25, 2004. Capitalized terms used in this Supplement have
the same meanings as in the Prospectus unless otherwise stated herein.
Information as to the number and types of properties acquired by AmREIT is
presented as of August 31, 2004 and all references to property acquisitions
should be read in that context. Proposed properties for which AmREIT enters
into initial commitments to acquire, as well as property acquisitions, that
occur after August 31, 2004, will be reported in a subsequent Supplement.
RECENT DEVELOPMENTS
AmREIT has acquired four new properties: The Courtyard at Post Oak, Bakery
Square Shopping Center, Plaza in the Park and Cinco Ranch Shopping Center. The
first three are located in Houston, Texas and the last property is located in
Katy, Texas, a suburb of Houston. As of the date of this Supplement, we have
sold 275,280.424 class D common shares, resulting in $2,752,804.24 in gross
sales proceeds.
The Courtyard at Post Oak:
On June 15, 2004, AmREIT acquired The Courtyard at Post Oak, consisting of
a 4,013 square foot, free standing building occupied by Verizon Wireless (NYSE:
VZ) and a 9,584 square foot, multi-tenant shopping center occupied by Ninfa's
Restaurant and Dessert Gallery. The property was acquired for $6.35 million in
cash.
Bakery Square Shopping Center:
On July 21, 2004, AmREIT acquired Bakery Square Shopping Center, which is
comprised of a free standing Walgreen's and a 19,494 square foot shopping
center anchored by Bank of America (NYSE: BOA). The shopping center was
acquired with approximately $3.97 million in cash and the assumption of $4.52
million in long term fixed rate debt.
Plaza in the Park:
On July 1, 2004, AmREIT acquired Plaza in the Park, a 129,955 square foot
Kroger (NYSE: KR) anchored shopping center located on approximately 14.3 acres
of land. The property was acquired with approximately $15.33 million in cash
and the assumption of $18.16 million in long term fixed rate debt.
Cinco Ranch Shopping Center:
On July 1, 2004, AmREIT acquired Cinco Ranch - Kroger, a 97,297 square
foot Kroger (NYSE: KR) anchored shopping center located on approximately 12.8
acres of land. The property was acquired with approximately $6.4 million in
cash and the assumption of $8.59 million in long term fixed rate debt.
BUSINESS AND PROPERTIES
Properties
Description.
The following sentence updates and replaces the table heading under this
caption on page 30 of the Prospectus.
Information concerning the properties owned solely by AmREIT as of August
31, 2004, is presented in the following table:
AmREIT Wholly-Owned Property Information
(August 31, 2004)
Building Lease
Property (Location) Date Purchase Leaseable Annual Expiration
Acquired Price Area Rent Date
Radio Shack
(Dallas, TX) .................... 06/15/94 $1,062,000 5,200 $108,900 11/30/06
Transworld Entertainment
(Independence, MO) .............. 11/14/94 1,550,000 14,047 187,655 04/30/04
Copperfield Medical Plaza
(Houston, TX) ................... 07/01/95 1,680,000 14,000 201,072 04/30/07
Wherehouse Entertainment
(Wichita, KS) ................... 09/12/95 1,700,000 15,158 (3) 12/31/04
FootStar, Inc. (1)
(Tucson, AZ) .................... 09/11/96 3,351,000 19,550 419,026 09/30/16
Washington Mutual
(The Woodlands, TX) (4).......... 09/23/96 500,000 - 59,461 09/30/11
Washington Mutual
(Houston, TX) (4)................ 12/11/96 828,000 - 97,861 12/31/11
FootStar, Inc. (1)
(Baton Rouge, LA) ............... 06/09/97 2,806,000 20,575 300,539 05/15/12
Hollywood Video
(Lafayette, LA) ................. 10/31/97 1,124,000 7,488 134,709 09/24/12
Hollywood Video
(Ridgeland, MS) ................. 12/30/97 1,208,000 7,488 138,453 12/22/12
OfficeMax
(Dover, DE) ..................... 04/14/98 2,548,000 23,500 264,679 04/30/13
Woodlands Plaza
(The Woodlands, TX).............. 06/03/98 3,542,000 16,922 374,100 Various
Sugar Land Plaza
(Sugar Land, TX) ................ 07/01/98 3,635,000 16,922 330,875 07/01/13
Dardin Restaurants
(Peachtree City, GA) (4)......... 12/18/98 738,000 - 75,000 12/17/08
IHOP, Corp.
(Sugarland, TX) ................. 09/30/99 1,608,000 4,020 165,180 09/30/24
IHOP, Corp.
(Topeka, KS) .................... 09/30/99 1,335,000 4,020 137,340 09/30/24
Foodmaker
(Dallas, TX)..................... 07/23/02 (2) 715,100 2,238 68,998 07/11/09
Baptist Memorial Health
(Memphis, TN).................... 07/23/02 (2) 2,079,200 15,000 204,375 08/31/07
Payless Shoes
(Austin, TX)..................... 07/23/02 (2) 698,300 4,000 82,000 01/30/08
Golden Corral
(Houston, TX).................... 07/23/02 (2) 1,811,800 12,000 182,994 11/30/07
Golden Corral
(Houston, TX).................... 07/23/02 (2) 1,843,400 12,000 181,688 03/14/08
Eckerd
(Houston, TX) (4)................ 01/10/03 2,646,900 - 327,167 10/31/23
TGI Friday's
(Houston, TX).................... 07/23/02 (2) 2,036,900 8,500 180,500 01/30/08
Guitar Center
(Minnesota, MN).................. 07/23/02 (2) 2,541,700 15,000 246,750 08/31/09
AFC, Inc. (Popeye's Chicken)
(Atlanta, GA).................... 07/23/02 (2) 1,113,900 2,583 105,563 07/19/14
Memorial Herman Hospital
(Houston, TX).................... 07/23/02 (2) 1,816,800 15,000 171,360 01/31/09
Blockbuster Video
(Oklahoma City, OK).............. 07/23/02 (2) 973,800 15,000 92,610 08/31/05
Pier One
(Longmont, CO)................... 07/23/02 (2) 1,423,600 8,014 135,560 02/29/08
IHOP, Corp.
(Grand Prairie, TX).............. 04/15/03 1,940,400 4,020 174,332 04/14/28
TGI Friday's
(Hanover, MD).................... 09/16/03 1,474,700 8,500 134,962 09/30/13
The Terrace Shops
(Houston, TX).................... 12/15/03 4,800,000 16,395 428,900 Various
Uptown Plaza
(Houston, TX).................... 12/15/03 13,000,000 28,000 1,268,400 Various
The Courtyard at Post Oak
(Houston, TX)..................... 06/15/04 6,350,000 13,597 481,609 Various
Plaza in the Park
(Houston, TX)..................... 07/01/04 33,490,000 129,955 2,607,862 Various
Cinco Ranch Shopping Center
(Katy, TX)........................ 07/01/04 14,990,000 97,297 1,218,466 Various
Bakery Square
(Houston, TX)..................... 07/21/04 8,490,000 34,704 531,108 Various
TOTAL .............................. $132,289,500 602,561 $11,711,154
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(1) Footstar, Inc. filed for Chapter 11 Bankruptcy protection on
March 2, 2004. In publicly released announcement, Footstar has
indicated their intent to reject the lease on all Just For Feet
locations, including the leases on our two properties.
(2) These properties were acquired as part of the merger of the
affiliated partnerships (Funds IX, X and XI) on July 23, 2002.
The purchase price reflects the pro-rata portion of the negotiated
price allocated to the properties that AmREIT paid the partnerships
in common shares.
(3) Wherehouse Entertainment filed for Chapter 11 Bankruptcy
protection, and as such, rejected the Wherehouse Entertainment lease
in Wichita, Kansas. At March 31, 2004, no rental income was being
received on this property.
(4) Represents a land lease only, and as such, no building leasable area
is reflected.
The following paragraphs are inserted following the first full paragraph
on page 33 of the Prospectus.
Recent Acquisitions and Dispositions.
On June 15, 2004, AmREIT acquired The Courtyard at Post Oak, consisting of
a 4,013 square foot, free standing building occupied by Verizon Wireless (NYSE:
VZ) and a 9,584 square foot, multi-tenant shopping center occupied by Ninfa's
Restaurant and Dessert Gallery. The property was constructed in 1994 and is
located at the northwest intersection of Post Oak and San Felipe in Houston,
Texas. This is a lighted intersection in the heart of the Galleria area, the
most significant retail corridor in the Greater Houston area. The property was
acquired for $6.35 million in cash. The weighted average remaining lease term
for the project is 5.2 years.
Tenant Square Footage Lease Term Expiration Rental Increases
Verizon Wireless 4,013 10 Years December 2009 Yes
Ninfa's 7,606 15 Years November 2009 Yes
Dessert Gallery 1,978 5 Years August 2008 No
On July 21, 2004, AmREIT acquired Bakery Square Shopping Center, which is
comprised of a free standing Walgreen's and a 19,494 square foot shopping
center anchored by Bank of America (NYSE: BOA). The property was constructed in
1996 and is located at the southwest corner of Dunlavy and West Gray in
Houston, Texas. This is a strong infill location just south of the central
business district in Houston. The property was acquired with approximately
$3.97 million in cash and the assumption of $4.52 million in long term fixed
rate debt. The debt is evidenced by note issued to New York Life Insurance
Company and has a current balance of $4.52 million, bears interest at a rate of
8% per year (and matures on February 10, 2017. The initial principal balance of
the note was $5.40 million. The loan has a term and amortization of 15-years,
with principal and interest payments of $47,617 due monthly. The weighted
average remaining lease term for the shopping center is 4.9 years. The
Walgreen's lease is for 60 years and will expire October 31, 2056. The shopping
center is 100% occupied.
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Tenant Square Footage Lease Term Expiration Rental Increases
Blockbuster Video 6,484 10 years October 2006 No
T-Mobile 1,416 10 years September 2007 No
Fantastic Sam's 1,050 4 years February 2008 Yes
River Oaks Nails 1,050 5 years May 2009 Yes
Bell Cleaners 1,750 14 years March 2010 Yes
Boston Market 2,816 10 years May 2010 Yes
Bank of America 3,878 15 years January 2012 Yes
Philly Connection 1,050 10 years May 2014 Yes
Walgreens 15,210 60 years September 2056 No
On July 1, 2004, AmREIT acquired Plaza in the Park, a 129,955 square foot
Kroger (NYSE: KR) anchored shopping center located on approximately 14.3 acres
of land. The property was constructed in 1999 and is located at the southwest
corner of Buffalo Speedway and Westpark in Houston, Texas. Plaza in the Park's
Kroger is undergoing a 13,120 square foot expansion and, when completed, is
expected to be the number one Kroger grocery store in both sales volume and
size in the State of Texas. Additionally, Kroger is the number one grocer in
the Houston marketplace, and enjoys over 26% of total market share. The
property was acquired with approximately $15.33 million in cash and the
assumption of $18.16 million in long term fixed rate debt. The debt is
evidenced by a note issued to Teachers Insurance and Annuity Association of
America and has a current balance of $18.16 million, bears interest at a rate
of 5.16% per year and matures in July 2013. The initial principal balance of
the note was approximately $18.43 million. The loan has a ten year term with a
30-year amortization. Principal and interest payments of $105,802 are due
monthly. The weighted average remaining lease term for the project is 9.2
years. The Kroger lease is for 20 years, containing approximately 69 thousand
square feet, expiring in August 2017. The shopping center is 96.67% occupied.
Tenant Square Footage Lease Term Expiration Rental Increases
Postal Annex 900 5 years April 2006 No
Dervish Enterprises 2,427 5 years June 2006 No
Quizno's 1,600 7 years October 2006 Yes
Sprintcom, Inc. 2,500 5-Year October 2006 No
The Root of You 2,850 5 years December 2006 No
Hallmark Gold Crown 5,650 5-Year February 2007 No
Siena Interiors 2,164 5 years October 2007 No
Image America 2,276 5-Year March 2008 Yes
Avenue Chocolates 1,200 5 years March 2008 No
Tapioca Express 1,112 5 years December 2008 No
Planet Beach 1,960 7 years March 2009 Yes
Huntington Learning Center 2,518 5 years March 2009 No
West University Wellness 2,400 5 years April 2009 No
Dr. Daniel O. Howes 1,500 10 years May 2009 No
Pilgrim Cleaners 1,200 10 years June 2009 Yes
General Nutrition 900 10 years June 2009 Yes
Bo Hwa Oh 1,295 5 years July 2009 No
Brelian, Inc. 2,300 10 years August 2009 Yes
Envision Nails 1,200 10 years September 2009 No
Vietopia Restaurant 5,640 10 years September 2009 Yes
Vision Optique 1,800 10 years October 2009 Yes
Copperfield Liquor 3,400 10 years December 2009 Yes
Buca di Beppo 7,573 10 years August 2010 Yes
Household Finance Corp III 2,000 10 years April 2011 Yes
Kroger Texas, LP 68,658 20 years August 2017 No
Vacant 2,932
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On July 1, 2004, AmREIT acquired Cinco Ranch - Kroger, a 97,297 square
foot Kroger (NYSE: KR) anchored shopping center located on approximately 12.8
acres of land. The property was constructed in 2001 and is located at the
northeast corner of Mason Road and Westheimer Parkway in Katy, Texas. The
shopping center is positioned in the heart of the affluent Cinco Ranch master
planned community, and is ranked by Kroger as one of the top 10 Kroger grocery
stores in Texas. The property was acquired with approximately $6.4 million in
cash and the assumption of $8.59 million in long term fixed rate debt. The debt
is evidenced by a note issued to Teachers Insurance and Annuity Association of
America and has a current balance of $8.59 million, bears interest at a rate of
5.16% per year and matures in July 2003. The initial principal amount of the
note was approximately $8.72 million. The loan has a ten year term with a
30-year amortization. Principal and interest payments of $50,060 are due
monthly. The weighted average remaining lease term for the project is 14 years.
The Kroger lease is for 20 years, containing approximately 63 thousand square
feet, expiring in June 2023. The shopping center is 100% occupied.
Tenant Square Footage Lease Term Expiration Rental Increases
Hallmark Gold Crown 4,500 5 years February 2006 No
General Nutrition 1,400 5 years March 2006 No
L'Aglio 1,720 5 years April 2006 No
Sally Beauty Company 1,400 5 years July 2006 No
State Farm Mutual 1,400 5 years September 2006 No
I-cafe 1,000 5 years February 2008 No
Uncle Lee's Cafe 1,600 5 years June 2008 No
Itty Bitty City 2,600 5 years December 2008 No
Pizza Hut of America 1,600 10 years January 2011 Yes
Fashion Park Cleaners 1,400 10 years February 2011 Yes
Nails Today 1,400 10 years February 2011 Yes
Parkway Liquor 1,927 10 years February 2011 Yes
eDentistry 1,750 10 years February 2011 Yes
TGF Haircutters 1,400 10 years March 2011 Yes
Wishnow-Sugar Vision Center 1,820 10 years March 2011 Yes
Blockbuster Inc. 4,417 10 years March 2011 Yes
Starbucks Corp. 1,400 10 years June 2011 Yes
Mail Boxes Etc. 1,190 10 years November 2011 Yes
Kroger Texas LP 63,373 20 years June 2023 No
REDEMPTION OF SHARES
Description.
The following sentence updates and replaces the first sentence in the
fifth paragraph under this caption on page 57 of the Prospectus.
Upon the Redemption Agent's receipt of notice for redemption of shares,
the redemption price for this limited optional redemption right will initially
be $10.00 per share.
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