4. REAL ESTATE ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS

Acquisitions - 2011

The Market at Lake Houston – On February 25, 2011, we completed the acquisition of The Market at Lake Houston, a 101,791 square foot grocery-anchored neighborhood shopping center situated on 13.86 acres in Atascocita, Texas, a northern suburb of Houston. The property was completed in 2002 and was 100% leased on the acquisition date. The anchor tenant is H-E-B, a regional supermarket, and other major tenants include Five Guys Burgers, Payless ShoeSource and Subway. We acquired the property for $20.1 million, of which $4.4 million was paid using cash on deposit with a qualified intermediary. The balance was paid through our assumption of $15.7 million of mortgage debt. The property was owned by two of our Advised Funds, and we completed the acquisition pursuant to an independent appraisal process.

Brookwood Village – On May 10, 2011, we completed the acquisition of Brookwood Village, a 28,774 square foot pharmacy-anchored, neighborhood shopping center located in the Buckhead District of Atlanta, Georgia. The property was renovated in 2000 and was 96% leased on the acquisition date. The anchor tenant is CVS/pharmacy and other tenants include Sprint, FedEx/Kinko's and Subway. We acquired the property for $10.6 million in cash using proceeds from our existing line of credit.

Alpharetta Commons – On July 29, 2011, we completed the acquisition of Alpharetta Commons, a 94,544 square foot grocery-anchored neighborhood shopping center located in the Alpharetta submarket of Atlanta, Georgia. The property was built in 1997 and was 100% leased on the acquisition date. The anchor tenant is Publix, a regional supermarket, with the remaining tenants comprised primarily of local and regional convenience retailers. We acquired the property for $18.8 million using cash on hand, $5.4 million from borrowings on our Facility and a loan of $12.5 million.

The table below details the total cash paid as reported on our consolidated statements of cash flows and the corresponding values assigned to the assets and liabilities acquired related to our acquisitions of investment real estate during 2011 (in thousands):


		Market at Lake			Brookwood			Alpharetta
		Houston			Village			Commons			Total
Assets:
Land	$	3,740		$	3,356		$	4,663		$	11,759
Buildings		13,021			6,037			12,475			31,533
Tenant improvements		330			158			426			914
Acquired lease intangibles, net		3,417			1,086			1,886			6,389
Accounts receivable - related party		60			-			-			60
Deferred costs, net		42			-			140			182
Other assets		221			-			161			382
Liabilities:
Notes payable		(16,010	)		-			(12,500	)		(28,510	)
Accounts payable and other liabilities		(59	)		(85	)		(161	)		(305	)
Acquired below-market lease intangibles, net		(73	)		(37	)		(700	)		(810	)
Net cash paid for the acquisition of investment
properties	$	4,689		$	10,515		$	6,390		$	21,594

Included in our consolidated statements of operations are total revenues of $3.2 million and net loss of $788,000 related to the operations of The Market at Lake Houston, Brookwood Village and Alpharetta Commons beginning on the respective dates of acquisition. The table below presents our pro forma results of operations for the year ended December 31, 2011, assuming that we acquired all properties on January 1, 2010 (in thousands):


		2011		Pro forma adjustments to historical results								2011
		Historical		Market at Lake			Brookwood		Alpharetta			Pro forma
		results		Houston			Village		Commons			results
Total revenues	$	36,915	$	315		$	350	$	917		$	38,497
Net income available to
stockholders	$	4,240	$	(26	)	$	45	$	(92	)	$	4,167

The table below presents our pro forma results of operations for the year ended December 31, 2010, assuming that we acquired all properties on January 1, 2010 (in thousands):


		2010		Pro forma adjustments to historical results									2010
		Historical		Market at Lake			Brookwood			Alpharetta			Pro forma
		results		Houston			Village			Commons			results
Total revenues	$	33,374	$	1,495		$	645		$	1,216		$	36,730
Net income available to
stockholders	$	6,132	$	(318	)	$	(260	)	$	(335	)	$	5,219

Acquisitions - 2010

500 Lamar – On December 9, 2010, we completed the acquisition of 500 Lamar, a 12,795 square foot neighborhood shopping center in Austin, Texas. The property consists of local boutique tenants with spaces ranging from 1,000 to 2,500 square feet and was 100% occupied at the time of purchase. We acquired the property for $4.6 million using cash on deposit with a qualified intermediary and the assumption of a $1.8 million loan.

Acquisitions - 2009

There were no real estate acquisitions or dispositions during 2009, except for the acquisition of REITPlus's net assets in conjunction with the merger as described in Note 14.

Dispositions and Discontinued Operations

On July 6, 2011, we sold two non-core, single-tenant assets to a third party, which generated total proceeds of $2.4 million and resulted in a gain of $417,000, net of tax.

During 2010, we sold 21 non-core, single tenant assets to third parties, which generated net proceeds of $19.5 million and resulted in total gains of $6.6 million. In conjunction with the sales, we extinguished outstanding debt in the amount of $17.4 million that was secured by the properties. Of these net proceeds, $12.8 million were deposited with a qualified intermediary to be used for the future acquisition of properties in accordance with section 1031 of the Internal Revenue Code.

During 2009, we ceased our general contracting operations and the fund-raising business as part of our REITPlus merger. See Note 14.

The following table is a summary of our discontinued operations for the years ended December 31, 2011, 2010, and 2009 (in thousands, except for per share data):


		For the years ended December 31,
		2011			2010			2009

Revenues:
Rental income from operating leases	$	201		$	642		$	816
Earned income from direct financing leases		-			1,405			2,240
Advisory services income - related party		-			-			1,002
Total revenues		201			2,047			4,058
Expenses:
General and administrative		(5	)		(63	)		47
Property expense		2			5			51
Construction costs		-			3			981
Legal and professional		42			23			125
Depreciation and amortization		13			51			77
Impairment - properties		-			1,219			-
Total expenses		52			1,238			1,281
Operating income		149			809			2,777
Other income (expense):
Gain on sale of real estate acquired for investment		-			1,216			-
Interest and other income		4			19			-
Income tax benefit (expense)		(5	)		(462	)		(669	)
Interest expense		-			(926	)		(1,373	)

Income from discontinued operations, net of tax		148			656			735
Gain on sale of real estate acquired for resale, net of tax	$	417		$	5,726		$	1,897
Income from discontinued operations	$	565		$	6,382		$	2,632

Basic and diluted income from discontinued operations per
share	$	0.02		$	0.28		$	0.39

In July 2010, the general partner of AmREIT Woodlake, L.P. entered into a joint venture agreement with a third party whereby we and MIG IV sold 90% of our interest in the property to a new partner. Prior to the sale we held a 10% interest in the property, and we now hold a 1% interest in the property as a result of this transaction. The sale of a portion of our investment in AmREIT Woodlake, L.P did not meet the criteria for reporting as discontinued operations. See Note 5.