10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
	FORM 10-K

(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Commission File No. 001-35609

AmREIT, Inc.

(Exact name of registrant as specified in its charter)

Maryland	20-8857707
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8 Greenway Plaza, Suite 1000	77046
Houston, Texas	(Zip Code)
(Address of principal executive offices)
Registrant’s telephone number, including area code: (713) 850-1400
Securities registered pursuant to Section 12(b) of the Act:

	Title of Each Class	Name of Exchange on which Registered
	Class B Common Stock	New York Stock Exchange
	$0.01 par value per share
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $0.01 par value per share
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	YES o NO x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.	YES o NO x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	YES x NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	YES x NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K § 229.405 is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.	x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o		Accelerated Filer o
Non-accelerated Filer o	(Do not check if a smaller reporting company)	Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO x

As of June 30, 2012, there was no established trading market for either our Class A or Class B common stock. The number of shares outstanding of each of the issuer’s classes of common stock held by non-affiliates of the registrant as of February 20, 2013 are as follows:

	Number of shares outstanding
Class A Common Stock, $0.01 par value		11,657,563
Class B Common Stock, $0.01 par value		4,465,725

DOCUMENTS INCORPORATED BY REFERENCE

The registrant incorporates by reference portions of its Definitive Proxy Statement for the 2013 Annual Meeting of Stockholders to be filed subsequently with the SEC into Part III of this Annual Report on Form 10-K to the extent stated herein.

AmREIT, Inc.

Annual report on Form 10-K
Fiscal year ended December 31, 2012

TABLE OF CONTENTS
Item No.		Form 10-K
		Report Page
	Cautionary Note Regarding Forward-Looking Statements	ii
	Definitions	iii
	PART I
1	Business	1
1A.	Risk Factors	6
1B.	Unresolved Staff Comments	6
2	Properties	7
3	Legal Proceedings	10
4	Mine Safety Disclosures	11
	PART II
5	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
6	Selected Financial Data	12
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
7A.	Quantitative and Qualitative Disclosures About Market Risk	34
8	Financial Statements and Supplementary Data	35
9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	35
9A.	Controls and Procedures	35
9B.	Other Information	36
	PART III
10	Directors, Executive Officers and Corporate Governance	36
11	Executive Compensation	36
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
13	Certain Relationships and Related Transactions, and Directors Independence	36
14	Principal Accountant Fees and Services	36
	PART IV
15	Exhibits and Financial Statement Schedules	37
	Signatures	40

i

CAUTIONARY NOTE REGARDING FORWARD – LOOKING STATEMENTS

          Our disclosure and analysis in this Annual Report contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. This Annual Report also contains forward-looking statements obtained from third parties relating to market and industry data and forecasts; forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements contained in this Annual Report. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and FFO, our strategic plans and objectives, cost management, occupancy and leasing rates and trends, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of anticipated cash distributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and other similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

          Forward-looking statements that were true at the time made involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors.

ii

DEFINITIONS

          As used in this Annual Report, the following abbreviations and terms have the meanings as listed below. Additionally, the terms “AmREIT,” the “Company,” “we,” “us” and “our” refer to AmREIT, Inc., its predecessors and consolidated subsidiaries, unless the context clearly indicates otherwise.

ABBREVIATION	DEFINITION
2013 Proxy Statement	Definitive Proxy Statement for the 2013 Annual Meeting of Stockholders.
2012 Offering	Our underwritten public offering in which we sold 3,650,000 shares of Class B common stock on August 1, 2012 and 503,226 shares of Class B common stock pursuant to exercise of an over-allotment option by the underwriters on August 24, 2012.
$25 Million Facility	Our $25 Million secured revolving credit facility as specified in our Credit Agreement with Amegy Mortgage Capital, dated December 23, 2009 and repaid in full on August 1, 2012.
$75 Million Facility	Our $75 Million unsecured revolving credit facility as specified in our Revolving Credit Agreement with PNC Capital Markets, LLC, as sole lead arranger and sole bookrunner, dated August 3, 2012.
ABR	Annualized base rent, which is calculated by multiplying (i) monthly base rent as of December 31, 2012, for leases that had commenced as of such date, by (ii) 12.
Advised Funds	Collectively, our varying minority ownership interests in four high net worth investment funds, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV.
AIGF	AmREIT Income and Growth Fund, Ltd.
AmREIT	AmREIT, Inc., a Maryland Corporation
ARIC	AmREIT Realty Investment Corporation, a taxable REIT subsidiary, and its consolidated subsidiaries.
Annual Report	Annual report on Form 10-K filed with the SEC for the year ended December 31, 2012.
CEO	Chief Executive Officer.
CFO	Chief Financial Officer.
Class A common stock	Shares of our Class A common stock, par value $0.01 per share, which were previously designated “common stock,” and which are not currently listed on a national securities exchange.
Class B common stock	Shares of our Class B common stock, par value $0.01 per share, a new class of common stock created in connection with our 2012 Offering, which is listed on the NYSE under the symbol “AMRE.”
Core FFO	FFO in accordance with NAREIT’s definition excluding items that do not reflect ongoing property operations, such as acquisition expenses, expensed issuance costs and gains on the sale of real estate held for resale as management believes that they are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance with similar REITs.
Core Markets	The affluent, high growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta, which represent five of the top population and job growth markets in the United States.
EPS	Earnings per share.
Exchange Act	Securities Exchange Act of 1934, as amended.
FFO	Funds from operations, as defined by NAREIT, which includes net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and impairments on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for depreciation recorded by our Advised Funds.

iii

GAAP	U.S. generally accepted accounting principles.
GLA	Gross leasable area.
Internal Revenue Code	The Internal Revenue Code of 1986, as amended.
LIBOR	London Interbank Offered Rate.
MIG	AmREIT Monthly Income and Growth Fund, Ltd.
MIG II	AmREIT Monthly Income and Growth Fund II, Ltd.
MIG III	AmREIT Monthly Income and Growth Fund III, Ltd.
MIG IV	AmREIT Monthly Income and Growth Fund IV, L.P.
MIGC	AmREIT Monthly Income and Growth Corporation, general partner of MIG.
MIGC II	AmREIT Monthly Income and Growth II Corporation, general partner of MIG II.
MIGC III	AmREIT Monthly Income and Growth III Corporation, general partner of MIG III.
MIGC IV	AmREIT Monthly Income and Growth IV Corporation, general partner of MIG IV.
NAREIT	National Association of Real Estate Investment Trusts.
NOI	Net operating income, defined as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense).
NYSE	New York Stock Exchange.
OCI	Other comprehensive income.
Preston Royal East	The northeast corner of the Preston Royal Shopping center consisting of 107,914 GLA in which we hold a ground lease interest with 27 years remaining on the ground lease.
Preston Royal Shopping Center	Collectively, a retail shopping center which was purchased as one contiguous property with approximately 230,000 square feet of GLA on the northwest and northeast corners of the intersection of Preston Road and Royal Lane in Dallas, Texas. It was 97.3% leased at acquisition, and its major tenants include Tom Thumb, Barnes & Noble and Chico’s. The northwest corner is comprised of a fee simple interest and subject to mortgage financing. The northeast corner consists of a ground lease interest with 27 years remaining on the ground lease. We purchased the properties for a total of $66.2 million on December 12, 2012. Because we financed the two corners independently, the two corners are separated by an intersection, and because we do not own the land on the northeast corner, we have accounted for these properties separately as Preston Royal East and Preston Royal West since the date of their acquisition.
Preston Royal West	The northwest corner of Preston Royal Shopping Center consisting of 122,564 square feet of GLA in which we hold a fee simple interest.
REIT	Real estate investment trust.
SEC	Securities and Exchange Commission.
Securities Act	Securities Act of 1933, as amended.
Texas Margin Tax	The tax charged to companies conducting business in Texas. It is computed by applying the applicable tax rate (1% for us) to the profit margin, which is determined for us as total revenue less a 30% standard deduction.

iv

PART I

ITEM 1. BUSINESS

BACKGROUND

          We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. We seek to own properties in major cities in the United States that contain submarkets with characteristics comparable to our existing markets. Our shopping centers are often anchored by strong national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. Our remaining tenants consist primarily of specialty retailers and local restaurants. Over our 29-year history, we have acquired, owned and operated retail properties across 19 states. We have elected to be taxed as a REIT for federal income tax purposes.

Operating History

          From 1985 to 2000, AmREIT and its affiliates and predecessors acquired and developed mainly single-tenant retail properties across the United States, including in markets in California, Colorado, Georgia, Illinois, Kansas, Louisiana, Maryland, Minnesota, Missouri, New Mexico, New York, North Carolina, Oregon, Tennessee, Texas, Utah and Virginia. In 1995, we began investing in multi-tenant shopping centers, and in 2000, we refined our investment strategy to focus on total investor returns and value creation with less emphasis on current yield. We began to accumulate multi-tenant shopping centers in high barrier in-fill locations with strong demographics, taking advantage of population growth and increased affluence in Houston, Dallas, San Antonio and Austin as well as leveraging our expertise in Texas and our experienced property management team. Since 2000, we have recycled capital by selectively disposing of single-tenant retail properties located outside of our Core Markets and redeploying the proceeds into high-quality, multi-tenant shopping centers in our Core Markets. As of December 31, 2012, our single tenant properties only comprised 9.6% of our total GLA and 8.1% of our annualized base rent.

          Over the past 29 years, AmREIT and its predecessors have raised, sponsored and managed 20 advised funds targeting third-party equity capital, 13 of which have since been fully liquidated. With respect to the remaining seven Advised Funds, as of December 31, 2012, we managed three institutional joint ventures and four high net worth Advised Funds, which owned an aggregate of 2.2 million square feet of retail shopping center space. Our institutional partners in the joint ventures are J.P. Morgan Investment Management and AEW Capital. Through our sponsorship, our Advised Funds have raised approximately $250 million of equity capital that has been invested in high-quality retail centers and mixed-use developments.

Our 2012 Offering

          On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we filed articles supplementary to our charter that created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. Each share of Class B common stock has the following rights:

• the right to vote together with Class A common stockholders on all matters on which holders of our Class A and Class B common stock are entitled to vote;

• one vote with respect to all matters voted upon by our Class A and Class B common stockholders;

• the right to receive distributions equal to any distributions declared on shares of our Class A common stock; and

• liquidation rights equal to the liquidation rights of each share of Class A common stock.

          All Class A share amounts and related per share data included in this Annual Report have been presented to reflect the reverse stock split.

1

          On August 1, 2012, we completed the sale of 3,650,000 shares of our Class B common stock and simultaneously listed our Class B common stock on the NYSE under the symbol “AMRE.” We received net proceeds of approximately $46.3 million, which were used to repay $45.3 million of mortgage debt, including the $25 Million Facility. On August 24, 2012, we sold an additional 503,226 shares of our Class B common stock to our underwriters at the offering price pursuant to the exercise of the underwriters’ over-allotment option. We received net proceeds of approximately $6.5 million from the sale of the additional shares. In addition, we issued 312,499 shares of restricted Class B common stock to our officers and directors in connection with our 2012 Offering that will vest over a ten-year period. Upon completion of our 2012 Offering and as of December 31, 2012, our capital structure was as follows:

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

Our Business and Growth Strategies

          Increase Scale by Capitalizing on Acquisition Opportunities. Our investment focus is predominantly concentrated in the affluent, high-growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta (collectively, our Core Markets), which represent five of the top population and job growth markets in the United States. We believe these metropolitan areas are compelling real estate markets given their favorable demographics, robust job growth and large and diverse economies. The primary economic drivers in these markets are transport and utilities (including energy), government (including defense), education and healthcare, professional and business services, and leisure and hospitality. We intend to continue to acquire additional properties within our Core Markets. We believe that properties located in the most prominent retail districts of high barrier-to-entry markets will experience greater value appreciation, greater rental rate increases and higher and more stable occupancy rates than similar properties in less prominent locations of high barrier-to-entry markets or than properties located in low barrier-to-entry markets. Demonstration of our strategy can been seen with our acquisitions of Preston Royal Village Shopping Center in December 2012 and Alpharetta Commons, Brookwood Village and The Market at Lake Houston properties in 2011.

          Employ Disciplined Investment Screening. We carefully review potential acquisitions that meet our investment criteria, performing rigorous and detailed analyses, including analyses of submarket demographics, location, tenants, retail sales, rental rates and projected returns. Moreover, prior to expanding into new markets, we rigorously map local submarkets to ensure that potential acquisitions are in locations consistent with our strategy of owning assets in the most affluent and densely populated areas of a particular market. We generally seek to invest in properties that possess the following attributes, which we refer to collectively as our “5Ds”:

• Demographic purchasing power – average household incomes within a one-mile radius of $100,000 or more, resulting in an affluent population with substantial disposable income;

• Density of population – 45,000 or more households within a three-mile radius and additional retail drivers, such as favorable daytime employment population, tourism and regional draws;

• Demand for retail space – limited nearby retail properties or land available for the development of new retail properties, providing for favorable retail per capita figures as compared to the national and metropolitan statistical area averages;

• Desirability of physical layout – physical attributes that provide the best opportunity for our tenants to attract and serve their target customers; and

• Demarcation advantage – site-specific factors that influence traffic to our properties and require analysis beyond the raw demographic data.

          Proactively Manage and Lease Properties. We will continue to actively manage our portfolio, employ aggressive leasing strategies and leverage the extensive acquisition, development, redevelopment, leasing and property management experience of our team to increase occupancy rates at our properties, attract high-quality tenants, maximize tenant retention rates and increase property cash flows.

2

          Expand Portfolio through Redevelopment and Expansion Opportunities at Our Properties. We intend to capitalize on the in-fill locations of our properties with high barriers to entry by selectively redeveloping and expanding our existing properties where we believe we can generate attractive risk-adjusted returns. We have historically added high-quality amenities to our properties such as additional parking, enhanced signage, and common areas situated around water or other natural features, which we believe improves tenant mix and generates higher average base rents. Our redevelopment and expansion initiatives also may include expanding or reconfiguring existing retail space, developing pad sites or building other property types adjacent to our existing shopping centers, thereby creating mixed-use properties that augment our retail operations and generate revenue enhancing opportunities for such properties.

          Fund Growth through Multiple Capital Sources and Recycling of Capital. In addition to continuing to access available capital from public and private markets, we intend to generate additional capital through selling selected properties that no longer meet our investment criteria and selectively redeploying capital into high-quality multi-tenant shopping centers with higher overall return prospects.

OUR PORTFOLIO

          As of December 31, 2012, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA, which were 96.7% leased and occupied with a weighted average remaining lease term of 5.2 years. Our neighborhood and community shopping centers accounted for 90.4% of our GLA and 91.9% of our annualized base rent as of December 31, 2012. Our single-tenant retail properties comprised 9.6% of our GLA and 8.1% of our annualized base rent. See also Item 2. “Our Properties” of this Annual Report

Recent Acquisition and Disposition Activity:

• On December 12, 2012, we completed the acquisition of the Preston Royal Village Shopping Center, a retail shopping center, containing approximately 230,000 square feet of GLA, for a total of $66.9 million, including closing costs and prorations of approximately $800,000. The property was originally built in 1956 and 1959 and is located on the northwest corner and northeast corner of the intersection of Preston Road and Royal Lane in Dallas, Texas. The northwest corner is comprised of a fee simple interest and subject to mortgage financing. The northeast corner consists of a ground lease interest with 27 years remaining on the ground lease. We account for each corner as a separate property (Preston Royal West and Preston Royal East). Collectively, the properties were 97.3% leased as of December 31, 2012 with major tenants including Tom Thumb, Barnes & Noble and Chico’s. We funded the purchase through funds drawn against our $75 Million Facility, cash on hand and mortgage financing of $23.4 million. See also Note 4 to the Notes to Consolidated Financial Statements.

• During 2012 we completed the construction of a single tenant property comprising an additional 8,046 square feet of GLA.

• On January 24, 2013, we entered into a joint venture agreement with an institutional joint venture partner to form a joint venture through our contribution of our MacArthur Park property to a newly-organized single purpose entity as well as the acquisition by the joint venture of the contiguous property to the north (“MacArthur Park Phase I”), excluding Target. The institutional joint venture partner will contribute cash for a 70% interest in the joint venture. The joint venture would concurrently purchase MacArthur Park Phase I, currently owned by an unrelated third party, for approximately $26.2 million and place mortgage financing on the entire combined property of approximately $43.9 million. The joint venture will fully repay the MacArthur Park debt of approximately $8.8 million (including a $2.2 million defeasance penalty). At the conclusion of this transaction, we will hold a 30% ownership interest in the joint venture and receive net cash proceeds of approximately $35.4 million which will be used to repay borrowings under our $75 Million Facility. We will continue to manage and lease MacArthur Park on behalf of the joint venture and we retain a right of first offer to acquire the project in the future, after a lock out period. We expect this transaction to close in March 2013; however, closing is subject to customary closing conditions and we can make no assurances of when or if this joint venture will actually be formed and capitalized. 

3

After closing this transaction, our 30% retained ownership will grant us the ability to exercise significant influence over the operation and management of the property; however, our retained ownership of the property will no longer qualify for consolidation under GAAP. Therefore, we expect to deconsolidate our MacArthur Park asset on the closing date and account for our ownership under the equity method of accounting on a prospective basis. Our net real estate investments owned by our MacArthur Park property were approximately $43.2 million as of December 31, 2012. Additionally, our significant continuing involvement in MacArthur Park precludes us from treating our contribution of the property to the joint venture as discontinued operations under GAAP. Accordingly, MacArthur Park’s operating results will continue to be reported as a component of our income from continuing operations.

          We believe that the combination of our Preston Royal Village Shopping Center acquisition and our future MacArthur Park joint venture demonstrate our ability to identify and acquire high quality assets, and also our ability to leverage off of our Advised Funds in order to recycle assets into high quality development opportunities, resulting in a higher quality portfolio. The two transactions will leave us with a balance sheet poised for growth with approximately $57.4 million in anticipated availability under our $75 Million Facility.

OUR ADVISORY SERVICES

          Advised Funds – As of December 31, 2012, our Advised Funds included four high net worth investment funds, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV. In August 2012, AIGF, one of our high net worth investment funds, sold its remaining real estate asset, and the fund has been liquidated. We have formed, invested in and managed 20 advised funds over the past 29 years.

          As the sole owner of the general partner of each of the remaining four high net worth investment funds, and as the exclusive operator of each of the properties owned in whole or in part by the Advised Funds, we believe that our Advised Funds provide us with a pipeline of acquisition opportunities in our Core Markets. If these properties meet our investment criteria, we may acquire these assets (i) from our high net worth investment funds based on fair market value as determined by an independent appraisal process and (ii) from our institutional joint venture partners pursuant to contractual buy-sell rights or rights of first offer, as applicable. As of December 31, 2012, our Advised Funds held all or a portion of the ownership interests in 17 properties with approximately 2.2 million square feet of GLA and an undepreciated book value of $454 million.

          Real Estate Operating and Development Business – Our real estate operating and development business focuses on acquiring, managing, leasing and providing development and redevelopment services for our wholly-owned properties as well as the properties held by our Advised Funds. By employing our own real estate team, we are able to provide all services to our properties in-house and maintain secure relationships with our tenants. Our real estate operating and development business is held under our taxable REIT subsidiary, ARIC. ARIC generates brokerage, leasing, construction management, development and property management fee income.

COMPETITION

          All of our properties are located in geographic areas that include competing properties. The number of competitive properties in a particular area could have a material adverse affect on both our ability to lease space at our properties and on the rents charged. When pursuing acquisition development and redevelopment opportunities, we also compete with an indeterminate number of other real estate investors, including domestic and foreign corporations and financial institutions, publicly-traded and privately-held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds, some of which have greater financial resources than we do. Similarly, should we decide to dispose of a property, we may compete with third-party sellers of similar types of commercial properties for suitable purchasers, which may result in our receiving lower net proceeds from a sale or in our not being able to dispose of such property at a time of our choosing due to the lack of an acceptable return.

          In operating and managing our properties, we compete for tenants based upon a number of factors including, but not limited to, location, rental rates, security, flexibility, expertise to design space to meet prospective tenants’ needs and the manner in which the property is operated, maintained and marketed. We may be required to provide rent concessions, incur charges for tenant improvements and other inducements, or we may not be able to timely lease vacant space, all of which would adversely impact our results of operations.

4

GOVERNMENTAL REGULATIONS

          Our properties and the tenants of our properties are subject to various federal, state and local environmental, health and safety laws, including laws governing the management of wastes, underground and aboveground storage tanks, local fire safety requirements, and local land use and zoning regulations. For example, some of our tenants handle regulated substances or wastes as part of their operations on our properties. Noncompliance with these environmental, health and safety laws could subject us or our tenants to liability. These environmental liabilities could affect a tenant’s ability to make rental payments to us. Moreover, changes in laws could increase the potential costs of compliance with environmental laws, health, and safety laws, including increasing liability for noncompliance or requiring significant unanticipated expenditures. We are not presently aware of any instances of material non-compliance with environmental, health and safety laws at our properties, and we believe that we have all permits and approvals necessary under current law to operate our properties.

Environmental Regulations

          Under various federal, state and local environmental laws, ordinances and regulations, a current or former owner or operator of real property may be liable for the cost to remove or remediate hazardous or toxic substances, asbestos-containing materials, wastes, or petroleum products at, on, under, from or in such property. These costs could be substantial and liability under these laws may attach whether or not the owner or operator knew of, or was responsible for, the presence of such contamination. The presence of contamination on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination, or otherwise adversely affect our ability to redevelop, sell or lease the property or mortgage the property. In addition, if contamination is discovered on one of our properties, environmental laws may impose restrictions on the manner in which a property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants. We also may be liable for the costs of remediating contamination at off-site disposal or treatment facilities when we arrange for disposal or treatment of hazardous substances at such facilities, without regard to whether we comply with environmental laws in doing so.

          Some of our properties are adjacent to or near other properties used for industrial or commercial purposes or that have contained or currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances. Releases from these nearby properties could impact our properties. In addition, certain of our properties are currently used, have been used, and may be used in the future by others, including former owners or tenants of our properties, for commercial or industrial activities, such as gas stations and dry cleaners, that may release petroleum products or other hazardous or toxic substances at our properties or to surrounding properties.

          We have obtained Phase I Environmental Site Assessments or similar environmental audits from an independent environmental consultant for substantially all our properties. A Phase I Environmental Site Assessment is a written report that identifies existing or potential environmental conditions associated with a particular property. These environmental site assessments generally involve a review of records, interviews and visual inspection of the property; however, they have a limited scope (e.g., they do not include soil sampling or ground water analysis) and may not reveal all potential environmental liabilities. Further, material environmental conditions may have arisen after the review was completed or may arise in the future, and future laws, ordinances or regulations may impose additional material environmental liability beyond what was known at the time the site assessment was conducted. Phase II environmental assessments generally involve the testing of soil, groundwater or other media and conditions. While environmental assessments conducted prior to acquiring our properties have not revealed, nor are we aware of, any environmental liability that we believe will have a material adverse effect on our financial condition and results of operations, certain properties that we have acquired contain, or contained, uses that could have impacted our properties, including dry-cleaning establishments utilizing solvents or gas stations. Where we believed it was warranted, subsurface investigations or samplings of building materials were undertaken with respect to these and other properties. To date, the costs associated with these investigations and any subsequent remedial measures taken to address any identified impacts have not resulted in material costs. Prior to purchasing properties in the future, we plan to conduct Phase I Environmental Site Assessments and other environmental investigations, as we determine appropriate.

5

Americans with Disabilities Act of 1990

          Under the Americans with Disabilities Act of 1990, or ADA, all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. Compliance with the ADA might require removal of structural barriers to handicapped access in certain public areas where such removal is “readily achievable.” We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. Noncompliance with the ADA, however, could result in the imposition of fines or an award of damages to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate.

EMPLOYEES

          As of December 31, 2012, we had a total of 45 employees comprised of 41 full-time employees and 4 part-time personnel.

FINANCIAL INFORMATION

          Additional financial information is included in Item 8 “Consolidated Financial Statements and Supplementary Data.”

AVAILABLE INFORMATION

          We file annual, periodic, current reports and other information with the SEC. All filings that we make with the SEC may be copied or read at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC as we do. The website is address is http://www.sec.gov.

          Additionally, a copy of this Annual Report on Form 10-K, along with our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to the aforementioned filings, are available on our website, www.amreit.com, free of charge as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC. The filings can be found under the category “SEC Filings.” Our website also contains our Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethical Conduct for Senior Financial Officers and the charters of the committees of the Board of Directors. These items can be found on the Stockholder Relation’s page of our corporate website at www.amreit.com under the category “Corporate Governance.” Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this Annual Report. If you wish to receive a copy of our Annual Report, as well as a copy of any exhibit specifically requested, we will mail these documents to you without charge. Requests should be sent to our Corporate Secretary, Chad C. Braun, at AmREIT, 8 Greenway Plaza, Suite 1000, Houston, Texas 77046.

ITEM 1A. RISK FACTORS.

          Not applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

          Not applicable.

6

ITEM 2. PROPERTIES.

OUR PROPERTIES

          As of December 31, 2012, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA, which were approximately 96.7% leased with a weighted average remaining lease term of 5.2 years.

          Our properties are located in metropolitan areas with compelling real estate markets given their favorable demographics, job growth and large and diverse economies. All of our Texas properties are located in the Houston, Dallas, San Antonio and Austin markets with Houston and Dallas representing our two largest markets and comprising approximately 85.5% of our annualized base rent as of December 31, 2012. We also added two multi-tenant properties in Dallas during 2012 that met our investment criteria.

7

          The following table provides an overview of our properties as of December 31, 2012.

Property	Property Location		Year Built/ Renovated	GLA	Percent Leased(1)		Annualized Base Rent(2)		ABR per Leased Square Foot(3)		Avg. Net Effective ABR per Leased Square Foot(4)		Key Tenants
Neighborhood and Community
Shopping Centers
Uptown Park	Houston,	TX	1999/2005	169,112	97.0	%	$	5,496,404	$	33.51	$	35.04	Champps, McCormick & Schmicks (owned by Landry’s)
MacArthur Park	Dallas,	TX	2000	237,351	92.6	%	$	3,721,329	$	16.92	$	17.68	Kroger, Barnes & Noble, GAP
Plaza in the Park	Houston,	TX	1999/2009	144,054	97.4	%	$	2,761,041	$	19.69	$	19.92	Kroger
Preston Royal East	Dallas,	TX	1956	107,914	95.8	%	$	2,576,720	$	24.93	$	25.13	Bank of America, Starbucks, FedEx Office
Preston Royal West	Dallas,	TX	1959	122,564	99.2	%	$	2,447,504	$	20.12	$	20.29	Tom Thumb, Barnes & Noble, Spec’s
Southbank	San Antonio,	TX	1995	46,673	96.0	%	$	1,656,463	$	36.96	$	37.30	Hard Rock Café
The Market at Lake Houston	Houston,	TX	2000	101,799	100.0	%	$	1,614,750	$	15.86	$	15.91	H-E-B, Five Guys
Uptown Plaza - Dallas	Dallas,	TX	2006	33,840	100.0	%	$	1,448,387	$	42.80	$	43.64	Morton’s (owned by Landry’s), Wells Fargo
Alpharetta Commons	Atlanta,	GA	1997	94,544	98.7	%	$	1,324,342	$	14.19	$	14.36	Publix
Cinco Ranch	Houston,	TX	2001	97,297	100.0	%	$	1,310,644	$	13.47	$	13.58	Kroger
Uptown Plaza - Houston	Houston,	TX	2002	28,000	100.0	%	$	1,315,746	$	46.99	$	46.11	CVS/pharmacy, The Grotto (owned by Landry’s)
Bakery Square	Houston,	TX	1996	34,614	94.3	%	$	913,061	$	27.98	$	28.09	Walgreens, Boston Market
Brookwood Village	Atlanta,	GA	1941/2000	28,774	97.9	%	$	710,043	$	25.21	$	22.66	CVS/pharmacy, Subway
Courtyard on Post Oak	Houston,	TX	1994	13,597	29.5	%	$	260,845	$	65.00	$	61.41	Verizon
Woodlands Plaza	Houston,	TX	1997/2003	20,018	100.0	%	$	460,229	$	22.99	$	24.05	FedEx Office
Terrace Shops	Houston,	TX	2000	16,395	91.3	%	$	456,682	$	30.50	$	30.19	Starbucks
Sugarland Plaza	Houston,	TX	1998/2001	16,750	100.0	%	$	402,188	$	24.01	$	23.45	Memorial Hermann
500 Lamar	Austin,	TX	1998	12,795	100.0	%	$	399,322	$	31.21	$	29.52	Title Nine Sports
Neighborhood and Community Shopping Centers Subtotal/Weighted Average				1,326,091	96.3	%	$	29,275,700	$	22.91	$	23.26
Single Tenant (Ground Leases) Subtotal/Weighted Average (5)				72,094	100.0	%	$	1,387,499	$	19.25	$	19.78
Single Tenant (Fee Simple) Subtotal/Weighted Average (6)				69,519	100.0	%	$	1,199,714	$	17.26	$	18.66
Portfolio Total/Weighted Average				1,467,704	96.7	%	$	31,862,913	$	22.45	$	22.86

(1)	Percent leased is calculated as (i) GLA under commenced leases as of December 31, 2012, divided by (ii) total GLA, expressed as a percentage.
(2)	Annualized base rent is calculated by multiplying (i) monthly base rent as of December 31, 2012, for leases that had commenced as of such date, by (ii) 12.
(3)	Annualized base rent per leased square foot is calculated by dividing (i) annualized base rent, by (ii) GLA under commenced leases as of December 31, 2012.
(4)	Average net effective annual base rent per leased square foot represents (i) the contractual base rent for commenced leases as of December 31, 2012, calculated on a straight line basis to amortize free rent periods, abatements and contractual rent increases, but without subtracting tenant improvement allowances and leasing commissions, divided by (ii) GLA under commenced leases as of December 31, 2012. Our leases do not contain material tenant concessions or rent abatements.
(5)	For single-tenant ground leases, we own and lease the land to the tenant. The tenant owns the building during the term of the lease and is responsible for all expenses relating to the property. Upon expiration or termination of the lease, ownership of the building will revert to us as owner of the land. The weighted average remaining term of our ground leases is 8.3 years.
(6)	For single-tenant fee simple properties, we own the land and the building, and the tenant is responsible for all expenses relating to the property. The weighted average remaining term of our fee simple leases is 7.2 years.

8

Neighborhood and Community Shopping Centers

          As of December 31, 2012, we owned 18 shopping centers representing approximately 1.3 million square feet of GLA. Our shopping center properties are primarily grocery-anchored and neighborhood, lifestyle and community centers, ranging from 13,000 to 237,000 square feet. Six of our centers are grocery-anchored centers representing approximately 798,000 square feet and comprise 41.3% of our annualized base rent. Our grocery-anchored centers are anchored by large regional grocery stores (Kroger, H-E-B, Tom Thumb or Publix). Our centers are designed for maximum retail visibility and ease of access and parking for the consumer. These properties have a mix of national, regional and local tenants, leased in a manner to provide a complementary array of services to support the local retail consumer. All of our centers are located in major metropolitan areas, are typically located at an intersection guided by a traffic light, with high visibility, significant daily traffic counts, and are in close proximity to neighborhoods and communities with household incomes above those of the national average.

          Our shopping center leases generally range from one to 25 years and generally include one or more five-year renewal options. Annualized base rent from these leases ranges from $3,000 to $1.1 million per year and typically allow for rental increases periodically through the life of the lease.

Single-tenant Properties

          As of December 31, 2012, we owned 14 single-tenant properties, representing approximately 142,000 square feet (9.6% of our total GLA). The primary term of the single-tenant leases generally ranges from five to 30 years and generally provides for one or more five-year renewal options. Annualized base rent for each of these leases ranges from $95,000 to $425,000 per year.

Leases, Collection of Rents and Operating Expenses

          All of our neighborhood and community shopping center leases provide for the monthly payment of base rent plus reimbursement of operating expenses. This monthly operating expense payment is based on an estimate of the tenant’s pro rata share of property taxes, insurance, utilities, maintenance and other common area maintenance charges. Annually these operating expenses are reconciled with any overage being reimbursed to the tenants and any underpayment being billed to the tenant. Although we are ultimately responsible for payment of these operating expenses, these net lease terms allow us to recover such expenses, with the exception of expenses allocable to any vacant space.

          All of our single-tenant leases provide for base rent; however, they typically provide that the tenant bear responsibility for substantially all property costs and expenses associated with ongoing maintenance and operation of the property such as utilities, property taxes and insurance. Some of the leases require that we are responsible for roof and structural repairs. In these instances, we normally require warranties and/or guarantees from the related vendors, suppliers and/or contractors to mitigate the potential costs of repairs during the primary term of the lease.

          Generally, our leases provide for either percentage rents based on sales in excess of certain amounts, periodic escalations or increases in the annual rental rates or both.

          Because most of our leases are entered into with or guaranteed by the corporate, parent tenant, they typically do not limit our recourse against the tenant and any guarantor in the event of a default.

Concentration of Our Properties

          Two of our properties individually accounted for more than 10% of our consolidated total assets – Uptown Park and MacArthur Park, which accounted for 15.7% and 12.7% of our total assets as of December 31, 2012, respectively. Of our 32 properties, 27 are located in Texas, with 20 being located in the greater Houston metropolitan statistical area. These 20 properties represented 63.0% of our rental income from operating leases for the year ended December 31, 2012. Because of the concentration of our investments in Texas, primarily in the greater Houston area, the Texas and Houston economies have a significant impact on our business and on the viability of our properties. Accordingly, management believes that any downturn in these economies could adversely affect us; however, we believe that general retail and grocery-anchored shopping centers that provide basic necessities, which we primarily own, that are located in strong population and job growth markets with strong barriers to entry and strong demographics, such as density and affluence of population, may be less sensitive to macroeconomic downturns.

9

          The rental income from operating leases generated by our properties during 2012 by state/city is as follows:

State/City	Rental Income		Rental Concentration
Texas - Houston	$	23,556		63.0	%
Texas - Dallas		7,332		19.6	%
Texas - San Antonio		2,905		7.8	%
Texas - Austin		561		1.5	%
Total Texas	$	34,354		91.8	%
Georgia	$	2,714		7.2	%
Illinois		187		0.5	%
Maryland		148		0.4	%
Total	$	37,403		100.0	%

          Additionally, we are impacted by the financial viability of certain of our larger tenants. See also Note 13 of the Notes to Consolidated Financial Statements.

Lease Expirations

          The following table sets forth a summary schedule of the lease expirations at our properties for leases in place as of December 31, 2012, for each of the ten years beginning January 1, 2013. The information set forth in this table assumes that tenants exercise no renewal options and all early termination rights, if any.

Year	Number of Expriring Leases		GLA of Expiring Leases		Percent of Total GLA Expiring			ABR of Expiring Leases(1)		Percent of Total ABR Expiring			ABR Per Square Foot(2)
Vacant		—		48,481		3.3	%	$	—		—		$	—
2013		56		154,350		10.5	%		3,482,089		10.9	%		22.56
2014		52		126,330		8.6	%		3,683,802		11.6	%		29.16
2015		50		179,946		12.3	%		5,000,891		15.7	%		27.79
2016		48		147,876		10.1	%		4,279,417		13.4	%		28.94
2017		33		241,517		16.5	%		4,656,294		14.6	%		19.28
2018		20		81,200		5.5	%		1,913,842		6.0	%		23.57
2019		10		31,493		2.1	%		893,136		2.8	%		28.36
2020		8		84,379		5.8	%		1,207,818		3.8	%		14.31
2021		9		108,743		7.4	%		1,855,824		5.8	%		17.07
2022		11		94,204		6.4	%		1,944,394		6.1	%		20.64
2023+		10		169,185		11.5	%		2,945,406		9.3	%		17.41
Total / Weighted Avg		307		1,467,704				$	31,862,913				$	22.45

(1)	ABR for expiring leases is calculated by multiplying (i) the monthly base rent as of December 31, 2012, for leases expiring during the applicable period by (ii) 12.
(2)	ABR per square foot is calculated by dividing (i) ABR for leases expiring during the applicable period by (ii) GLA for leases expiring during the applicable period.

ITEM 3. LEGAL PROCEEDINGS.

          As the owner or operator of real property, we may incur liability based on various property conditions and may be subject to liability for personal injury or property damage sustained as a result. We maintain sufficient comprehensive, general liability and extended insurance coverage as deemed necessary with respect to our properties. In addition, we may be potentially liable for costs and damages related to environmental matters. In particular, we are subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. There are no material legal proceedings pending against us, and we are not aware of any pending environmental proceedings with respect to our properties that would have a material adverse effect on our consolidated financial statements.

10

ITEM 4. MINE SAFETY DISCLOSURES.

          Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

          On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. See Note 10 of the Notes to Consolidated Financial Statements for further discussion of the rights of our Class A and Class B common stock. All Class A share amounts and related per share data included in the consolidated financial statements and related footnotes have been presented to reflect the reverse stock split.

          On August 1, 2012, we completed the sale of 3,650,000 shares of our Class B common stock and simultaneously listed our Class B common stock on the NYSE under the symbol “AMRE.” We received net proceeds of approximately $46.3 million, which were used to repay $45.3 million of mortgage debt, including the $25 Million Facility. See Note 8 for a further discussion of our notes payable. On August 24, 2012, we sold an additional 503,226 shares of our Class B common stock to our underwriters at the offering price pursuant to the exercise of the underwriters’ over-allotment option. We received net proceeds of approximately $6.5 million from the sale of the additional shares. In addition, we issued 312,499 shares of restricted Class B common stock to our officers and directors in connection with our 2012 Offering that will vest over a ten-year period.

          As of December 31, 2012, we had a total of 16,123,288 shares of common stock outstanding as follows:

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

          There is no established trading market for our shares of Class A common stock. The following table sets forth the high and low bid prices for our Class B common stock on the NYSE for each of the quarters since their issuance on August 1, 2012.

	High		Low
Third quarter 2012	$	15.52	$	13.91
Fourth quarter 2012	$	17.59	$	14.71

HOLDERS

          As of February 20, 2013, there were 6,973 holders of record of the 11,657,563 shares of our Class A common stock and 2 holders of the 4,465,725 shares of our Class B common stock outstanding on such date.

11

DIVIDENDS AND OUR DISTRIBUTION POLICY

          In order to remain qualified as a REIT, we are required to distribute at least 90% of our annual taxable income to our stockholders. We or our predecessors have paid regular dividends to our stockholders since 1997, and we currently declare and pay dividends quarterly. For a description of restrictions regarding the payment of dividends, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” of this Annual Report. The table below details our distributions per share of both our Class A and Class B common stock for each quarter during the years ended December 31, 2012 and 2011.

	2012		2011
First Quarter	$	0.2000	$	0.2000
Second Quarter		0.2000		0.2000
Third Quarter		0.2000		0.2000
Fourth Quarter		0.2000		0.2000
Total for year	$	0.8000	$	0.8000

          Our Board of Directors determines the time and amount of dividends to holders of our common stock. Future dividends with respect to shares of both our Class A and Class B common stock will be authorized at the discretion of the Board of Directors and will depend on our actual cash flow, financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code, and such other factors as our Board of Directors may deem relevant.

EQUITY COMPENSATION PLANS

          Please refer to Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report for information regarding securities authorized under our equity compensation plans.

ITEM 6. SELECTED FINANCIAL DATA.

          The following table sets forth selected consolidated financial data with respect to AmREIT and should be read in conjunction with Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” the Consolidated Financial Statements and the Notes to Consolidated Financial Statements (amounts in thousands except for per share amounts, number of properties and percentage leased data):

12

	For the year ended December 31,
	2012			2011			2010			2009			2008
Operating Data
Revenues:	$	41,308		$	36,915		$	33,374		$	35,016		$	37,781
Expenses:		27,058			22,521			26,328			24,141			27,173
Operating income		14,250			14,394			7,046			10,875			10,608
Other income (expense):		(9,790	)		(10,719	)		(7,123	)		(8,252	)		(8,569	)
Income (loss) from continuing operations		4,460			3,675			(77	)		2,623			2,039
Income (loss) from discontinued operations		—			565			6,382			2,632			(1,896	)
Net income		4,460			4,240			6,305			5,255			143
Net income attributable to non-controlling interest		—			—			(173	)		(121	)		(331	)
Net income (loss) attributable to AmREIT stockholders		4,460			4,240			6,132			5,134			(188	)
Distributions paid to Class C and D stockholders (1)		—			—			—			(18,528	)		(10,013	)
Net income available to stockholders	$	4,460		$	4,240		$	6,132		$	(13,394	)	$	(10,201	)
Net income per share of common stock-basic and diluted
Income (loss) from continuing operations	$	0.32		$	0.31		$	(0.04	)	$	(4.74	)	$	(2.93	)
Income (loss) from discontinued operations		—			0.05			0.56			0.77			(0.67	)
Net income (loss) per share	$	0.32		$	0.36		$	0.52		$	(3.97	)	$	(3.60	)
Balance sheet data (at end of period)
Real estate investments before accumulated
depreciation and amortization	$	387,525		$	325,033		$	279,314		$	283,809		$	280,701
Total assets		397,394			330,610			293,848			320,332			325,605
Notes payable		218,579			201,658			161,848			182,976			184,352
Total stockholders’ equity		165,715			118,924			123,067			126,913			128,624
Other data
Funds from operations (2)	$	13,914		$	13,062		$	13,821		$	(5,546	)	$	(1,215	)
Net operating income(3)	$	27,027		$	24,984		$	21,100		$	20,964		$	21,641
Number of properties at end of period		32			29			28			49			49
Percent leased at end of period(4)		97	%		96	%		92	%		91	%		98	%
Distributions per share	$	0.80		$	0.80		$	0.90		$	1.00		$	1.00

(1)	Reflects distributions to classes of common shares outstanding prior to the November 2009 merger with REITPlus, Inc. whereby we combined three classes of common shares into a single class of common stock.
(2)	For a definition and reconciliation of funds from operations, or FFO, and a statement disclosing the reasons why our management believes that presentation of FFO provides useful information to investors and, to the extent material, any additional purposes for which our management uses FFO, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report.
(3)	For a definition and reconciliation of net operating income and a statement disclosing the reasons why our management believes that presentation of NOI provides useful information to investors and, to the extent material, any additional purposes for which our management uses NOI, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report.
(4)	Percent leased is calculated as (i) GLA under commenced leases as of December 31, 2012, divided by (ii) total GLA, expressed as a percentage.
	The following is a discussion of significant and/or unusual items impacting FFO for the years presented above:
•	2012 – Includes the acquisitions of our Preston Royal Village Shopping Center properties since the acquisition date. See Note 4 of the Notes to Consolidated Financial Statements. Additionally, we recorded approximately $687,000 in acquisition costs related to that acquisition, and we recorded recovery income of approximately $443,000 on notes receivable payments received in 2012 on previously impaired notes receivable.
•	2011 – Includes the acquisitions of The Market at Lake Houston, Brookwood Village and Alpharetta Commons properties since their respective acquisition dates. See Note 4 of the Notes to Consolidated Financial Statements. Additionally, we recorded recovery income of approximately $1.1 million on notes receivable payments received in 2011 on a previously impaired note receivable.
•	2010 – Includes a $5.4 million gain on debt extinguishment, a $5.4 million gain (net of tax) on the sale of real estate acquired for resale and $852,000 in adjustments for non-consolidated entities related to accelerated depreciation resulting from the redevelopment of our Woodlake Square property. Partially offsetting these gains is $864,000 in impairments taken on two of our non-core, single-tenant properties, a $1.3 million impairment on a note receivable related to the sale of a tract of land adjacent to our Uptown Plaza – Dallas property, a $500,000 impairment on a note receivable from one of our Advised Funds and debt prepayment penalties of $988,000 related to the early extinguishment of three property mortgages during the year.

13

• 2009 – Includes a $10.2 million premium related to the conversion of the AmREIT class C and class D shares to shares of AmREIT Class A common stock. Additionally, we recorded a $441,000 impairment related to the acquisition of REITPlus’s net assets. Additionally, included in FFO is a $1.9 million gain on real estate held for resale, net of taxes, which was realized in 2009.

• 2008 – FFO includes an impairment charge of $1.4 million related to four properties that represented non-core real estate assets, three of which have subsequently been sold. FFO for the year ended December 31, 2008 also includes a restructuring charge of $2.5 million related to the wind-down of our fund raising business and general contracting operations, including severance costs related to the employees terminated as part of the restructuring.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

EXECUTIVE OVERVIEW

Our Company

          We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. We seek to own properties in major cities in the United States that contain submarkets with characteristics comparable to our existing markets. Our shopping centers are often anchored by strong national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. Our remaining tenants consist primarily of specialty retailers and local restaurants. Over our 29-year history, we have acquired, owned and operated retail properties across 19 states. We have elected to be taxed as a REIT for federal income tax purposes.

          Our investment focus is predominantly concentrated in the affluent, high-growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta (collectively, our Core Markets), which represent five of the top population and job growth markets in the United States. We believe these metropolitan areas are compelling real estate markets given their favorable demographics, robust job growth and large and diverse economies. The primary economic drivers in these markets are transport and utilities (including energy), government (including defense), education and healthcare, professional and business services, and leisure and hospitality. We intend to continue to acquire additional properties within our Core Markets. We generally seek to invest in properties that possess the following attributes, which we refer to collectively as our “5Ds”:

• Demographic purchasing power – average household incomes within a one-mile radius of $100,000 or more, resulting in an affluent population with substantial disposable income;

• Density of population – 45,000 or more households within a three-mile radius and additional retail drivers, such as favorable daytime employment population, tourism and regional draws;

• Demand for retail space – limited nearby retail properties or land available for the development of new retail properties, providing for favorable retail per capita figures as compared to the national and metropolitan statistical area averages;

• Desirability of physical layout – physical attributes that provide the best opportunity for our tenants to attract and serve their target customers; and

• Demarcation advantage – site-specific factors that influence traffic to our properties and require analysis beyond the raw demographic data.

14

Our 2012 Offering

          On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we filed articles supplementary to our charter that created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. Each share of Class B common stock has the following rights:

• the right to vote together with Class A common stockholders on all matters on which holders of our Class A and Class B common stock are entitled to vote;

• one vote with respect to all matters voted upon by our Class A and Class B common stockholders;

• the right to receive distributions equal to any distributions declared on shares of our Class A common stock; and

• liquidation rights equal to the liquidation rights of each share of Class A common stock.

          All Class A share amounts and related per share data included in this Annual Report have been presented to reflect the reverse stock split.

          On August 1, 2012, we completed the sale of 3,650,000 shares of our Class B common stock and simultaneously listed our Class B common stock on the NYSE under the symbol “AMRE.” We received net proceeds of approximately $46.3 million, which were used to repay $45.3 million of mortgage debt, including the $25 Million Facility. On August 24, 2012, we sold an additional 503,226 shares of our Class B common stock to our underwriters at the offering price pursuant to the exercise of the underwriters’ over-allotment option. We received net proceeds of approximately $6.5 million from the sale of the additional shares. In addition, we issued 312,499 shares of restricted Class B common stock to our officers and directors in connection with our 2012 Offering that will vest over a ten-year period. Upon completion of our 2012 Offering and as of December 31, 2012, our capital structure was as follows:

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

Our Portfolio

          As of December 31, 2012, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA, which were 96.7% leased and occupied with a weighted average remaining lease term of 5.2 years. Our neighborhood and community shopping centers accounted for 90.4% of our GLA and 91.9% of our annualized base rent as of December 31, 2012. Our single-tenant retail properties comprised 9.6% of our GLA and 8.1% of our annualized base rent.

          In connection with executing our investment strategy, we completed the acquisition of Preston Royal Village Shopping Center, a retail shopping center, containing approximately 230,000 square feet of GLA for a total of $66.9 million including closing costs and prorations of approximately $800,000 on December 12, 2012. The property was originally built in 1956 and 1959 and is located on the northwest corner and northeast corner of the intersection of Preston Road and Royal Lane in Dallas, Texas. The northwest corner is comprised of a fee simple interest and subject to mortgage financing. The northeast corner consists of a ground lease interest with 27 years remaining on the ground lease. We account for each corner as a separate property (Preston Royal West and Preston Royal East). Collectively, the properties are 97.3% leased with major tenants including Tom Thumb, Barnes & Noble and Chico’s. We funded the purchase through funds drawn against our $75 Million Facility, cash on hand and mortgage financing of $23.4 million. See also Note 4 to the Notes to Consolidated Financial Statements.

Our Advisory Services

          Advised Funds – As of December 31, 2012, our Advised Funds included four high net worth investment funds, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV. In August 2012, AIGF, one of our high net worth investment funds, sold its remaining real estate asset, and the fund was liquidated. We have formed, invested in and managed 20 advised funds over the past 29 years.

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          As the sole owner of the general partner of each of the remaining four high net worth investment funds, and as the exclusive operator of each of the properties owned in whole or in part by the Advised Funds, we believe that our Advised Funds provide us with a pipeline of acquisition opportunities in our Core Markets. If these properties meet our investment criteria, we may acquire these assets (i) from our high net worth investment funds based on fair market value as determined by an independent appraisal process and (ii) from our institutional joint venture partners pursuant to contractual buy-sell rights or rights of first offer, as applicable. As of December 31, 2012, our Advised Funds held all or a portion of the ownership interests in 17 properties with approximately 2.2 million square feet of GLA and an undepreciated book value of $454 million.

          Real Estate Operating and Development Business – Our real estate operating and development business focuses on acquiring, managing, leasing and providing development and redevelopment services for our wholly-owned properties as well as the properties held by our Advised Funds. By employing our own real estate team, we are able to provide all services to our properties in-house and maintain secure relationships with our tenants. Our real estate operating and development business is held under our taxable REIT subsidiary, ARIC. ARIC generates brokerage, leasing, construction management, development and property management fee income.

SUMMARY OF CRITICAL ACCOUNTING POLICIES

          Our results of operations and financial condition, as reflected in the accompanying consolidated financial statements and related notes, require us to make estimates and assumptions that are subject to management’s evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors related to the ongoing viability of our tenants, which are inherently imprecise and may differ significantly from the actual results achieved. We believe the following are our more critical accounting policies due to the significance, subjectivity and judgment used in determining our estimates included in the preparation of our consolidated financial statements. See also Note 2 of the Notes to Consolidated Financial Statements for a discussion of the application of these and other accounting policies. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable and appropriate based upon the circumstances.

Revenue Recognition

          Rental income from operating leases – We lease space to tenants under agreements with varying terms. Our leases are accounted for as operating leases, and, although certain leases of the properties provide for tenant occupancy during periods for which no rent is due and/or for increases or decreases in the minimum lease payments over the terms of the leases, revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, possession or control occurs on the lease commencement date. In all cases, we have determined that we are the owner of any tenant improvements that we fund pursuant to the lease terms. In cases where significant tenant improvements are made prior to lease commencement, the leased asset is considered to be the finished space, and revenue recognition therefore begins when the improvements are substantially complete. Accrued rents are included in tenant receivables. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Additionally, certain of our lease agreements contain provisions that grant additional rents based upon tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Accrued rents are included in tenant and accounts receivable, net.

          Lease termination income – We recognize lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets.

          Advisory services income – related party – We provide various real estate services, including development, construction management, property management, leasing and brokerage. The fees for these services are recognized as services are provided and are generally calculated as a percentage of revenues earned or to be earned or of property cost, as appropriate. We also earn asset management fees from certain of the Advised Funds for providing accounting related services, investor relations, facilitating the deployment of capital, and other services provided in conjunction with operating the fund, which are calculated as a percentage of equity under management. See also Note 13 of the Notes to Consolidated Financial Statements for a detail of our advisory services income – related party.

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Real Estate Acquisitions

          We allocate the purchase price of acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based upon their respective fair values as required by GAAP. The allocation and determination of respective fair values require significant judgment and inherently complex calculations. We typically obtain the assistance of third party advisors to assist us in making these determinations. See also Note 4 of the Notes to Consolidated Financial Statements.

          Identifiable intangibles include amounts allocated to acquired above and below market leases, the value of in-place leases and customer relationships, if any. We determine fair value based upon estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based upon a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods, considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to above and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Below market lease amortization includes fixed-rate renewal periods where we believe the renewal is reasonably assured. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

          We capitalize costs associated with pending acquisitions of raw land once the acquisition of the property is determined to be probable, but we expense acquisition costs for operating properties as incurred. During the years ended December 31, 2012, 2011 and 2010 we incurred acquisition costs of $687,000, $229,000 and $12, respectively.

Depreciation

          Depreciation is computed using the straight-line method over an estimated useful life of 39 - 50 years for buildings, up to 20 years for site improvements and over the life of the respective leases for tenant improvements. Leasehold estate properties, where we own the building and improvements but not the related ground, are amortized over the life of the lease. The determination of useful lives requires judgment and includes significant estimates that management reassesses as circumstances warrant.

Impairment of Long Lived Assets

          We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the property, with the carrying value of the individual property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. Both the estimated undiscounted cash flow analysis and fair value determination are based upon various factors that require complex and subjective judgments to be made by management. Such assumptions include projecting lease-up periods, holding periods, cap rates, rental rates, operating expenses, lease terms, tenant credit-worthiness, tenant improvement allowances, terminal sales value and certain macroeconomic factors among other assumptions to be made for each property. We did not recognize any impairment charges on long lived assets during the years ended December 31, 2012 and 2011. During the year ended December 31, 2010, we recognized impairment charges of $2.3 million in income (loss) from continuing operations related to four non-core, single-tenant properties and impairment charges of $1.2 million in income from discontinued operations related to two non-core, single-tenant properties that we sold in July 2011.

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Investments in Advised Funds

          Investments in joint ventures and partnerships where we have the ability to exercise significant influence but do not exercise financial and operating control, are accounted for using the equity method. We record our percentage interest in the earnings and losses of these entities in our statement of operations on a net basis as prescribed under GAAP.

LEASING ACTIVITY AND TRANSACTIONS

          The following table summarizes our leasing activity for comparable leases for the years ended December 31, 2012, 2011 and 2010.

	For the Years Ended December 31,
	2012			2011			2010
Expirations
Number of leases		44			53			50
GLA		180,245			187,605			224,578
New Comparable Leases(1)
Number of leases		5			7			11
GLA		12,997			14,231			17,737
Expiring annualized base rent per square foot	$	27.22		$	28.36		$	31.07
New annualized base rent per square foot	$	34.84		$	30.85		$	31.44
% Change (Cash)		28.0	%		8.8	%		1.2	%
Renewals(2)
Number of leases		30			38			39
GLA		115,501			143,324			140,236
Expiring annualized base rent per square foot	$	23.91		$	24.92		$	26.12
New annualized base rent per square foot	$	25.27		$	25.74		$	27.32
% Change (Cash)		5.7	%		3.3	%		4.6	%
Combined
Number of leases		35			45			50
GLA		128,498			157,555			157,973
Expiring annualized base rent per square foot	$	24.24		$	25.23		$	26.68
New annualized base rent per square foot	$	26.24		$	26.20		$	27.78
% Change (Cash)		8.2	%		3.8	%		4.1	%

(1)	Comparable leases are defined as new leases for a space that was not vacant for more than 12 consecutive months prior to lease signing.
(2)	Represents existing tenants that, upon expiration of their leases, enter into new leases for the same space.

RESULTS OF OPERATIONS

Recent Acquisition and Disposition Activity

          We have recently acquired the Preston Royal Village Shopping Center and also entered into a joint venture agreement that may affect our future results of operations as discussed further below.

          On December 12, 2012, we completed the acquisition of Preston Royal Village Shopping Center, a retail shopping center, containing approximately 230,000 square feet of GLA, for a total of $66.9 million including closing costs and prorations of approximately $800,000. The financial results from the Preston Royal Village Shopping Center since the date of its acquisition on December 12, 2012 were not material to our non-same store results. See Note 4 to the Notes to Consolidated Financial Statements for the pro forma results of our acquisitions.

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          On January 24, 2013, we entered into a joint venture agreement with an institutional joint venture partner to form a joint venture through our contribution of our MacArthur Park property to a newly-organized single purpose entity as well as the acquisition by the joint venture of the contiguous property to the north (“MacArthur Park Phase I”), excluding Target. The institutional joint venture partner will contribute cash for a 70% interest in the joint venture. The joint venture would concurrently purchase MacArthur Park Phase I, currently owned by an unrelated third party, for approximately $26.2 million and place mortgage financing on the entire combined property of approximately $43.9 million. The joint venture will fully repay the MacArthur Park debt of approximately $8.8 million (including a $2.2 million defeasance penalty). At the conclusion of this transaction, we will hold a 30% ownership interest in the joint venture and receive net cash proceeds of approximately $35.4 million which will be used to repay borrowings under our $75 Million Facility. We will continue to manage and lease MacArthur Park on behalf of the joint venture and we retain a right of first offer to acquire the project in the future, after a lock out period. We expect this transaction to close in March 2013; however, closing is subject to customary closing conditions and we can make no assurances of when or if this joint venture will actually be formed and capitalized.

          After closing this transaction, our 30% retained ownership will grant us the ability to exercise significant influence over the operation and management of the property; however, our retained ownership of the property will no longer qualify for consolidation under GAAP. Therefore, we expect to deconsolidate our MacArthur Park asset on the closing date and account for our ownership under the equity method of accounting on a prospective basis. Additionally, our significant continuing involvement in MacArthur Park precludes us from treating our contribution of the property to the joint venture as discontinued operations under GAAP. Accordingly, MacArthur Park’s operating results will continue to be reported as a component of our income from continuing operations. There can be no assurance that we will successfully close this transaction, or that we will close this transaction within our expected timeframe. The table below details significant operating results from our MacArthur Park property that are included in our consolidated results for the years ended December 31, 2012, 2011 and 2010.

	For the Year Ended December 31,
	2012		2011		2010
Revenues	$	4,942	$	4,443	$	4,933
Property expenses		1,394		1,263		1,748
Net operating income	$	3,548	$	3,180	$	3,185

Same store properties

          Throughout this section, we have provided certain information on a “same store” property basis. Properties that we have designated as “same store” represent those properties that we owned and operated for the entirety of both periods being compared, except for properties for which significant redevelopment or expansion occurred during either of the periods. While there is some judgment surrounding changes in designation as a given property is redeveloped or expanded, we typically remove properties from the same store designation once significant redevelopment has commenced. We typically move redevelopment properties and expansion properties into the same store designation once they have stabilized, which is typically considered when the growth expected from the redevelopment or expansion has been included in the comparable periods.

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Comparison of the Year Ended December 31, 2012, to the Year Ended December 31, 2011

          Below are the results of operations for the year ended December 31, 2012 and 2011 (in thousands, except for per share amounts, percentages and number of properties). In the comparative tables presented below, increases in revenues/income or decreases in expenses (favorable variances) are shown without parentheses while decreases in revenues/income or increases in expenses (unfavorable variances) are shown with parentheses. For purposes of comparing our results of operations for the periods presented below, all of our properties in the “same store” reporting group were owned since January 1, 2011. As of December 31, 2012, our portfolio was comprised of 32 wholly-owned properties with an aggregate of approximately 1.5 million square feet of GLA compared to a portfolio that was comprised of 29 wholly-owned properties with an aggregate of approximately 1.2 million square feet of GLA as of December 31, 2011. During 2012, we acquired the Preston Royal Village Shopping Center. During the year ended December 31, 2011, we sold two non-core, single-tenant properties, the results for which are presented in income from discontinued operations, and we acquired three neighborhood shopping centers.

	Year Ended December 31,
	2012			2011			Change $			Change %
Same store properties (26 properties)
Rental income (1)	$	22,993		$	22,300		$	693			3.1	%
Recovery income (1)		8,274			6,911			1,363			19.7	%
Percentage rent (1)		631			425			206			48.5	%
Less:
Property expenses		8,699			7,121			(1,578	)		(22.2	)%
Same store net operating income		23,199			22,515			684			3.0	%
Non-same store properties (6 properties)
Rental income (1)		3,914			2,498			1,416			56.7	%
Recovery income (1)		1,196			825			371			45.0	%
Less:
Property expenses		1,282			854			(428	)		(50.1	)%
Non-same store net operating income		3,828			2,469			1,359			55.0	%
Total net operating income(2)		27,027			24,984			2,043			8.2	%
Other revenues (see further detail below):		5,247			4,768			479			10.0	%
Less other expenses (see further detail below):		27,814			26,077			(1,737	)		(6.7	)%
Income from continuing operations		4,460			3,675			785			21.4	%
Income from discontinued operations		—			565			(565	)		(100.0	)%
Net income	$	4,460		$	4,240		$	220			5.2	%
Other data
Funds from operations(3)	$	13,914		$	13,062		$	852			6.5	%
Core FFO(3)	$	14,601		$	13,788		$	813			5.9	%
Number of properties at end of period		32			29			n/a			n/a
Percent leased at end of period(4)		96.7	%		95.9	%		n/a			0.8	%
Distributions per share	$	0.80		$	0.80		$	—			—

(1)	Rental income from operating leases on the consolidated statements of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the year ended December 31, 2012 and 2011, rental income from operating leases was $37,438 and $32,995, respectively.
(2)	For a definition and reconciliation of NOI and a statement disclosing the reasons why our management believes that presentation of NOI provides useful information to investors and, to the extent material, any additional purposes for which our management uses NOI, see “Net Operating Income” below.
(3)	For a reconciliation of FFO and Core FFO to net income, and a statement disclosing the reasons why our management believes that presentation of FFO and Core FFO provides useful information to investors and, to the extent material, any additional purposes for which our management uses FFO, see “Funds From Operations” below.
(4)	Percent leased is calculated as (i) GLA under commenced leases as of the end of the applicable period, divided by (ii) total GLA at the end of the applicable period, expressed as a percentage.

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Same Store Properties – Property Revenues and Property Expenses

• Rental income. Rental income increased by $693,000, or 3.1%, on a same store basis to $23.0 million for the year ended December 31,2012, as compared to $22.3 million for the same period in 2011. Of this increase, $380,000 was driven by an increase in average occupancy percentage, and $313,000 was driven by an increase in average rental rates.

• Recovery income. Recovery income increased by $1.4 million, or 19.7%, on a same store basis to $8.3 million for the year ended December 31, 2012, as compared to $6.9 million for the same period in 2011. This increase was primarily due to (i) increased property tax assessments at our Uptown Park property of approximately $550,000, (ii) a new lease with a national tenant at one of our single tenant properties representing approximately $160,000 of the increase, (iii) lower property tax recoveries in 2011 resulting from a favorable property tax refund received during 2011 and passed along to our tenants at our MacArthur Park property of $203,000, as well as (iv) an approximate 1% increase in average total portfolio occupancy. This increase was partially offset by a property tax refund received during 2012 at our Uptown Plaza – Dallas property of approximately $61,000.

• Percentage Rent. Percentage rent increased by $206,000, or 48.5% on a same store basis to $631,000 for the year ended December 31, 2012, as compared to $425,000 for the same period in 2011. This increase was primarily due to improving sales volumes for certain of our tenants at our MacArthur Park property and certain single tenant properties.

• Property expenses. Property expenses increased by $1.6 million, or 22.2%, on a same store basis to $8.7 million for the year ended December 31, 2012, as compared to $7.1 million for the same period in 2011. This same store increase was primarily attributable to (i) increased property tax assessments at our Uptown Park property of approximately $550,000, (ii) an increase in bad debt expense recorded during 2012 of approximately $215,000 as we continue to monitor collectability of our tenant receivables and (iii) due to lower property taxes in 2011 resulting from a favorable property tax refund received at our MacArthur Park property of approximately $203,000. This increase was partially offset by a property tax refund received during 2012 at our Uptown Plaza – Dallas property of approximately $61,000.

Non-same Store Properties – Property revenues and Property expenses

          Our rental income, tenant recovery income and property expenses increased for our non-same store investment properties due to the acquisitions The Market at Lake Houston on February 25, 2011, Brookwood Village on May 10, 2011, and Alpharetta Commons on July 29, 2011. The results of operations for the Market at Lake Houston, Brookwood Village and Alpharetta Commons have been recorded in the consolidated statements of operations from the date of acquisition. The financial results from the Preston Royal Village Shopping Center since the date of its acquisition on December 12, 2012 were not material to our non-same store results.

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Other Revenues:

          Overall, other revenues increased by $479,000, or 10.0%, to $5.2 million for the year ended December 31, 2012, as compared to $4.8 million for the same period in 2011, primarily due to the following (in thousands, except percentages):

	Year Ended December 31,
	2012		2011		Change $			Change %
Amortization of straight-line rents and above/below market rents(1)	$	430	$	36	$	394			*
Advisory services income - related party:
Real estate fee income - related party		3,005		2,491		514			20.6	%
Asset management fee income - related party		622		1,064		(442	)		(41.5	)%
Construction management fee income - related party		243		234		9			3.8	%
Total advisory services income - related party		3,870		3,789		81			2.1	%
Lease termination and other income		—		131		(131	)		(100.0	)%
Interest and other income		485		493		(8	)		(1.6	)%
Interest and other income - related party		462		319		143			44.8	%
Total other revenues	$	5,247	$	4,768	$	479			10.0	%

(1)	Included in rental income from operating leases as presented on our consolidated statements of operations.
*	Percentage change not shown as prior year amount is immaterial, or the percentage change is not meaningful.

• Amortization of straight-line rents and above/below market rents. Amortization of straight-line rents and above/below market rents increased by $394,000 to accretion of $430,000 during the year ended December 31, 2012, as compared to accretion of $36,000 for the same period in 2011. This increase was due to the accelerated amortization of accrued rent balances for certain tenants in 2011.

• Real estate fee income – related party. Real estate fee income – related party increased by $514,000, or 20.6%, to $3.0 million for the year ended December 31, 2012, as compared to $2.5 million for the same period in 2011. This increase was primarily attributable to disposition fees earned upon the sale of a land parcel by one of our Advised Funds and increased development fees during 2012 associated with the redevelopments of properties that we manage for our Advised Funds. This increase was partially offset by a reduction in lease commissions earned as we executed leases for several anchor tenants in 2011 for properties that we manage on behalf of our Advised Funds.

• Asset management fee income– related party. Asset management fee income – related party decreased by $442,000, or 41.5%, to $622,000 for the year ended December 31, 2012, as compared to $1.1 million for the same period in 2011. Our asset management fees are calculated based upon the net equity raised in the Advised Funds that we manage. Through a combination of property sales in our Advised Funds, and the voluntary reduction by us as the general partner of the asset management fees in response to the recent economic recession, our asset management fee income – related party has decreased since the second quarter of 2011.

• Lease termination fee income. Lease termination fee income was $131,000 for the year ended December 31, 2011 and was primarily related to the early termination of leases at our Southbank and Terrace Shops properties during 2011. We had no such comparable lease termination income during the year ended December 31, 2012.

• Interest and other income – related party. Interest and other income – related party increased by $143,000 or 44.8%, to $462,000 for the year ended December 31, 2012, as compared to $319,000 for the same period in 2011. This increase was due to $100,000 of interest income from a payment we received from AIGF on our note receivable due from AIGF. This amount represented previously unrecognized interest income.

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Other Expenses:

          Overall, other expenses increased by $1.7 million, or 6.7%, to $27.8 million for the year ended December 31, 2012, as compared to $26.1 million for the same period in 2011, primarily due to the following (in thousands, except percentages):

	Year Ended December 31,
	2012			2011			Change $			Change %
Straight-line bad debt recoveries(1)	$	(90	)	$	(205	)	$	(115	)		(56.1	)%
General and administrative		6,733			6,049			(684	)		(11.3	)%
Legal and professional		919			945			26			2.8	%
Real estate commissions		387			342			(45	)		(13.2	)%
Acquisition costs		687			229			(458	)		*
Depreciation and amortization		8,884			8,257			(627	)		(7.6	)%
Impairment (recovery) - notes receivable		(443	)		(1,071	)		(628	)		58.6	%
Loss from Advised Funds		238			384			146			38.0	%
State income taxes		248			262			14			5.3	%
Interest expense		10,251			9,971			(280	)		(2.8	)%
Issuance costs		—			914			914			100.0	%
Total other expenses	$	27,814		$	26,077		$	(1,737	)		(6.7	)%

(1)	Included in property expense on our consolidated statements of operations.
*	Percentage change not shown as prior year amount is immaterial, or the percentage change is not meaningful.

• Straight-line bad debt recoveries. Straight-line bad debt recoveries decreased by $115,000 or 56.1%, to $90,000 for the year ended December 31, 2012, as compared to $205,000 for the same period in 2011. Certain of our leases provide for increases in minimum lease payments over the term of the lease, and we recognize revenues on a straight-line basis over the term of such leases. The straight-line method results in accrued rent on our balance sheet, representing the portion of the rent that we expect to recover from the tenant in the future as they fulfill their obligation to us under the terms of the lease. We previously recorded a reserve against the accrued rent balances due from certain of our tenants that we believed may not fulfill their obligation to us. A portion of the reserve was reversed in 2011 due to the collection of such rents as well as a stabilizing economy. A smaller portion of such reserve was reversed during the 2012 period.

• General and administrative. General and administrative expense increased by $684,000, or 11.3%, to $6.7 million for the year ended December 31, 2012, as compared to $6.0 million for the same period in 2011. This increase was primarily attributable to (i) additional deferred compensation expense of $265,000, primarily associated with the 312,499 shares of restricted Class B common stock issued to management in connection with our 2012 Offering and (ii) higher compensation and payroll taxes expense of approximately $346,000 primarily driven by changes in estimates for our incentive compensation accruals during the periods. Our cash compensation related to the year ended December 31, 2011 approximates the cash compensation related to the year ended December 31, 2011.

• Acquisition costs. During 2012, we incurred $687,000 in acquisition costs for the acquisition of the Preston Royal Village Shopping Center on December 12, 2012. During 2011, we incurred acquisition costs of $229,000 for the acquisitions of The Market at Lake Houston on February 25, 2011, Brookwood Village on May 10, 2011 and Alpharetta Commons on July 29, 2011.

• Depreciation and amortization. Depreciation and amortization expense increased by $627,000 or 7.6%, to $8.9 million for the year ended December 31, 2012, as compared to $8.3 million for the same period in 2011. This increase was primarily attributable to the acquisitions of Preston Royal Village Shopping Center during 2012, the Market at Lake Houston, Brookwood Village and Alpharetta Commons during 2011.

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• Impairment recovery – notes receivable. Impairment recovery – notes receivable was $443,000 during the year ended December 31, 2012 compared to approximately $1.1 million for the year ended December 31, 2011. During 2012, we received a $2.3 million payment from AIGF on its note receivable, a portion of which had previously been reserved, and we recorded an impairment recovery of $214,000. Additionally, during 2012, we received a $1.0 million payment on a note receivable from a third party due from the sale of a tract of land adjacent to our Uptown Plaza – Dallas property that had previously been reserved in 2010, and we recorded an impairment recovery of $229,000. During 2011, we recorded an impairment recovery of $1.1 million from payments received on our note receivable due from the sale of the same tract of land adjacent to our Uptown Plaza – Dallas property.

• Loss from Advised Funds. Loss from Advised Funds decreased by $146,000, or 38.0%, to $238,000 during the year ended December 31, 2012, as compared to $384,000 for the same period in 2011. This decrease was attributable to our portion of a debt forgiveness gain that was recorded by one of our Advised Funds from the disposition of one of its properties during 2012. During the 2011 period, we recorded our portion of an impairment loss related to the same Advised Fund property.

• Interest Expense. Interest expense increased by $280,000, or 2.8%, to $10.3 million for the year ended December 31, 2012, as compared to $10.0 million for the same period in 2011. The increase was primarily due to the write off of $368,000 of unamortized loan premiums during the third quarter of 2012 when we repaid $45.3 million of debt on August 1, 2012 with proceeds received from our 2012 Offering. In addition, we incurred increased interest during 2012 from borrowings associated with the acquisitions of The Market at Lake Houston, Brookwood Village and Alpharetta Commons during 2011. This increase was partially offset by interest savings on lower average debt balances from the $45.3 million debt pay down.

• Issuance costs. Stock issuance costs were $0 for the year ended December 31, 2012 as compared to $914,000 for the year ended December 31, 2011. During 2011, we initiated plans for a public offering and filed a registration statement on Form S-11; however, market volatility and uncertainty prevented us from proceeding with the offering at that time. Accordingly, at December 31, 2011, the costs incurred no longer met the criteria for capitalization under GAAP and were expensed. Market conditions improved during the second quarter of 2012, and we successfully completed our 2012 Offering in August 2012. Costs incurred subsequent to December 31, 2011 and related toour 2012 Offering were offset against the proceeds received and treated as a reduction of stockholders’ equity.

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Comparison of the Year Ended December 31, 2011 to the Year Ended December 31, 2010

          Below are the results of operations for the years ended December 31, 2011 and 2010 (in thousands, except per share amounts, percentages and number of properties). In the comparative tables presented below, increases in revenues/income or decreases in expenses (favorable variances) are shown without parentheses while decreases in revenues/income or increases in expenses (unfavorable variances) are shown with parentheses. For purposes of comparing our results of operations for the periods presented below, all of our properties in the “same store” reporting group were owned since the beginning of the year ended December 31, 2010. As of December 31, 2011, our portfolio was comprised of 29 wholly-owned properties with an aggregate of approximately 1.2 million square feet of GLA, compared to a portfolio that was comprised of 28 wholly-owned properties with an aggregate of approximately 1.0 million square feet of GLA as of December 31, 2010. During 2011 and 2010, we sold certain non-core, single-tenant properties, the results for which are presented in income from discontinued operations.

	Year Ended December 31,
	2011			2010			Change $			Change %
Same store properties (25 properties)
Rental income (1)	$	22,090		$	21,675		$	415			1.9	%
Recovery income (1)		6,737			6,674			63			0.9	%
Percentage rent (1)		425			555			(130	)		(23.4	)%
Less:
Property expenses		6,943			7,829			886			11.3	%
Same store net operating income		22,309			21,075			1,234			5.9	%
Non-same store properties (4 properties)
Rental income (1)		2,708			22			2,686			*
Recovery income (1)		999			7			992			*
Less:
Property expenses		1,032			4			(1,028	)		*
Non-same store net operating income		2,675			25			2,650			*
Total net operating income(2)		24,984			21,100			3,884			18.4	%
Other revenues (see further detail below):		4,768			10,548			(5,780	)		(54.8	)%
Less other expenses (see further detail below):		26,077			31,725			5,648			17.8	%
Income from continuing operations		3,675			(77	)		3,752			*
Income from discontinued operations		565			6,382			(5,817	)		(91.1	)%
Net income		4,240			6,305			(2,065	)		(32.8	)%
Net loss attibutable to non-controlling interest		—			(173	)		173			(100.0	)%
Net income attributable to AmREIT stockholders	$	4,240		$	6,132		$	(1,892	)		(30.9	)%
Other data
Funds from operations(3)	$	13,062		$	13,821		$	(759	)		(5.5	)%
Core FFO(3)	$	13,788		$	8,107		$	5,681			70.1	%
Number of properties at end of period		29			28			n/a			—
Percent leased at end of period(4)		95.9	%		92.0	%		n/a			3.9	%
Distributions per share	$	0.80		$	0.90		$	(0.1	)		(11.1	)%

(1)	Rental income from operating leases on the consolidated statement of operations is comprised of rental income, recovery income and percentage rent from same store properties, rental income and recovery income from non-same store properties and amortization of straight-line rents and above/below market rents. For the year ended December 31, 2011 and 2010, rental income from operating leases was $32,995 and $29,155, respectively.
(2)	For a definition and reconciliation of NOI and a statement disclosing the reasons why our management believes that presentation of NOI provides useful information to investors and, to the extent material, any additional purposes for which our management uses NOI, see “Net Operating Income” below.
(3)	For a reconciliation of FFO and Core FFO to net income, and a statement disclosing the reasons why our management believes that presentation of FFO and Core FFO provides useful information to investors and, to the extent material, any additional purposes for which our management uses FFO, see “Funds From Operations” below.
(4)	Percent leased is calculated as (i) GLA under commenced leases at the end of the applicable period, divided by (ii) total GLA at the end of the applicable period, expressed as a percentage.
*	Percentage change not shown as prior year amount is immaterial, or the percentage change is not meaningful.

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Same Store Properties – Property Revenues and Property Expenses

• Rental income. Rental income increased by $415,000, or 1.9%, on a same store basis to $22.1 million in 2011 as compared to $21.7 million in 2010. Of this increase, $120,000 was driven by an increase in average occupancy percentage, and $295,000 was driven by an increase in average rental rates.

• Recovery income. Recovery income remained comparable at $6.7 million on a same store basis in 2011 and 2010. During 2011, recovery income decreased due to a favorable property tax refund received on our MacArthur Park property and was offset slightly by an increase in recovery income due to increased occupancy at our Uptown Plaza – Dallas property. Recovery income also decreased during 2010 due to a favorable property tax refund received on our Southbank property.

• Percentage rent. Percentage rent decreased by $130,000, or 23.4%, on a same store basis to $425,000 in 2011 as compared to $555,000 in 2010. This decrease was due to lower sales volumes for our tenants at our Southbank and Uptown Plaza properties.

• Property expenses. Property expenses decreased by $886,000, or 11.3%, on a same store basis to $6.9 million in 2011 as compared to $7.8 million in 2010. This same store decrease was attributable to a favorable property tax refund received during 2011 on our MacArthur Park property and bad debt recoveries recorded during 2011, compared to bad debt expense in 2010, as we continue to assess our receivables in light of a stabilizing economy. These decreases were partially offset by an increase in property tax expense at our Southbank property due to a refund received in 2010, with no similar refund in 2011, as well as an increase in landscaping supplies and services, porter and security expense.

Non-same store properties – Property revenues and Property expenses. 

          Our rental income, tenant recovery income and property expenses increased for our non-same store investment properties due to the acquisitions of 500 Lamar (December 9, 2010), The Market at Lake Houston on February 25, 2011, Brookwood Village on May 10, 2011 and Alpharetta Commons on July 29, 2011. The results of operations for these properties have been recorded in the consolidated statements of operations from the date of acquisition.

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Other Revenues:

          Overall, other revenues decreased by $5.8 million, or 54.8%, to $4.8 million in 2011 as compared to $10.6 million in 2010, primarily due to the following (in thousands, except percentages):

	Year Ended December 31,
	2011		2010		Change $			Change %
Amortization of straight-line rents and above/below market rents(1)	$	36	$	222	$	(186	)		(83.8	)%
Advisory services income - related party:
Real estate fee income - related party		2,491		2,375		116			4.9	%
Asset management fee income - related party		1,064		1,480		(416	)		(28.1	)%
Construction management fee income - related party		234		349		(115	)		(33.0	)%
Total advisory services income - related party		3,789		4,204		(415	)		(9.9	)%
Lease termination fee income		131		15		116			*
Interest and other income		493		459		34			7.4	%
Interest and other income - related party		319		274		45			16.4	%
Gain on extinguishment of debt		—		5,374		(5,374	)		(100.0	)%
Total other revenues	$	4,768	$	10,548	$	(5,780	)		(54.8	)%

(1)	Included in rental income from operating leases as presented on our consolidated statements of operations.
*	Percentage change not shown as prior year amount is immaterial, or the percentage change is not meaningful.
•	Amortization of straight-line rents and above/below market rents. Amortization of straight-line rents and above/below market rents decreased by $186,000, or 83.8%, to $36,000 in 2011 as compared to $222,000 in 2010. This decrease was primarily attributable to the accelerated amortization of accrued rent balances for certain tenants.
•	Real estate fee income – related party. Real estate fee income – related party increased by $116,000, or 4.9%, to $2.5 million in 2011 as compared to $2.4 million in 2010. This increase was primarily attributable to leasing commissions earned on several new anchor leases at the properties that we manage for our Advised Funds during 2011.
•	Asset management fee income– related party. Asset management fee income – related party decreased by $416,000, or 28.1%, to $1.1 million in 2011 as compared to $1.5 million in 2010. Our asset management fees are calculated based upon the net value of the assets held by the Advised Funds that we manage. The net value of the assets held by the Advised Funds decreased during 2011.
•	Construction management fee income – related party. Construction management fee income – related party decreased by $115,000, or 33.0%, to $234,000 in 2011 as compared to $349,000 in 2010. This reduction was primarily due to the completion of the redevelopment project at our Woodlake Square property, which included fee income during six months in 2010 but only four months in 2011.
•	Lease termination and other income. Lease termination and other income increased by $116,000 to $131,000 in 2011 as compared to $15,000 in 2010. This increase was attributable to the early termination and move out of tenants at our Southbank and Terrace Shops properties during 2011 compared to $15,000 of other income in 2010.
•	Gain on debt extinguishment. Gain on debt extinguishment was $5.4 million in 2010 due to the extinguishment of a $19.9 million mortgage on our Uptown Plaza – Dallas property at a gain of $5.4 million in September 2010. We had no similar extinguishment of debt during 2011.

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Other Expenses:

          Overall, other expenses decreased by $5.6 million, or 17.8%, to $26.1 million in 2011 from $31.7 million in 2010, primarily due to the following (in thousands, except percentages):

	Year Ended December 31,
	2011			2010		Change $			Change %
Straight-line bad debt recoveries(1)	$	(205	)	$	481	$	686			(142.6	)%
General and administrative		6,049			5,944		(105	)		(1.8	)%
Legal and professional		945			1,165		220			18.9	%
Real estate commissions		342			191		(151	)		(79.1	)%
Acquisition costs		229			12		(217	)		*
Depreciation and amortization		8,257			6,634		(1,623	)		(24.5	)%
Impairment - properties		—			2,268		2,268			100.0	%
Impairment (recovery) - notes receivable		(1,071	)		1,800		2,871			*
Loss from Advised Funds		384			1,186		802			67.6	%
Income tax expense (benefit) for taxable REIT subsidiary		—			1,245		1,245			100.0	%
State income taxes		262			270		8			3.0	%
Interest expense		9,971			9,541		(430	)		(4.5	)%
Issuance costs		914			—		(914	)		*
Debt prepayment penalties		—			988		988			100.0	%
Total other expenses	$	26,077		$	31,725	$	5,648			17.8	%

(1)	Included in property expense on our consolidated statements of operations.
*	Percentage change not shown as prior year amount is immaterial, or the percentage change is not meaningful.
•	Straight-line bad debt expense. Straight-line bad debt expense decreased by $686,000, or 142.6%, to recoveries of $205,000 in 2011 as compared to an expense of $481,000 in 2010. Certain of our leases provide for increases in minimum lease payments over the term of the lease, and we recognize revenues on a straight-line basis over the term of such leases. The straight-line method results in accrued rent on our balance sheet, representing the portion of the rent that we expect to recover from the tenant in the future as they fulfill their obligation to us under the terms of the lease. During the fourth quarter of 2010, we recorded a reserve against the accrued rent balances due from certain of our tenants whom we believed may not fulfill their obligation to us. A portion of the reserve was reversed in 2011 due to the collection of such rents as well as a stabilizing economy.
•	Legal and professional. Legal and professional fees decreased by $220,000, or 18.9%, to $945,000 in 2011 as compared to $1.2 million in 2010. This decrease was primarily attributable to reduced transfer agent fees resulting from quarterly, instead of monthly, dividend distributions as well as reduced fees for audit and tax related services.
•	Real estate commissions. Real estate commissions increased by approximately $151,000, or 79.1%, to $342,000 in 2011 as compared to $191,000 in 2010. This increase was primarily attributable to leasing activity for several new anchor leases at properties owned by our Advised Funds.
•	Acquisition costs. Acquisition costs increased by $217,000 to $229,000 in 2011 as compared to $12,000 in 2010. This increase was attributable to the acquisitions of The Market at Lake Houston on February 25, 2011, Brookwood Village on May 10, 2011 and Alpharetta Commons on July 29, 2011. We acquired one property during the year ended December 31, 2010 (500 Lamar on December 9, 2010).
•	Depreciation and amortization. Depreciation and amortization expense increased by approximately $1.6 million, or 24.5%, to $8.3 million in 2011 as compared to $6.6 million in 2010. This increase was primarily attributable to the acquisitions of 500 Lamar (December 9, 2010), The Market at Lake Houston on February 25, 2011, Brookwood Village on May 10, 2011 and Alpharetta Commons on July 29, 2011.

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• Impairment – properties. Impairment – properties was $2.3 million in 2010. During the third quarter of 2010 and in connection with the marketing of several of our non-core, single-tenant properties located in tertiary markets, we identified a negative trend in the market for such properties. Accordingly, we performed an impairment analysis on all of our properties with these characteristics. The analysis indicated that, for four such properties, the estimated undiscounted future cash flows associated with these assets would not be sufficient to recover their carrying values. As a result, we recorded impairments in the aggregate amount of $2.3 million on these four single-tenant, non-core properties in order to reduce their carrying values to their respective fair values. Our determination of fair value was based on market data for similar assets. As of the date of the impairment assessment, these assets had an aggregate estimated fair value of $3.4 million and were impaired by $2.3 million. No such impairments were recorded during the year ended December 31, 2011.

• Impairment (recovery) – notes receivable. Impairment (recovery) – notes receivable improved by $2.9 million to recoveries of $1.1 million in 2011 as compared to an expense of $1.8 million in 2010. During 2011, we received payments totaling $1.4 million on our note receivable due from the sale of a tract of land adjacent to our Uptown Plaza – Dallas property. The note matured, unpaid, in December 2010, and we recorded a $1.3 million impairment to reduce the value of the note to the fair value of the underlying collateral. Of the payments received in 2011, $313,000 was recorded as interest income, and the remaining $1.1 million was recorded as an impairment recovery. Also, during 2010, we, as the general partner of AIGF, approved a plan to begin marketing the fund’s assets for sale, and recorded a $500,000 impairment on the note from AIGF as we believed that the fund would be unable to repay the full balance after settlement of its other obligations (see Note 7 of the Notes to Consolidated Financial Statements).

• Loss from Advised Funds. Loss from Advised Funds decreased by $802,000, or 67.6%, to $384,000 in 2011 as compared to $1.2 million in 2010. The decrease was primarily attributable to the increased depreciation expense in 2010 resulting from the impending redevelopment of the Woodlake Square property. During the first quarter of 2010, we reassessed and shortened the estimated useful lives of various Woodlake Square buildings consistent with our redevelopment plan.

• Income tax expense. Income tax expense of $1.2 million in 2010 was primarily attributable to recording a full valuation allowance against our federal deferred tax assets at December 31, 2010. As a result, any federal tax expense or benefit in 2011 was fully offset by a corresponding change in the valuation allowance.

• Issuance costs. Stock issuance costs were $914,000 in 2011. During 2011, we initiated plans for a public offering and filed a registration statement on Form S-11; however, market volatility and uncertainty prevented us from taking the registration statement effective in the near term. The costs incurred no longer met the criteria for capitalization under GAAP at December 31, 2011 and were expensed. We had no such expenses in 2010.

• Debt prepayment penalties. Debt prepayment penalties were $988,000 in 2010, and reflected penalties incurred upon the early extinguishment of the mortgages on our Plaza in the Park, Cinco Ranch and Terrace Shops properties in December 2010. We incurred no such early extinguishment penalties during 2011.

Income from discontinued operations. Income from discontinued operations decreased by $5.8 million, or 91.1%, to $565,000 in 2011, as compared to $6.4 million in 2010. The decrease was primarily attributable to our property disposition activity during 2010. We sold two non-core, single tenant properties during the year ended December 31, 2011, for a gain of $417,000 whereas we sold 21 non-core, single tenant properties during the year ended December 31, 2010, for a gain of $5.5 million.

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FUNDS FROM OPERATIONS

          We consider FFO to be an appropriate measure of the operating performance of an equity REIT. NAREIT defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and impairment charges on properties held for investment, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT recommends that extraordinary items not be considered in arriving at FFO. We calculate FFO in accordance with this definition.

          Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental non-GAAP financial measure of operating performance because, by excluding gains or losses on dispositions, impairment charges and depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself.

          Additionally, we consider Core FFO, which adjusts FFO for items that do not reflect ongoing property operations, such as acquisition expenses, expensed issuance costs and gains on the sale of real estate held for resale, to be a meaningful performance measurement. Management believes that the computation of FFO in accordance with NAREIT’s definition includes certain items such as acquisition costs, issuance costs and gains on sale of real estate held for resale that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance with similar REITs. Accordingly, management believes that it is helpful to investors to adjust FFO for items that do not reflect ongoing property operations to arrive at our Core FFO. There can be no assurance that FFO or Core FFO presented by us is comparable to similarly titled measures of other REITs. FFO and Core FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.

          The table below details our FFO and Core FFO reconciliation to net income under GAAP for the periods presented (in thousands).

	Year Ended December 31,
	2012 (1)		2011 (1)			2010 (2)			2009 (3)			2008 (4)
Net income	$	4,460	$	4,240		$	6,305		$	5,255		$	143
Add:
Depreciation of real estate assets - from operations		8,832		8,181			6,537			7,219			8,808
Depreciation of real estate assets - from discontinued operations		—		13			51			77			111
Depreciation of real estate assets for nonconsolidated affiliates		622		628			1,453			552			849
Impairments of real estate held for investment		—		—			864			—			142
Less:
Net income attributable to non-controlling interest		—		—			(173	)		(121	)		(331	)
Gain on real estate assets held for investment		—		—			(1,216	)		—			(924	)
Class B, C and D distributions		—		—			—			(8,357	)		(10,013	)
Premium on merger conversion of AmREIT class C and D shares		—		—			—			(10,171	)		—
FFO	$	13,914	$	13,062		$	13,821		$	(5,546	)	$	(1,215	)
Acquisition costs		687		229			12			—
Issuance costs		—		914			—			—			—
Gains on sale of real estate acquired for resale				(417	)		(5,726	)		(1,897	)		(229	)
Core FFO	$	14,601	$	13,788		$	8,107		$	(7,443	)	$	(1,444	)

(1)	Net income for the years ended December 31, 2012 and 2011, includes acquisition costs of $687 and $229, respectively, incurred in connection with the acquisition of operating properties. Additionally, we recorded recovery income of $443,000 and $1.1 million for the years ended December 31, 2012 and 2011, respectively, on collections of notes receivable payments related to notes receivable that were impaired in prior years.
(2)	Included in net income is a $5,374 gain on debt extinguishment. Offsetting this gain is $864 in impairments taken on two of our non-core, single-tenant properties, a $1,300 impairment on a note receivable related to the sale of a tract of land adjacent to our Uptown Plaza – Dallas property, a $500 impairment on a note receivable from one of our Advised Funds and debt prepayment penalties of $988 related to the early extinguishment of three property mortgages during the year. Included in income (loss) from discontinued operations is a $5,384 gain (net of tax) on the sale of real estate acquired for resale and $1,219 in impairments taken on two of our non-core, single-tenant properties that were sold in July 2011. Included in depreciation of real estate assets for nonconsolidated affiliates is $852 in adjustments for non-consolidated entities related to accelerated depreciation resulting from the redevelopment of our Woodlake Square property.
(3)	Included in net income is a $441 impairment related to the acquisition of REITPlus’s net assets. Additionally, included in income (loss) from discontinued operations is a $1,897 gain on real estate held for resale, net of taxes, which was realized in 2009.
(4)	Included in income (loss) from continuing operations is an impairment charge of $1,495 related to four properties that represented non-core real estate assets, one of which was sold in July 2008. Included in income (loss) from discontinued properties is a restructuring charge of $2,456 related to the wind-down of our fund raising business and general contracting operations, including severance costs related to the employees terminated as part of the restructuring.

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NET OPERATING INCOME

          We believe that NOI, a non-GAAP financial measure, is a useful measure of our operating performance. We define NOI as operating revenues (rental income, tenant recovery income, percentage rent, excluding straight-line rental income and amortization of acquired above- and below-market rents) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line rent bad debt expense). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.

          We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a property-by-property basis because NOI allows us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results. However, NOI should only be used as a supplemental measure of our financial performance.

          The following table sets forth a reconciliation of NOI to net income as computed in accordance with GAAP, for the periods presented (in thousands):

	Year Ended December 31,
	2012			2011			2010			2009			2008
Net income	$	4,460		$	4,240		$	6,305		$	5,255		$	143
Adjustments to add/(deduct):
Amortization of straight-line rents and above/below-market rents(1)		(430	)		(36	)		(222	)		(197	)		(869	)
Advisory services income - related party		(3,870	)		(3,789	)		(4,204	)		(4,584	)		(6,227	)
Lease termination fee income		—			(131	)		(15	)		(1,065	)		(141	)
Interest and other income		(485	)		(493	)		(459	)		(446	)		(11	)
Interest and other income - related party		(462	)		(319	)		(274	)		(201	)		(1,018	)
Gain on debt extinguishment		—			—			(5,374	)		—			—
Straight-line rent bad debt (recoveries) expense(2)		(90	)		(205	)		481			—			—
General and administrative		6,733			6,049			5,944			6,320			7,096
Legal and professional		919			945			1,165			1,667			1,559
Real estate commissions		387			342			191			157			162
Acquisition costs		687			229			12			—			—
Depreciation and amortization		8,884			8,257			6,634			7,350			8,969
Impairment - notes properties		—			—			2,268			441			484
Impairment recovery - notes receivable		(443	)		(1,071	)		1,800			—			—
Loss from Advised Funds		238			384			1,186			604			894
Income tax expense (benefit) for taxable REIT subsidiary		—			—			1,245			(1,159	)		(704	)
State income taxes		248			262			270			308			212
Interest expense		10,251			9,971			9,541			9,146			9,196
Stock issuance costs		—			914			—			—			—
Debt prepayment penalties		—			—			988			—			—
Income from discontinued operations		—			(565	)		(6,382	)		(2,632	)		1,896
Net operating income	$	27,027		$	24,984		$	21,100		$	20,964		$	21,641

(1)	Included in rental income from operating leases as presented on our consolidated statements of operations.
(2)	Included in property expense on our consolidated statements of operations.

31

LIQUIDITY AND CAPITAL RESOURCES

          Our primary sources of liquidity are our cash on hand as well as availability under our $75 Million Facility. As of December 31, 2012, we had $3.0 million of available cash on hand as well as $26.9 million available under the $75 Million Facility which can be used for general corporate purposes, including debt financing, property acquisitions, new construction, renovations, expansions, tenant improvement costs and equity investments. Our acquisition of the Preston Royal Shopping Center and our anticipated joint venture with an institutional joint venture partner (see also Note 4 to the Notes to Consolidated Financial Statements) are expected to positively impact our future liquidity and availability under our $75 Million Facility. Our availability under our $75 Million Facility will increase as we add the Preston Royal East property to our unencumbered asset pool and as we pay down our outstanding debt under our $75 million Facility with proceeds received from our potential MacArthur Park joint venture. This increase will be partially offset by a reduction of our available borrowing base as we remove our MacArthur Park asset from our unencumbered asset pool. On a net basis, the two transactions will leave us with approximately $57.4 million in anticipated availability under our $75 Million Facility.

          The $75 Million Facility, which was entered into on August 3, 2012, has a term of three years and has an accordion feature that may allow us to increase the availability by $75 million to $150 million. The amount available for us to borrow under the $75 Million Facility at any given time will be subject to the lesser of 55% of the unencumbered asset property value at such time, the maximum commitment amount at such time or an amount that results in a debt service coverage ratio for the four preceding calendar quarters of 1.50 to 1.0. Our ability to borrow under the $75 Million Facility is subject to our ongoing compliance with a number of customary restrictive covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, a maximum recourse debt ratio, a minimum net worth and maximum dividend payout ratio. We also covenant that certain changes in our executive management team will not occur unless the departing executive management team member is replaced by a party reasonably acceptable to the administrative agent within 90 days of such departure. Additionally, it will constitute an event of default under the $75 Million Facility if we default on any of our other indebtedness that equals or exceeds $1 million, including any indebtedness we have guaranteed.

          Our short-term liquidity requirements consist primarily of operating expenses and other expenditures associated with our properties, regular debt service requirements, dividend payments to our stockholders, capital expenditures and, potentially, acquisitions. We expect to meet our short-term liquidity requirements primarily from cash on hand, cash flows generated from the operation of our properties, proceeds from the $75 Million Facility and, potentially, proceeds from new mortgages, as needed for acquisitions. The cash generated from operations is primarily paid to our stockholders in the form of dividends. As a REIT, we generally must make annual distributions to our stockholders of at least 90% of our REIT taxable income.

          We anticipate that our primary future uses of capital will include, but will not be limited to, operating expenses, scheduled debt service payments, property renovations, property expansions, and other significant capital expenditures for our existing portfolio of properties and, subject to the availability of attractive properties and our ability to consummate acquisitions on satisfactory terms, acquisition of new assets compatible with our investment strategy. These capital expenditures include building improvement projects, as well as amounts for tenant improvements and leasing commissions related to releasing and are subject to change as market and tenant conditions dictate.

          We may utilize several other forms of capital for funding our long-term liquidity requirements, including proceeds from secured mortgages and unsecured indebtedness, proceeds from equity issuances, cash generated from the sale of property and the formation of joint ventures.

32

          We believe our current cash flows from operations, coupled with our $75 Million Facility are sufficient to allow us to meet our liquidity needs for both the near and longer term to continue operations, satisfy our contractual obligations and pay dividends to our stockholders. We have no significant debt coming due within the next twelve months.

          We intend to maintain a financially disciplined and conservative capital structure. As of December 31, 2012, approximately 85% of our debt outstanding was fixed, long-term mortgage financing, and our ratio of total debt to gross book assets was approximately 48%. We continue to seek additional opportunities to selectively invest capital in high-quality, multi-tenant shopping centers with higher overall return prospects while maintaining our conservative capital structure. We may consider all or a combination of future joint ventures, sales of selected properties that no longer meet our investment criteria, refinancing of current debt and unencumbered properties or possible future public offerings of our Class B common stock in order to provide us with significant financial flexibility and to fund future growth.

          Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our ability to access the equity capital markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about our company. Potential disruptions in the financial markets and deteriorating economic conditions could adversely affect our ability to utilize any one or more of these sources of funds.

          Our operations are sensitive to changes in overall economic conditions that impact our tenants, including, among other things, increased bad debts due to such recessionary pressures. A general reduction in the level of tenant leasing or shifts in tenant leasing practices could adversely affect our business, financial condition, liquidity, results of operations, FFO and prospects. The United States is still experiencing weakness from the recent, severe recession. Continued concerns regarding the uncertainty of whether the United States economy will be adversely affected by inflation, deflation or stagflation and the systemic impact of increased unemployment, volatile energy costs, geopolitical issues, the availability and cost of credit, the United States mortgage market and a severely distressed real estate market have contributed to increased market volatility and weakened business and consumer confidence. Additionally, the uncertainty surrounding the United States’ rapidly increasing national debt and continuing global economic upheaval have kept markets volatile. It is difficult to determine the breadth and duration of the financial market problems and the many ways in which they may affect our tenants and our business in general. While we believe that we have sufficient access to cash in order to meet our contractual obligations, a significant additional deterioration in the United States economy or the bankruptcy or insolvency of one or more of our significant tenants could cause our 2013 cash resources to be insufficient to meet our obligations.

Comparison of Cash Flows for the Years Ended December 31, 2012 and 2011

	Year Ended December 31,
	2012			2011
Operating activities	$	11,330		$	16,496
Investing activities	$	(43,567	)	$	(18,029	)
Financing activities	$	34,179		$	1,928

          Operating Activities. The decrease in operating cash flows of approximately $5.2 million was primarily attributable to $2.5 million in proceeds from the sales of properties acquired for resale during 2011 and a decrease in cash inflows from tenant receivables and receivables from related parties during 2012 of approximately $4.5 million. This is partially offset by an increase in net income (excluding gains on the sales of assets) of approximately $769,000.

          Investing Activities. The $25.5 million increase in cash outflows from investing activities was primarily due to approximately $42.8 million in cash paid for the acquisition of the Preston Royal Village Shopping Center in December 2012 compared to approximately $21.6 million paid for the property acquisitions of Alpharetta Commons, Brookwood Village and the Market at Lake Houston during 2011. Additionally, we received $9.4 million in cash during the first quarter of 2011 from our qualified intermediary with no such receipts during 2012. Our cash on deposit with the qualified intermediary represented the net proceeds from the sale of 17 single tenant properties during 2010. We used a substantial portion of these proceeds during 2011 to acquire properties during 2011 in accordance with Section 1031 of the Internal Revenue Code.

33

          Financing Activities. Cash flows from financing activities increased approximately $32.3 million compared to 2011. The increase in cash flow is primarily attributable to (i) $52.7 million (net of issuance costs) received from the sale of our Class B common stock from our 2012 Offering, (ii) drawings under our $75 Million Facility of approximately $33.5 million, primarily for the purchase of the Preston Royal Village Shopping Center, (iii) additional borrowings of $3.7 million related to our refinance of the Uptown Dallas property, (iv) new financing of $3.5 million related to one of our single tenant properties and lower scheduled debt principle payments coming due in 2012 of approximately $2.2 million compared to 2011. This was partially offset by (i) repayments of debt of approximately $45.3 million from the proceeds received from our 2012 Offering, (ii) 2011 increased borrowings under our $25 Million Facility of $7.6 million, (iii) borrowings in 2011 of $7.4 million related to the acquisition of Brookwood Village, (iv) increases in distributions of $1.8 million due to the sale of additional shares of Class B common stock from our 2012 Offering and (v) increased payments for financing costs of approximately $1.0 million during 2012.

Off-Balance Sheet Arrangements

          As of December 31, 2012, none of our off-balance sheet arrangements had, or are reasonably likely to have, a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. We own interests in several unconsolidated Advised Funds that are accounted for under the equity method as we exercise significant influence over, but do not control, the investee. See Note 5 of the Notes to Consolidated Financial Statements. We have made loans to some of these affiliates as discussed in Note 2 of the Notes to Consolidated Financial Statements and may make additional loans to them in the future.

Contractual Obligations

          As of December 31, 2012, we had the following contractual debt obligations, in thousands (see also Note 8 of the Notes to Consolidated Financial Statements for further discussion regarding the specific terms of our debt):

	2013		2014		2015		2016		2017		Thereafter		Total
$75 Million Facility	$	—	$	—	$	33,500	$	—	$	—	$	—	$	33,500
Secured debt (1)		1,590		2,301		52,799		69,225		1,403		57,443		184,761
Unused credit fee (2)		145		145		85		—		—		—		375
Interest (2)		8,590		8,556		7,116		3,337		2,491		6,451		36,541
Non-cancelable operating lease payments		214		220		226		—		—		—		660
Total contractual obligations	$	10,539	$	11,222	$	93,726	$	72,562	$	3,894	$	63,894	$	255,837

(1)	Secured debt as shown above is $318 less than the total secured debt as reported in the accompanying consolidated balance sheet due to the premium recorded on above market debt assumed in conjunction with the assumption of certain of our property acquisitions.
(2)	Interest expense includes our interest obligations on our $75 Million Facility as well as all secured debt. The $75 Million Facility is a variable-rate debt instrument. We pay an unused credit fee on the amount available under the $75 Million Facility that remains undrawn.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          Not applicable.

34

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          The information required by this Item 8 is incorporated by reference to our Financial Statements beginning on page F-1 of this Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

          None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

          Under the supervision and with the participation of our CEO and CFO, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2012. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2012.

Management’s Report on Internal Control over Financial Reporting

          The Company and its subsidiaries maintain a system of internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, which is a process designed under the supervision of our principal executive officer and principal financial officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

          The Company’s internal control over financial reporting includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our Board of Directors; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

          The Company’s management has responsibility for establishing and maintaining adequate internal control over our financial reporting. Management, with the participation of our CEO and CFO, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2012 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

          Based on their evaluation of our internal control over financial reporting, our management along with our CEO and CFO believe that the Company’s internal control over financial reporting is effective as of December 31, 2012.

Changes in Internal Controls

          There has been no change to our internal control over financial reporting during the quarter ended December 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION.

          Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

          The information required by this Item will be presented in our 2013 Proxy Statement, which will be filed with the SEC and which is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

          The information required by this Item will be presented in our 2013 Proxy Statement which will be filed with the SEC and which is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

          The following table provides information with respect to compensation plans under which our equity securities are authorized for issuance as of December 31, 2012.

Plan Category	Number of securities to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options	Number of securities available for future issuances under equity compensation plans
Equity compensation plans approved by security holders	—	—	937,444(1)
Equity compensation plans not approved by security holders	—	—	—
Total	—	—	937,444

(1) Represents shares of our Class B common stock available under our 1999 Flexible Incentive Plan.

               The remaining information required by this Item will be presented in our 2013 Proxy Statement, which will be filed with the SEC and which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

          The information required by this Item will be presented in our 2013 Proxy Statement, which will be filed with the SEC and which is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

          The information required by this Item will be presented in our 2013 Proxy Statement, which will be filed with the SEC and which is incorporated herein by reference.

36

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)	The following financial statements and schedules are included in this Annual Report on Form 10-K beginning on page F-1:
	(1)	Financial Statements
		Report of Independent Registered Public Accounting Firm
		Consolidated Balance Sheets as of December 31, 2012 and 2011
		Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010
		Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2012, 2011 and 2010
		Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010
		Notes to Consolidated Financial Statements
	(2)	Financial Statement Schedule
		Schedule III – Consolidated Real Estate Owned and Accumulated Depreciation
(b)		Exhibits

2.1	Amended and Restated Agreement and Plan of Merger among REITPlus, Inc. REITPlus Advisors, Inc. and AmREIT (incorporated by reference to Annex D to Amendment No. 5 to the Company’s Registration Statement on Form S-4, filed on October 8, 2009).
3.1.1	Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 Amendment No. 3 to the Company’s Registration Statement on Form S-4, filed on September 9, 2009).
3.1.2	Articles of Amendment, effective July 23, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on July 27, 2012).
3.1.3	Articles of Amendment, effective July 23, 2012 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on July 27, 2012).
3.1.4	Articles Supplementary, effective July 23, 2012 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed on July 27, 2012).
3.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed November 3, 2010).
10.1†	Executive Employment Agreement with H. Kerr Taylor, dated as of March 29, 2011 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 31, 2011).
10.2†	Executive Employment Agreement with Chad C. Braun dated as of March 29, 2011 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 31, 2011).
10.3†	Executive Employment Agreement with Tenel H. Tayar, dated as of March 29, 2011 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 31, 2011).
10.4†	Employment Agreement with Charles A. Scoville dated as of March 29, 2011 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 31, 2011).
10.5†	Employment Agreement with Brett Treadwell dated as of March 29, 2011 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 31, 2011).

37

10.6†	AmREIT, Inc. 1999 Flexible Incentive Plan (incorporated by reference to Annex A of the Company’s Proxy Statement for its 1999 Annual Meeting of Stockholders, filed April, 30, 1999).
10.7	Revolving Credit Agreement among AmREIT, Inc. and the lenders listed therein, with PNC Bank, National Association as Administrative Agent, PNC Capital Markets LLC as Sole Lead Arranger and Sole Bookrunner and Capital One, National Association, as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on August 1, 2012).
10.8	Form of Grant Agreement (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.9	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.10	Promissory Note dated as of June 1, 2005 by and between AmREIT Uptown Park, LP and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.11	Deed of Trust and Security Agreement dated as of June 1, 2005 by and between AmREIT Uptown Park, LP and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.12	Loan Agreement dated as of May 22, 2006 by and between AmREIT Riverwalk, LP and Bank of America, N.A. (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.13	Deed of Trust and Security Agreement dated as of December 9, 2005 by and between AmREIT Lake Houston, LP and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.14	Promissory Note dated as of December 12, 2005 by and between AmREIT Lake Houston, LP and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.15	Assumption Agreement dated as of February 25, 2011 by and between AmREIT Lake Houston, LP and U.S. Bank National Association as Trustee for Morgan Stanley Mortgage Capital I Inc. (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.16	Promissory Note dated as of December 29, 2010 by and between AmREIT Plaza in the Park, LP and MetLife Bank, N.A. (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.17	Deed of Trust, Security Agreement and Fixture Filing dated as of December 29, 2010 by and between AmREIT Plaza in the Park, LP and MetLife Bank, N.A. (incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-11 filed July 19, 2011).
10.18 *	Purchase and Sale Agreement dated as of October 12, 2012 between Preston Royal Realty Company and AmREIT Realty Investment Corporation.
10.19 *	Deed of Trust Security Agreement and Fixture Filing dated as of December 12, 2012 by and between AmREIT Preston Royal, LP and Transamerica Financial Life Insurance Company
10.20 *	Secured Promissory Note dated as of December 12, 2012 by and between AmREIT Preston Royal, LP and Transamerica Financial Life Insurance Company
21.1 *	Subsidiaries of the Company.

38

31.1 *	Certification pursuant to Rule 13a-14(a) of Chief Executive Officer.
31.2 *	Certification pursuant to Rule 13a-14(a) of Chief Financial Officer.
32.1 **	Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 **	Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document***
101.SCH	XBRL Taxonomy Extension Schema Document***
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document***
101.LAB	XBRL Taxonomy Extension Label Linkbase Document***
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document***
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document***

†	Denotes a management contract or compensatory plan or arrangement.
*	Filed herewith
**	Furnished herewith
***	Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 31, 2012, and 2011, (ii) the Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010, (iii) the Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2012, 2011 and 2010, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010 and (v) the Notes to the Consolidated Financial Statements.

Pursuant to Rule 406T of Regulation S-T, the Interactive Data File on Exhibit 101 hereto is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under those sections.

39

SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AmREIT, Inc.
By:	/s/ H. Kerr Taylor
	H. Kerr Taylor, President and Chief Executive Officer
Date:	February 22, 2013

          Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ H. Kerr Taylor	February 22, 2013
H. KERR TAYLOR
Chairman of the Board, President, and Chief Executive
Officer (Principal Executive Officer)
/s/ Chad C. Braun	February 22, 2013
CHAD C. BRAUN, Executive Vice President, Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary (Principal Financial Officer)
/s/ Brett P. Treadwell	February 22, 2013
BRETT P. TREADWELL, Managing Vice President – Finance and Chief Accounting Officer (Principal Accounting Officer)
/s/ Robert S. Cartwright, Jr.	February 22, 2013
ROBERT S. CARTWRIGHT, JR., Director
/s/ Brent M. Longnecker	February 22, 2013
BRENT M. LONGNECKER, Director
/s/ Scot Luther	February 22, 2013
SCOT LUTHER., Director
/s/ Mack D. Pridgen III	February 22, 2013
MACK D. PRIDGEN III, Director
/s/ Philip W. Taggart	February 22, 2013
PHILIP W. TAGGART, Director
/s/ H.L. Rush, Jr.	February 22, 2013
H.L. RUSH, JR., Director

40

AmREIT, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS:
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2012 and 2011	F-3
Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2012, 2011 and 2010	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010	F-6
Notes to Consolidated Financial Statements	F-8
FINANCIAL STATEMENT SCHEDULE:
Schedule III - Consolidated Real Estate Owned and Accumulated Depreciation for the year ended December 31, 2012	S-1

All other financial statement schedules are omitted as the required information is either not applicable or is included in the financial statements or related notes.

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
AmREIT, Inc.:

          We have audited the accompanying consolidated balance sheets of AmREIT, Inc. and subsidiaries (“the Company”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audit of the consolidated financial statements, we have also audited the related financial statement schedule. These consolidated financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

          We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AmREIT, Inc. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

KPMG LLP

Houston, Texas
February 22, 2013

F-2

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

	December 31,
	2012			2011
ASSETS
Real estate investments at cost:
Land	$	147,460		$	138,404
Buildings		222,679			172,146
Tenant improvements		17,386			14,483
		387,525			325,033
Less accumulated depreciation and amortization		(39,820	)		(33,865	)
		347,705			291,168
Acquired lease intangibles, net		15,976			10,139
Investments in Advised Funds		7,953			8,322
Net real estate investments		371,634			309,629
Cash and cash equivalents		2,992			1,050
Tenant and accounts receivable, net		5,566			4,340
Accounts receivable - related party, net		821			645
Notes receivable, net		2,731			3,412
Notes receivable - related party, net		6,748			6,513
Deferred costs, net		3,696			2,887
Other assets		3,206			2,134
TOTAL ASSETS	$	397,394		$	330,610
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Notes payable	$	218,579		$	201,658
Accounts payable and other liabilities		9,593			8,007
Acquired below-market lease intangibles, net		3,507			2,021
TOTAL LIABILITIES		231,679			211,686
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued		—			—
Class A common stock, $0.01 par value, 100,000,000 shares authorized, 11,657,563 and 11,598,959 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively		117			116
Class B common stock, $0.01 par value, 900,000,000 shares authorized, 4,465,725 and 0 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively		45			—
Capital in excess of par value		245,403			192,005
Accumulated distributions in excess of earnings		(79,850	)		(73,197	)
TOTAL STOCKHOLDERS’ EQUITY		165,715			118,924
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	397,394		$	330,610

See Notes to Consolidated Financial Statements

F-3

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

	Year Ended December 31,
	2012			2011			2010
Revenues:
Rental income from operating leases	$	37,438		$	32,995		$	29,155
Advisory services income - related party		3,870			3,789			4,204
Lease termination fee income		—			131			15
Total revenues		41,308			36,915			33,374
Expenses:
General and administrative		6,733			6,049			5,944
Property expense		9,891			7,770			8,314
Legal and professional		919			945			1,165
Real estate commissions		387			342			191
Acquisition costs		687			229			12
Depreciation and amortization		8,884			8,257			6,634
Impairment - properties		—			—			2,268
Impairment (recovery) - notes receivable		(443	)		(1,071	)		1,800
Total expenses		27,058			22,521			26,328
Operating income		14,250			14,394			7,046
Other income (expense):
Interest and other income		485			493			459
Interest and other income - related party		462			319			274
Gain on debt extinguishment		—			—			5,374
Loss from Advised Funds		(238	)		(384	)		(1,186	)
State income taxes		(248	)		(262	)		(1,515	)
Interest expense		(10,251	)		(9,971	)		(9,541	)
Issuance costs		—			(914	)		—
Debt prepayment penalties		—			—			(988	)
Income (loss) from continuing operations		4,460			3,675			(77	)
Income (loss) from discontinued operations, net of taxes		—			148			656
Gain on sale of real estate acquired for resale, net of taxes		—			417			5,726
Income from discontinued operations		—			565			6,382
Net income	$	4,460		$	4,240		$	6,305
Net income attributable to non-controlling interest		—			—			(173	)
Net income available to AmREIT stockholders	$	4,460		$	4,240		$	6,132
Net income per share of common stock - basic and diluted
Income (loss) before discontinued operations	$	0.32		$	0.31		$	(0.04	)
Income from discontinued operations		—			0.05			0.56
Net income	$	0.32		$	0.36		$	0.52
Weighted average shares of common stock used to compute net income per share, basic and diluted		13,120			11,384			11,336
Distributions per share of common stock	$	0.80		$	0.80		$	0.90

See Notes to Consolidated Financial Statements.

F-4

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)

	Common Stock				Capital inexcess of			Accumulated distributions in excess of			Accumulatedothercomprehensive			Treasury			Non-controlling
	Class A		Class B		par value			earnings			loss			stock			interest			Total
Balance as of December 31, 2009	$	115	$	—	$	191,090		$	(63,908	)	$	(384	)	$	—		$	265		$	127,178
Net income		—		—		—			6,305			—			—			—			6,305
Net loss attributable to noncontrolling interest		—		—		—			(173	)		—			—			173			—
Change in fair value of hedge		—		—		—			—			38			—			—			38
Deferred compensation		—		—		(1,669	)		—			—			—			—			(1,669	)
Issuance of shares of common stock for deferred compensation		1		—		1,622			—			—			115			—			1,738
Amortization of deferred compensation		—		—		442			—			—			—			—			442
Repurchase of shares of Class A common stock		—		—		—			—			—			(143	)		—			(143	)
Distributions									(10,384	)								(438	)		(10,822	)
Balance as of December 31, 2010	$	116	$	—	$	191,485		$	(68,160	)	$	(346	)	$	(28	)	$	—		$	123,067
Net income		—		—		—			4,240			—			—			—			4,240
Change in fair value of hedge		—		—		—			—			346			—			—			346
Deferred compensation		—		—		(762	)		—			—			—			—			(762	)
Issuance of shares of common stock for deferred compensation		—		—		762			—			—			—			—			762
Amortization of deferred compensation		—		—		561			—			—			—			—			561
Forfeitures of Class A
Class A common stock		—		—		30			—			—			(43	)		—			(13	)
Retirement of shares of Class A common stock		—		—		(71	)		—			—			71			—			—
Distributions		—		—		—			(9,277	)		—			—			—			(9,277	)
Balance as of December 31, 2011	$	116	$	—	$	192,005		$	(73,197	)	$	—		$	—		$	—		$	118,924
Net income		—		—		—			4,460			—			—			—			4,460
Deferred compensation		—		—		(5,299	)		—			—			—			—			(5,299	)
Issuance of shares of
common stock for
deferred compensation		1		3		5,295			—			—			—			—			5,299
Issuance of shares of
Class B common stock		—		42		52,655			—			—			—			—			52,697
Amortization of deferred compensation		—		—		815			—			—			—			—			815
Retirement of shares of Class A common stock		—		—		(68	)		—			—			—			—			(68	)
Distributions		—		—		—			(11,113	)		—			—			—			(11,113	)
Balance as of December 31, 2012	$	117	$	45	$	245,403		$	(79,850	)	$	—		$	—		$	—		$	165,715

See Notes to Consolidated Financial Statements.

F-5

AmREIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Year Ended December 31,
	2012			2011			2010
Cash flows from operating activities:
Net income	$	4,460		$	4,240		$	6,305
Adjustments to reconcile net income to net cash provided by
operating activities:
Proceeds from sale of real estate acquired for resale		—			2,457			886
Gain on sale of real estate acquired for resale		—			(549	)		(5,384	)
Gain on sale of real estate acquired for investment		—			—			(1,216	)
Gain on debt extinguishment		—			—			(5,374	)
Impairment - properties		—			—			3,487
Impairment (recovery) - notes receivable		(443	)		(1,071	)		1,800
Bad debt expense (recoveries)		44			(322	)		1,265
Loss from Advised Funds		238			384			1,186
Cash receipts for related party fees		17			14			(166	)
Depreciation and amortization		9,336			8,575			6,934
Amortization of deferred compensation		815			561			442
Distributions from Advised Funds		—			—			11
Decrease (increase) in tenant and accounts receivable		(1,500	)		1,177			(1,272	)
Increase in accounts receivable - related party		(1,946	)		(64	)		(369	)
Cash receipts from direct financing leases more than income recognized		—			—			237
Increase in other assets		(1,157	)		489			2,310
Increase (decrease) in accounts payable and other liabilities		1,466			605			(1,404	)
Net cash provided by operating activities		11,330			16,496			9,678
Cash flows from investing activities:
Improvements to real estate, including leasing costs		(3,827	)		(4,492	)		(1,963	)
Net cash paid for acquisition of investment properties		(42,760	)		(21,594	)		(2,760	)
Additions to furniture, fixtures and equipment		(18	)		(47	)		(74	)
Notes receivable collections		1,175			1,071			—
Investments in and advances to Advised Funds		(1,421	)		(3,353	)		(2,338	)
Distributions and payments from Advised Funds		3,284			1,016			2,107
Proceeds from sale of real estate acquired for resale		—			—			14,053
Proceeds from sale of investment property		—			—			4,608
Residual economic interest paid		—			—			(2,866	)
Cash deposited with a qualified intermediary		—			—			(12,804	)
Cash received from qualified intermediary		—			9,370			3,434
Net cash provided by (used in) investing activities		(43,567	)		(18,029	)		1,397
Cash flows from financing activities:
Proceeds from notes payable		59,100			35,870			32,423
Payments of notes payable		(65,457	)		(24,577	)		(32,536	)
Payments for financing costs		(980	)		(88	)		(478	)
Issuance of shares of Class A common stock		—			—			(26	)
Issuance of shares of Class B common stock		58,146			—			—
Issuance costs		(5,449	)		—			—
Retirement of shares of class A common stock		(68	)		—			—
Purchase of treasury stock		—			—			(48	)
Distributions to non-controlling interests		—			—			(438	)
Common dividends paid		(11,113	)		(9,277	)		(10,384	)
Net cash provided by (used in) financing activities		34,179			1,928			(11,487	)
Net increase in cash and cash equivalents		1,942			395			(412	)
Cash and cash equivalents, beginning of period		1,050			655			1,067
Cash and cash equivalents, end of period	$	2,992		$	1,050		$	655

F-6

Supplemental schedule of cash flow information:
Cash paid during the year for:
Interest	$	9,716	$	9,260	$	10,149
Taxes	$	229	$	566	$	382
Deferred compensation recorded upon issuance of restricted shares of common stock	$	5,299	$	762	$	1,669
Reclassification of tenant and accounts receivable to notes receivable	$	284	$	—	$	—
Reclassification of accounts receivable - related party to notes
receivable - related party	$	1,770	$	—	$	—
Assumption of debt associated with the acquisition of
operating properties	$	23,400	$	28,510	$	1,800

See Notes to Consolidated Financial Statements.

F-7

AmREIT, Inc. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2012
(unaudited)

1. OUR BUSINESS AND OUR RECENT HISTORY

Our Business

          We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. We seek to own properties in major cities in the United States that contain submarkets with characteristics comparable to our existing markets. Our shopping centers are often anchored by strong national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. Our remaining tenants consist primarily of specialty retailers and national and local restaurants. Over our 29-year history, we have acquired, owned and operated retail properties across 19 states. We have elected to be taxed as a REIT for federal income tax purposes.

          Our investment focus is predominantly concentrated in the affluent, high-growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta (collectively, our Core Markets), which represent five of the top population and job growth markets in the United States. We believe these metropolitan areas are compelling real estate markets given their favorable demographics, robust job growth and large and diverse economies. The primary economic drivers in these markets are transport and utilities (including energy), government (including defense), education and healthcare, professional and business services, and leisure and hospitality. We intend to continue to acquire additional properties within our Core Markets. Our targeted properties will include premier retail frontage locations in high-traffic, highly populated, affluent areas with high barriers to entry.

          As of December 31, 2012, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA. In addition to our portfolio, we have an advisory services business that provides a full suite of real estate services to the properties within our wholly-owned portfolio as well as to seven real estate funds in which we have varying ownership interests and that we manage on behalf of institutional and individual high-net-worth investors, which we collectively refer to as our Advised Funds. The investment strategy of the Advised Funds is focused upon the development and re-development of retail and mixed-use properties situated on premium-quality locations. As of December 31, 2012, our Advised Funds held all or a portion of ownership in 17 properties.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

          Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. The consolidated financial statements include our accounts as well as the accounts of any subsidiaries in which we have a controlling financial interest. Investments in joint ventures and partnerships, where we have the ability to exercise significant influence but do not exercise financial and operating control, are accounted for using the equity method. The significant accounting policies of our non-consolidated entities are consistent with those of our subsidiaries in which we have a controlling financial interest. As of December 31, 2012, we did not have any interests in variable interest entities. All significant inter-company accounts and transactions have been eliminated through consolidation.

Use of Estimates

          The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-8

Cash and Cash Equivalents

          We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of demand deposits at commercial banks and money market funds.

Financial Instruments

          Our consolidated financial instruments consist of cash and cash equivalents, tenant and accounts receivable, accounts receivable – related party, notes receivable, notes receivable – related party, notes payable and accounts payable and other liabilities. Except for the notes payable, the carrying values are representative of the fair values due to the short term nature of the instruments and/or due to impairments. Our notes payable consist of both variable-rate and fixed-rate notes. The fair value of the variable-rate notes, including our $75 Million Facility, approximate their carrying values. See Note 7 for further discussion of the fair value of our notes payable.

Revenue Recognition

          Rental income from operating leases – We lease space to tenants under agreements with varying terms. Our leases are accounted for as operating leases, and, although certain leases of the properties provide for tenant occupancy during periods for which no rent is due and/or for changes in the minimum lease payments over the terms of the leases, revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, possession or control occurs on the lease commencement date. In all cases, we have determined that we are the owner of any tenant improvements that we fund pursuant to the lease terms. In cases where significant tenant improvements are made prior to lease commencement, the leased asset is considered to be the finished space, and revenue recognition therefore begins when the improvements are substantially complete. A substantial portion of our revenue is earned from operating leases. Our operating leases range from one to 25 years and generally include one or more five year renewal options. A summary of minimum future base rentals to be received, exclusive of any renewals, under non-cancelable operating leases in existence at December 31, 2012 is as follows (in thousands):

Year Ending December 31,	Minimum base rents
2013	$	30,493
2014		28,124
2015		23,114
2016		18,641
2017		13,849
Thereafter		47,230
	$	161,451

          Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Additionally, certain of our lease agreements contain provisions that grant additional rents based upon tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. During the years ended December 31, 2012, 2011 and 2010, we recognized percentage rents of $631,000, $425,000 and $555,000, respectively. Accrued rents are included in tenant and accounts receivable, net.

          Lease termination income – We recognize lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets. During the years ended December 31, 2012, 2011 and 2010, we recognized lease termination fees of $0, $131,000 and $0, respectively.

          Advisory services income – related party – We provide various real estate services, including development, construction management, property management, leasing and brokerage. The fees for these services are recognized as services are provided and are generally calculated as a percentage of revenues earned or to be earned or of property cost, as appropriate. We also earn asset management fees from certain of the Advised Funds for facilitating the deployment of capital and for monitoring the real estate investments. Asset management fees are calculated as a percentage of equity under management. See Note 12 for a detail of our advisory services income – related party.

F-9

Discontinued Operations

          Our properties generally have operations and cash flows that can be clearly distinguished from the rest of the Company. The operations and gains on sales reported in discontinued operations include those properties that have been sold and for which operations and cash flows have been clearly distinguished. The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties and business has been reclassified as discontinued operations in the accompanying statements of operations. See Note 4 for additional information related to our discontinued operations.

Gains on Sale of Real Estate

          Gains and losses on sales of real estate are not recognized under the full accrual method until certain criteria are met. Gains relating to transactions that do not meet the criteria for full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate under the circumstances. During the years ended December 31, 2012, 2011 and 2010, we recognized gains on sales of real estate of $0, $417,000 and $5.7 million, respectively, which are included in income from discontinued operations.

Real Estate Investments

          Development Properties – Expenditures related to the development of real estate are capitalized as part of construction in progress, which includes carrying charges, primarily interest, real estate taxes and loan acquisition costs, and direct and indirect development costs related to buildings under construction. The capitalization of such costs ceases at the earlier of one year from the date of completion of major construction or when the property, or any completed portion, becomes available for occupancy. We capitalize costs associated with pending acquisitions of raw land once the acquisition of the property is determined to be probable. We did not capitalize any interest or taxes during the years ended December 31, 2012, 2011 and 2010.

          Acquired Properties and Acquired Intangibles – We account for operating real estate acquisitions as an acquisition of a business as we believe most operating real estate meets the definition of a “business” under GAAP. Accordingly, we allocate the purchase price of acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values. Identifiable intangibles include amounts allocated to acquired above and below market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include (i) an estimate of carrying costs during the expected lease-up periods, considering market conditions, and (ii) costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to in-place lease value and above and below-market leases are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Below market leases include fixed-rate renewal periods where we believe the renewal is reasonably assured. Premiums or discounts on debt are amortized to interest expense over the remaining term of such debt. Costs related to acquiring operating properties are expensed as incurred. See Note 4 for additional information related to our acquisition of the Preston Royal Village Shopping Center during 2012.

          Depreciation – Depreciation is computed using the straight-line method over an estimated useful life, generally, 39 to 50 years for buildings, up to 20 years for site improvements and over the term of the lease for tenant improvements. Leasehold estate properties, which are properties where we own the building and improvements and are subject to a ground lease because we do not own the related ground, are amortized over the life of the ground lease.

F-10

          Impairment – We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment of value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the property, with the carrying value of the individual property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. We did not recognize any impairment charges during the years ended December 31, 2012 and 2011. During the year ended December 31, 2010, we recognized an impairment charge of $2.3 million on four properties that represented non-core real estate assets and $1.2 million on two non-core real estate assets reported in discontinued operations.

Investments in Advised Funds

          Our investments in our Advised Funds are accounted for under the equity method because we exercise significant influence over such entities. We record our percentage interest in the earnings and losses of these entities in our statement of operations on a net basis as prescribed under GAAP. See Note 5 for further disclosure related to our Advised Funds.

Tenant and Accounts Receivable

          Included in tenant and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of tenant and accounts receivables is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels and current economic trends. Bad debt expenses and any recoveries related to tenant receivables are included in property expense, and bad debt expenses and any related recoveries on other accounts receivable are included in general and administrative expense.

          The table below summarizes the activity within our allowance for uncollectible accounts for tenant receivables (in thousands):

	Year Ended December 31,
	2012			2011			2010
Beginning balance	$	1,780		$	2,068		$	1,025
Additional reserves		523			540			1,579
Collections/reversals		(479	)		(788	)		(360	)
Write-offs		(690	)		(40	)		(176	)
Ending balance	$	1,134		$	1,780		$	2,068

Notes Receivable

          Included in notes receivable is a $2.5 million note due from the sale of a tract of land adjacent to our Uptown Plaza – Dallas property located outside of downtown Dallas, Texas. The note matured unpaid on December 31, 2010, and we recorded a $1.3 million impairment to reduce the value of the note to the fair value of the underlying collateral. During 2011, we recorded an impairment recovery of $1.1 million to reflect payments received on this note. Also during 2011, we entered into a new agreement with the borrower and extended the note to June 30, 2014. In May 2012, the borrower made a $1.0 million payment, and we recorded an additional impairment recovery of $229,000. The fair value of the underlying collateral now exceeds the remaining note balance.

          Also included in notes receivable is approximately $259,000 in notes receivable from various tenants. An allowance for the uncollectible portion of notes receivable from tenants is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2012 and December 31, 2011, we had an allowance for uncollectible notes receivable from tenants of $45,000 and $29,000, respectively. During the years ended December 31, 2012 and 2010, we recorded bad debt expense related to tenant notes receivable of $19,000 and $99,000. During the year ended December 31, 2011, we recorded bad debt recoveries of $71,000.

F-11

Notes Receivable – Related Party

          Included in notes receivable – related party are loans made to certain of our affiliated Advised Funds related to the acquisition or development of properties and the deferral of asset management fees. These loans bear interest at LIBOR plus a spread and are due upon demand. The notes are secured by the Advised Funds’ ownership interests in various unencumbered properties. The following is a summary of the notes receivable due from related parties (in thousands):

	December 31, 2012							December 31, 2011
Related Party	Face Amount		Reserve (1)			Carrying Amount		Face Amount		Reserve (1)			Carrying Amount
AIGF	$	—	$	—		$	—	$	2,488	$	(619	)	$	1,869
MIG III		3,729		(373	)		3,356		3,218		(356	)		2,862
MIG IV		3,658		(266	)		3,392		2,026		(244	)		1,782
Total	$	7,387	$	(639	)	$	6,748	$	7,732	$	(1,219	)	$	6,513

(1) A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266 for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

          We recorded a $500,000 impairment on the note from AIGF during 2010. As a result, we ceased recording interest income on the note due from AIGF, and interest accruals were recorded directly to the reserve balance. In August 2012, we received approximately $2.3 million as final payment of the AIGF note receivable and related accrued interest. During 2012, we recorded $100,000 in interest income and $214,000 in impairment recovery. The remaining balance, which had previously been reserved, was written off as uncollectible.

Offering Costs

          Issuance costs incurred for the purposes of raising capital through the sale of common stock are treated as a reduction of stockholders’ equity. During 2012, we incurred underwriting commissions, legal, accounting and other offering-related costs of approximately $5.4 million in connection with our 2012 Offering.

          During 2011, we initiated plans for the public sale of our common stock, and we incurred $914,000 of costs; however, market volatility and uncertainty prevented us from proceeding with the offering at that time. Accordingly, at December 31, 2011, the costs incurred no longer met the criteria for capitalization under GAAP and were expensed.

Deferred Compensation Incentive Plan

          Our 1999 Flexible Incentive Plan is designed to attract and retain the services of our directors and employees that we consider essential to our long-term growth and success. As such, it is designed to provide them with the opportunity to own shares of our restricted common stock. All long-term compensation awards are designed to vest over a period of three to ten years and promote retention of our team. See also Note 10.

Income Taxes

          Federal – We have elected to be taxed as a REIT under the Internal Revenue Code and are, therefore, not subject to Federal income taxes to the extent of dividends paid, provided we meet all conditions specified by the Internal Revenue Code for retaining our REIT status. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our stockholders and meet certain income source and investment restriction requirements. Our stockholders must report their share of income distributed in the form of dividends. However, ARIC, our real estate development and operating business, is a fully integrated and wholly-owned business consisting of brokers and real estate professionals that provide development, acquisition, brokerage, leasing, construction, asset and property management services to our portfolio of assets and Advised Funds as well as to third parties. ARIC and our wholly-owned corporations that serve as the general partners of our Advised Funds are treated as taxable REIT subsidiaries for federal income tax purposes and are not subject to the REIT exemption above.

F-12

          State –The Texas Margin Tax is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction. Although the Texas Margin Tax is not designed as an income tax, we believe it meets the requirements of an income tax for financial reporting under GAAP.

          To the extent we are subject to federal and state income taxes, we account for income taxes under the asset and liability method. See also Note 9.

Derivative Financial Instruments

          We do not have any derivative financial instruments as of December 31, 2012 or December 31, 2011. Our use of derivative financial instruments to date has been limited to the use of interest rate swaps to mitigate our interest rate risk on variable-rate debt. The impact of derivative accounting is immaterial to our consolidated financial statements. We do not use derivative financial instruments for trading or speculative purposes. GAAP requires that all derivative instruments, whether designated in hedging relationships or not, be recorded on the balance sheet at their fair value. Gains or losses resulting from changes in the values of those derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. Changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income, or OCI, while the ineffective portion of the derivative’s change in fair value is recognized in the income statement. As the hedge transactions settle, gains and losses associated with the transaction are reclassified out of OCI and into earnings. We assess, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items.

          During the years ended December 31, 2011 and 2010, we had an interest rate swap with a notional amount of $17 million and a fixed rate of 5.11% hedging our variable-rate loan on our MacArthur Park property. The swap matured on December 1, 2011. We designated this interest rate swap as a cash flow hedge for financial reporting purposes and therefore recorded any changes in its fair value to other comprehensive income. The swap settled monthly with an amount paid to or received from our counterparty, which was recorded as an adjustment to interest expense. During the years ended December 31, 2011 and 2010, we paid $356,000 and $359,000, respectively, related to this swap.

Subsequent Events

          Except as disclosed in Note 4 of this Annual Report related to the potential sale of our 70% ownership interest in our MacArthur Park property to a joint venture, we did not have any material subsequent events as of the date of this filing that impacted our consolidated financial statements.

3. 2012 OFFERING

          On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. See Note 10 for further discussion of the rights of our Class A and Class B common stock. All Class A share amounts and related per share data included in the consolidated financial statements and related footnotes have been presented to reflect the reverse stock split.

          On August 1, 2012, we completed the sale of 3,650,000 shares of our Class B common stock and simultaneously listed our Class B common stock on the NYSE under the symbol “AMRE.” We received net proceeds of approximately $46.3 million, which were used to repay $45.3 million of mortgage debt, including the $25 Million Facility. See Note 8 for a further discussion of our notes payable. On August 24, 2012, we sold an additional 503,226 shares of our Class B common stock to our underwriters at the offering price pursuant to the exercise of the underwriters’ over-allotment option. We received net proceeds of approximately $6.5 million from the sale of the additional shares. In addition, we issued 312,499 shares of restricted Class B common stock to our officers and directors in connection with our 2012 Offering that will vest over a ten-year period.

F-13

          As of December 31, 2012, we had a total of 16,123,288 shares of common stock outstanding as follows:

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

4. REAL ESTATE ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS

Acquisitions

          Preston & Royal Village –On December 12, 2012, we purchased the Preston Royal Village Shopping Center, a retail shopping center containing approximately 230,000 square feet of gross leasable area located in Dallas, Texas, for a purchase price of $66.2 million, exclusive of closing costs. The property, originally built in 1956 and 1959, is comprised of a fee simple interest on the northwest corner portion and a ground leasehold interest on the northeast corner portion, with 27 years remaining on the ground lease. Collectively, the two corners are currently 97.3% leased with major tenants including Tom Thumb, Barnes & Noble and Chico’s. We account for each corner as a separate property for accounting and reporting purposes. The purchase price was funded through a combination of cash on hand, draws on our $75 Million Facility and $23.4 million in mortgage financing on the property.

          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 acquisition of investment Preston & Royal Village during 2012 (in thousands):

	Preston Royal West			Preston Royal East			Total
Assets:
Land	$	9,056		$	—		$	9,056
Buildings		24,535			25,352			49,887
Tenant improvements		520			433			953
Acquired lease intangibles, net		4,333			3,660			7,993
Deferred costs, net		157			77			234
Other assets		—			10			10
Liabilities:
Notes payable		(23,400	)		—			(23,400	)
Accounts payable and other liabilities		(66	)		(129	)		(195	)
Acquired below-market lease intangibles, net		(1,159	)		(619	)		(1,778	)
Net cash paid for the acquisition of investment properties(1)	$	13,976		$	28,784		$	42,760

(1) The $42,760 of net cash paid for the acquisition for the Preston Royal Village Shopping Center was funded with approximately $12.3 million (including acquisition costs of $687) from cash on hand and approximately $31.2 million in borrowings from our $75 Million Facility.

          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.

F-14

          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 the $25 Million Facility.

          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 $25 Million Facility and a mortgage loan of $12.5 million.

          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.

Pro Forma Results of Acquisitions

          The table below presents our pro forma results of operations for the years ended December 31, 2012 and 2011, for all of our acquisitions assuming that we acquired the Preston Royal Village Shopping Center, The Market at Lake Houston, Brookwood Village and Alpharetta Commons on January 1, 2011 (in thousands):

			Pro forma adjustments to historical results
	Historical results		Preston & Royal Village			Market at Lake Houston			Brookwood Village			Alpharetta Commons			Pro forma results
Year Ended December 31, 2012
Total revenues	$	41,308	$	6,619		$	—		$	—		$	—		$	47,927
Net income available to stockholders	$	4,460	$	134		$	—		$	—		$	—		$	4,594
Year Ended December 31, 2011
Total revenues	$	36,915	$	6,567		$	315		$	350		$	917		$	45,064
Net income available to stockholders	$	4,240	$	(1,473	)	$	(66	)	$	(23	)	$	(206	)	$	2,472

          The financial results from the Preston Royal Village Shopping Center since the date of its acquisition on December 12, 2012 were not material to our results of operations.

Dispositions and Discontinued Operations

          Our properties generally have operations and cash flows that can be clearly distinguished from the rest of our company. The operations and gains on sales reported in discontinued operations include those properties that have been sold and for which operations and cash flows have been clearly distinguished. The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties and business has been reclassified as discontinued operations in the accompanying statements of operations.

F-15

          During 2011, we sold two non-core, single-tenant properties to a third party. The following table is a summary of our discontinued operations for the years ended December 31, 2012, 2011 and 2010 (in thousands, except for per share data):

	Twelve months ended December 31,
	2012		2011			2010
Revenues:
Rental income from operating leases	$	—	$	201		$	642
Earned income from direct financing leases		—		—			1,405
Total revenues		—		201			2,047
Expenses:
General and administrative		—		(5	)		(63	)
Property expense		—		2			5
Construction costs		—		—			3
Legal and professional		—		42			23
Depreciation and amortization		—		13			51
Impairment - properties		—		—			1,219
Total expenses		—		52			1,238
Operating income		—		149			809
Other income (expense):
Gain on sale of real estate acquired for investment		—		—			1,216
Interest and other income		—		4			19
State income taxes		—		(5	)		(462	)
Interest expense		—		—			(926	)
Income (loss) from discontinued operations, net of taxes	$	—	$	148		$	656
Gain on sale of real estate acquired for resale, net of taxes		—		417			5,726
Income from discontinued operations	$	—	$	565		$	6,382
Basic and diluted income from discontinued operations per share	$	—	$	0.05		$	0.56

Subsequent Event – Joint Venture Agreement

          On January 24, 2013, we entered into a joint venture agreement with an institutional joint venture partner to form a joint venture through our contribution of our MacArthur Park property to a newly-organized single purpose entity as well as the acquisition by the joint venture of the contiguous property to the north (“MacArthur Park Phase I”), excluding Target. an institutional joint venture partner will contribute cash for a 70% interest in the joint venture. The joint venture would concurrently purchase MacArthur Park Phase I, currently owned by an unrelated third party, for approximately $26.2 million and place mortgage financing on the entire combined property of approximately $43.9 million. The joint venture will fully repay the MacArthur Park debt of approximately $8.8 million (including a $2.2 million defeasance penalty). At the conclusion of this transaction, we will hold a 30% ownership interest in the joint venture and receive net cash proceeds of approximately $35.4 million which will be used to repay borrowings under our $75 Million Facility. We will continue to manage and lease MacArthur Park on behalf of the joint venture and we retain a right of first offer to acquire the project in the future, after a lock out period. We expect this transaction to close in March 2013; however, closing is subject to customary closing conditions and we can make no assurances of when or if this joint venture will actually be formed and capitalized. 

          After closing this transaction, our 30% retained ownership will grant us the ability to exercise significant influence over the operation and management of the property; however, our retained ownership of the property will no longer qualify for consolidation under GAAP. Therefore, we expect to deconsolidate our MacArthur Park asset on the closing date and account for our ownership under the equity method of accounting on a prospective basis. Our net real estate investments owned by our MacArthur Park property were approximately $43.2 million as of December 31, 2012. Additionally, our significant continuing involvement in MacArthur Park precludes us from treating our contribution of the property to the joint venture as discontinued operations. Accordingly, MacArthur Park’s operating results will continue to be reported as a component of our income from continuing operations. We expect to record a gain of approximately $10 million to $12 million upon the sale of 70% of the MacArthur Park assets to the joint venture.

F-16

5. INVESTMENTS IN ADVISED FUNDS

          As of December 31, 2012, our Advised Funds included four high net worth investment funds, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV. Our Advised Funds are accounted for under the equity method as we exercise significant influence over, but do not control, the investee. We record our pro rata share of income or loss from the underlying entities based on our ownership interest.

High Net Worth Investment Funds

          In August 2012, AIGF, one of our high net worth investment funds, sold its remaining real estate asset, and the fund has been liquidated. We received approximately $2.3 million as final payment of AIGF’s note receivable and related accrued interest. See also “Notes Receivable – Related Party” in Note 2 above.

          Our remaining four high net worth investment funds are limited partnerships, wherein each of the unrelated limited partners have the right, with or without cause, to remove and replace the general partner by a vote of the unrelated limited partners owning a majority of the outstanding units. These high net worth investment funds were formed to develop, own, manage and add value to properties with an average holding period of two to four years. Our interests in these limited partnerships range from 2.1% to 3.0%. As a sponsor of our Advised Funds, we maintain a 1% general partner interest in each of the Advised Funds. The funds are typically structured such that the limited partners receive 99% of the available cash flow until 100% of their original invested capital has been returned and a preferred return has been met. Once the preferred return has been met, the general partner begins sharing in the available cash flow at various promoted levels. Our Advised Funds are designed to have a finite life with a specified liquidation commencement date, which may be extended dependent upon approval from the majority of the limited partners. Once the liquidation commencement begins, we, as general partner, will begin to actively market all operating properties, complete all development and redevelop projects and wind up operations in an orderly fashion, which may take months or years to complete.

          MIG – MIGC, our wholly-owned subsidiary, invested $200,000 as a limited partner and $1,000 as a general partner in MIG. We currently own a 1.4% limited partner interest in MIG. MIG was originally scheduled to begin liquidation in November 2009; however, the liquidation commencement date has been extended to March 2013, pursuant to the approval of a majority of the limited partners. We expect MIG to be liquidated over the next 12-24 months. Pursuant to the MIG limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC as, if and when the annual return thresholds have been achieved by the limited partners.

          MIG II – MIGC II, our wholly-owned subsidiary, invested $400,000 as a limited partner and $1,000 as a general partner in MIG II. We currently own a 1.6% limited partner interest in MIG II. MIG II was originally scheduled to begin liquidation in March 2011; however, the liquidation commencement date has been extended to March 2013, pursuant to the approval of a majority of the limited partners. We expect MIG II to be liquidated over the next 12-24 months. Pursuant to the MIG II limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC II as, if and when the annual return thresholds have been achieved by the limited partners.

          MIG III – MIGC III, our wholly-owned subsidiary, invested $800,000 as a limited partner and $1,000 as a general partner in MIG III. We currently own a 1.1% limited partner interest in MIG III. MIG III’s liquidation date commenced on October 31, 2012. During the liquidation stage, we cannot reinvest net proceeds from the sales of properties without limited partner approval. As we stabilize and sell the properties, we will either be presenting, to the extent available, additional investment opportunities to the limited partners or will be distributing to them the net proceeds received from the sales of the properties. Pursuant to the MIG III limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC III as, if and when the annual return thresholds have been achieved by the limited partners.

F-17

          MIG IV – MIGC IV, our wholly-owned subsidiary, invested $800,000 as a limited partner and $1,000 as a general partner in MIG IV. We currently own a 1.6% limited partner interest in MIG IV. MIG IV is scheduled to commence liquidation in November 2013; however, we may extend the liquidation commencement date, subject to approval by a majority of the limited partners. During the liquidation stage, we cannot reinvest net proceeds from the sales of properties without limited partner approval. As we stabilize and sell the properties, we will either be presenting, to the extent available, additional investment opportunities to the limited partners or will be distributing to them the net proceeds received from the sales of the properties. Pursuant to the MIG IV limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC IV as, if and when the annual return thresholds have been achieved by the limited partners.

          The following table sets forth certain interest and sharing information for the MIG, MIG II, MIG III and MIG IV Advised Funds:

			Sharing Ratios(1)
Advised Fund	LP interest	GP interest	LP		GP			LP Preference
MIG	1.40%	1.00%	99	%		1	%		8	%
			90	%		10	%		10	%
			80	%		20	%		12	%
			0	%		100	%		40% Catch Up
			60	%		40	%		Thereafter
MIG II	1.60%	1.00%	99	%		1	%		8	%
			85	%		15	%		12	%
			0	%		100	%		40% Catch Up
			60	%		40	%		Thereafter
MIG III	1.10%	1.00%	99	%		1	%		10	%
			0	%		100	%		40% Catch Up
			60	%		40	%		Thereafter
MIG IV	1.60%	1.00%	99	%		1	%		8.50	%
			0	%		100	%		40% Catch Up
			60	%		40	%		Thereafter

(1) Using MIG as an example of how the sharing ratios and LP preference provisions are applied, the LPs share in 99% of the cash distributions until they receive an 8% preferred return. The LPs share in 90% of the cash distributions until they receive a 10% preferred return and so on.

Joint Ventures

          AmREIT Woodlake, L.P. – In 2007, we invested $3.4 million in AmREIT Woodlake L.P., for a 30% limited partnership interest. AmREIT Woodlake, L.P. was formed in 2007 to acquire, lease and manage Woodlake Square, a grocery-anchored shopping center located in Houston, Texas. In June 2008, we sold two-thirds (a 20% limited partnership interest) of our interest in Woodlake Square to MIG IV. Pursuant to the purchase agreement, the interest in the property was sold at its carrying value, resulting in no gain or loss to us. In July 2010, we and our affiliated partners entered into a joint venture with a third-party institutional partner wherein the partner acquired a 90% interest in the joint venture. As a result of this transaction, we, MIG III and MIG IV now hold a 1%, 3% and 6% interest in Woodlake Square, respectively. Our combined 10% ownership carries a promoted interest in profits and cash flows once an 11.65% return is met on the project.

          AmREIT Westheimer Gessner, L.P. – In 2007, we invested $3.8 million in AmREIT Westheimer Gessner, LP, for a 30% limited partner interest in the partnership. AmREIT Westheimer Gessner, L.P. was formed in 2007 to acquire, lease and manage the Woodlake Pointe Shopping Center, a shopping center located on the west side of Houston, Texas. In June 2008, we sold two-thirds of our interest (a 20% limited partner interest) in the Woodlake Pointe Shopping Center to MIG IV. Pursuant to the purchase agreement, our interest in the property was sold at its carrying value, resulting in no gain or loss to us. We, MIG III and MIG IV now hold a 10%, 30% and 40% interest, respectively, in the Woodlake Pointe Shopping Center.

F-18

          AmREIT SPF Shadow Creek, L.P. – In 2009, we acquired a 10% investment in AmREIT SPF Shadow Creek, L.P., which was formed to acquire, lease and manage Shadow Creek Ranch, a shopping center located in Pearland, Texas. The investment was recorded at $5.8 million on the date of the acquisition, net of acquisition costs of $441,000, which were recorded as an other-than-temporary impairment. MIG IV and a third party institutional joint venture partner own the remaining 10% and 80% ownership interests, respectively.

          Combined condensed financial information for the Advised Funds (at 100%) is summarized as follows (in thousands):

	As of December 31,
Combined Balance Sheets	2012		2011
Assets
Property, net	$	185,821	$	200,806
Cash		10,182		8,604
Notes receivable		312		77
Other assets		41,938		43,752
Total Assets		238,253		253,239
Liabilities and partners’ capital
Notes payable(1)		122,882		130,739
Other liabilities		18,654		19,435
Partners capital		96,717		103,065
Total Liabilities and Partners’ Capital	$	238,253	$	253,239
AmREIT share of Partners’ Capital	$	7,953	$	8,322

(1) Includes $7,387and $7,732 payable to us as of December 31, 2012 and 2011, respectively.

Combined Statements of Operations	Year Ended December 31,
	2012			2011			2010
Revenue
Total Revenue	$	16,885		$	18,259		$	18,778
Expense
Interest		7,362			8,189			9,342
Depreciation and amortization		7,574			7,904			15,797
Other		7,419			11,851			10,864
Total Expense		22,355			27,944			36,003
Net loss	$	(5,470	)	$	(9,685	)	$	(17,225	)
AmREIT share of Net loss	$	(238	)	$	(384	)	$	(1,186	)

6. ACQUIRED LEASE INTANGIBLES

          We identify and record the value of acquired lease intangibles at the property acquisition date. Such intangibles include the value of acquired in-place leases and above and below-market leases. Acquired lease intangibles are amortized over the leases’ remaining terms, which generally range from one month to 25 years. Below market lease amortization includes fixed-rate renewal periods where we believe the tenant is reasonably compelled to renew the lease.

F-19

Balance Sheet Presentation

          Total in-place and above and below-market lease amounts and their respective accumulated amortization as of December 31, 2012 and December 31, 2011 are as follows (in thousands):

	December 31,
	2012			2011
Acquired lease intangible assets:
In-place leases	$	28,179		$	22,720
In-place leases – accumulated amortization		(14,096	)		(12,978	)
Above-market leases		3,774			2,247
Above-market leases – accumulated amortization		(1,881	)		(1,850	)
Acquired leases intangibles, net	$	15,976		$	10,139
Acquired lease intangible liabilities:
Below-market leases	$	6,286		$	4,623
Below-market leases – accumulated amortization		(2,779	)		(2,602	)
Acquired below-market lease intangibles, net	$	3,507		$	2,021

Income Statement Presentation

          The following table details our amortization related to in-place leases and above and below-market leases as well as the presentation of such amounts in our consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 (in thousands):

	Presentation	2012		2011		2010
In-place leases	amortization expense	$	2,061	$	2,117	$	1,409
Above-market leases	reduction of rental income	$	95	$	108	$	104
Below-market leases	increase in rental income	$	292	$	274	$	300

          The estimated aggregate amortization amounts from acquired lease intangibles for each of the next five years are as follows (in thousands):

Year Ending December 31,	Amortization expense (in place lease value)		Rental income (above and below market rent)
2013	$	3,638	$	469
2014		2,831		405
2015		2,162		304
2016		1,528		75
2017		927		33
	$	11,086	$	1,286

F-20

7. FAIR VALUE MEASUREMENTS 

          GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. GAAP requires the use of observable market data, when available, in making fair value measurements. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of ours. When market data inputs are unobservable, we utilize inputs that we believe reflect our best estimate of the assumptions market participants would use in pricing the asset or liability. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access.

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 – Unobservable inputs for the asset or liability, which are typically based on the company’s own assumptions, as there is little, if any, related market activity.

          The following table presents our assets and liabilities and related valuation inputs within the fair value hierarchy utilized to measure fair value as of December 31, 2012, and December 31, 2012 (in thousands):

December 31, 2012	Level 1		Level 2		Level 3
Fixed-rate notes payable	$	—	$	196,112	$	—
December 31, 2011	Level 1		Level 2		Level 3
Notes receivable	$	—	$	3,288	$	—
Fixed-rate notes payable	$	—	$	150,839	$	—

Notes Receivable

          During 2010, we recorded an impairment of $1.3 million on a $4.6 million note receivable related to the sale of a tract of land adjacent to our Uptown Plaza – Dallas property. During 2011, we recorded an impairment recovery of $1.1 million to reflect payments received on this note. As of December 31, 2011, the fair value of the note was $3.3 million based on an average, per-acre price of vacant tracts of land recently sold near downtown Dallas, Texas. In May 2012, the borrower made a $1.0 million payment, and we recorded an additional impairment recovery of $229,000. As of December 31, 2012, the fair value of the underlying collateral exceeded the carrying value of the note. We have concluded that our valuation of the seller-financing note as of December 31, 2011 is classified in Level 2 of the fair value hierarchy.

Notes Payable

          Our notes payable consist of both variable-rate and fixed-rate notes; however, our only variable rate debt as of December 31, 2012 was the $75 Million Facility, which is a variable rate plus an applicable margin (see Note 8). We recently entered into the $75 Million Facility and therefore believe that the applicable margin represents the best estimate of fair value and, accordingly, its fair value is equal to its carrying value of $33.5 million as of December 31, 2012. In determining the fair value of our fixed-rate notes, we determine the appropriate Treasury Bill Rate based on the remaining time to maturity for each of the debt instruments. We then add the appropriate yield spread to the Treasury Bill Rate. The yield spread is a risk premium estimated by investors to account for credit risk involved in debt financing. The spread is typically estimated based on the property type and loan-to-value ratio of the debt instrument. The result is an estimate of the market interest rate a typical investor would expect to receive given the underlying subject asset (property type) and remaining time to maturity. We believe the fair value of our notes payable is classified in Level 2 of the fair value hierarchy. Fixed-rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time of acquisition.

Real Estate Investments and Impairment

          We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. We did not recognize any impairment charges related to any of our properties during the years ended December 31, 2012 and 2011. During the year ended December 31, 2010, we discovered a negative trend in the market for non-credit, single tenant assets, which triggered an impairment analysis. As a result, we recognized an impairment charge of $2.3 million on four properties that represent non-core real estate assets and $1.2 million on two non-core real estate assets reported in discontinued operations. Both the estimated undiscounted cash flow analysis and fair value determination were based upon various factors that required complex and subjective judgments to be made by management. We determined the fair value of the properties by applying an income method using assumptions that include projecting lease-up periods, holding periods, cap rates, rental rates, operating expenses, lease terms, tenant credit-worthiness, tenant improvement allowances, terminal sales value and certain macroeconomic factors among other assumptions to be made for each property as well as certain macroeconomic factors.

F-21

Notes Receivable – Related Party

          During the year ended December 31, 2010, we approved a plan to begin liquidating the assets owned by AIGF. Using valuation techniques similar to those used for our own properties (described in the “Real Estate Investments and Impairment” paragraph above), we determined likely terminal values for these properties and assessed the likelihood that we would be able to recover the carrying value of our note receivable from AIGF after it settles its obligations with its other creditors. Accordingly, we recorded an impairment of $500,000 to reduce the carrying value of our notes receivable – related party. During the year ended December 31, 2012, we recorded an impairment recovery of $214,000 to reflect payments received on this note. AIGF has been liquidated, and we will receive no further payments on this note receivable.

8. NOTES PAYABLE

          Our outstanding debt as of December 31, 2012, and December 31, 2012, consisted of the following (in thousands):

	December 31, 2012		December 31, 2011
Fixed-rate mortgage loans	$	185,079	$	141,373
Variable-rate unsecured loans - $75.0 Million Facility		33,500		—
Variable-rate secured loans - $25.0 Million Facility		—		19,345
Other		—		40,940
Total	$	218,579	$	201,658

          As of December 31, 2012, the $75 Million Facility was our primary source of additional credit. Our $25 Million Facility was terminated concurrent with our 2012 Offering as further discussed in Note 2. The $75 Million Facility has a term of three years and has an accordion feature that may allow us to increase the availability by $75 Million to $150.0 million provided we are not in default and certain conditions are met. During 2012, we utilized the $75 Million Facility to fund a portion of the Preston Royal Village Shopping Center acquisition. We expect to use the $75 Million Facility for general corporate purposes including debt financing, property acquisitions, new construction, renovations, expansions, tenant improvement costs and equity investments.

          The $75 Million Facility bears interest at LIBOR plus a margin of 205 basis points to 275 basis points, depending on our leverage ratio, and matures in August 2015. The amount available for us to borrow under the $75 Million Facility at any given time will be subject to the lesser of the unencumbered asset property value at such time, the maximum commitment amount at such time or an amount that results in a debt service coverage ratio for the four preceding calendar quarters of 1.50 to 1.0.

F-22

          Our ability to borrow under the $75 Million Facility is subject to our ongoing compliance with a number of customary restrictive covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, a maximum recourse debt ratio, a minimum net worth and maximum dividend payout ratio. We also covenant that certain changes in our executive management team will not occur unless the departing executive management team member is replaced by a party reasonably acceptable to the administrative agent within 90 days of such departure. Additionally, it will constitute an event of default under the $75 Million Facility if we default on any of our other indebtedness that equals or exceeds $1.0 million, including any indebtedness we have guaranteed. As of December 31, 2012, our availability under our $75 Million Facility was approximately $26.9 million based upon the value of our unencumbered asset pool.

          Our acquisition of the Preston Royal Shopping Center and our anticipated joint venture with an institutional joint venture partner (see Note 4) are expected to positively impact our future liquidity and availability under our $75 Million Facility on a net basis. Our borrowing base available will be increased as we add the Preston Royal East property to our unencumbered asset pool and as we pay down our outstanding debt under our $75 million Facility with proceeds received from our potential MacArthur Park joint venture. This increase will be partially offset by a reduction of our available borrowing base as we remove the MacArthur Park asset from our unencumbered asset pool.

          As of December 31, 2012, the weighted average interest rate on our fixed-rate debt was 4.8%, and the weighted average remaining life of such debt was 4.5 years.

          Additional debt transactions in 2012 and 2011 were as follows:

2012
	•	On December 12, 2012 we purchased the Preston Royal West property with a fixed rate mortgage of $23.4 million. The note bears interest at 3.21% with monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due January 1, 2020.
	•	In August 2012, we refinanced the debt securing our Uptown Plaza–Dallas property in the amount of $14.0 million. The new loan bears a fixed interest rate of 4.25% and includes monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due August 10, 2022.
	•	In February 2012, we refinanced the mortgage on our Brookwood Village property with a 10-year note that bears interest at 5.4% with monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due February10, 2022.
2011
	•	In February 2011, we assumed a $15.7 million mortgage in connection with our acquisition of The Market at Lake Houston property in Houston, Texas.
	•	In June 2011, we entered into a loan for $7.4 million that is secured by our Brookwood Village property. We refinanced this loan in February 2012 as discussed above.
	•	In July 2011, we entered into a mortgage loan for $12.5 million to finance the acquisition of our Alpharetta Commons property.
	•	In December 2011, we exercised a 12-month extension option on a $16.6 million loan secured by our MacArthur Park property. We have one 12-month extension option remaining on this loan subject to certain covenants.

F-23

          As of December 31, 2012, scheduled principal payments on notes payable and the $75 Million Facility were as follows (in thousands):

Year Ending December 31,	Scheduled Principal Payments		Term-Loan Maturities		Total Payments
2013	$	1,590	$	—	$	1,590
2014		2,301		—		2,301
2015		2,371		83,928		86,299
2016		1,794		67,431		69,225
2017		1,403		—		1,403
Beyond five years		3,605		53,838		57,443
Unamortized debt premiums	$	—	$	318	$	318
Total		13,064		205,515		218,579

9. INCOME TAXES

Non-taxable Operations

          We have elected to be treated as a REIT for federal income tax purposes. To maintain our REIT status, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. As a REIT, we generally are not subject to federal income tax on our REIT taxable income that we currently distribute to our stockholders. If we fail to maintain our status as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. Even if we qualify for taxation as a REIT, we may be subject to some federal, state and local taxes on our income or property. In addition, the income of any taxable REIT subsidiary that we own will be subject to taxation at regular corporate rates.

          As of December 31, 2012, the gross tax and book bases of real estate assets were $407.0 million and $387.5 million, respectively. As of December 31, 2011, the gross tax and book bases of real estate assets were $336.9 million and $325.0 million, respectively.

Taxable Operations

          Income tax expense (benefit) attributable to the continuing and discontinued operations of our taxable REIT subsidiaries for the years ended December 31, 2012, 2011 and 2010 consists of the following and is included in income tax expense (benefit) or in discontinued operations as appropriate (in thousands):

	Year Ended December 31,
	2012			2011			2010
Federal - current	$	(443	)	$	(219	)	$	(31	)
Federal - deferred		38			30			(819	)
State - current		281			267			346
Valuation allowance		372			189			2,482
Total income tax expense (benefit)	$	248		$	267		$	1,978

          Our effective federal tax rate differs from the statutory tax rate of 34% for the years ended December 31, 2012 and 2011 as a result of the offsetting change in our valuation allowance. Our income taxes for the years ended December 31, 2012 and 2011, primarily relate to the Texas Margin Tax discussed below. Our effective federal tax rate of (70)% differs from the statutory tax rate of 34% for the year ended December 31, 2010 as a result of the valuation allowance that we recorded on our deferred tax assets as of December 31, 2010. No other significant permanent differences exist between book and taxable income of the taxable REIT subsidiaries.

F-24

Texas Margin Tax

          We have recorded an income tax provision of $248,000, $267,000 and $320,000, respectively, for the Texas Margin Tax for the years ended December 31, 2012, 2011 and 2010. The Texas Margin Tax is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction. Although the Texas Margin Tax is not designed as an income tax, we believe that the Texas Margin Tax meets the requirements of an income tax for financial reporting purposes under GAAP.

Deferred Tax Assets and Valuation Allowance

          Our taxable REIT subsidiaries had a gross deferred tax asset of $3.0 million and $2.9 million as of December 31, 2012 and 2011, respectively. Our deferred tax assets primarily relate to net operating loss carry forwards, impairments taken on certain of our non-core, single-tenant properties located in tertiary markets as well as to fees received from transactions with our Advised Funds. The impairments are not deductible for tax purposes until realized upon disposition of the properties, and the fees from our Advised Funds have been subject to tax, but have been deferred for financial reporting purposes.

          To the extent that we have deferred tax assets at period end, we will determine whether it is more likely than not that we will generate sufficient future taxable income in order to realize those assets. In making that determination, we will consider our current financial position, our results of operations for the current and preceding years, and our expectation of future operations. As of December 31, 2012 and 2011, our deferred tax assets were fully offset by a valuation allowance as we believe they are not more likely than not to be realized.

10. STOCKHOLDERS’ EQUITY

Common Stock

          On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we filed articles supplementary to our charter that created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. Each share of Class B common stock has the following rights:

• the right to vote together with Class A common stockholders on all matters on which holders of our Class A and Class B common stock are entitled to vote;

• one vote with respect to all matters voted upon by our Class A and Class B common stockholders;

• the right to receive distributions equal to any distributions declared on shares of our Class A common stock; and

• liquidation rights equal to the liquidation rights of each share of Class A common stock.

          All Class A share amounts and related per share data included in this Annual Report have been presented to reflect the reverse stock split.

          In accordance with the amendments to our charter on July 23, 2012, we are authorized to issue 1,050,000,000 shares of capital stock consisting of 100,000,000 shares of Class A common stock, par value $0.01 per share, 900,000,000 shares of Class B common stock, par value $0.01 per share and 50,000,000 shares of preferred stock, par value $0.01 per share. As further described in Note 3, we completed the sale of 3,650,000 shares of our Class B common stock on August 1, 2012 in connection with our offering and sold an additional 503,226 shares of Class B common stock on August 24, 2012 pursuant to the exercise of the underwriters’ over-allotment option. In connection with our 2012 Offering, we also issued 312,499 shares of restricted Class B common stock to our officers and directors that will vest over a ten-year period.

          As of December 31, 2012 and December 31, 2011, there were 11,657,563 and 11,598,959 shares of our Class A common stock and 4,465,725 and 0 shares of our Class B common stock issued and outstanding, respectively. Our payment of any future dividends to our common stockholders is dependent upon applicable legal and contractual restrictions, as well as our earnings and financial needs.

F-25

Equity Incentive Plan

          Our 1999 Flexible Incentive Plan is designed to attract and retain the services of our directors and employees that we consider essential to our long-term growth and success. As such, it is designed to provide them with the opportunity to own shares of our restricted common stock. All long-term compensation awards are designed to vest over a period of three to ten years and promote retention of our team. Effective July 23, 2012, we amended the 1999 Flexible Incentive Plan to provide that all future awards are in, or related to, shares of our Class B common stock.

Restricted Stock Issuances

          Deferred compensation includes grants of restricted stock to our directors and officers as a form of long-term compensation. The share grants vest over a period of three to ten years. We determine the fair value of the restricted stock as the number of shares awarded multiplied by the fair value per share of our common stock on the grant date. We amortize such fair value ratably over the vesting periods of the respective awards.

          The following table presents restricted share activity during the years ended December 31, 2012 and 2011:

	2012					2011
	Non-vested Shares			Weighted average grant date fair value		Non-vested Shares			Weighted average grant date fair value
Beginning of period		207,199		$	17.88		215,588		$	17.56
Granted		376,970			13.91		42,500			17.94
Vested		(41,653	)		16.28		(48,280	)		16.66
Forfeited		—			—		(2,609	)		16.74
End of period		542,516		$	15.24		207,199		$	17.88

          The weighted average, per share grant date value of shares of restricted stock issued during the years ended December 31, 2012 and 2011 was $13.91 and $17.94, respectively. The total grant date fair value of shares vested during the years ended December 31, 2012 and 2011 was $678,000 and $804,000 respectively. Total compensation cost recognized related to restricted stock during years ended December 31, 2012 and 2011, was $815,000 and $548,000, respectively. As of December 31, 2012, total unrecognized compensation cost related to restricted stock was $7.1 million, and the weighted average period over which we expect this cost to be recognized is 6.8 years.

11. EARNINGS PER SHARE

          We report both basic and diluted EPS using the two-class method as required under GAAP. The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes either two or more classes of common stock or includes common stock and participating securities. The two-class method determines EPS based on distributed earnings (i.e. dividends declared on common stock and any participating securities) and undistributed earnings. Our unvested shares of restricted stock contain rights to receive non-forfeitable dividends and thus are participating securities. Undistributed losses are not allocated to participating securities under the two-class method unless the participating security has a contractual obligation to share in losses on a basis that is objectively determinable. Pursuant to the two-class method, our unvested shares of restricted stock have not been allocated any undistributed losses.

F-26

          As further described in Note 3, we completed a one-for-two reverse stock split of our Class A common stock on July 23, 2012 in connection with our 2012 Offering. Accordingly, all Class A share amounts and related per share data, including our EPS data below have been presented to reflect the reverse stock split. The following table provides a reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic and diluted EPS under the two-class method (in thousands, except per share amounts):

	For the Year Ended December 31,
	2012			2011			2010
Continuing Operations
Income from continuing operations attributable to common stockholders	$	4,460		$	3,675		$	(77	)
Less: Dividends attributable to unvested restricted stockholders		(287	)		(166	)		(194	)
Less: Income attributable to non-controlling interests		—			—			(173	)
Basic and Diluted — Income from continuing operations		4,173			3,509			(444	)
Discontinued Operations
Basic and Diluted — Income from discontinued operations		—			565			6,382
Net income attributable to common stockholders after allocation to participating securities	$	4,173		$	4,074		$	5,938
Number of Shares:
Basic and Diluted — Weighted average shares outstanding(1)		13,120			11,384			11,336
Basic and Diluted Earnings Per Share
Income from continuing operations attributable to common stockholders	$	0.32		$	0.31		$	(0.04	)
Income from discontinued operations attributable to common stockholders		—			0.05			0.56
Net income attributable to common stockholders	$	0.32		$	0.36		$	0.52

(1) Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359, 207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

12. RELATED PARTY TRANSACTIONS

          See Note 5 regarding investments in our Advised Funds, Note 2 regarding notes receivable from affiliates and Note 4 for a discussion of our acquisition of The Market at Lake Houston.

          The table below details our income and administrative cost reimbursements from the Advised Funds for the years ended December 31, 2012 and 2011 (in thousands):

	Year Ended December 31,
	2012		2011		2010
Real estate fee income(1)	$	3,005	$	2,491	$	2,375
Asset management fee income(2)		622		1,064		1,480
Construction management fee income(3)		243		234		349
Advisory services income - related party	$	3,870	$	3,789	$	4,204
Reimbursements of administrative costs	$	855	$	885	$	1,009

(1)	We earn real estate fee income by providing property acquisition, leasing and property management services to our Advised Funds. We own 100% of the entities that serve as the general partner for the funds.
(2)	We earn asset management fees from our Advised Funds for providing accounting related and investor relation services, facilitating the deployment of capital and other services provided in conjunction with operating the funds.
(3)	We earn construction management fees by managing construction and tenant build-out projects on behalf of our Advised Funds.

F-27

13. CONCENTRATIONS

          As of December 31, 2012, two properties individually accounted for more than 10% of our consolidated total assets – Uptown Park in Houston, Texas and MacArthur Park in Dallas, Texas, which accounted for 15.7% and 12.7% of total assets, respectively. Consistent with our strategy of investing in geographic areas that we know well, 19 of our properties are located in the Houston metropolitan area. These Houston properties represent 63.0%, 64.2% and 62.9% of our rental income for the years ended December 31, 2012, 2011 and 2010, respectively. Houston is Texas’ largest city and the fourth largest city in the United States.

          Following are the base revenues generated by our top ten tenants for the years ended December 31, 2012, 2011 and 2010 (in thousands):

	Year Ended December 31,
	2012		2011		2010
Kroger	$	2,116	$	2,116	$	2,192
Landry’s (1)		1,257		1,143		843
CVS/pharmacy		1,222		1,115		922
H-E-B		1,110		938		—
Publix(2)		781		332		—
Hard Rock Café		497		497		497
TGI Friday’s		459		451		451
The Container Store(3)		448		89		—
Golden Corral		427		419		419
Champps Americana		422		422		422
	$	8,739	$	7,522	$	5,746

(1)	Includes tenants owned by Landry’s, including Landry’s Seafood House, McCormick & Schmicks, Mortons and The Grotto.
(2)	Publix, a regional grocer, is the anchor tenant at Alpharetta Commons, which was acquired in July 2011.
(3)	Rent commenced on a new lease with The Container Store in Houston, Texas in November 2011.

14. COMMITMENTS AND CONTINGENCIES

          As the owner or operator of real property, we may incur liability based on various property conditions and may be subject to liability for personal injury or property damage sustained as a result. We maintain sufficient comprehensive, general liability and extended insurance coverage as deemed necessary with respect to our properties. In addition, we may be potentially liable for costs and damages related to environmental matters. In particular, we are subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. There are no material legal proceedings pending against us, and we are not aware of any pending environmental proceedings with respect to our properties that would have a material adverse effect on our consolidated financial statements.

F-28

15. SEGMENT REPORTING

          We assess our business based upon the nature of operations. Our reportable segments presented are our portfolio segment and our advisory services segment, which includes our real estate operating and development business and our Advised Funds, which are segments where separate financial information is both available, and revenue and operating performance is evaluated regularly by senior management in deciding how to allocate resources and in assessing performance. However, this operating performance data might not be indicative of what a third party would assess or evaluate for purposes of determining fair value of our segments.

Portfolio Segment

          Our portfolio segment consists of our portfolio of single and multi-tenant shopping center projects. Expenses for this segment include depreciation, interest, legal cost directly related to the portfolio of properties and property level expenses. Substantially all of our consolidated assets are in this segment.

Advisory Services Segments

          Our advisory services segments consist of our real estate operating and development business as well as our Advised Funds. The real estate operating and development business is a fully integrated and wholly-owned business consisting of brokers and real estate professionals that provide development, acquisition, brokerage, leasing, and asset and property management services to our portfolio and Advised Funds. Our Advised Funds include four high net worth investment funds that have sold limited partnership interests to retail investors to develop, own, manage and add value to properties with an average holding period of two to four years and three joint ventures with institutional investors.

          Segment results for the years ended December 31, 2012, 2011 and 2010, were as follows (in thousands):

				Advisory Services
For the Year Ended December 31, 2012	Portfolio			Real Estate Operating and Development			Advised Funds			Total
Rental income from operating leases	$	37,251		$	187		$	—		$	37,438
Advisory services income - related party		—			3,248			622			3,870
Total revenue		37,251			3,435			622			41,308
General and administrative		2,321			4,303			109			6,733
Property expense		9,870			21			—			9,891
Legal and professional		833			83			3			919
Real estate commissions		—			387			—			387
Acquisition fees		687			—			—			687
Depreciation and amortization		8,861			23			—			8,884
Impairment recovery - notes receivable		(443	)		—			—			(443	)
Total expenses		22,129			4,817			112			27,058
Interest expense		(10,251	)		—			—			(10,251	)
Other income/(expense)		690			9			(238	)		461
Income (loss) from continuing operations	$	5,561		$	(1,373	)	$	272		$	4,460

F-29

				Advisory Services
For the Year Ended December 31, 2011	Portfolio			Real Estate Operating and Development			Advised Funds			Total
Rental income from operating leases	$	32,798		$	197		$	—		$	32,995
Advisory services income - related party		147			2,578			1,064			3,789
Lease termination fee income		131			—			—			131
Total revenue		33,076			2,775			1,064			36,915
General and administrative		2,213			3,701			135			6,049
Property expense		7,724			46			—			7,770
Legal and professional		877			65			3			945
Real estate commissions		2			340			—			342
Acquisition costs		229			—			—			229
Depreciation and amortization		8,233			24			—			8,257
Impairment recovery - notes receivable		(1,071	)		—			—			(1,071	)
Total expenses		18,207			4,176			138			22,521
Interest expense		(9,971	)		—			—			(9,971	)
Other income/(expense)		(505	)		142			(385	)		(748	)
Income (loss) from continuing operations	$	4,393		$	(1,259	)	$	541		$	3,675

				Advisory Services
For the Year Ended December 31, 2010	Portfolio			Real Estate Operating and Development			Advised Funds			Total
Rental income from operating leases	$	28,959		$	196		$	—		$	29,155
Advisory services income - related party		10			2,714			1,480			4,204
Lease termination fee income		—			15			—			15
Total revenue		28,969			2,925			1,480			33,374
General and administrative		1,995			3,806			143			5,944
Property expense		8,292			22			—			8,314
Legal and professional		1,169			(13	)		9			1,165
Real estate commissions		9			182			—			191
Acquisition costs		12			—			—			12
Depreciation and amortization		6,594			40			—			6,634
Impairment - properties		864			1,404			—			2,268
Impairment - notes receivable		1,800			—			—			1,800
Total expenses		20,735			5,441			152			26,328
Interest expense		(9,541	)		—			—			(9,541	)
Other income/(expense)		2,496			1,156			(1,234	)		2,418
Income (loss) from continuing operations	$	1,189		$	(1,360	)	$	94		$	(77	)

F-30

16. SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)

          Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2012 and 2011 (amounts in thousands, except per share data):

	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
For the Year Ended December 31, 2012
Revenues	$	10,060	$	9,861	$	10,027	$	11,360
Net income available to AmREIT stockholders	$	1,257	$	1,446	$	1,023	$	734
Net income per share - basic and diluted	$	0.10	$	0.12	$	0.07	$	0.04
For the Year Ended December 31, 2011
Revenues	$	8,534	$	9,067	$	9,632	$	9,765
Net income available to AmREIT stockholders	$	1,336	$	566	$	1,118	$	1,220
Net income per share - basic and diluted	$	0.12	$	0.04	$	0.10	$	0.11

F-31

	Initial Cost							Total Cost
Property Description	Building and Improvements		Land		Cost Capitalized Subsequent to Acquisition (Note A)			Building and Improvements		Land		Total			Accumulated Depreciation		Date Acquired	Encumbrances (Note B)
SHOPPING CENTERS
500 Lamar, Texas		1,640,623		2,530,178		18,614			1,659,237		2,530,178		4,189,415			139,188	12/09/10		1,630,349
Alpharetta Commons, Georgia		12,901,200		4,663,425		12,459			12,913,659		4,663,425		17,577,084			555,832	07/29/11		12,230,985
Bakery Square, Texas		4,806,518		4,325,612		13,313			4,809,957		4,335,486		9,145,443			1,156,902	07/21/04		2,018,947
Brookwood Village, Georgia		6,195,376		3,355,689		56,342			6,251,718		3,355,689		9,607,408			325,981	05/10/11		7,270,792
Cinco Ranch, Texas		11,558,491		2,666,534		100,996			11,657,795		2,668,226		14,326,021			2,905,340	07/01/04		9,750,000
Courtyard Square, Texas		1,777,161		4,133,641		30,293			1,790,342		4,150,752		5,941,095			467,197	06/15/04		-
Lake Woodlands Plaza, Texas		2,385,103		1,366,452		1,301,317			3,683,807		1,369,065		5,052,872			1,521,311	06/03/98		-
Market at Lake Houston, Texas		13,351,264		3,740,540		46,036			13,381,137		3,740,540		17,121,677			753,397	02/25/11		15,675,000
MacArthur Park, Texas		32,299,035		15,583,628		2,674,320			34,973,353		15,583,629		50,556,983			8,655,873	12/27/04		6,613,001
Plaza in the Park, Texas		17,375,782		13,257,976		657,737			18,029,703		13,261,792		31,291,495			4,464,233	07/01/04		23,250,000
Preston Royal East, Texas		25,785,057		-		-			25,785,057		-		25,785,057			115,239	12/12/12		-
Preston Royal West, Texas		25,054,873		9,055,941		-			25,054,873		9,055,941		34,110,814			81,995	12/12/12		23,400,000
Southbank, Texas		17,148,688		7,979,779		377,763			17,517,262		7,988,968		25,506,230			3,519,342	09/30/05		20,000,000
Sugar Land Plaza, Texas		3,016,816		1,280,043		286,176			3,302,993		1,280,043		4,583,035			1,251,905	07/01/98		-
Terrace Shops, Texas		2,544,592		2,212,278		192,866			2,737,458		2,212,278		4,949,736			641,903	12/15/03		-
Uptown Park, Texas		27,060,070		36,976,809		2,395,078			29,566,856		36,865,101		66,431,957			8,180,551	06/01/05		49,000,000
Uptown Plaza Dallas, Texas		14,129,798		9,295,665		130,603			14,259,839		9,296,227		23,556,066			2,903,216	03/30/06		13,922,436
Uptown Plaza, Texas		4,887,774		7,796,383		275,296			5,163,070		7,796,383		12,959,453			1,293,202	12/10/03		-
Total Shopping Centers		223,918,221		130,220,573		8,569,209			232,538,116		130,153,724		362,691,839			38,932,605			184,761,510
SINGLE TENANT
Citibank, Texas		-		1,318,418		165,743			50,943		1,433,217		1,484,161			23,379	12/17/04		-
CVS Pharmacy, Texas		-		2,665,332		23,663			-		2,688,995		2,688,995	n/a			01/10/03		-
Golden Corral, Texas		1,093,139		718,702		(687,192	)		584,497		540,152		1,124,649			42,654	07/23/02		-
Golden Corral, Texas		1,290,347		553,006		(660,126	)		744,607		438,620		1,183,227			63,458	07/23/02		-
Smokey Bones, Georgia		-		773,800		(60,414	)		-		713,386		713,386	n/a			12/18/98		-
Sunbelt Rental, Illinois		-		402,080		673,087			832,395		220,968		1,053,363			52,536	05/23/07		-
TGI Friday’s, Maryland		-		1,473,613		860			-		1,474,473		1,474,473	n/a			09/16/03		-
TGI Friday’s, Texas		1,425,843		611,075		39,894			1,453,769		623,043		2,076,812			389,846	07/23/02		-
Woodlands Ring Road, Texas		-		8,957,570		4,077,161			3,861,079		9,173,652		13,034,731			316,044	12/01/07		-
Total Single Tenant		3,809,329		17,473,596		3,572,676			7,527,290		17,306,507		24,833,797			887,918			-
Total	$	227,727,550	$	147,694,169	$	12,141,885		$	240,065,406	$	147,460,231	$	387,525,636		$	39,820,523		$	184,761,510

Note A - The negative balance for costs capitalized subsequent to acquisition could be the result of out-parcels sold, tenant activity or reductions in our investments in properties accounted for as direct financing leases.

Note B - The notes secured by the Cinco Ranch and Plaza in the Park properties contain a cross-collateralization clause whereas an event of default on one note constitutes an event of default on both notes.

Activity within real estate and accumulated depreciation during the three years ended December 31, 2011 is as follows:

	Cost			Accumulated Depreciation
Balance at December 31, 2009	$	283,809,070		$	24,934,167
Acquisitions / additions		10,794,709			-
Disposals		(11,048,686	)		(451,194	)
Impairment		(4,241,649	)		(754,486	)
Depreciation expense		-			4,891,223
Balance at December 31, 2010	$	279,313,444		$	28,619,710
Acquisitions / additions		47,982,336			-
Disposals		(2,262,954	)		(196,747	)
Impairment		-
Depreciation expense		-			5,441,981
Balance at December 31, 2011	$	325,032,826		$	33,864,944
Acquisitions / additions		62,890,931			-
Disposals		(398,121	)		(335,424	)
Impairment		-			-
Depreciation expense		-			6,291,003
Balance at December 31, 2012	$	387,525,636		$	39,820,523

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EX-10.18

EXHIBIT 10.18

PURCHASE AND SALE AGREEMENT
(Existing Center)
(Preston Royal Village Shopping Center, Dallas, Texas)

          THIS AGREEMENT is made as of the 12^th day of October, 2012, between PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Seller”), and AMREIT REALTY INVESTMENT CORPORATION, a Texas corporation (“Buyer”).

Background

          Buyer wishes to purchase Seller’s interest in a shopping center located at the northwest and northeast corners of the intersection of Preston Road and Royal Lane in the City of Dallas, County of Dallas, State of Texas, known as Preston Royal Village Shopping Center (the “Shopping Center”);

          Seller wishes to sell the Seller’s interest in the Shopping Center to Buyer;

          In consideration of the mutual agreements herein, and other good and valuable consideration, including the sum of One Hundred Dollars ($100.00) paid to Seller by Buyer, the receipt of which is hereby acknowledged, Seller agrees to sell to Buyer and Buyer agrees to purchase the Seller’s interest in the Shopping Center, subject to the following terms and conditions:

1. DEFINITIONS

          As used in this Agreement, the following terms shall have the following meanings:

          1.1       Agreement means this Purchase and Sale Agreement, which shall supersede all prior agreements and understandings between Buyer and Seller concerning the sale and purchase of the Seller’s interest in the Property.

          1.2       Assignment and Assumption Agreement means an Assignment and Assumption Agreement in the form attached hereto as Exhibit 1.2, assigning the Existing Leases and Assigned Existing Agreements from Seller to Buyer.

          1.3       Assignment and Assumption Agreement of Ground Lease means an Assignment and Assumption Agreement of Ground Lease in the form attached hereto as Exhibit 1.3, assigning Seller’s leasehold interest and estate in the Leasehold Parcel existing under, and by virtue of, the Ground Lease from Seller to Buyer, subject to the Permitted Exceptions affecting the Leasehold Parcel.

          1.4       Assigned Existing Agreements means the service contracts, agreements and other instruments concerning the ownership, operation and leasing of the Property identified on Exhibit 1.4.

          1.5       Audit Representation Letter means the form of audit representation letter attached hereto as Exhibit 1.5.

          1.6       Bill of Sale means a Bill of Sale in the form attached hereto as Exhibit 1.6, conveying the Personal Property from Seller to Buyer.

          1.7       Buyer’s Broker means the real estate brokerage firm listed as Broker on Exhibit 1.7 of this Agreement. Participating broker(s), if any, are also identified on Exhibit 1.7.

          1.8       Buyer’s Notice has the meaning ascribed to such term in Section 2.2.

          1.9       Closing means generally the execution and delivery of those documents and funds necessary to effect the purchase and sale of the Property.

          1.10     Closing Date has the meaning ascribed to such term in Section 2.4(a).

          1.11     Code has the meaning ascribed to such term in Section 2.4(b).

          1.12     Continuation Notice has the meaning ascribed to such term in Section 14(e).

          1.13     Earnest Money Deposit means the deposit delivered by Buyer to Escrow Agent under Section 2.2 of this Agreement, together with the earnings thereon, if any.

          1.14     Effective Date means the means the day and year first written above.

          1.15     Environmental Law means any current legal requirement pertaining to (a) the protection of health, safety, and the indoor or outdoor environment, (b) the conservation, management, protection or use of natural resources and wildlife, (c) the protection or use of source water and groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any release to air, land, surface water, and groundwater); and includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC §§9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC §§6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC §§1251 et seq., Clean Air Act of 1966, as amended, 42 USC §§7401 et seq., Toxic Substances Control Act of 1976, 15 USC §§2601 et seq., Hazardous Materials Transportation Act, 49 USC App. §§1801, Occupational Safety and Health Act of 1970, as amended, 29 USC §§651 et seq., Oil Pollution Act of 1990, 33 USC §§2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC App. §§11001 et seq., National Environmental Policy Act of 1969, 42 USC §§4321 et seq., Safe Drinking Water Act of 1974, as amended by 42 USC §§300(f) et seq., and any similar, implementing or successor law, any amendment, rule, regulation, order or directive, issued thereunder.

          1.16     Escrow Agent means the Title Company.

          1.17     Existing Leases has the meaning ascribed to such term in Section 4.

          1.18     Existing Loan means, collectively, those certain mortgage loans obtained by Seller from Nationwide Life Insurance Company (“Lender”) in the aggregate original principal amount of $16,050,000.00.

          1.19     Existing Loan Documents means those loan documents identified on Exhibit 1.19 attached to this Agreement evidencing and securing the Existing Loan.

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          1.20     Existing Survey means, collectively, those certain Improvement Surveys of the Property dated November 23, 2004 and December 9, 2004 (each most recently revised January 16, 2006), prepared by James Barton Carroll, R.P.L.S. No. 5129.

          1.21     FIRPTA Certification means a FIRPTA Certification in the form attached hereto as Exhibit 1.21.

          1.22     Ground Lease means, collectively, that certain Agreement of Lease dated November 3, 1964, by and between Preston Royal Shopping Center, Inc. (“Original Landlord”), as landlord, and Trammell Crow and Henry S. Miller, as tenant and predecessors-in-interest to Seller, a memorandum of which is recorded in Volume 482, Page 931, Deed Records, Dallas County, Texas, as amended by (i) letter agreement dated January 9, 1990 made and entered into by and among Mixon Investment Company, Inc. (“Ground Lessor”), successor in interest to Original Landlord, as landlord, and Henry S. Miller, Jr., an individual, Henri L. Bromberg, Jr., an individual, Edward S. Bromberg, an individual, Louise W. Kahn, individually and as Independent Executrix of the Estate of Edmund J. Kahn, deceased, Dan R. Cullum, an individual, Betsy Cullum Bolin, an individual, Robert Brooks Cullum, Jr., an individual, and Sally Cullum Holmes, an individual, collectively, as tenant; (ii) letter agreement dated September 22, 1993, made and entered into by and between Ground Lessor, as landlord, and Henry S. Miller, Jr. on behalf of tenant, (iii) First Amendment to Short Form Lease dated January 19, 2006, by and between Ground Lessor, as landlord, and Seller, as tenant, recorded as Document No. 20006000211974, Deed Records, Dallas County, Texas; and (iv) Estoppel and Recognition Agreement dated January 19, 2006, by and among Ground Lessor, Seller and Lender.

          1.23     Ground Lease Estoppel Letter means a letter or other certificate from the Ground Lessor consenting to the transfer of Seller’s interest in the Ground Lease to Buyer and certifying as to certain matters regarding the Ground Lease, in substantially the form attached hereto as Exhibit 1.23.

          1.24     Hazardous Material means any hazardous or toxic substance as defined in or regulated by any Environmental Law in effect at the pertinent date or dates.

          1.25     Improvements means all buildings, structures or other improvements situated on the Real Property.

          1.26     Independent Contract Consideration has the meaning ascribed to such term in Section 2.3.

          1.27     Inspection Period has the meaning ascribed to such term in Section 14.

          1.28     Leases means all leases and other occupancy agreements, other than the Ground Lease, permitting persons to lease or occupy all or any portion of the Property.

          1.29     Lender Approval has the meaning ascribed to such term in Section 14(c)(iii).

          1.30     Loan Assumption has the meaning ascribed to such term in Section 14(c).

          1.31     Loan Assumption Documents has the meaning ascribed to such term in Section 14(c)(i).

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          1.32     Major Tenants are the tenants identified on the schedule of Major Tenants attached as Exhibit 1.32 to this Agreement.

          1.33     Materials means all plans, drawings, specifications, soil test reports, environmental reports, market studies, surveys and similar documentation, if any, owned by or in the possession of Seller with respect to the Property and any proposed improvements to the Property.   

1.34	New Lease has the meaning ascribed to such term in Section 4(a).
1.35	Permitted Exceptions means only the following interests, liens and encumbrances:
	(a)	The Ground Lease;
	(b)	Subject to adjustment as set forth in the Agreement, taxes and assessments which are a lien, but which are not yet billed, or are billed but are not yet due and payable on or before Closing;
	(c)	Any laws, regulations or ordinances (including, but not limited to, zoning, building and environmental matters) as to the use, occupancy, subdivision or improvement of the Property adopted or imposed by any governmental agency having jurisdiction thereover;
	(d)	Any state of facts disclosed by the Existing Survey and/or the Survey which have been approved or waived by Buyer as provided herein;
	(e)	Any utility company rights, easements and franchises for electricity, water, steam, gas, telephone or other service or the right to use and maintain poles, lines, wires, cables, pipes, boxes, and other fixtures and facilities in, over, under and upon the Property, but only to the extent servicing the Property;
	(f)	Any liens, encumbrances or other title exceptions (and the same shall not constitute title objections but shall be deemed Permitted Exceptions) (1) over which the Title Company is willing to insure in a manner acceptable to Buyer (without material additional cost to Buyer), (2) against which the Title Company is willing to provide affirmative insurance in a manner acceptable to Buyer (without material additional cost to Buyer), or (3) which will be extinguished upon the transfer of the Property to Buyer;
	(g)	Rights of tenants under the Existing Leases; and
	(h)	Other matters which have been waived or approved by Buyer during the title review period, as contemplated by Article 3 of this Agreement;

it being understood, however, that, subject to the provisions of Article 3 of this Agreement, Buyer shall have until five (5) business days prior to the end of the Inspection Period within which to determine whether any such item is unacceptable to Buyer in Buyer’s sole discretion,

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and only such matters approved or deemed approved by Buyer pursuant to Article 3 shall be deemed Permitted Exceptions hereunder. The previous provisions to the contrary notwithstanding, the Ground Lease shall, in any event, be deemed a Permitted Exception.

          1.36     Personal Property means all of Seller’s right, title and interest in and to (a) sprinkler, plumbing, heating, air-conditioning, electric power or lighting, incinerating, ventilating and cooling systems, with each of their respective appurtenant furnaces, boilers, engines, motors, dynamos, radiators, pipes, wiring and other apparatus, equipment and fixtures, elevators, partitions, fire prevention and extinguishing systems located in or on the Improvements, (b) the Materials, (c) other tangible personal property used in connection with the ownership or operation of the Improvements, provided the same are now owned or are acquired by Seller prior to the Closing, and (d) all trade names, franchises, licenses, permits, easements, development rights and approvals, deposits, credits, petroleum and mineral interests and royalties, air and water rights, construction and product warranties, the Leases (including all security deposits and guarantees given with respect thereto), and all other intangibles owned or used by or for the benefit of Seller in connection with the Property.

          1.37     Property means, collectively, the Real Property, the Improvements and the Personal Property.

          1.38     Purchase Price means the consideration agreed to be paid by Buyer to Seller for the purchase of the Seller’s interest in the Property, including but not limited to the Seller’s ground leasehold interest in the Ground Lease, as set forth in Section 2.1 (subject to prorations and adjustments as provided herein).

          1.39     Real Property means, collectively, (i) with respect to the portion of the Shopping Center identified in Exhibit 1.39(a) of this Agreement, fee title to the lands, together with all easements, licenses, privileges, rights of way and other appurtenances pertaining to or accruing to the benefit of such lands (collectively, the “Fee Parcel”), and (ii) with respect to the portion of the Shopping Center identified in Exhibit 1.39(b) of this Agreement, leasehold title to the lands, together with all easements, licenses, privileges, rights of way and other appurtenances pertaining to or accruing to the benefit of such lands (collectively, the “Leasehold Parcel”).

          1.40     Rent Roll means the rent roll attached hereto as Exhibit 1.40 of this Agreement.

          1.41     Seller Financial Statements means the unaudited balance sheets and statements of income, cash flows and changes in financial position in the form prepared by Seller’s managing agent for the Property, as of and for the two (2) calendar years next preceding the date of this Agreement and all monthly and quarterly reports of income, expense and cash flow in the form prepared by Seller’s managing agent for the Property, which shall be consistent with past practice, for any such period beginning after the latest of such calendar years, and ending prior to Closing.

          1.42     Seller’s Broker means Henry S. Miller Interests, Inc.

          1.43     Seller’s Notice has the meaning ascribed to such term in Section 2.2.

          1.44     Seller’s Reports has the meaning ascribed to such term in Section 6(b)(viii).

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          1.45     Shopping Center means the Shopping Center identified on the initial page hereof.

          1.46     Special Warranty Deed means a Special Warranty Deed in the form attached hereto as Exhibit 1.46, conveying the Fee Parcel from Seller to Buyer, subject to the Permitted Exceptions affecting the Fee Parcel.

          1.47     Survey has the meaning ascribed to such term in Section 3(b).

          1.48     Tenant Estoppel Letter means a letter or other certificate from a tenant certifying as to certain matters regarding such tenant’s Lease, in substantially the same form as Exhibit 1.48 of this Agreement unless a different form is permitted by such tenant’s Lease, or in the case of a Major Tenant or a national or regional “credit” tenant, the form customarily used by such tenant.

          1.49     Tenant Inducement Costs has the meaning ascribed to such term in Section 4.

          1.50     Tenant Notice means a notice to each tenant under a Lease in the form attached hereto as Exhibit 1.50.

          1.51     Title Company means Republic Title of Texas, Inc., Dallas Uptown Commercial, having an address of 2626 Howell St,10th Floor, Dallas, TX 75204, Attn: Janine Barber, Tel: (214) 855-8863, Fax: (214) 855-8898, Email: jbarber@republictitle.com

          1.52     Title Defect means any exception in the Title Insurance Commitment or any matter disclosed by Existing Survey or the Survey, other than a Permitted Exception.

          1.53     Title Insurance means an Owner Policy of Title Insurance promulgated by the Texas State Board of Insurance in the amount of the Purchase Price insuring Buyer’s good and indefeasible (i) fee simple title in the Fee Parcel, subject only to the Permitted Exceptions applicable to the Fee Parcel, and (ii) leasehold interest in the Leasehold Parcel, subject only to the Permitted Exceptions applicable to the Leasehold Parcel, issued by the Title Company, together with such available endorsements as are customary in transactions of this type (such as, where applicable, a survey deletion endorsement), and any available special endorsements which are necessary because of the nature, configuration or particular character of the Property.

          1.54     Title Insurance Commitment means a preliminary title report whereby the Title Company agrees to issue the Title Insurance to Buyer, together with copies of all instruments which are exceptions noted therein or conditions to be satisfied.

          1.55     Title Notice has the meaning ascribed to such term in Section 3(c).

          1.56     Update Certificate means an Update Certificate in the form attached hereto as Exhibit 1.56, updating the warranties and representations of Seller in Section 6(a) as of the Closing Date.

          1.57     Warranty Notice has the meaning ascribed to such term in Section 18(iii).

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2. PURCHASE PRICE AND PAYMENT

          2.1          Purchase Price; Payment. The total Purchase Price for the Seller’s interest in the Property (subject to adjustment as provided herein) shall be SIXTY-TWO MILLION AND NO/100THS DOLLARS ($62,000,000.00). The Purchase Price shall be payable in cash at Closing by the wire transfer of immediately available United States federal funds to an account at a bank designated by Escrow Agent. Buyer, at Buyer’s election to be made prior to the end of the Inspection Period pursuant to Section 14 and expense (and at no cost to Seller), shall at Closing either (i) assume the Existing Loan, or (ii) prepay or defease the Existing Loan. In the event Buyer assumes the Existing Loan or prepays or defeases the Existing Loan, the amount of cash to be paid at Closing shall be reduced by the principal balance of the Existing Loan and all then-accrued interest thereon (excluding any such interest allocable to prepayment or defeasance of such loan) paid by Buyer on the Closing Date.

          2.2          Earnest Money Deposit. An earnest money deposit in the amount ONE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($1,250,000.00) shall be deposited with Escrow Agent by Buyer within three (3) business days after the Effective Date. Escrow Agent shall provide Seller written notice of the receipt of the Earnest Money Deposit. This Agreement may be terminated by Seller by notice to Buyer if the Earnest Money Deposit is not delivered to Escrow Agent by such deadline. All deposits made as earnest money, together with the earnings thereon, shall be deemed included within the meaning of the term Earnest Money Deposit for all purposes. The Earnest Money Deposit shall be held as specifically provided in this Agreement and, if Closing shall occur, shall be applied to the Purchase Price at Closing. If Closing shall not occur, the Earnest Money Deposit shall be disbursed to Seller or returned to Buyer in accordance with the provisions of this Agreement. If Seller delivers to Escrow Agent a written notice (“Seller’s Notice”) that (i) Buyer has defaulted under this Agreement; (ii) as a result of such default Seller has duly terminated this Agreement (if Seller is entitled to terminate this Agreement as a result of such default) and is entitled to payment of the Earnest Money Deposit; and (iii) Seller is simultaneously delivering to Buyer, pursuant to the notice provisions of this Agreement, a copy of the Seller’s Notice, Escrow Agent agrees if Buyer has not given notice of a dispute to Escrow Agent within five (5) business days of the date of Seller’s notice, then Escrow Agent agrees to deliver the Earnest Money Deposit to Seller. If Escrow Agent receives such a written dispute from Buyer, then Escrow Agent shall not be permitted to deliver the Earnest Money Deposit to Seller. If Buyer delivers written notice (“Buyer’s Notice”) that (A) Buyer is entitled to the return of the Earnest Money Deposit as a result of Buyer’s proper exercise of a termination right expressly afforded Buyer under this Agreement; and (B) Buyer is simultaneously delivering to Seller, pursuant to the notice provisions of this Agreement, a copy of the Buyer’s Notice, then Escrow Agent agrees to deliver notice thereof to Seller and if the Seller has not given notice of a dispute to Escrow Agent within five (5) business days of Seller’s receipt of such Escrow Agent’s notice, then Escrow Agent agrees to deliver the Earnest Money Deposit to Buyer. If Escrow Agent receives such a written dispute from Seller, then Escrow Agent shall not be permitted to deliver the Earnest Money Deposit to Buyer. Notwithstanding the foregoing, if Buyer terminates, or is deemed to have terminated this Agreement prior to the end of the Inspection Period, Seller shall have no right to the return of the Earnest Money Deposit and Escrow Agent shall promptly deliver the Earnest Money Deposit to Buyer.

          2.3          Independent Consideration. Seller and Buyer acknowledge and agree that One Hundred and No/100 Dollars ($100.00) of the Earnest Money Deposit shall be paid to Seller if this Agreement is terminated for any reason (the “Independent Contract Consideration”).

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Moreover, Seller and Buyer acknowledge and agree that the Independent Contract Consideration has been bargained for and agreed to as additional consideration for Seller’s execution and delivery of this Agreement. At Closing, the Independent Contract Consideration shall be applied to the Purchase Price. In the event this Agreement is terminated for any reason, Seller shall be entitled to the Independent Contract Consideration.

          2.4          Closing; Designation of Reporting Person.

                         (a)          Closing shall be held and completed on Monday, December 3, 2012 (the “Closing Date”), subject to extension as hereinafter provided, or such earlier date as may hereafter be agreed to by Buyer and Seller, commencing at 10:00 a.m. Central Time through Escrow Agent or at such other time or in such other manner as may hereafter be agreed to by Buyer and Seller. Time is of the essence. Buyer acknowledges and agrees that consummation of the Closing in calendar year 2012 is a material inducement to Seller to sell the Property to Buyer and that under no state of facts whatsoever shall Seller be obligated to extend the Closing Date except as expressly provided below in this Section 2.4(a). Closing shall be consummated and the closing payment set forth in Section 2.1 above wire transferred to an account designated by Escrow Agent, and by Escrow Agent to Seller, by 1:00 P.M. Central Time on the Closing Date, failing which the closing adjustments shall be recalculated as if the Closing Date were the next business day.

          The Closing Date may be extended by Buyer or Seller for up to five (5) days by written notice to the other party and Escrow Agent at least one (1) business day prior to the then scheduled Closing Date in order to obtain the Required Tenant Estoppel Percentage of Tenant Estoppel Letters. After the Required Tenant Estoppel Percentage of Tenant Estoppel Letters have been obtained, the Closing shall be held and completed on the day that is three (3) business days following the delivery of the final Required Tenant Estoppel Letter to Buyer or such earlier date as may hereafter be agreed to by Buyer and Seller, commencing at 10:00 a.m. Central Time through Escrow Agent or at such other time or in such other manner as may hereafter be agreed to by Buyer and Seller. In the event of Seller’s failure to satisfy the Required Tenant Estoppel Percentage of Tenant Estoppel Letters by the Closing Date, as it may have been extended by Buyer or Seller as provided above, Buyer’s sole remedy shall be to either (x) waive the estoppel requirement and proceed to Closing without any abatement in the Purchase Price or (y) terminate this Agreement with notice to Seller and Escrow Agent and receive a prompt return of the Earnest Money Deposit, and neither party shall have any further liability or obligation hereunder (except for the obligations of the parties set forth in this Agreement which expressly survive the termination of this Agreement). If under such circumstances Buyer fails to deliver notice to extend the Closing Date, Buyer shall be deemed to have elected to waive the estoppel requirement and proceed to Closing without abatement of the Purchase Price.

          In addition to the foregoing, the Closing Date, as it may have been extended in accordance with the provisions of the preceding paragraph, may also be extended by Buyer for one additional period of up to twenty (20) days by written notice to Seller and Escrow Agent at least five (5) days prior to the then scheduled Closing Date to permit Buyer to finalize all loan assumption, prepayment and/or defeasance matters related to the Existing Loan. After the loan assumption, prepayment and/or defeasance matters have been finalized, the Closing shall be held and completed on the day that is three (3) business days following the finalization of all loan assumption, prepayment and/or defeasance matters related to the Existing Loan, or such earlier date as may hereafter be agreed to by Buyer and Seller, commencing at 10:00 a.m.

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Central Time through Escrow Agent or at such other time or in such other manner as may hereafter be agreed to by Buyer and Seller. In the event of Buyer’s failure to finalize the loan assumption, prepayment and/or defeasance matters by the Closing Date, as it may have been extended by Buyer or Seller as provided above, Buyer shall be obligated to prepay or defease the Existing Loan, as required by Section 14(c). However, notwithstanding anything to the contrary set forth in the foregoing provisions of this paragraph or elsewhere in this Agreement, in no event whatsoever shall the Closing Date be later than 5:00 p.m., Central Time, on December 27, 2012.

                         (b)          In order to assure compliance with the requirements of Section 6045 of the Internal Revenue Code of 1986, as amended (the “Code”), and any related reporting requirements of the Code, the parties agree as follows:

                                        (i)          Escrow Agent is designated as the person to be responsible for all information reporting under Section 6045(e) of the Code.

                                        (ii)         Seller and Buyer shall:

(A)

provide to Escrow Agent all information and certifications regarding such party, as reasonably requested by Escrow Agent or otherwise required to be provided by a party to the transaction described herein under Section 6045 of the Code; and

(B)

provide to Escrow Agent such party’s taxpayer identification number and a statement (on Internal Revenue Service Form W-9 or an acceptable substitute form, or on any other form the applicable current or future Code sections and regulations might require and/or any form requested by Escrow Agent), signed under penalties of perjury, stating that the taxpayer identification number supplied by such party to Escrow Agent is correct.

          3.            Condition of Title.

                         (a)          Title. Title to the Property shall be good and indefeasible and insurable as such by the Title Company pursuant to the standard stipulations and conditions of the Title Insurance, and otherwise free and clear of all liens and encumbrances except for the Permitted Exceptions.

                         (b)          Survey. Seller has delivered a copy of the Existing Survey to Buyer. During the Inspection Period, Buyer, at Buyer’s option and expense may, but shall not be obligated to, cause the Existing Survey to be updated or a new survey (in either event, the “Survey”) to be prepared by a surveyor and in a form acceptable to Buyer. If Buyer elects not to obtain the Survey, all matters which would be reflected on a current survey of the Property shall be deemed to be Permitted Exceptions. The Purchase Price has been fixed without regard to the area of the Property and is not to be abated or changed should the Survey prove an area different from the area of the Property described herein. The Special Warranty Deed shall contain the legal description of the Fee Parcel attached hereto. The Assignment and Assumption of Ground Lease shall contain the legal description of the Leasehold Parcel

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attached hereto. If the Survey contains a different legal description of the Fee Parcel and/or the Leasehold Parcel, Seller will quitclaim any additional property to Buyer. Nothing contained in this Agreement, including the legal descriptions attached hereto, shall constitute any warranty, representation or agreement by Seller as to the location of separate lots in, or acreage of, the Property.

                    (c)          Title Defects. Buyer shall cause the Title Company to deliver the Title Commitment, together with copies of the exceptions to title referred therein, to Seller and Buyer. At least five (5) business days prior to the expiration of the Inspection Period, Buyer shall submit to Seller a written notice from Buyer (the “Title Notice”) specifying (A) any alleged defects in or objections to the title to the Property, and/or (B) its disapproval of any of the matters shown on the Existing Survey or the Survey. Buyer shall be deemed to have waived its right to make objection at the time of the Title Notice to matters shown in the Title Commitment or on the Existing Survey or the Survey unless Buyer shall have timely given to Seller the Title Notice which specified Buyer’s objection. Seller shall cause any mortgage or other lien voluntarily created by Seller (other than the Existing Loan) to be paid and discharged at or prior to Closing. Seller shall have no obligation to cure any other alleged defect or objection raised in the Title Notice, except as specifically provided in this Section. Seller shall have the right, at its sole option, upon written notice to Buyer given within two (2) business days following receipt of the Title Notice, to notify Buyer of its intent to (A) remove any encumbrance or other title objection or (B) elect not to do (A), in which event Buyer will have the right to make the election set forth below. Failure by Seller to deliver a notice of elections pursuant to this subparagraph shall be deemed an election by Seller under clause (B). If Seller elects, or is deemed to have elected, not to do (A), Buyer may elect, by written notice given to Seller prior to the expiration of the Inspection Period, as its sole right and remedy, either (i) to take such title to the Property as Seller can convey, with no abatement of the Purchase Price, or (ii) to terminate this Agreement and to receive on written demand by Buyer to Seller and Escrow Agent the return of the Earnest Money Deposit. Upon the delivery of Buyer’s notice to terminate under clause (ii) above to Escrow Agent and Seller, this Agreement shall be and become null and void and neither party shall have any further rights or obligations hereunder (except for the indemnity obligations of Buyer to Seller as set forth in this Agreement which shall survive the cancellation of this Agreement). If Buyer makes no election prior to the expiration of the Inspection Period, Buyer is deemed to have elected to take such title to the Property as Seller can convey, with no abatement of the Purchase Price.

                    (d)          Failure of Title. Further, if Seller, after notifying Buyer of its intention to do so, fails to remove any defects or objections to the title to the Property that were identified by Buyer in a Title Notice or if Seller fails to remove any other material defects to the title to the Property disclosed after the Inspection Period which were not previously identified in the Title Commitment, the Existing Survey or the Survey, Buyer may elect, as its sole right and remedy, either (i) to take such title to the Property as Seller can convey, with no abatement of the Purchase Price, or (ii) to terminate this Agreement and to receive on written demand by Buyer to Seller and Escrow Agent the return of the Earnest Money Deposit; provided, however, if such failure is a result of any intentional act or omission of Seller, such failure shall constitute a Seller default. Upon the delivery of Buyer’s notice to terminate under clause (ii) above to Escrow Agent and Seller, this Agreement shall be and become null and void and neither party shall have any further rights or obligations hereunder (except for the indemnity obligations set forth in this Agreement which shall survive the cancellation of this Agreement). If under such circumstances Buyer fails to deliver notice, Buyer shall be deemed to have elected to take such title to the Property as Seller can convey, with no abatement of the Purchase Price.

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                    (e)          Reliance on Title Insurance. Notwithstanding anything contained in this Agreement to the contrary, with respect to all matters affecting title to the Property and any liens or other encumbrances affecting the Property, Buyer acknowledges and agrees it will, at Closing, rely primarily upon the Title Insurance. If Buyer has a claim which may be properly asserted under its Title Insurance and the subject matter of that claim also constitutes a breach of any warranty made by Seller in the Special Warranty Deed or Assignment and Assumption of Ground Lease, Buyer agrees that, to the extent its Title Insurance permits, (i) it will look first to its Title Insurance for recovery on such claim, and (ii) although Buyer may assert a claim against Seller for a breach of a representation, warranty or covenant by delivering a Warranty Notice in accordance with the provisions of Section 18 (b)(iii) with respect to such claim, Buyer will not pursue such claim unless and until Buyer has pursued its remedies against the Title Company to final judgment and has not been made whole, and Seller will remain liable for such breach, subject to the provisions of Section 19 (b), to the extent recovery is not obtained by Buyer under its Title Insurance. The provisions of this Section shall survive Closing.

          4.       Possession, Assignment of Agreements and Leases.

                    (a)          Existing Leases; New Leases. Seller shall, prior to Closing, cause the Property to be operated in substantially the same manner as it is operated as of the date hereof. If Seller wishes to execute any renewal or modification of an existing lease or any new lease for occupancy of space in the Property (each, a “New Lease”) between the date hereof and the end of the Inspection Period, Seller shall immediately advise Buyer, shall furnish Buyer copies of all letters of intent and lease drafts, if any, with any such prospective tenant, shall keep Buyer closely informed of all negotiations with any such prospective tenant and shall give due consideration to any comments or suggestions made by Buyer. If Buyer and Seller disagree on how to proceed with any such prospective tenant, and Seller, notwithstanding such disagreement, elects to execute a New Lease with such prospective tenant prior to the expiration of the Inspection Period, Seller shall give written notice to Buyer of such election prior to execution by Seller and Buyer shall have two (2) business days from the date of such notice to elect to reconsider and agree to the terms of the New Lease or terminate this Agreement by written notice to Seller in which event the Earnest Money Deposit shall be returned to Buyer, provided nothing herein shall limit Buyer’s termination rights pursuant to Section 14(e) of this Agreement. If Buyer fails to respond to such notice, Buyer shall be deemed to have elected to reconsider and to agree to the terms of the New Lease.

                    If Seller wishes to execute a New Lease between the end of the Inspection Period and the Closing Date, such New Lease will be submitted to Buyer for approval, which approval shall not be unreasonably withheld, prior to execution by Seller. Buyer agrees to notify Seller in writing within two (2) business days after delivery to Buyer of Buyer’s approval or disapproval thereof, including all Tenant Inducement Costs and leasing commissions to be incurred in connection therewith. In the event that such New Lease is delivered by Seller to Buyer following the end of the Inspection Period and before the Closing Date, and Buyer does not approve such New Lease, Seller shall not enter into such New Lease and this Agreement shall remain in full force and effect. In the event that Buyer at any time fails to timely notify Seller in writing of its approval or disapproval, such failure shall be deemed approval by Buyer.

                    At Closing, Buyer shall reimburse Seller for any Tenant Inducement Costs, leasing commissions or other expenses paid by Seller in connection with any New Lease approved, or deemed approved, by Buyer and any other amounts designated as Buyer’s responsibility on Exhibit 4(a). Seller shall be responsible for those Tenant Inducement Costs,

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leasing commissions or other expenses incurred by Seller in connection with the tenant commonly known as Spec’s Wines, Spirits, and Finer Foods, and which are shown in greater detail on Exhibit 4(a); provided, however, that to the extent that such amounts have not been paid by Seller to the tenant prior to Closing, those amounts shall be credited to Buyer at Closing whereupon they shall be the responsibility of the Buyer. For purposes hereof, the term “Tenant Inducement Costs” means any out-of-pocket payments required under a Lease to be paid by the landlord thereunder to or for the benefit of the tenant thereunder which is in the nature of a tenant inducement, including specifically, without limitation, tenant improvement costs (including landlord’s work), space planning costs, construction management fees, lease buyout costs, and moving, design, refurbishment, club membership allowances and reasonable legal fees and expenses, but specifically excluding free rent. All such New Leases and the presently existing Leases are collectively herein called the “Existing Leases”. The termination of any of the Existing Leases prior to Closing by reason of the expiration of its term or by reason of the tenant’s default shall not excuse Buyer from its obligation to complete Closing and to pay the full Purchase Price. Seller shall give Buyer prompt notice of the termination of any of the Existing Leases prior to Closing. Notwithstanding the foregoing, Seller shall not terminate any Existing Leases after the end of the Inspection Period without Buyer’s prior written consent.

                    (b)          Existing Agreements. Seller shall also assign to Buyer at the completion of Closing, if assignable, all Assigned Existing Agreements. The existing management agreement and all leasing agreements shall be terminated at Closing and shall not be assigned to Buyer. The termination of any of the Assigned Existing Agreements prior to Closing by reason of the expiration of its term or by reason of a default thereunder shall not excuse Buyer from its obligation to complete Closing and to pay the full Purchase Price.

                    (c)          Tenant Estoppel Letters. Seller shall use good faith efforts (but without obligation to incur any unreasonable cost or expense) to obtain and deliver to Buyer prior to Closing, a Tenant Estoppel Letter dated no more than forty-five (45) days prior to Closing and made a part hereof signed by each tenant occupying space in the Property. Seller shall obtain and deliver to Buyer prior to Closing, as a condition precedent to Buyer’s obligation to proceed to Closing, a Tenant Estoppel Letter (i) from each Major Tenant and (ii) from other tenants Existing Leases which cover seventy-five percent (75%) (the “Required Tenant Estoppel Percentage”) of the remaining leased net rentable area of the Property. In determining whether the foregoing requirement has been satisfied, Buyer agrees not to object to (i) any non-material (as determined in Buyer’s reasonable judgment) qualifications or modifications which a tenant may make to the form of Tenant Estoppel Letter, or (ii) any modification to a Tenant Estoppel Letter necessary to conform it to the requirements of such tenant’s Lease, provided such modification is consistent with such tenant’s lease. Seller agrees to deliver copies of Tenant Estoppel Letters to Buyer prior to submission to tenants for Buyer’s review and comment. Buyer shall have five (5) business days following delivery of copies of the Tenant Estoppel Letters to provide suggested modifications for Seller’s consideration. Seller further agrees to deliver copies of executed Tenant Estoppel Letters within three (3) business days after receipt from tenants and will deliver originals thereof to Buyer at Closing. If Seller does not obtain a Tenant Estoppel Letter from a sufficient number of tenants to meet the Required Tenant Estoppel Percentage, then, unless Buyer waives the condition precedent, at Seller’s election, Seller may either (x) extend Closing pursuant to Section 2.4(a) of this Agreement in order to give Seller additional time to continue its good faith efforts to obtain a Tenant Estoppel Letter from a sufficient number of tenants to meet the Required Tenant Estoppel Percentage and/or (y) execute an estoppel certificate with respect to leases comprising up to ten percent (10%) of the leased net rentable area of the Property in order to satisfy the estoppel requirements hereof,

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provided in no event shall the Seller have the right to deliver any landlord estoppel letter for any Major Tenant. If Seller elects to execute a Tenant Estoppel Letter for any portion of the leased net rentable area of the Property and thereafter receives and delivers to Buyer a Tenant Estoppel Letter for such respective tenant, Seller shall be released from any liability under the Tenant Estoppel Letter executed by Seller. This provision shall survive Closing.

          5.          Apportionments.

                       (a)          (i)          Taxes, Assessments and Other. Real estate taxes and annual municipal or special district assessments (on the basis of the actual fiscal years for which such taxes are assessed), sums paid to or paid or payable by Seller under the Assigned Existing Agreements, rentals paid by Seller under the Ground Lease, as certified by the Ground Lease Estoppel Letter, and rentals and other sums paid to and received by Seller under the Existing Leases shall be apportioned at Closing pro rata between Buyer and Seller on a per diem basis as of the Closing Date with Buyer entitled to income, and charged with expenses, for the Closing Date. Any and all real estate taxes and annual municipal or special district assessments that are due and payable at Closing shall be paid in full by Seller at or prior to Closing.

                                     (ii)          Percentage Rents and Tenant Reimbursements. If the apportionment of any percentage rents for the month in which the Closing occurs cannot be precisely determined at the time of Closing, Seller and Buyer shall reasonably estimate the apportionment of such sums, and such estimated sums shall be apportioned at Closing pro-rata between Buyer and Seller on a per diem basis as of the date of Closing, and such apportionment shall be final and not subject to further adjustment following Closing.

          If as of the Closing Date Seller has actually incurred and paid more than it has billed to tenants in estimated calendar year 2012 (but not prior calendar years) operating expenses, real estate taxes and assessments (after giving effect to amounts credited by Seller to Buyer under Section 5(a)(i) above) or other payments, Seller shall receive a credit for the amount of such shortage at Closing. If as of the Closing Date Seller has actually incurred and paid less than it has received from tenants in estimated calendar year 2012 (but not prior calendar years) operating expenses, real estate taxes and assessments (after giving effect to amounts credited by Seller to Buyer under Section 5(a)(i) above) or other payments, Buyer shall receive a credit for the amount of such excess at Closing. The foregoing prorations shall be final and not subject to further adjustment following Closing.

                                     (iii)          Arrearages. Except as set forth in Exhibit 5(a) and except for tenant reimbursements for calendar year 2012 (for which provision is made in Section 5(a)(ii) above), any rents, percentage rents or tenant reimbursements payable by tenants after the Closing Date but applicable to periods on or prior to the Closing Date shall be remitted to Seller by Buyer promptly after receipt. The amounts set forth in Exhibit 5(a) to the extent not paid on or before the Closing Date shall be credited by Buyer to Seller on the Closing Date and Buyer shall be entitled to retain such amounts when paid. Buyer shall have no obligation to collect delinquencies other than to submit invoices of past due amounts (which amounts will be provided by Seller to Buyer) to tenants at the time of current billing for up to three (3) months following the Closing Date, but should Buyer collect any delinquent rents or other sums which cover periods prior to the Closing Date and for which Seller received no proration or credit, Buyer shall remit same to Seller promptly after receipt. Seller may pursue collection efforts (other than termination or eviction) against tenants for such amounts following the Closing Date.

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Seller will promptly remit to Buyer after receipt any rents, percentage rents or tenant reimbursements received by Seller after Closing which are attributable to periods occurring on or after the Closing Date. Undesignated receipts after Closing received by either Buyer or Seller from tenants shall be applied first to then current rents and reimbursements for such tenant(s), then to delinquent rents and reimbursements attributable to post-Closing Date periods, and then to delinquent rents and reimbursements attributable to pre-Closing Date periods.

                                  (iv)          No Tax Bill. If, on the Closing Date, final bills for the real estate taxes imposed upon the Property for the tax fiscal years in which Closing occurs have been issued but shall not have been paid, such taxes shall be prorated at the time of Closing. If such bills shall not have been issued on the Closing Date or, if the same have been issued but based upon an estimate rather than a definitive tax amount, then the amount of the taxes shall be prorated based on the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments payable during the year of Closing differ from the amount apportioned at Closing, the parties shall make all necessary by appropriate payments between themselves following Closing. Real estate taxes which are payable by any tenant directly to the taxing authority shall not be apportioned hereunder, and Buyer shall accept title subject to any of such charges unpaid and shall look solely to the tenant responsible therefor for the payment of the same.

                    (b)          Tenant Security Deposits. At Closing, Seller shall pay to Buyer or, at Buyer’s request, credit against the Purchase Price the amount of all security deposits then held by or for Seller under the Existing Leases. If any security deposits shall be held by Seller in the form of letters of credit or surety bonds, Seller shall assign its rights thereunder to Buyer and shall cooperate reasonably with Buyer in respect of the reissuance of any such letters of credit or bonds in the name of Buyer. After Closing, until such letters of credit or bonds have been reissued in the name of Buyer, Seller shall hold each such letter of credit for the benefit of Buyer and shall draw on such letter of credit at Buyer’s direction, until a substitute letter of credit is drawn in favor of Buyer and notification of delivery of such substitute letter of credit is given to Seller by Buyer, whereupon Seller shall promptly surrender such letter of credit to the applicable tenant, provided, however, that Buyer shall indemnify, defend and hold harmless Seller from any charge or claim from a third party that such post-closing draw request was improper or in violation of such letter of credit or surety bond. Seller shall reciprocally indemnify, defend and hold harmless Buyer from any charge or claim from a third party that any pre-closing draw request was improper or in violation of such letter of credit or surety bond. During the pendency of this Agreement, Seller shall only apply security deposits in the ordinary course of business following default.

                    (c)          Utility Readings. Seller shall use reasonable efforts to obtain readings of the gas (if any), water, electric and other utility meters, if any, on the Property as of the Closing Date. At or prior to Closing, Seller shall pay all charges based upon such meter readings. However, if after reasonable efforts Seller is unable to obtain readings of any meters prior to Closing, Closing shall be completed without such readings and utility charges will be prorated based on Seller’s reasonable estimate thereof. To the extent that the utility charges differ from the amount apportioned at Closing, the parties shall make all necessary by appropriate payments between themselves following Closing.

                    (d)          Existing Loan. If the Existing Loan is prepaid or defeased by Buyer on the Closing Date, Seller shall be entitled to the refund of any deposits or reserves held by

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Lender for taxes, insurance or other items. If the Existing Loan is assumed by Buyer on the Closing Date, Buyer shall credit Seller at Closing an amount equal to any deposits or reserves held by Lender for taxes, insurance or other items, to the extent such deposits and reserves are transferred to Buyer. Interest on the Existing Loan shall be pro rated between Seller and Buyer as of the Closing Date with Seller responsible for interest for the period from the payment date to the Closing Date and Buyer responsible for interest on and after the Closing Date.

                    (e)           Closing Costs.

                                   (i)          Seller shall pay:

                                                 (A)          Any and all state, county and/or municipal transfer taxes imposed upon the transactions contemplated hereby;

                                                 (B)          The costs, if any, of satisfying any monetary liens (other than the Existing Loan) required to be satisfied by Seller, curing title defects for any title defects Seller elects to cure and recording any curative title documents for any title defects Seller elects to cure;

                                                 (C)          The costs of recording the Special Warranty Deed;

                                                 (D)          The costs of recording the Assignment and Assumption of Ground Lease;

                                                 (E)          100% of the costs of Title Insurance (excluding the cost of title endorsements requested by Buyer, which shall be borne by Buyer as provided below);

                                                 (F)          100% of the brokerage commission payable to Seller’s Broker incurred in connection with the transactions contemplated herein, if and when this transaction closes, in an amount equal to one percent (1%) of the Purchase Price

                                                 (G)          One-half of Escrow Agent’s fees; and

                                                 (H)          Seller’s attorneys’ fees.

                                   (ii)         Buyer shall pay:

                                                 (A)          The costs of Buyer’s due diligence investigations;

                                                 (B)          If Buyer elects to assume the Existing Loan, all assumption fees charged by the holder of the Existing Loan and all costs and expenses, including attorneys’ fees and out of pocket expenses, charged by such holder or otherwise incurred with respect to the Buyer’s assumption of the Existing Loan, or, If Buyer elects not to assume the Existing Loan, all prepayment or defeasance fees, costs and expenses, including attorneys’ fees and out of pocket expenses, charged by the holder of the Existing Loan or otherwise incurred with respect to the Seller’s prepayment of the Existing Loan on the Closing Date;

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                                                   (C)          Any and all costs and expenses, including attorneys’ fees and out of pocket expenses, if any, charged by the Ground Lessor in connection with the assignment of the Seller’s ground leasehold interest in the Ground Lease to Buyer;

                                                   (D)          The costs of the Phase I environmental site assessment to be obtained by Buyer;

                                                   (E)          The costs of the Survey;

                                                   (F)          0% of the cost of Title Insurance, except as provided in clause (H) below;

                                                   (G)          100% of the brokerage commission payable to Buyer’s Broker (including any co-brokerage fees payable by Buyer’s Broker to other participating brokers) incurred in connection with the transactions contemplated herein, if and when this transaction closes;

                                                   (H)          The costs of any title endorsements requested by Buyer;

                                                   (I)           One-half of Escrow Agent’s fees; and

                                                   (J)          Buyer’s attorneys’ fees.

                                      (iii)       All other costs and expenses incident to this transaction and the closing thereof shall be paid by the party incurring same.

                       (f)           Final Settlement. All prorations and adjustments, other than real estate taxes and assessments and utilities, shall be final at Closing and not subject to further adjustment. Utility charges shall be finally adjusted directly between Seller and Buyer within sixty (60) days after the Closing Date. Real estate taxes and assessments shall be finally adjusted directly between Seller and Buyer within ten (10) business days after tax statements for calendar year 2012 become available (historically on or about October 1 of each calendar year). The agreements with respect to prorations in this Section 5 shall survive Closing.

          6.          Seller’s Representations.

                       (a)          Seller hereby represents and warrants to Buyer as follows:

                                      (i)          Organization. Seller is a general partnership, duly organized and validly existing under the laws of the State of Texas, and has all requisite partnership power and authority to carry on its business as now conducted.

                                      (ii)          Authorization. Seller has the requisite power and authority to enter into and perform this Agreement, and Seller has duly authorized (a) the execution of this Agreement and all documents to be delivered by Seller at Closing and (b) the performance of all of Seller’s obligations hereunder.

                                      (iii)          No Condemnation. There are no existing or, to Seller’s actual knowledge (without investigation on Seller’s part), pending or overtly threatened condemnation proceedings or deeds in lieu of condemnation affecting the Property.

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                                     (iv)          Litigation. There is no existing or, to Seller’s actual knowledge (without investigation on Seller’s part), pending or overtly threatened litigation involving Seller or the Property, except as set forth on Exhibit 6(a)(iv) attached hereto.

                                     (v)           Existing Leases. Seller has provided Buyer access on-site to or copies of all files relating to the Existing Leases and, to Seller’s actual knowledge, has delivered or made available to Buyer true, complete and correct copies of each Existing Lease (including all amendments thereto). To Seller’s actual knowledge, there are no Leases affecting the Property other than those listed on the Rent Roll. To Seller’s actual knowledge, there are no unpaid Tenant Inducement Costs under any Existing Leases other than as set forth in Exhibit 4(a) attached hereto.

                                     (vi)          Assigned Existing Agreements. Seller has provided Buyer access on-site to or copies of all files relating to the Assigned Existing Agreements and, to Seller’s actual knowledge, has delivered or made available to Buyer true, complete and correct copies of each Assigned Existing Agreement (including all amendments thereto). To Seller’s actual knowledge, there are no service contracts, service agreements and other similar instruments affecting the Property other than the Assigned Existing Agreements.

                                     (vii)         FIRPTA. Seller is not a “foreign person” (as defined in the Code and Income Tax Regulations). The provisions of the Foreign Investment in Real Property Tax Act of 1980, as amended, are not applicable to this transaction.

                                     (viii)        OFAC. Neither Seller nor, to Seller’s knowledge, any of its affiliates, nor any of their respective partners, members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) (including those named on OFAC’s Specially Designated and Blocked Persons List and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable executive orders (such lists are collectively referred to as the “Lists”)) or under any statute, executive order (including Executive Order No. 133224, 66 Fed. Reg. 49079 (Sept. 25, 2001)), or other governmental action.

                                     (ix)          No Options to Purchase. Seller has not entered into any other contracts for the sale of the Property or any portion thereof.

                                     (x)           Property Taxes. Neither Seller nor any of Seller’s predecessors within the past five (5) years has claimed, with respect to any of the Property, the benefit of any law permitting a special use valuation for the purposes of obtaining a lower ad valorem tax rate. A change in the ownership or use of the Property from its present ownership and use will not trigger liability for “rollback” taxes or other assessments for prior years.

                                     (xi)          Governmental Matters. Seller, to Seller’s actual knowledge, has not received written notice from any governmental authorities or agencies of uncured violations at the Property of building, fire, air pollution or zoning codes, rules, ordinances or regulations, environmental and hazardous substances laws, or other rules, ordinances or regulations relating to the Property.

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                                     (xii)          Environmental Matters. Seller, to Seller’s actual knowledge, has not received written notice of any violation of any Environmental Law from any governmental agency. Seller, to Seller’s actual knowledge, has not received written notice from any neighboring landowner of any claim of any violation of any Environmental Law.

                       (b)          Deliveries. On or before October 15, 2012, Seller also agrees that it will furnish or make available on-site to Buyer true copies of the following:

                                     (i)             Copies of all plans and specifications relating to the Property to the extent currently in Seller’s or Seller’s property manager’s possession or control;

                                     (ii)            Copies of 2010, 2011, and 2012 year-to-date books and records (excluding, however, internal memoranda, financial projections, appraisals and projected budgets) customarily prepared by or at Seller’s request with respect to the Property, including, without limitation, to the extent so prepared, all ledgers, records of income, expense, capital expenditures, deposit receipts, utility bills and property tax bills for such calendar years or portions thereof, to the extent currently in Seller’s, or its property manager’s, possession or control;

                                     (iii)           Copies of all Assigned Existing Agreements and other management, service, maintenance and other contracts, if any, currently in force with respect to the Property to the extent currently in Seller’s or its property manager’s, possession or control;

                                     (iv)           Copies of all Existing Leases currently in force with respect to the Property, delinquency reports, rent rolls, and tenant lease files including, without limitation, all notices to or from tenants, copies of all letters of credit, insurance certificates, and financial reports, if any, to the extent currently in Seller’s, or its property manager’s, possession or control;

                                     (v)            Copies of all operating permits, licenses and certificates of occupancy issued with respect to the Property to the extent currently in Seller’s or its property manager’s, possession or control;

                                     (vi)           Copies of insurance certificates or other customary evidence of all existing insurance coverage with respect to the Property;

                                     (vii)          Copies of all notices to or from any governmental entity or insurance company to the extent currently in Seller’s, or its property manager’s, possession or control;

                                     (viii)         Copies of environmental reports (“Seller’s Reports”) to the extent currently in Seller’s, or its property manager’s, possession or control; provided that Buyer first executes and delivers a non-reliance letter to Seller in form acceptable to Seller;

                                     (ix)           Copies of the Ground Lease;

                                     (x)            Copies of the Existing Loan Documents; and

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                                     (xi)          Copies of all Materials and any other documentation reasonably requested by Buyer to the extent currently in Seller’s, or its property manager’s, possession or control and not expressly excluded above.

                       (c)          NO WARRANTY. NOTWITHSTANDING THE PRIOR PROVISIONS OF THIS SECTION TO THE CONTRARY, BUYER ACKNOWLEDGES AND UNDERSTANDS THAT SOME OF THE MATERIALS DELIVERED BY SELLER HAVE BEEN PREPARED BY PARTIES OTHER THAN SELLER. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 6(A) ABOVE, SELLER MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, CONTENT OR ACCURACY OF THE DELIVERED MATERIALS WHETHER OR NOT PREPARED BY SELLER.

                       (d)          All references in this Section 6 or elsewhere in this Agreement to “Seller’s actual knowledge” shall refer solely to the actual knowledge of Jacqueline Miller Stewart, and shall not be construed to refer to the knowledge of any other partner, employee, officer, director, shareholder or agent of Seller or any affiliate of Seller, and shall not include imputed or constructive knowledge. Notwithstanding anything contained herein to the contrary, Jacqueline Miller Stewart, shall have no personal liability hereunder.

          7.          Buyer Representations. Buyer hereby represents to Seller as follows:

                       (a)          Organization. Buyer is a corporation duly organized and validly existing under the laws of the State of Texas and has all requisite power and authority to carry on its business as now conducted.

                       (b)          Authorization. Buyer has the requisite power and authority to enter into and perform this Agreement, and Buyer has duly authorized (a) the execution of this Agreement and all documents to be delivered by Buyer at Closing and (b) the performance of all of Buyer’s obligations hereunder.

                       (c)          OFAC. Neither Buyer nor, to Buyer’s knowledge, any of its affiliates, nor, to Buyer’s knowledge, any of their respective partners, members, shareholders or other equity owners, and, to Buyer’s knowledge, none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on any of the Lists or under any statute, executive order (including Executive Order No. 133224, 66 Fed. Reg. 49079 (Sept. 25, 2001)), or other governmental action. Notwithstanding anything contained hereinto the contrary, for the purposes of this provision, the phrase “any of its affiliates, nor any of their respective partners, members, shareholders or other equity owners” shall not include (x) any holder of a direct or indirect interest in a publicly traded company whose shares are listed and traded on a United States national stock exchange, or (y) any limited partner, unit holder or shareholder owning an interest of five percent (5%) or less in Buyer or in the holder of any direct or indirect interest in Buyer.

          8.          Conditions Precedent to Closing.

                       (a)          Buyer shall not be obligated to close under this Agreement unless each of the following conditions (to the extent material) shall exist on the Closing Date:

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                                     (i)            Title Insurance. The Title Company shall commit unconditionally in writing to Buyer to issue the Owner Policy in accordance with the provisions of Article 3 of this Agreement.

                                     (ii)           Accuracy of Representations. The representations and warranties made by Seller in this Agreement shall be true and correct as of the Closing Date in all material respects with appropriate modifications permitted under this Agreement; provided, however, Buyer shall have no right to assert a failure of this condition based upon any change in any representation to the extent that such change was known to Buyer prior to the end of the Inspection Period.

                                     (iii)          Tenant Estoppel Letters. Seller shall have delivered to Buyer the Tenant Estoppel Certificates required pursuant to the terms of Section 4(c).

                                     (iv)          Closing Deliveries. Seller shall have delivered to Buyer all of the items required to be delivered to Buyer pursuant to the terms of Section 9.

                                     (v)           Ground Lease Estoppel Letter. The parties shall have obtained the Ground Lease Estoppel Letter.

          If Buyer does not close under this Agreement because the condition(s) set forth above are not satisfied, Buyer shall have the right to terminate this Agreement upon written notice to Seller and Escrow Agent and immediately receive a return of the Earnest Money Deposit. Upon the return of the Earnest Money Deposit by Escrow Agent to Buyer, this Agreement shall be and become null and void and neither party shall have any further rights or obligations hereunder (except for the indemnity obligations of Buyer to Seller and Seller to Buyer as set forth in this Agreement, which shall survive the cancellation of this Agreement); provided, however, if Buyer does not close under this Agreement because the condition(s) set forth above are not satisfied due to an intentional act or omission of Seller, it shall be deemed an event of default by Seller, and Buyer shall have the remedies set forth in Section 10(b) below for such default.

                       (b)         Seller shall not be obligated to close under this Agreement unless each of the following conditions (to the extent material) shall exist on the Closing Date:

                                     (i)          Purchase Price. Seller shall have received the Purchase Price.

                                     (ii)          Accuracy of Representations. The representations and warranties made by Buyer in this Agreement shall be true and correct as of the Closing Date in all material respects with appropriate modifications permitted under this Agreement.

                                     (iii)          Closing Deliveries. Buyer shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of Section 9.

                                     (iv)          Ground Lease Estoppel Letter. The parties shall have received the Ground Lease Estoppel Letter.

                                     (v)           Existing Loan. Buyer shall have obtained the Loan Approval or irrevocably committed to prepay or defease the Existing Loan.

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          If Seller does not close under this Agreement because the condition set forth in subsection (iv) is not satisfied through no act or omission of Buyer, it shall not be an event of default by Buyer, however Seller shall have the right to terminate this Agreement upon written notice to Buyer and Escrow Agent and return of the Earnest Money Deposit to Buyer. Upon the return of the Earnest Money Deposit by Escrow Agent to Buyer, this Agreement shall be and become null and void and neither party shall have any further rights or obligations hereunder (except for the indemnity obligations of Buyer to Seller and Seller to Buyer as set forth in this Agreement, which shall survive the cancellation of this Agreement). The failure of any other condition precedent set forth above shall be deemed an event of default by Buyer, and Seller shall have the remedies set forth in Section 10(a) below for such default.

          9.          Deliveries at Closing.

                       (a)          Seller’s Deliveries. On the Closing Date, Seller shall execute (as indicated) and deliver to the Title Company (or make available at the Property if so indicated and not required to be at the Title Company for Closing) the following (collectively, the “Seller Deliveries”):

                                     (i)             The Special Warranty Deed.

                                     (ii)            The Assignment and Assumption of the Ground Lease.

                                     (iii)           The Bill of Sale.

                                     (iv)           The Assignment and Assumption Agreement.

                                     (v)            A current and updated Rent Roll without warranty, representation or recourse.

                                     (vi)           If requested by the Title Company, a bills paid affidavit and a resolution to evidence the capacity of the signatory for Seller.

                                     (vii)          The FIRPTA Certification.

                                     (viii)        Possession of the Property free and clear of all parties in possession except under the Existing Leases, and (to the extent in Seller’s possession) all keys, codes and other security devices for the Property (to be made available at the Property).

                                     (ix)           The Tenant Notices.

                                     (x)            Copies (to the extent in Seller’s possession or control) of all books and records for the orderly transition of operation of the Property (to be made available at the Property).

                                     (xi)           The originals (to the extent in Seller’s possession or control) of all Existing Leases, all Assigned Existing Agreements, and all other materials owned by Seller relating to the maintenance and operation of the Property and which are currently in Seller’s possession or control (to be made available at the Property).

                                     (xii)          The Tenant Estoppel Letters to the extent required pursuant to Section 4(c).

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          (xiii)     The Ground Lease Estoppel Letter duly executed by Seller and Ground Lessor.

                                     (xiv)          If Lender Approval has been obtained and the Loan Assumption Documents to be executed by Seller (if any) have been delivered to Seller, the Loan Assumption Documents required to be executed by Seller (if any).

                                     (xv)           Termination of the existing management agreement.

                                     (xvi)          Termination of any Existing Lease or occupancy agreement with Seller, Seller’s managing agent and any affiliate of Seller for any portion of the Property; except as follows: (A) Seller’s managing agent may continue to lease Suite 635-205 (managing agent’s office) containing approximately 1,238 square feet, more or less, located at 5959 Royal Lane, Dallas, Texas 75230, under the terms of the Existing Lease between Seller and Seller’s managing agent at the current rent of $14.50 per rentable square foot for a term of up to six(6) months following Closing, terminable on two (2) days’ written notice to Buyer; and (B) Seller’s managing agent may continue to occupy Suite 635-202 (managing agent’s conference room), located at 5959 Royal Lane, Dallas, Texas 75230, at no rent for up to one (1) week following Closing.

                                     (xvii)         The Update Certificate.

                                     (xviii)        A Lien Waiver executed by Seller’s Broker.

                                     (xix)          Any other documents which Seller is obligated to deliver to Buyer pursuant to this Agreement.

                       (b)          Buyer’s Deliveries. On the Closing Date, Buyer shall execute (as indicated) and deliver to the Title Company the following:

                                     (i)              The Assignment and Assumption of the Ground Lease.

                                     (ii)             The Assignment and Assumption Agreement.

                                     (iii)            The Tenant Notices.

                                     (iv)            If Lender Approval has been obtained, the Loan Assumption Documents required to be executed by or on behalf of Buyer.

                                     (v)             A Lien Waiver executed by Buyer’s Broker.

                                     (vi)            If requested by the Title Company, a resolution executed by the appropriate parties to evidence the capacity of the signatory for Buyer.

                                     (vii)           That portion of the Purchase Price payable in cash at Closing.

                                     (viii)          Any other documents which Buyer is obligated to deliver to Seller pursuant to this Agreement.

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          10.        Default.

                       (a)          Buyer Default. If Buyer shall have refused to complete Closing in accordance with this Agreement (other than pursuant to a right granted in this Agreement), then as Seller’s sole and exclusive remedy, the Earnest Money Deposit shall be paid to Seller by Escrow Agent and the Earnest Money Deposit shall be retained by Seller as liquidated damages and not as a penalty; provided, however, Seller agrees to give Buyer one (1) written notice of a Buyer default and two (2) business days following delivery of such notice to cure such default before Seller shall be entitled to retain the Earnest Money Deposit; and provided, further, such obligation of Seller to give Buyer such written notice and right to cure shall not be applicable at Closing if Seller shall have satisfied Seller’s conditions precedent to Closing set forth in Section 8(a). The receipt of the Earnest Money Deposit shall be Seller’s sole and exclusive remedy in the event of Buyer’s default hereunder, and Seller in such event hereby waives any right, unless Closing is completed, to recover the balance of the Purchase Price or any other amount. Seller and Buyer agree that the actual damages to Seller in the event of such breach are impractical to ascertain as of the date of this Agreement and the amount of the Earnest Money Deposit is a reasonable estimate thereof. If Seller shall retain the Earnest Money Deposit as liquidated damages, this Agreement shall be and become null and void. Nothing in this Section 10 shall limit Seller’s rights against Buyer or Buyer’s rights against Seller by reason of any indemnity obligations set forth in this Agreement all of which shall survive the termination of this Agreement.

                       (b)          Seller Default. Buyer agrees that Buyer’s sole and exclusive remedy for any default by Seller will be to either (i) terminate this Agreement and receive the Earnest Money Deposit, or (ii) to commence or maintain an action against Seller for specific performance under this Agreement. Any action against Seller for specific performance under this Agreement must be commenced by Buyer within thirty (30) days following the Closing Date. In no event (i.e., even upon the occurrence of a Seller default) may Buyer ever pursue, commence or maintain an action for, or otherwise collect, damages from Seller. Buyer may not pursue an action for specific performance or other equitable relief in the absence of a Seller default.

          11.        Notices; Computation of Periods.

                       (a)          Notices. All notices given by either party to the other shall be in writing and shall be sent either (i) by United States Postal Service registered or certified mail, postage prepaid, return receipt requested, (ii) by nationally recognized overnight courier service for next business day delivery, addressed to the other party at the following addresses listed below or (iii) via facsimile transmission to the facsimile numbers listed below; provided, however, that if such communication is given via facsimile, an original counterpart of such communication shall concurrently be sent in the manner specified in clause (ii) above. Addresses and facsimile numbers of the parties are as follows:

As to Seller: Preston Royal Realty Company
Attention: Jacqueline Miller Stewart
5959 Royal Lane, Suite 634-205
Dallas, Texas 75230
Telephone: 214/559-2740
Facsimile:214/521-4326

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with a copy at the same time to:	Bell Nunnally & Martin LLP Attention: Jean Pierre Boyea 3232 McKinney Avenue, Suite 1400 Dallas, Texas 75204 Telephone: 214/740-1439 Facsimile: 214/740-5739
As to Buyer:	Tenel H. Tayar AmREIT Realty Investment Corporation 8 Greenway Plaza, Suite 1000 Houston, TX 77046 Telephone: 713-860-4941 Facsimile:713-850-0498 Email: ttayar@amreit.com
with a copy at the same time to:	T. Gaillard Uhlhorn Bass, Berry & Sims PLC The Tower at Peabody Place 100 Peabody Place, Suite 900 Memphis, TN 38103 Telephone: 901-543-5943 Facsimile: 901-543-5999 Email: guhlhorn@bassberry.com
With a copy to Escrow Agent: (if required)	Janine Barber Republic Title of Texas, Inc. Dallas Uptown Commercial 2626 Howell St,10th Floor Dallas, TX 75204 Telephone: (214) 855-8863 Facsimile: (214) 855-8898 Email: jbarber@republictitle.com

or to such other address as the respective parties may hereafter designate by notice in writing in the manner specified above. Any notice may be given on behalf of any party by its counsel. Notices given in the manner aforesaid shall be deemed sufficiently served or given for all purposes under this Agreement upon the earliest of (i) actual receipt or refusal by the addressee, or (ii) one day following the date of delivery to a nationally recognized overnight courier service.

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                       (b)          Computation of Periods. If the final day of any period of time in any provision of this Agreement falls upon a Saturday, Sunday or a holiday observed by federally insured banks in the State in which the Property is located or by the United States Postal Service, then, the time of such period shall be extended to the next day which is not a Saturday, Sunday or holiday. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period is so computed as to be included, unless such last day is a Saturday, Sunday or holiday in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or holiday.

          12.        Fire or Other Casualty.

                       (a)          Risk of Loss and Casualty Insurance. Prior to Closing, Seller shall have full risk of loss or damage with respect to the Property. Upon Closing, full risk of loss or damage with respect to the Property shall pass to Buyer. For purposes of this Section, “loss or damage” shall mean the following (i) any loss, damage, destruction or injury by fire, storm, accident, vandalism, flood or other casualty or hazard to the Property; and (ii) any condemnation, eminent domain or other similar proceeding. Seller agrees to maintain in effect until the Closing Date the fire and extended coverage insurance policies now in effect on the Property.

                       (b)          Casualty Damage. If the Property shall be damaged or destroyed by fire or other casualty or vandalism between the date of this Agreement and the Closing Date, subject to subparagraph (c) below, the obligation of Buyer to complete Closing under this Agreement shall in no way be voided or impaired, and Buyer shall be required to accept the Property in its then damaged conditioned without abatement of the Purchase Price. If any such damage or destruction occurs after the date of this Agreement, the proceeds of all fire and extended coverage insurance policies attributable to the Property received by Seller and not used by Seller for the repair of the Property (and Buyer hereby authorizes Seller to use the proceeds for such purpose) shall be disbursed by Seller to Buyer at Closing or thereafter immediately upon receipt by Seller and Seller shall also pay to Buyer at Closing the amount of any deductible; and all unpaid claims under such insurance policies attributable to the Property shall be assigned by Seller to Buyer on the date of Closing and there shall be no reduction in the Purchase Price by reason of such unpaid claim except that the Purchase Price shall be reduced by the amount of any deductible.

                       (c)          Right of Termination. Notwithstanding any of the preceding provisions of this Section 12, if the Property shall be substantially damaged by vandalism, fire or other insured casualty prior to the Closing Date, Buyer shall have the right to terminate this Agreement by written notice to Seller. Upon such termination, the Earnest Money Deposit shall be returned by Escrow Agent to Buyer, neither party shall have any further rights or obligations hereunder (except the indemnity obligations of Buyer to Seller and Seller to Buyer set forth in this Agreement which shall survive the termination of this Agreement), and this Agreement shall be null and void. Substantial damage shall mean such damage that would either (i) cost, in the reasonable judgment of Seller’s independent insurance adjuster, at least two percent (2%) of the Purchase Price to repair to its prior condition, (ii) permit any Major Tenant to terminate its Lease, or (iii) permit tenants with leases comprising an aggregate of 15,000 leased net rentable area of the Property to terminate their respective lease(s). If Buyer desires to terminate this Agreement pursuant to this subparagraph (c), Buyer must give a written notice of termination to Seller within ten (10) business days following Buyer’s receipt of Seller’s notice of the occurrence

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of the casualty and of Seller’s independent insurance adjuster’s reasonable estimate of the cost of repair.

          13.        Assignability.

                       (a)          Limited Assignment. Subject to the further limitations in subparagraph (b) below, prior to Closing Buyer may, without the prior written consent of Seller, assign this Agreement, and all, but not part, of Buyer’s rights under this Agreement, to an entity (i) which is qualified to do business in the State in which the Property is located, and (ii) which is directly or indirectly controlled by the entity owning all or substantially all of the interests in Buyer or is an investment fund of, or investment advisory client of, Buyer; provided, however, that such assignment shall not release or relieve Buyer of and from any liability or obligation under this Agreement, and Buyer shall continue to be primarily liable to Seller under this Agreement. No such assignment shall be effective, however, unless and until Buyer shall have furnished to Seller both an executed copy of the assignment and assumption agreement, in form reasonably satisfactory to Seller, by the assignee to assume, perform and be responsible, jointly and severally with the Buyer named herein, for the performance of all of the obligations of Buyer under this Agreement, and which contains a representation by the assignee that all of the representations and warranties made by Buyer in this Agreement are true and correct with respect to the assignee as of the date of the assumption agreement (or if the assignee is a different form of entity, the applicable representation shall be modified as appropriate). Seller shall have the right to rely in good faith on the genuineness and validity of the notice from Buyer of an assignment and to convey the Property to the assignee without liability to Buyer or any other person. Buyer shall indemnify and save Seller harmless from and against any such liability in connection with such conveyance to the assignee.

                       (b)          Prohibited Assignments. Notwithstanding the foregoing provisions of subparagraph (a), Buyer shall have no right to assign this Agreement (i) to any person who, or to any entity which, has as a direct or indirect majority owner a person with a felony criminal record or currently under a felony criminal indictment; or (ii) to any person who, or entity which, cannot make the Buyer OFAC representation.

                       (c)          Successors and Assigns. Except as provided in subparagraph (a), Buyer may not assign or suffer an assignment of this Agreement and its rights under this Agreement, without the prior written consent of Seller, which consent Seller may deny in its sole and absolute discretion. Subject to the foregoing limitations, this Agreement shall extend to, and shall bind, the respective heirs, executors, personal representatives, successors and assigns of Seller and Buyer.

          14.        Inspection Period.

                       (a)          Right to Inspect. Buyer, and Buyer’s agents and representatives, shall have the right, from time to time, between the Effective Date and 5:00 p.m., Central Standard Time, on November 2, 2012 (“Inspection Period”), during normal business hours, to enter upon the Property for the purpose of examining the financial and operating books and records relating to the Property maintained by or for the benefit of Seller, interviewing tenants of the Property and conducting such non-destructive physical engineering, feasibility and other studies and tests on or of the Property as Buyer considers to be appropriate (including a Phase I environmental assessment report and a structural engineering report, but excluding, without Seller’s prior written consent, any invasive testing), testing of machinery and equipment, taking

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of measurements, making of surveys and generally for the reasonable ascertainment of the physical condition of the Property; provided, however, that Buyer shall (i) give Seller at least one (1) business day prior notice of the time, place and purpose of such entry and permit a representative of Seller to accompany Buyer; (ii) restore any damage to the Property or any adjacent property caused by such actions; (iii) indemnify, defend and save Seller and, as the case may be, its partners, trustees, shareholders, directors, officers, employees and agents harmless of and from any and all liabilities which Seller and its partners, trustees, shareholders, directors, officers, employees and agents may suffer related to property damage or personal injury, to the extent caused by such entry and such activities; (iv) give Seller at least one (1) business day prior notice of the time and place of any tenant interview, and permit a representative of Seller to be present at each tenant interview; and (v) prior to entry onto the Property, furnish Seller with a certificate of general liability and property damage insurance maintained by Buyer with single occurrence coverage of at least $5,000,000.00 and naming Seller and its management agent as additional insureds. Notwithstanding the generality of the foregoing, Buyer agrees (i) not to conduct any tenant interviews on or before October 26, 2012, (ii) to provide at least one (1) business day prior notice to Seller of the tenants Buyer desires to interview (not to exceed tenants occupying in excess of 75% of the net leasable area of the Property) and (iii) to permit a representative of the Seller to be present at all tenant interviews. All such inspection rights shall be subject to the rights of tenants under the Existing Leases.

                       (b)          No Liens Permitted. Nothing contained in this Agreement shall be deemed or construed in any way as constituting the consent or request of Seller, express or implied by inference or otherwise, to any party for the performance of any labor or the furnishing of any materials to the Property or any part thereof, nor as giving Buyer any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any liens against the Property or any part thereof.

                       (c)          Assumption of the Existing Loan. Buyer and Seller agree that in connection with the sale of the Property, it shall be a condition precedent to the Closing obligations of Seller that Buyer either (i) assume the Existing Loan (the “Loan Assumption”), or (ii) prepay and/or defease the Existing Loan. Buyer shall make such election, and notify Seller in writing, before noon, Central Time, on November 2, 2012. If Buyer elects to assume the Existing Loan and is unable to obtain Lender Approval (as hereinafter defined) prior to Closing, Buyer shall nonetheless proceed to Closing, in which event Buyer shall prepay and/or defease the Existing Loan at Closing at Buyer’s sole expense.

                                     (i)           Assumption of the Existing Loan Documents. In connection with the Closing and, if Buyer so elects, the Loan Assumption, Buyer shall have the right to contact Lender regarding the Loan Assumption. Seller and Buyer agree to promptly furnish all applications and reasonable information requested by Lender, shall reasonably cooperate with Lender and each other in expediting the Loan Assumption approval process, and Buyer shall keep Seller closely advised of Buyer’s communication with Lender. In connection with the Loan Assumption, the parties will diligently pursue negotiations of an assumption agreement (and such other documents, instruments, certificates and/or legal opinions as may be required by Lender (collectively, the “Loan Assumption Documents”)). The Loan Assumption Documents shall provide a release of Seller in a form reasonably acceptable to Seller.

                                     (ii)          Assumption Fees. Buyer shall pay (a) any and all fees and charges associated with the Lender Approval; (b) any and all loan transfer fees and debt assumption fees due to Lender in connection with the Loan Assumption; and (c) any and all

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fees charged by Lender in connection with the drafting and negotiating of the Loan Assumption Documents. Each of Buyer and Seller shall pay their respective attorneys’ fees incurred in connection with the Loan Assumption.

                                     (iii)          Lender Approval. Lender’s conditional approval of the Loan Assumption, together with a final version of the Loan Assumption Documents providing for a full release of Seller from all obligations and liabilities with respect to the Loan first accruing from and after Closing, shall constitute “Lender Approval”. Buyer will deliver draft copies of the Loan Assumption Documents to Seller promptly after receipt from Lender and will deliver executed originals of the Loan Assumption Documents at Closing. Buyer shall be responsible for any and all prepayment fees and/or costs in connection with the payoff or defeasance of the Existing Loan including, without limitation, any prepayment fee.

                       (d)          Ground Lease Estoppel Letter. Buyer and Seller agree that in connection with the sale of the Property, it shall be a condition precedent to the Closing obligations of Seller and Buyer that Buyer obtain the Ground Lease Estoppel Letter. If the parties are unable to obtain the Ground Lease Estoppel Letter by the end of the Inspection Period, then either party may terminate this Agreement, the Earnest Money shall be returned to Buyer and neither party shall have any further liability hereunder (except for the indemnity obligations of Buyer to Seller and Seller to Buyer under this Agreement which shall survive termination of this Agreement). Seller and Buyer agree to promptly furnish all reasonable information requested by Ground Lessor, and shall reasonably cooperate with Ground Lessor in expediting the Ground Lessor approval process. In connection therewith, the parties will diligently pursue any reasonable changes to the form of Ground Lease Estoppel Letter requested by Ground Lessor. Each of Buyer and Seller shall pay their respective attorneys’ fees incurred in connection any negotiation of the form of Ground Lease Estoppel Letter. Neither Seller nor Buyer shall be obligated to pay incur any additional cost or expense in connection therewith. Seller will deliver a copy of the executed Ground Lease Estoppel Letter promptly after receipt from Ground Lessor and will deliver the executed original Ground Lease Estoppel Letter at Closing.

                       (e)          Right of Termination. If Buyer, in Buyer’s sole and absolute discretion, determines that it is not satisfied with the Property for any or no reason, or fails to obtain Lender’s consent to the assumption of the Existing Loan by Buyer, Buyer shall have the right on or prior to the expiration of the Inspection Period to terminate this Agreement. In the event that Buyer is satisfied with the Property and other matters contemplated herein and chooses to proceed with the transaction contemplated by this Agreement, Buyer will give Seller written notice (“Continuation Notice”) on or prior to the expiration of the Inspection Period. In the event that Buyer does not provide such Continuation Notice to Seller by the expiration of the Inspection Period, then Buyer will be deemed to have elected to terminate this Agreement pursuant to this Section 14(e). In such event, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller and Seller to Buyer under this Agreement which shall survive termination of this Agreement) and the Earnest Money Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. Upon termination of this Agreement by Buyer, as a condition to the return of the Earnest Money Deposit, Buyer shall return the due diligence materials delivered by Seller to Buyer and shall furnish a copy of reports obtained by Buyer with respect to the Property to Seller.

                       (f)          Financing. Except for the provisions of this Agreement related to the assumption, prepayment or defeasance of the Existing Loan, there is no financing contingency to Buyer’s obligations under this Agreement.

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          15.        Condemnation.

                       (a)          Taking. If any part of the Property shall be taken by exercise of the power of eminent domain after the date of this Agreement, subject to the provisions of subparagraph (b) below, this Agreement shall continue in full force and effect and there shall be no abatement of the Purchase Price. Seller shall be relieved, however, of its duty to convey title to the portion so taken, but Seller shall, on the Closing Date, assign to Buyer all rights and claims to any awards arising therefrom as well as any money theretofore received by Seller on account thereof net of any expenses to Seller, including reasonable attorneys’ fees of collecting the same. Seller shall promptly furnish Buyer with a copy of the declaration of taking promptly after Seller’s receipt thereof. If Seller fails to permit Buyer to approve the settlement of any condemnation claim and Buyer, in Buyer’s good faith reasonable judgment, determines that the final condemnation award will not adequately compensate for the portion of the Property lost as a result of such taking, then Buyer may terminate this Agreement by written notice to Seller no later than the fifth (5th) business day following Buyer’s receipt of notice of such final condemnation award.

                       (b)          Material Taking. If any taking a portion of the Property materially interferes with the use of the Property for the purposes for which it is currently used, Buyer may terminate this Agreement, by written notice to Seller and Escrow Agent within ten (10) days of Seller’s notice to Buyer of such a taking. Upon the giving of such termination notice, the Earnest Money Deposit shall be returned to Buyer by Escrow Agent and this Agreement shall become null and void, except for the indemnity obligations of Buyer to Seller and of Seller to Buyer set forth in this Agreement which will survive termination of this Agreement. If Buyer does not timely give notice of termination, Buyer shall be deemed to have waived its option contained in this Section 15(b) to terminate this Agreement, Buyer’s obligations under this Agreement shall remain in effect notwithstanding such condemnation and Buyer shall remain obligated to consummate the purchase in accordance with the terms of this Agreement; provided, however, that Seller shall, on the Closing Date (i) assign and remit to Buyer, and Buyer shall be entitled to receive and keep, the net proceeds of any award or other proceeds of such Material Taking which may have been collected by Seller as a result of such Material Taking less the reasonable expenses incurred by Seller in connection with such Taking, or (ii) if no award or other proceeds have been collected, deliver to Buyer an assignment of Seller’s right to any such award or other proceeds which may be payable to Seller as a result of such Material Taking. As used herein, the term “Material Taking” shall mean any taking or proposed taking by eminent domain which involves a taking of two percent (2%) or more of the leased area of the Property as determined by an independent appraiser chosen by Seller and Buyer, or which materially adversely affects access to the Property on a permanent basis, or causes the Property to be in violation of applicable zoning laws or parking requirements, which violation cannot be cured, or which permits any tenant to terminate its lease.

          16.        Brokers. Buyer represents and warrants to Seller that Buyer has dealt with no broker or other intermediary in connection with this transaction or the Property other than Seller’s Broker and Buyer’s Broker. Seller represents and warrants to Buyer that Seller has dealt with no broker or other intermediary in connection with this transaction or the Property other than Seller’s Broker and Buyer’s Broker. If any broker or other intermediary other than Seller’s Broker or Buyer’s Broker claims to have dealt with Buyer or Seller in connection with this transaction or the Property, to have introduced the Property to Buyer for sale, or to have been the inducing cause of the sale, the party under whom such broker or intermediary is

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claiming shall indemnify, defend and save the other party harmless of and from any claim for commission or compensation by such broker or other intermediary.

          17.        CONDITION OF PROPERTY.

                       (a)          NO WARRANTIES. THE ENTIRE AGREEMENT BETWEEN SELLER AND BUYER WITH RESPECT TO THE PROPERTY AND THE SALE THEREOF IS EXPRESSLY SET FORTH IN THIS AGREEMENT. THE PARTIES ARE NOT BOUND BY ANY AGREEMENTS, UNDERSTANDINGS, PROVISIONS, CONDITIONS, REPRESENTATIONS OR WARRANTIES (WHETHER WRITTEN OR ORAL AND WHETHER MADE BY SELLER OR ANY AGENT, EMPLOYEE OR PRINCIPAL OF SELLER OR ANY OTHER PARTY) OTHER THAN AS ARE EXPRESSLY SET FORTH AND STIPULATED IN THIS AGREEMENT OR IN THE DOCUMENTS CONTEMPLATED UNDER THIS AGREEMENT TO BE EXECUTED AT CLOSING. WITHOUT IN ANY MANNER LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES THAT, AS OF THE CLOSING DATE, IT AND ITS REPRESENTATIVES SHALL BE DEEMED TO HAVE FULLY INSPECTED THE PROPERTY, THE EXISTING LEASES AND ASSIGNED EXISTING AGREEMENTS, OR PURSUANT TO THIS AGREEMENT WILL BE PROVIDED WITH AN ADEQUATE OPPORTUNITY TO DO SO, ARE OR WILL BE FULLY FAMILIAR WITH THE FINANCIAL AND PHYSICAL (INCLUDING WITHOUT LIMITATION, ENVIRONMENTAL AND SOIL COMPACTION) CONDITION THEREOF, AND THAT THE PROPERTY, THE EXISTING LEASES AND ASSIGNED EXISTING AGREEMENTS WILL BE PURCHASED BY BUYER (SUBJECT IN ALL EVENTS AND CIRCUMSTANCES, AS TO THE PROPERTY, TO SELLER’S SPECIAL WARRANTY OF TITLE) IN AN “AS IS” AND “WHERE IS” CONDITION AND WITH ALL EXISTING DEFECTS AS A RESULT OF SUCH INSPECTIONS AND INVESTIGATIONS AND NOT IN RELIANCE ON ANY AGREEMENT, UNDERSTANDING, CONDITION, WARRANTY (INCLUDING, WITHOUT LIMITATION, WARRANTIES OF HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) OR REPRESENTATION MADE BY SELLER OR ANY AGENT, EMPLOYEE OR PRINCIPAL OF SELLER OR ANY OTHER PARTY (EXCEPT AS EXPRESSLY ELSEWHERE PROVIDED IN THIS AGREEMENT) AS TO THE FINANCIAL OR PHYSICAL (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL AND SOIL COMPACTION) CONDITION OF THE PROPERTY OR THE AREAS SURROUNDING THE PROPERTY, AS TO ANY MATTER, INCLUDING WITHOUT LIMITATION AS TO ANY PERMITTED USE THEREOF, THE ZONING CLASSIFICATION THEREOF OR COMPLIANCE THEREOF WITH FEDERAL, STATE OR LOCAL LAWS, AS TO THE INCOME OR EXPENSE IN CONNECTION THEREWITH, AS TO WHETHER OR NOT ANY PORTION THEREOF IS IN THE FLOOD PLAIN, OR AS TO ANY OTHER MATTER IN CONNECTION THEREWITH. BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN THE DOCUMENTS CONTEMPLATED UNDER THIS AGREEMENT TO BE EXECUTED AT CLOSING, NEITHER SELLER, OR ANY AGENT OR EMPLOYEE OF SELLER NOR ANY OTHER PARTY ACTING ON BEHALF OF SELLER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY SUCH AGREEMENT, CONDITION, REPRESENTATION OR WARRANTY EITHER EXPRESSED OR IMPLIED. THIS PARAGRAPH SHALL SURVIVE CLOSING, AND SHALL BE DEEMED INCORPORATED BY REFERENCE AND MADE A PART OF ALL DOCUMENTS DELIVERED BY SELLER TO BUYER IN CONNECTION WITH THE SALE OF THE PROPERTY.

                       (b)          CHANGE OF CONDITIONS. SUBJECT TO THE PROVISIONS OF THIS AGREEMENT, BUYER SHALL ACCEPT THE PROPERTY AT THE TIME OF CLOSING IN THE SAME CONDITION AS THE SAME ARE IN AS OF THE EXPIRATION OF THE

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INSPECTION PERIOD, AS SUCH CONDITION SHALL HAVE CHANGED BY REASON OF NORMAL WEAR AND TEAR, DAMAGE BY FIRE OR OTHER CASUALTY AND VANDALISM. SUBJECT TO THE PROVISIONS OF THIS AGREEMENT, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER SPECIFICALLY ACKNOWLEDGES THAT THE FACT THAT ANY PORTION OF THE PROPERTY OR ANY EQUIPMENT OR MACHINERY THEREIN OR ANY PART THEREOF MAY NOT BE IN WORKING ORDER OR CONDITION AT THE CLOSING DATE BY REASON OF NORMAL WEAR AND TEAR OR DAMAGE BY FIRE OR OTHER CASUALTY OR VANDALISM, OR BY REASON OF ITS PRESENT CONDITION, SHALL NOT RELIEVE BUYER OF ITS OBLIGATION TO COMPLETE CLOSING UNDER THIS AGREEMENT AND PAY THE FULL PURCHASE PRICE. NOTWITHSTANDING THAT, EXCEPT AS PROVIDED IN THIS AGREEMENT, SELLER HAS NO OBLIGATION TO MAKE ANY REPAIRS OR REPLACEMENTS REQUIRED BY REASON OF NORMAL WEAR AND TEAR, FIRE OR OTHER CASUALTY, OR VANDALISM, SELLER MAY, AT ITS OPTION, MAKE ANY SUCH REPAIRS AND REPLACEMENTS PRIOR TO THE CLOSING DATE IF SELLER BELIEVES SUCH REPAIRS AND REPLACEMENTS ARE NECESSARY, DESIRABLE OR LEGALLY REQUIRED TO PROTECT THE PROPERTY.

                    (c)     Condition of Delivery. Seller has, subject to subparagraph (d) below, no obligation to deliver the Property in a “broom clean” condition if it is currently not in broom clean condition, and at Closing Seller may leave in the Property all items of personal property and equipment, partitions and debris as are now presently therein.

                    (d)     Seller Operation of the Property. Notwithstanding the foregoing provisions of this Section 17, between the date of the execution of this Agreement and the Closing Date, Seller shall, subject to the limitations and other provisions hereof, continue to lease and operate the Property in a manner consistent with leasing and operation on the date of this Agreement, shall comply in all material respects with Seller’s obligations under the Existing Leases and Assigned Existing Agreements, and shall perform all customary repairs (and emergency repairs, to the extent necessary to remedy the emergency) to the Property as Seller has customarily previously performed to maintain them in the same condition or better as they are as of the date of the expiration of the Inspection Period, as said condition shall be changed by normal wear and tear, damage by fire or other casualty, or vandalism. Seller shall maintain all insurance which is in effect as of the date this Agreement through the Closing Date.

                    (e)     RELEASE. WITHOUT LIMITING THE PROVISIONS OF SUBPARAGRAPH (a) ABOVE AND NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, BUYER HEREBY RELEASES SELLER AND (AS THE CASE MAY BE) SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, TRUSTEES, PARTNERS, EMPLOYEES, MANAGERS AND AGENTS FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTIONS, LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES WHETHER THE SUIT IS INSTITUTED OR NOT) WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR CONTINGENT (HEREINAFTER COLLECTIVELY CALLED THE “CLAIMS”) ARISING FROM OR RELATING TO (i) ANY DEFECTS, ERRORS OR OMISSIONS IN THE DESIGN OR CONSTRUCTION OF THE PROPERTY WHETHER THE SAME ARE THE RESULT OF NEGLIGENCE, OR OTHERWISE, OR (ii) ANY OTHER CONDITIONS, INCLUDING ENVIRONMENTAL AND OTHER PHYSICAL CONDITIONS, AFFECTING THE PROPERTY WHETHER THE SAME ARE A RESULT OF NEGLIGENCE OR OTHERWISE. THE RELEASE SET FORTH IN THIS SECTION SPECIFICALLY INCLUDES, WITHOUT LIMITATION, ANY CLAIMS (INCLUDING INDEMNITY AND CONTRIBUTION CLAIMS) UNDER ANY ENVIRONMENTAL LAWS OF THE UNITED

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STATES, THE STATE IN WHICH THE PROPERTY IS LOCATED OR ANY POLITICAL SUBDIVISION THEREOF OR UNDER THE AMERICANS WITH DISABILITIES ACT OF 1990, AS ANY OF THOSE LAWS MAY BE AMENDED FROM TIME TO TIME AND ANY REGULATIONS, ORDERS, RULES OF PROCEDURES OR GUIDELINES PROMULGATED IN CONNECTION WITH SUCH LAWS, REGARDLESS OF WHETHER THEY ARE IN EXISTENCE ON THE DATE OF THIS AGREEMENT. BUYER ACKNOWLEDGES THAT BUYER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF BUYER’S SELECTION AND BUYER IS GRANTING THIS RELEASE OF ITS OWN VOLITION AND AFTER CONSULTATION WITH BUYER’S COUNSEL.

                    (f)     Seller Reports. Buyer acknowledges that Seller makes no warranties or representations regarding the adequacy, accuracy or completeness of the Seller’s Reports or other documents relating to the Seller’s Reports, if any, and Buyer shall have no claim against Seller based upon the Seller’s Reports or such other documents relating to the Seller’s Reports. Buyer further acknowledges that Buyer has had full opportunity to perform such environmental and engineering investigations as Buyer deems appropriate prior to entering into this Agreement or shall have such opportunity during the Inspection Period, and Buyer obtained or shall obtain, at Buyer’s option, its own environmental and engineering reports of the Property.

                    (g)     Effect of Disclaimers. Buyer acknowledges and agrees that the Purchase Price has been negotiated to take into account that the Property are being sold subject to the provisions of this Section 17.

          18.     Survival of Provisions.

                    (a)     Acceptance by Buyer of the Seller’s Deliveries at Closing shall constitute an acknowledgment by Buyer of full performance by Seller of all of Seller’s obligations under this Agreement, except for those expressly set forth in this Agreement which will expressly survive Closing.

                    (b)     Buyer’s obligations under this Agreement which expressly require performance or observance after the Closing Date shall survive Closing, notwithstanding any presumption to the contrary.

                              (i)     Notwithstanding any provision to the contrary set forth in this Agreement, the warranties and representations of Seller (all herein called the “Surviving Warranties”) shall survive Closing under this Agreement until six (6) months following the Closing Date.

                              (ii)    If Buyer (A) obtains actual knowledge that any of the Surviving Warranties are breached prior to the Closing Date, (B) contemporaneously gives written notice of such breach to Seller, and (C) Seller, using commercially reasonable efforts, is unable to cure such breach within fifteen (15) following Seller’s receipt of such notice, then Buyer’s sole right and remedy shall be to terminate this Agreement by giving to Seller written notice of such termination on or prior to the Closing Date. In any such event, the Closing Date shall be extended to the end of such cure period. Upon the giving of such termination notice, the Earnest Money Deposit shall be returned to Buyer by Escrow Agent and this Agreement shall become null and void, except for the indemnity obligations of Buyer to Seller and of Seller to Buyer set forth in this Agreement which will survive termination of this Agreement. If Buyer fails to give such written termination notice to Seller prior to Closing, Buyer shall be deemed to have waived

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any right or remedy (including, without limitation, any right under this Agreement to terminate this Agreement) against Seller by reason of the breach of such warranty.

                              (iii)   Subsequent to Closing, Seller shall have no liability to Buyer by reason of a breach or default of any of the Surviving Warranties, unless Buyer shall have given to Seller written notice (“Warranty Notice”) of such breach or default within six (6) months after the Closing Date, and shall have given to Seller an opportunity to cure any such breach or default within a reasonable period of time after Buyer’s learning of such breach of warranty. In no event shall Seller’s aggregate liability to Buyer by reason of any one or more breaches or defaults of any covenants, indemnities, representations, warranties or other breaches under this Agreement or any document delivered by Seller to Buyer at Closing exceed $620,000.00 (such liability will be subject to floor of $50,000.00) and Buyer will have no right to rescind this Agreement. Any litigation to enforce any Surviving Warranty must be commenced on or before six (6) months following the Closing Date, and if not commenced on or before such date, Buyer shall be deemed to have waived its claims for such breach or default.

          19.     Limited Liability.

                    (a)     Except as expressly provided in Section 19(b), the obligations of Seller under this Agreement or directly or indirectly arising out of this Agreement shall be limited solely to Seller’s interest in the Property and neither Buyer nor any one else claiming by or through Buyer shall have any claim against any other asset of Seller or any partner of Seller.

                    (b)     Seller covenants that until six (6) months following the Closing Date, Seller shall maintain its legal existence. If no claim has been made by Buyer against Seller prior to six (6) months following the Closing Date, Seller may dissolve its legal existence. If a claim has been made by Buyer against Seller prior to six (6) months following the Closing Date, Seller shall maintain its legal existence until Buyer’s claim is resolved or finally determined by a court of competent jurisdiction. Buyer may seek actual damages (but not consequential, exemplary or punitive damages) up to, but not in excess of, the amount of $620,000.00, for Seller’s breach of the provisions of this Agreement that survive Closing or for Seller’s breach of its obligations under the documents executed by Seller and delivered to Buyer at Closing, if and only if all of the conditions to Buyer’s recovery right set forth below occur. No suit may be brought which is commenced after six (6) months following the Closing Date, nor may any suit be brought that does not satisfy all of the following conditions (with the burden of proving that such conditions have been satisfied falling on Buyer):

                              (i)     Buyer first becomes aware of such breach after the Closing Date;

                              (ii)    Buyer provides the Warranty Notice on or before six (6) months following the Closing Date; and

                              (iii)   If Buyer’s claim is for a breach of any of Seller’s warranties or representations contained in Section 6(a) made by Seller to the standard of knowledge, Seller must have known that the warranty or representation was inaccurate at the time made.

          This Section 19(b) shall survive Closing.

                    (c)     This limitation of liability provision is a material inducement for Seller to enter into this Agreement, and but for this provision Seller would not have entered into this

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Agreement.

          20.     Miscellaneous.

                    (a)     Captions or Headings; Interpretation. The captions or headings of the sections, paragraphs, and subparagraphs of this Agreement are for convenience only, and shall not control or affect the meaning or construction of any of the terms or provisions of this Agreement. Wherever in this Agreement the singular number is used, the same shall include the plural and vice versa and the masculine gender shall include the feminine gender and vice versa as the context shall require.

                    (b)     Amendments and Waivers. No change, alteration, amendment, modification or waiver of any of the terms or provisions of this Agreement shall be valid, unless the same shall be in writing and signed by Buyer and Seller.

                    (c)     No Rule of Construction. This Agreement has been negotiated at arms length by both Seller and Buyer, and no rule of construction shall be invoked against either party with respect to the authorship thereof or of any of the documents to be delivered by the respective parties at Closing.

                    (d)     Counterparts. This Contract may be executed in multiple counterparts each of which shall be deemed an original but together shall constitute one agreement.

                    (e)     Applicable Law. This Agreement shall be governed and construed according to the laws of the State in which the Property is located.

                    (f)     Right to Waive Conditions or Contingency. Either party may waive any of the terms and conditions of this Agreement made for its benefit provided such waiver is in writing and signed by the party waiving such term or condition.

                    (g)     Partial Invalidity. If any term, covenant, condition or provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable, at any time or to any extent, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby. Each term, covenant, condition and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

                    (h)     Confidentiality. Except for Buyer’s disclosure to its investors, attorneys, accountants, consultants, potential lenders and potential partners, Seller and Buyer agree to keep this Agreement confidential and not make any public announcements or disclosures with respect to the subject matter of this Agreement without the written consent of the other party. This provision shall survive Closing unless Seller or Buyer is required to disclose such matter by law or for purposes of regulatory compliance.

                    (i)     Property Excluded. This sale does not include, and Seller shall remove from the Property prior to Closing, the items of personal property listed on Exhibit 20(i) attached hereto. Prior to the Closing Date, Seller shall repair in a reasonable manner, all holes and other damage to the building directly resulting from the removal by Seller from the building of the items of property not included in this sale.

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                    (j)     Agreement Not To Be Recorded. This Agreement shall not be filed of record by or on behalf of Buyer in any office or place of public record. If Buyer fails to comply with the terms hereof by recording or attempting to record this Agreement or a notice thereof, such act shall not operate to bind or cloud the title to the Property. Seller shall, nevertheless, have the right forthwith to institute appropriate legal proceedings to have the same removed from record. If Buyer or any agent, broker or counsel acting for Buyer shall cause or permit this Agreement or a copy thereof to be filed in an office or place of public record, Seller, at its option, and in addition to Seller’s other rights and remedies, may treat such act as a default of this Agreement on the part of Buyer. However, the filing of this Agreement in any lawsuit or other proceedings in which such document is relevant or material shall not be deemed to be a violation of this paragraph.

                    (k)    Time of the Essence. Time, wherever specified herein for the performance by Seller or Buyer of any of their respective obligations hereunder (including, without limitation the time deadline for Buyer’s delivery of the Earnest Money Deposit under Section 2.2 and Buyer’s delivery of a Continuation Notice under Section 14), is hereby made and declared to be of the essence of this Agreement.

                    (l)     Attorneys’ Fees. If either party commences legal proceedings for any relief against the other party arising out of this Agreement or any documents, agreements, exhibits or certificates contemplated hereby, the losing party shall pay the prevailing party’s reasonable attorneys’ fees upon final settlement, judgment or appeal thereof.

                    (m)    Jury Trial. Seller and Buyer each hereby knowingly and unconditionally waive any and all right to demand a jury trial in any action for the interpretation or enforcement of this Agreement.

                    (n)     No Partnership. Nothing contained in this Agreement shall be construed to create a partnership or joint venture between the parties or their successors in interest or permitted assigns.

                    (o)     Post Closing Audit.

                              (i)     Following Closing, at the request of Buyer, and at Buyer’s expense, Seller shall make available to Buyer the historical financial information (including any underlying documentation) in Seller’s possession regarding the operation of the Property to the extent required by Buyer or its successors in order to prepare stand-alone audited financial statement for such operations and in accordance with generally accepted accounting principles, as of the end of the fiscal year 2012 and any required subsequent date or period, and to cooperate (at Buyer’s expense) with Buyer and any auditor engaged by Buyer for such purpose. Seller has no obligation to incur any expense or assume any liability as a result of such cooperation and Buyer agrees to indemnify, protect, defend and hold Seller harmless from any liability with respect thereto. Seller shall, without liability, recourse or cost to Seller, provide to Buyer’s designated independent auditor the Audit Representation Letter.

          In addition, Seller covenants and agrees to cooperate reasonably with Buyer’s accounting auditors in relation to a Rule 3-14 of the Securities and Exchange Commission Regulation S-X audit for significant transactions. Such cooperation will require access to accounting records of Seller only with respect to the Property. To the extent necessary for Buyer to comply with such Rule 3-14, Seller will make representations to the auditor about the

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accounting records to the extent that they are no more onerous than the representations already made about such records by Seller in this Agreement and do not expand the liability of Seller beyond Seller’s liability under this Agreement. Completion of this audit will not be required before Closing and will not affect the Closing Date. Notwithstanding the foregoing, Seller shall not be obligated to incur any third party cost or expense in connection with the examination of Seller’s accounting records or such audit, and Buyer shall be solely responsible for such costs and expenses.

                              (ii)    Buyer shall cooperate with Seller after Closing, at no cost to Buyer, in case of Seller’s need in response to any legal requirement, a tax audit, tax return preparation or litigation threatened or brought against Seller, by allowing Seller and its agents or representatives access, upon reasonable advance notice (which notice shall identify the nature of the information sought by Seller), at all reasonable times to examine and make copies of any and all instruments, files and records.

                    (p)     Facsimile or .pdf. Signatures to this Agreement transmitted by telecopy or email (.pdf) shall be valid and effective to bind the party so signing. Each party agrees to promptly deliver an execution original to this Agreement with its actual signature to the other party, but a failure to do so shall not affect the enforceability of this Agreement, it being expressly agreed that each party to this Agreement shall be bound by its own telecopied or emailed signature and shall accept the telecopied or emailed signature of the other party to this Agreement.

                    (q)     Section 1031 Exchange. Seller acknowledges that Buyer may effect a like-kind exchange under Section 1031 of the Code. Accordingly, Seller agrees that it will cooperate with Buyer to effect a tax-free exchange in accordance with the provisions of Section 1031 of the Code and the regulations promulgated with respect thereto. Buyer shall be solely responsible for any additional fees, costs or expenses incurred in connection with the like-kind exchange contemplated by this paragraph, and Seller shall not be required to incur any debt, obligation or expense in accommodating Buyer hereunder. In no event shall Buyer’s ability or inability to effect a like-kind exchange, as contemplated hereby, in any way delay the Closing or relieve Buyer from its obligations and liabilities under this Agreement. Buyer hereby agrees to indemnify and hold harmless Seller from any liability, losses or damages incurred by Seller in connection with or arising out of the Section 1031 like-kind exchange, including but not limited to any tax liability.

                    (r)     Escrow Agent. By their execution and delivery of this Agreement, Buyer and Seller acknowledge and confirm that under certain circumstances deposits (including the funds subject to this Agreement) may not be insured or fully insured by the Federal Deposit Insurance Corporation (“FDIC”). Each party has made its own analysis of FDIC insurance regulations affecting, or potentially affecting, the funds subject to this Agreement and is not relying upon any advice from Escrow Agent as to FDIC matters. Buyer and Seller understand and agree that Escrow Agent is holding the escrow funds as agent and that the funds are not trust funds. Simultaneously with final disbursement of the escrow funds pursuant to this Agreement, Escrow Agent shall be released of all liability and responsibility under this Agreement. Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine. Escrow Agent may assume that any person purporting to give any writing, notice, advice or instructions in connection with the provisions hereof, has been duly authorized to do so. Escrow Agent undertakes and agrees to perform only such duties as expressly set forth herein. The duty of Escrow Agent hereunder shall be

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limited to the safe keeping of the escrow funds and the disposition of same in accordance with the provisions hereof. Escrow Agent shall have the right, but not the obligation, to require a written statement signed by Buyer and Seller confirming satisfaction of all conditions precedent to disbursement of funds hereunder and authorizing disbursement of said funds, together with accrued interest, if any. All notices to or from Escrow Agent shall be in writing. Buyer and Seller hereby release Escrow Agent from any losses incurred with respect to funds deposited hereunder by reason of the absence of or insufficiency of FDIC insurance with respect to such funds. Buyer and Seller acknowledge that Escrow Agent has entered into this Agreement at their specific request and, in order to induce Escrow Agent to accept said escrow, do hereby agree to indemnify and hold Escrow Agent harmless from all loss, cost and expense, including reasonable attorneys’ fees and court costs, which it may suffer or incur as a result of acting as Escrow Agent under this Agreement, including, without limitation, claims arising with respect to the absence or insufficiency of FDIC insurance for funds subject to this Agreement. In the event of any dispute as to the disbursement of escrow funds or any claim thereto by any party or person, Escrow Agent shall have the right to bring a suit in interpleader in the Circuit Court for Dallas County, Texas naming the parties to this Agreement and any other parties as may be appropriate in the opinion of Escrow Agent. Buyer and Seller shall indemnify and hold harmless Escrow Agent from all costs, including attorneys’ fees, in connection with such interpleader action. Upon the filing of said suit and deposit of the balance of escrow funds in the registry of the Court, Escrow Agent shall have the right to withdraw from said suit, and all obligations of Escrow Agent shall cease and terminate.

[SEE SIGNATURES ON THE FOLLOWING PAGES]

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          IN WITNESS WHEREOF, the parties hereto, intending legally to be bound hereby, have executed this Agreement as of the Effective Date.

SELLER:
PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:	/s/ Jacqueline Miller Stewart
			Jacqueline Miller Stewart,
			Vice President
Tax Identification No: 75-1002194

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BUYER:
	AMREIT REALTY INVESTMENT CORPORATION,
	a Texas corporation
	By:	/s/ Chad Braun
	Name:			Chad Braun
	Title:		Vice President

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ESCROW AGENT’S AGREEMENT

          1.          Duties. Escrow Agent joins herein for the purpose of agreeing to comply with the terms hereof insofar as they apply to Escrow Agent. Escrow Agent shall receive and hold the Earnest Money Deposit in trust, to be disposed of in accordance with the provisions of this joinder and the foregoing Agreement. The Earnest Money Deposit shall be invested by Escrow Agent in an interest bearing account at a national bank reasonably acceptable to Seller, Buyer and Escrow Agent having assets in excess of one billion dollars.

          2.          Indemnity. Escrow Agent shall not be liable to any party except for claims resulting from the negligence or willful misconduct of Escrow Agent. If any escrow is the subject of any controversy or litigation, the parties to the Agreement shall jointly and severally indemnify and hold Escrow Agent harmless from and against any and all loss, cost, damage, liability or expense, including costs of reasonable attorneys’ fees to which Escrow Agent may be put or which Escrow Agent may incur by reason of or in connection with such controversy or litigation, except to the extent it is determined that such controversy or litigation resulted from Escrow Agent’s negligence or willful misconduct. If the indemnity amounts payable hereunder result from the fault of Buyer or Seller (or their respective agents), the party at fault shall pay and hold the other party harmless against such amounts.

          3.          Conflicting Demands. If conflicting demands are made upon Escrow Agent or if Escrow Agent is uncertain with respect to any escrow, the parties to the Agreement expressly agree that Escrow Agent shall have the absolute right to do either or both of the following: (i) withhold and stop all proceedings in performance of any escrow and await settlement of the controversy by final appropriate legal proceedings or otherwise as it may require; or (ii) file suit for declaratory relief and/or interpleader and obtain an order from the court requiring the parties to interplead and litigate in such court their several claims and rights between themselves. Upon the filing of any such declaratory relief or interpleader suit and tender of the Earnest Money Deposit to the court, Escrow Agent shall thereupon be fully released and discharged from any and all obligations to further perform the duties or obligations imposed upon it. Buyer and Seller agree to respond promptly in writing to any request by Escrow Agent for clarification, consent or instructions. Any action proposed to be taken by Escrow Agent for which approval of Buyer and/or Seller is requested shall be considered approved by the particular party if Escrow Agent does not receive written notice of disapproval within five (5) business days after a written request for approval is received by the party whose approval is being requested the other party and Escrow Agent. Escrow Agent shall not be required to take any action for which approval of Buyer and/or Seller has been sought unless such approval has been received. No notice by Buyer or Seller to Escrow Agent of disapproval of a proposed action shall affect the right of Escrow Agent to take any action as to which such approval is not required.

REPUBLIC TITLE OF TEXAS, INC. (“Escrow Agent”)
By:	/s/ Janine N. Barber
		Its Authorized Agent
Date:		October 12, 2012

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BUYER’S BROKER’S AGREEMENT

          1.          For and in consideration of the foregoing Purchase and Sale Agreement, Buyer and Venture Commercial Real Estate, LLC (“Buyer’s Broker”), agree that the Buyer’s Broker shall be entitled to be paid a commission, as its sole compensation for the Purchase and Sale Agreement and the sale of the Property, in an amount set forth in a separate agreement. The commission shall be payable only if, as and when Closing is completed and the Closing payment is paid to Buyer. Buyer’s Broker agrees that it shall not be entitled to any commission if Seller or Buyer terminates the Purchase and Sale Agreement or defaults thereunder.

          2.          Buyer’s Broker represents and warrants that Buyer’s Broker is a licensed real estate broker in the State of Texas.

          3.          Buyer’s Broker agrees to treat the Purchase and Sale Agreement and the sale of the Property as confidential.

          4.          Buyer’s Broker hereby irrevocably waives any rights Buyer’s Broker may have to file a lien or other encumbrance of any type against all or any portion of the Property for payment of Buyer’s Broker’s commission or other compensation.

          5.          Buyer’s Broker agrees not to disclose the Purchase Price.

          IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first above written.

Date: October 12, 2012.

BUYER’S BROKER:
VENTURE COMMERCIAL REAL ESTATE, LLC
By:	/s/ John P. Zikas
Name:			John P. Zikas
Title:		Partner

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SELLER’S BROKER’S AGREEMENT

          1.          For and in consideration of the foregoing Purchase and Sale Agreement, Seller and Henry S. Miller Interests, Inc. (“Seller’s Broker”), agree that the Seller’s Broker shall be entitled to be paid a commission, as its sole compensation for the Agreement of Sale and the sale of the Property, in the amount of one percent (1%) of the Purchase Price. The commission shall be payable only if, as and when Closing is completed and the Closing payment is paid to Seller. Seller’s Broker agrees that it shall not be entitled to any commission if Seller or Buyer terminates the Purchase and Sale Agreement or defaults thereunder.

          2.          Seller’s Broker represents and warrants that Seller’s Broker is a licensed real estate broker in the State of Texas.

          3.          Seller’s Broker agrees to treat the Purchase and Sale Agreement and the sale of the Property as confidential.

          4.          Seller’s Broker hereby irrevocably waives any rights Seller’s Broker may have to file a lien or other encumbrance of any type against all or any portion of the Property for payment of Seller’s Broker’s commission or other compensation.

          5.          Seller’s Broker agrees not to disclose the Purchase Price.

          IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first above written.

Date: October 12, 2012.

SELLER’S BROKER:
HENRY S. MILLER INTERESTS, INC.
By:	/s/ Jacqueline Miller Stewart
Name:			Jacqueline Miller Stewart
Title:		President

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List of Exhibits

Exhibit 1.2	Assignment and Assumption Agreement
Exhibit 1.3	Assignment and Assumption of Ground Lease
Exhibit 1.4	Assigned Existing Agreements
Exhibit 1.5	Audit Representation Letter
Exhibit 1.6	Bill of Sale
Exhibit 1.7	Buyer’s Broker and Buyer’s Participating Brokers
Exhibit 1.19	Existing Loan Documents
Exhibit 1.21	FIRPTA Certification
Exhibit 1.23	Ground Lease Estoppel Letter
Exhibit 1.32	Schedule of Major Tenants
Exhibit 1.39(a)	Legal Description of Fee Parcel
Exhibit 1.39(b)	Legal Description of Leasehold Parcel
Exhibit 1.40	Rent Roll
Exhibit 1.46	Special Warranty Deed
Exhibit 1.48	Tenant Estoppel Letter
Exhibit 1.50	Tenant Notice
Exhibit 1.56	Update Certificate
Exhibit 4(a)	Tenant Inducement Costs and Leasing Commissions
Exhibit 5(a)(ii)	Rent Arrearages
Exhibit 6(a)(iv)	Litigation
Exhibit 20(i)	Personal Property

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EXHIBIT 1.2

Assignment and Assumption Agreement

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS	§

          THAT, PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Assignor”), hereby transfers, assigns and sets over unto ____________ ____________(“Assignee”), all of Assignor’s right, title and interest, if any, in and to any and all Existing Leases and Assigned Existing Agreements set forth on Schedule 1 attached hereto and made a part hereof (collectively, the “Assigned Contracts”), and to the extent assignable without expense to Assignor, the interest of Assignor in and to tenant lease files and correspondence relating to the Existing Leases, plans and specifications with respect to the Property, promotional materials with respect to the leasing of space within the Property, warranties and guaranties relating to any of the other property to be conveyed pursuant to the Purchase and Sale Agreement (as hereinafter defined), licenses and permits relating to the Property, and all other property to be conveyed pursuant to the Purchase and Sale Agreement, all as defined in that certain Purchase and Sale Agreement (the “Purchase and Sale Agreement”) dated as of October ___, 2012, between Assignor and Assignee.

          TO HAVE AND TO HOLD the Assigned Contracts, subject to all applicable exceptions (collectively, the “Permitted Exceptions”) set forth in that certain Special Warranty Deed and Assignment and Assumption of Ground Lease, each dated of even date hereof executed by Assignor to Assignee, together with any and all security and other tenant deposits and rights and appurtenances thereto in anywise belonging to Assignor, unto Assignee, its successors, legal representatives and assigns FOREVER.

          Except as otherwise expressly provided in Section 4(a) of the Purchase and Sale Agreement, Assignor agrees to reimburse Assignee for any loss, cost, damage or expense arising from or in connection with (a) any liabilities or obligations of the landlord and/or owner under the Assigned Contracts, including, without limitation, any liability for the payment of leasing or other commissions attributable thereto, arising during Assignor’s period of ownership (but not prior thereto), and (b) security and other tenant deposits not transferred to Assignee, and Assignor shall be solely liable for such liabilities and obligations.

          Except as otherwise expressly provided in Section 4(a) of the Purchase and Sale Agreement, Assignee assumes all Assignor’s obligations and liabilities under the Assigned Contracts arising from and after the date hereof, acknowledges receipt and sole liability for the return of all security and other tenant deposits (to the extent delivered by Assignor to Assignee), and agrees to reimburse Assignor for any loss, cost, damage or expense arising from or in connection with any liabilities or obligations of the landlord and/or owner under the Assigned Contracts, including any liability for the payment of leasing or other commissions attributable thereto, arising from and after the date hereof, and Assignee shall be solely liable for such liabilities and obligations. This instrument may be executed in multiple counterparts, each of which shall be deemed an original but together shall constitute one and the same instrument.

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          IN WITNESS WHEREOF, this instrument has been executed as of (but not necessarily on) this ___ day of _________________, 2012.

ASSIGNOR:
PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:
			Jacqueline Miller Stewart,
			Vice President

ASSIGNEE:

By:

Name:

Title:

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SCHEDULE 1

List of Existing Leases and Assigned Existing Agreements

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EXHIBIT 1.3

Assignment and Assumption of Ground Lease

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS	§

          THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE (this “Agreement”) is made as of the ________ day of __________, 2012, by and between PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Assignor”) and ___________________, a ______________________ (“Assignee”).

RECITALS

          WHEREAS, Assignor has succeeded to the leasehold interest of the lessee under that certain Agreement of Lease (the “Ground Lease”) more particularly described on Exhibit A attached hereto and made a part hereof for all purposes, covering certain real property (the “Property”) in Dallas County, Texas, more particularly described on Exhibit B attached hereto and made a part hereof for all purposes;

          WHEREAS, the Property is subject to those matters more particularly described in Exhibit C attached hereto and made a part hereof for all purposes (but only if and to the extent currently enforced and applicable) (collectively, the “Permitted Exceptions”); and

          WHEREAS, Assignor desires to assign Assignor’s leasehold interest under the Ground Lease to Assignee, and Assignee desires to accept such assignment, on the terms and conditions hereinafter set forth.

AGREEMENT

          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, Assignor by these presents does hereby SELL, ASSIGN, TRANSFER and CONVEY unto Assignee, its successors and assigns, Assignor’s right, title and interest in and to the Ground Lease, together with Assignor’s right, title and interest in and to all buildings, improvements, fixtures and personal property, owned or leased by Assignor, situated on the Property.

          TO HAVE AND TO HOLD, the same, together with all and singular the rights, privileges, appurtenances and immunities thereto belonging or in otherwise appertaining onto Assignee and Assignee’s successors and assigns forever, Assignor hereby covenanting that Assignor’s right, title and interest in and to the Ground Lease is free and clear from any encumbrance done or suffered by Assignor other than the Permitted Exceptions; and that Assignor will warrant and defend the title to be Asignor’s right, title and interest in and to the Ground Lease onto Assignee and Assignee’s successors and assigns forever, against the lawful claims and demands of all persons claiming by, through or under Assignor, but not otherwise.

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          Assignee, by its acceptance hereof, hereby assumes and promises to pay and perform all covenants, agreements and obligations of Assignor as lessee under the Ground Lease from and after the date hereof. Without limiting the generality of the foregoing, Assignee hereby assumes and agrees to pay ad valorem real estate taxes and assessments with respect to the 2013 calendar year and subsequent calendar years, not yet due and payable, each to the extent attributable to all or any portion of the Property.

          IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first written above.

ASSIGNOR:
PRESTON ROYAL REALTY COMPANY, a Texas joint venture
By:	SC Preston Royal, Ltd., a Texas limited partnership, Joint Venturer
	By:	SC Preston Royal GP, Inc., a Texas corporation, Managing Partner

By:
	Jacqueline Miller Stewart, Vice President

ASSIGNEE:

By:

Name:

Title:

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EXHIBIT 1.4

Assigned Existing Agreements

Waste Management of Texas Inc.

Dallas Valet Services, Inc.

Ambius LLC

G Systems Pest Management

Maintenance of America, Inc.

Sylvania Lighting Services Corp.

The Landscape Partners

Whelan Security Co.

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EXHIBIT 1.5

Audit Representation Letter

(Acquisition Completion Date)

Dear Sirs:

We are writing at your request to confirm our understanding that your audit of the shopping center operations of “_______________________” for the twelve months ended ________________, was made for the purpose of complying with the Securities and Exchange Commission Regulation S-X, subsection 210.3-14 “Special Instructions for Real Estate Operations to Be Acquired”. In connection with your audit we confirm, to the best of our knowledge and belief, the following representations made to you during your audit:

1.	We have made available to you all financial records and related data for the period under audit. We acknowledge that we are responsible for providing a complete set of financial records and related data sufficient to make a determination of the shopping center operations for the twelve month period ended ____________________.
2.	There have been no undisclosed:
	a.	Irregularities involving any member of management or employees who have significant roles in the internal control structure.
	b.	Irregularities involving other persons that could have a material effect on the financial records and related data.
	c.	Violations or possible violations of laws or regulations, the effects of which should be considered for disclosure in the financial records and related data.
3.	There are no undisclosed:
	a.	Unasserted claims or assessments that our lawyers have advised us are probable of assertion and must be disclosed in accordance with Statement of Financial Accounting Standards No. 5 (SFAS No.5).
	b.	Material gain or loss contingencies (including oral and written guarantees) that are required to be accrued or disclosed by SFAS No. 5.
	c.	Material transactions that have not been properly recorded in the financial records and related data.
	d.	Material undisclosed related party transactions and related amounts receivable or payable, including sales, purchases, loans, transfers, leasing arrangements, and guarantees.
	e.	Events that have occurred subsequent to the audit period that would require adjustment to or disclosure in the financial records and related data.
4.	All aspects of contractual agreements that would have a material effect on the financial records and related data have been complied with.

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To our knowledge and belief, no events have occurred subsequent to December 31, 2012, and through the date this letter is signed that would require adjustment to or disclosure in the Financial Statements. Notwithstanding anything herein or otherwise to the contrary, this letter has been delivered without recourse to the undersigned and in the event of any errors or inconsistencies, you agree not to seek recourse against us (or our partners, officers, employees, agents or advisors) for any loss, cost expense, liability or claim you may suffer or incur as a result thereof. This letter has been delivered solely, as an accommodation to Buyer and, as a result, is without consideration.

Very truly yours,

“Seller/Management”

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EXHIBIT 1.6

Bill of Sale

          THIS BILL OF SALE is made as of the ____ day of ____________, 2012, from PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Seller”), to __________________ (“Buyer”).

RECITALS:

          WHEREAS, contemporaneously with the execution and deliver of this Bill of Sale, Seller has sold and conveyed to Buyer all of Seller’s right, title and interest and estate in and to the real property described in Exhibit “A” attached hereto and made a part hereof and all buildings, structures and improvements located thereon by Special Warranty Deed and Assignment and Assumption of Ground Lease, each dated of even date herewith (all of such buildings, structures, improvements and interests in real property collectively hereinafter referred to as the “Real Property”); and

          WHEREAS, as a part of the consideration for the conveyance of the Real Property, Seller has agreed to convey to Buyer the items of personal property described below which are owned by Seller and located in, on and used in connection with, the Real Property;

          NOW THEREFORE, in consideration of the sum of $10.00 and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller does hereby (a) sell, assign, and convey to Buyer all the personal property described on Exhibit “B” (whether or not any of the items listed on Exhibit “B” constitute “personal property” or “fixtures” as a matter of state law) attached hereto and incorporated herein by reference (collectively the “Personal Property”), and (b) quit claim and release to Buyer, to the extent existing and assignable, Seller’s right, title and interest (if any) in and to any personal property, in the possession of Seller which directly relate to the Real Property, subject in both cases to matters of public record and to rights of tenants under written leases in effect on the date hereof.

          This Bill of Sale shall be binding upon and shall inure to the benefit of Seller, Buyer and their respective successors and assigns.

          Seller represents and warrants that it has not transferred or otherwise encumbered Seller’s interest in the Personal Property.

          This Bill of Sale shall be governed by and construed in accordance with the laws of the State of Texas.

          NOTWITHSTANDING ANYTHING CONTAINED IN THIS BILL OF SALE TO THE CONTRARY, THIS BILL OF SALE IS SUBJECT TO ALL DISCLAIMERS AND QUALIFICATIONS BY SELLER AND ALL ENCUMBRANCES SET FORTH IN THE PURCHASE AND SALE AGREEMENT DATED AS OF OCTOBER ___, 2012, WITH RESPECT TO THE PERSONAL PROPERTY, AND SUCH DISCLAIMERS, QUALIFICATIONS AND ENCUMBRANCES ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND MADE A PART HEREOF.

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          IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly signed as of the day and year first written above.

PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:
			Jacqueline Miller Stewart,
			Vice President

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Exhibit “A”

Legal Description

-54-

Exhibit “B”

All of Seller’s right, title and interest in and to (a) sprinkler, plumbing, heating, air-conditioning, electric power or lighting, incinerating, ventilating and cooling systems, with each of their respective appurtenant furnaces, boilers, engines, motors, dynamos, radiators, pipes, wiring and other apparatus, equipment and fixtures, elevators, partitions, fire prevention and extinguishing systems located in or on the Improvements, (b) all plans, drawings, specifications, soil test reports, environmental reports, market studies, surveys and similar documentation, if any, owned by or in the possession of Seller with respect to the Real Property and any proposed improvements to the Real Property, (c) other tangible personal property used in connection with the ownership or operation of the Improvements, and (d) all trade names, franchises, licenses, permits, easements, development rights and approvals, deposits, credits, petroleum and mineral interests and royalties, air and water rights, construction and product warranties, the Leases (including all security deposits and guarantees given with respect thereto), and all other intangibles owned or used by or for the benefit of Seller in connection with the Real Property.

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EXHIBIT 1.7

Buyer’s Broker and Buyer’s Participating Brokers

Buyer’s	Broker:
	Name:	Venture Commercial Real Estate, LLC
	Attn:	John Zikos
	Address:	8235 Douglas Avenue, Suite 720
		Dallas, TX 75225
	Phone Number:	214-378-1212
	Fax Number:	214-

Buyer’s Participating Brokers: None

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EXHIBIT 1.19

Existing Loan Documents

1.	Loan Application, dated January 16, 2006, made and entered into by and between Nationwide Life Insurance Company, an Ohio corporation (“Lender”), and Preston Royal, with respect to a loan (the “Loan”).
2.	Deed of Trust, Mortgage and Security Agreement, dated January 19, 2006, executed and delivered by Preston Royal in favor of Lender, recorded January 19, 2006, as Document No. 200600021971, in the Dallas County Records, with respect to the Loan.
3.	Assignment of Leases, Rents and Profits, dated January 19, 2006 executed and delivered by Preston royal in favor of Lender, recorded January 19, 2006, as Document No. 200600021972, in the Dallas County Records, with respect to the Loan.
4.	UCC Financing Statement, undated, unexecuted, naming Preston Royal as debtor, for the benefit of Lender, as secured party, recorded (i) January 19, 2006, as Document No. 200600021973, in the Dallas County Records; and (ii) ___________, 2006, as Document No. ___________ with the Secretary of State of Texas.
5.	Note, dated January 19, 2006, executed and delivered by Preston Royal, payable to the order of Lender in the original principal amount of $11,000,000.00, with respect to the Loan.
6.	Note, dated January 19, 2006, executed and delivered by Preston royal, payable to the order of Lender in the original principal amount of $5,050,000.00, with respect to the Loan.
7.	Indemnity Agreement, dated January 19, 2006, executed and delivered by Preston Royal, as indemnitors, to Lender, relating to certain indemnification obligations of Preston Royal with respect to the environmental condition of the Property.
8.	Certificate of Non-Foreign Status, dated January 19, 2006, executed and delivered by Preston Royal with respect to the Loan.
9.	Notice and Agreement, dated January 19, 2006, made and entered into by and between Preston Royal and Lender, with respect to the Loan.
10.	Subordination of Management Agreement to Deed of Trust, Mortgage and Security Agreement, dated January 19, 2006, executed and delivered by Henry S. Miller Interests, Inc. (“HSMI”), with respect to the Loan; together with Management Agreement, dated December 26, 1990, made and entered into by and between Henry S. Miller, Jr., as agent, and HSMI, as contractor.
11.	Borrower’s Certificate, dated January 19, 2006, executed and delivered by Preston Royal with respect to the Loan.

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12.	Escrow Waiver Letter, undated, addressed and delivered by Lender to Preston Royal, with respect to the waiver of taxes, assessments and insurance premiums.
13.	Side Letter, dated January 19, 2006, executed and delivered by Preston Royal to Lender, with respect to licensing and regulation of the Property.
14.	Side Letter, dated January 19, 2006, executed and delivered by Preston Royal to Lender, with respect to application of insurance proceeds relating to the Property.
15.	Opinion Letter, dated January 19, 2006, executed and delivered by Kane, Russell, Coleman & Logan, P.C. to Lender, with respect to enforceability of the Loan transaction and the authority of the Partnership to enter into the Loan transaction.
16.	Certificate of Liability Insurance, dated December 12, 2005, produced by Unimark Insurance Agency, Inc., as agent for Philadelphia Indemnity Insurance Company, naming Henry S. Miller Interests, Inc. as the insured, and naming Lender as additional insured, with respect to commercial general liability insurance.
17.	UCC Searches, prepared by Capital Services, Inc. for Mixon Development Company, Inc. a Texas corporation, formerly known as Preston Royal Shopping Center, Preston Royal, and Preston Royal Shopping Center, Inc., with respect to the Property.

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EXHIBIT 1.21

FIRPTA Certification

          Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by the undersigned (“Transferor”), the undersigned hereby certifies the following on behalf of Transferor:

1.       Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);
2.       Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii) of the Income Tax Regulations.
	3.	Transferor’s U.S. taxpayer identification number is 75-1002194; and
	4.	Transferor’s office address is:
		5959 Royal Lane, Suite 634-205
		Dallas, Texas 75230.
Transferor understand that the above information may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this instrument and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Transferor.

PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:
			Jacqueline Miller Stewart,
			Vice President

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EXHIBIT 1.23

Form of Ground Lease Estoppel Letter

GROUND LEASE ESTOPPEL LETTER

          This Ground Lease Estoppel Letter (this “Agreement”) is entered into as of _____________, 2012, by and between Mixon Investment Company, Inc., f/k/a Preston Royal Shopping Center, Inc. (“Landlord”), Preston Royal Realty Company, a Texas joint venture (“Tenant”) and _____________________ (“Tenant’s Assignee”).

RECITALS

          A          Landlord is the owner of certain real property located in the County of Dallas, State of Texas, and more particularly described in attached Exhibit A (the “Premises”) and the Landlord under that certain Agreement of Lease (the “Lease”) described on Exhibit B attached hereto and incorporated herein.

          B.          Tenant desires to assign Tenant’s leasehold interest under the Lease to Tenant’s Assignee.

          C.          Landlord is willing to consent to the transfer of Tenant’s leasehold interest under the Lease on the terms and conditions set forth in this Agreement.

AGREEMENT:

          NOW THEREFORE, in consideration of the premises and other mutual valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

          1.          Subject to the terms and conditions of this Agreement, Landlord hereby consents to the assignment of Tenant’s leasehold interest under the Lease to Tenant’s Assignee.

          2.          Tenant’s Assignee agrees to assume and perform Tenant’s obligations under the Lease from and after the date of the Tenant’s Assignee’s assumption of Tenant’s leasehold interest under the Lease.

          3.          Tenant agrees to promptly deliver an executed copy of such assignment of Tenant’s leasehold interest under the Ground Lease to Landlord. From and after the date of such assignment, Landlord agrees to release Tenant from liability accruing after the date of such assignment.

          4.          As an inducement to Tenant’s Assignee to acquire the Premises and to agree, assume and perform Tenant’s obligation under the Ground Lease, Landlord hereby certifies to Tenant and Tenant’s Assignee the following:

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	(a)          Landlord is and remains the landlord under the Lease. Landlord is the fee simple owner of the Premises as described in Exhibit A hereto free and clear of all deed of trust liens and security interests.
	(b)          The Lease, as described on Exhibit B hereto, is in full force and effect, represents the entire agreement between the parties and has not been amended, modified, supplemented, cancelled or superseded, either orally or in writing. The original term of the Lease commenced on January 12, 1965, and the Lease will expire on January 11, 2040.
	(c)          All rent and other charges which Tenant is required to pay either to Landlord or to third parties under the Lease have been fully and promptly paid through _______________, 2012. The total amount of rent currently due and payable under the Lease is $30,000 per month.
	(d)          As of the date hereof. Landlord and, to the knowledge of Landlord, Tenant have fully and promptly performed and observed all covenants, agreements and obligations on their part to be performed under the Lease. No notice of default or notice of termination of the Lease has been delivered by Landlord to Tenant and to Landlord’s knowledge no default or event which with the passage of time or giving of nonce or both could constitute a default exists under the Lease.
	(e)          Tenant is and remains the sole tenant under the Lease and Landlord has not received notice of and has no knowledge of any assignment, transfer, mortgage or hypothecation of Tenant’s interest under the Lease except as security for a loan from Nationwide Life Insurance Company to Tenant more particularly described in the Estoppel and Recognition Agreement (as defined on Exhibit B).
	(f)          No bankruptcy proceedings, whether voluntary or otherwise, are pending, or to Landlord’s knowledge, threatened, against Landlord.
	(g)          As of the date hereof; all conditions and obligations under the Lease to be satisfied or performed by Tenant and Landlord have been satisfied or performed. As of the date hereof, Landlord does not assert, and is not entitled to assert, any claim against Tenant or any defense to or offset against the enforcement of the Lease by Tenant. As of the date hereof, Tenant does not assert, and is not entitled to assert, any claim against Landlord or any defense to or offset against the enforcement of the Lease by Landlord.
5.       Any notice or communication required or permitted hereunder shall be in writing, and shall be given or delivered: (a) by United States mail, registered or certified, postage fully prepaid, return receipt requested, or (b) by recognized courier service or recognized overnight delivery service; and in any event addressed to the party for which it is intended at its address set forth below:

Landlord:

Mixon Investment Company, Inc.

P.O. Box 670038

Dallas, Texas 75367

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Tenant:

Preston Royal Realty Company

5959 Royal Lane, Suite 634-205

Dallas, Texas 75230

Tenant’s Assignee:

Such addresses may be changed by notice to the other parties given in the same manner as provided herein, such changes to be effective only upon receipt of notice thereof.

          6.       This Agreement and the exhibits hereto, which are incorporated herein by this reference, shall constitute the entire agreement between the parties with respect to the subject matter hereof. In the case of a conflict between the terms of the Lease and the terms of this Agreement, the terms of this Agreement shall control. This Agreement may not be changed or modified orally or in any manner other than by any agreement in writing signed by the parties hereto. No waiver of any of the terms or conditions of this Agreement and no waiver of any default or failure of compliance shall be effective unless in writing and no waiver furnished in writing shall be deemed to be a waiver of any other term or provision or any future condition of this Agreement. Time is of the essence of this Agreement and the performance of each of the covenants and agreements herein. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

(Remainder of page intentionally left blank)

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	LANDLORD:
	Mixon Investment Company, Inc., f/k/a
	Preston Royal Realty Shopping Center, Inc.
	By:
	Name:
	Title:
STATE OF _______________	)
	) SS:
COUNTY OF _____________	)

          This instrument was acknowledged before me on ___________, 2012, by _________________, of Mixon Investment Company, Inc. a _____________ corporation, f/k/a Preston Royal Realty Shopping Center, Inc., on behalf of said corporation.

	Notary Public, State of Texas
My Commission Expires:
	Printed/Typed Name of Notary

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TENANT:
Preston Royal Realty Company,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:
			Jacqueline Miller Stewart,
			Vice President

STATE OF ____________________	)
	) SS:
COUNTY OF __________________	)

          This instrument was acknowledged before me on ______________, 2012, by Jacqueline Miller Stewart, Vice President of SC Preston Royal GP, Inc., a Texas corporation, the managing partner of SC Preston Royal, Ltd., a Texas limited partnership, a joint venturer in Preston Royal Realty Company, a Texas joint venture, on behalf of said joint venture.

	Notary Public, State of Texas
My Commission Expires:
	Printed/Typed Name of Notary

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TENANT’S ASSIGNEE:

By:

	Name:
	Title:
STATE OF _______________          )
) SS:
COUNTY OF _____________          )

          This instrument was acknowledged before me on ___________, 2012, by _________________, of.___________________________________.

	Notary Public, State of ______________
My Commission Expires:
	Printed/Typed Name of Notary

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EXHIBIT A

BEING a tract of land situated in City Block 5500, City of Dallas, Dallas County, Texas and being part of the land conveyed to Preston Royal Shopping Center, Inc. by deed recorded in Volume 3689, Page 80 of the Deed Records of Dallas County, Texas, and being more particularly described as follows:

BEGINNING at an “X” set for corner at the point of intersection of the Easterly right-of-way line of Preston Road (100’ R0O.W.) with the Southerly line of a 15’ alley;

THENCE South 89 degrees 52 minutes 00 seconds East, along the Southerly line of said 15’ alley, a distance of 362.48 feet to an iron pin set for corner at the beginning of a curve to the right, having a central angle of 44 degrees 52 minutes 00 seconds, a radius of 44.50 feet and a chord bearing South 67 degrees 26 minutes 00 seconds East, 33.96 feet;

THENCE Southeasterly, along said curve to the right and continuing along the Southerly line of said alley, an arc distance of 34.85 feet to an iron pin set for corner,

THENCE South 45 degrees 00 minutes 00 seconds East, along the Southwesterly line of said 15’ alley, a distance of 286.12 feet to an iron pin set for corner at the beginning of a curve to the right having a central angle of 45 degrees 08 minutes 00 seconds, a radius of 50.00 feet and a chord bearing South 22 degrees 26 minutes 00 seconds East, 38.38 feet;

THENCE Southeasterly along said curve to the right and continuing along the Southwesterly line of said 15’ alley, an arc distance of 39.39 feet to an iron pin set for corner;

THENCE South 00 degrees 08 minutes 00 seconds West, along the Westerly line of said 15’ alley, a distance of 359.71 feet to an “X” in concrete set for corner;

THENCE North 89 degrees 52 minutes 00 seconds West, along the Northerly right-of-way line of Royal Lane (80’ R.O. W.), a distance of 485.00 feet to an “X” in concrete set for corner;

THENCE North, along the Easterly line of a tract of land conveyed to Humble Oil and Refining Company by deed recorded in Volume 71123, Page 14 of the Deed Records of Dallas County, a distance of 155.00 feet to an “X” in concrete set for corner;

THENCE North 89 degrees 52 minutes 00 seconds West, along the Northerly line of said Humble Oil Tract, a distance of 125.00 feet to an “X” in concrete set for corner;

THENCE North, along the Easterly right-of-way line of Preston Road, a distance of 455.00 feet to the point of beginning and containing 7.497 acres of land, more or less. (326,585 sq. ft.)

-66-

EXHIBIT B

Agreement of Lease dated November 3, 1964, by and between Landlord and Trammell Crow and Henry S. Miller, as predecessors-in-interest to Tenant, a memorandum of which is recorded in Volume 482, Page 931, Deed Records, Dallas County, Texas, as amended by (i) letter agreement dated January 9, 1990, made and entered into by and between Landlord, as landlord, and Henry S. Miller, Jr., an individual, Henri L. Bromberg, Jr., an individual, Edward S. Bromberg, an individual, Louise W. Kahn, individually and as Independent Executrix of the Estate of Edmund J. Kahn, deceased, Dan R. Cullum, an individual, Betsy Cullum Bolin, an individual, Robert Brooks Cullum, Jr., an individual, and Sally Cullum Holmes, an individual, collectively, as tenant; (ii) letter agreement dated September 22, 1993. made and entered into by and between Landlord, as landlord, and Henry S. Miller, Jr., on behalf of tenant; (iii) First Amendment to Short Form Lease dated January 19, 2006, by and between Ground Lessor, as landlord, and Seller, as tenant, recorded as Document No. 20006000211974, Deed Records, Dallas County, Texas; and (iv) Estoppel and Recognition Agreement dated January 19, 2006, by and among Ground Lessor, Seller and Lender (“Estoppel and Recognition Agreement”).

-67-

EXHIBIT 1.32

Schedule of Major Tenants

1.	Barnes & Noble
2.	Tom Thumb
3.	Dougherty’s Pharmacy

-68-

EXHIBIT 1.39(a)

Legal Description of Fee Parcel

BEING a tract of land situated in City Block 5501, City of Dallas, Dallas County, Texas and being the same land conveyed to Hal Winfield Padgett, Jr., by deed recorded in Volume 72185, Page 1637 of the Deed Records of Dallas County, Texas and being more particularly described as follows:

BEGINNING at a P.K. nail set for comer at the point of intersection of the Westerly right-of-way line of Preston Road (100’ R.O.W.) with the Southerly line of a 15 foot alley, said P.K. nail being the Northeasterly comer of said Winfield Tract;

THENCE South, along the Westerly right-of-way line of Preston Road, a distance of 481.15 feet to a metal “X” found for comer;

THENCE North 89 degrees 50 minutes 00 seconds West, a distance of 100.00 feet to a P.K. nail set for comer;

THENCE South a distance of 120.00 feet to a metal “X” found for corner;

THENCE North 89 degrees 50 minutes 00 seconds West, along the Northerly right-of-way line of Royal Lane (80’ R.O.W.), a distance of 121.00 feet to a 1/2 inch capped iron pin set for comer;

THENCE South a distance of 5.00 feet to a 1/2 inch capped iron pin set for corner;

THENCE North 89 degrees 50 minutes 00 seconds West, along the Northerly right-of-way line of Royal Lane (80’ R.O.W.), a distance of 389.31 feet to an 1/2 inch capped iron pin set for comer;

THENCE North 00 degrees 02 minutes 25 seconds East, a distance of 609.82 feet to an 1/2 inch capped iron pin set for corner;

THENCE South 89 degrees 29 minutes 20 seconds East, along the Southerly line of a 15’ alley, a distance of 609.90 feet to the POINT OF BEGINNING and CONTAINING 8.217 acres of land, more or less.

-69-

EXHIBIT 1.39(b)

Legal Description of Leasehold Parcel

BEING a tract of land situated in City Block 5500, City of Dallas, Dallas County, Texas and being part of the land conveyed to Preston Royal Shopping Center, Inc. by deed recorded in Volume 3689, Page 80 of the Deed Records of Dallas County, Texas, and being more particularly described as follows:

BEGINNING at an “X” set for corner at the point of intersection of the Easterly right-of-way line of Preston Road (100’ R0O.W.) with the Southerly line of a 15’ alley;

THENCE South 89 degrees 52 minutes 00 seconds East, along the Southerly line of said 15’ alley, a distance of 362.48 feet to an iron pin set for corner at the beginning of a curve to the right, having a central angle of 44 degrees 52 minutes 00 seconds, a radius of 44.50 feet and a chord bearing South 67 degrees 26 minutes 00 seconds East, 33.96 feet;

THENCE Southeasterly, along said curve to the right and continuing along the Southerly line of said alley, an arc distance of 34.85 feet to an iron pin set for corner,

THENCE South 45 degrees 00 minutes 00 seconds East, along the Southwesterly line of said 15’ alley, a distance of 286.12 feet to an iron pin set for corner at the beginning of a curve to the right having a central angle of 45 degrees 08 minutes 00 seconds, a radius of 50.00 feet and a chord bearing South 22 degrees 26 minutes 00 seconds East, 38.38 feet;

THENCE Southeasterly along said curve to the right and continuing along the Southwesterly line of said 15’ alley, an arc distance of 39.39 feet to an iron pin set for corner;

THENCE South 00 degrees 08 minutes 00 seconds West, along the Westerly line of said 15’ alley, a distance of 359.71 feet to an “X” in concrete set for corner;

THENCE North 89 degrees 52 minutes 00 seconds West, along the Northerly right-of-way line of Royal Lane (80’ R.O. W.), a distance of 485.00 feet to an “X” in concrete set for corner;

THENCE North, along the Easterly line of a tract of land conveyed to Humble Oil and Refining Company by deed recorded in Volume 71123, Page 14 of the Deed Records of Dallas County, a distance of 155.00 feet to an “X” in concrete set for corner;

THENCE North 89 degrees 52 minutes 00 seconds West, along the Northerly line of said Humble Oil Tract, a distance of 125.00 feet to an “X” in concrete set for corner;

THENCE North, along the Easterly right-of-way line of Preston Road, a distance of 455.00 feet to the point of beginning and containing 7.497 acres of land, more or less. (326,585 sq. ft.)

-70-

EXHIBIT 1.40

Rent Roll

Database:		HSMI	Rent Roll									Page:	1
Bldg Status:		ALL	Preston Royal Shopping Center									Date:	10/10/2012
			10/10/2012									Time:	12:30 PM
Bldg Id-Suit Id		Occupant Name	Rent Start	Expiration	GLA Sqft	Monthly Base Rent	Annual Rate PSF	Monthly Cost Recovery	Expense Stop	Monthly Other Income	------------ Future Rent Increases ------------
											Cat	Date	Monthly Amount	PSF
New Leases
0107	-1600	Merge	11/1/2012	10/31/2014	2,154
0107	-1750	PACE Joint Interests	4/1/2013	3/31/2018	936
0107	-2600	Hair Bar Dallas	11/30/2012	11/30/2017	1,800
0107	-4900	The Toy Maven	11/1/2012	10/31/2022	6,263
0107	-5400	Premier Sports Chiropractic	12/1/2012	11/30/2017	1,190
Vacant Suites
0107	-2500	Vacant			2,540
0107	-2600	Vacant			1,800
0107	-3700	Vacant			1,960
Occupied Suites
0107	-0200	The Cobbler	4/1/2008	3/31/2013	1,329	2,658.00	24.00	854.37		150.75
0107	-0300	Dougherty’s Pharmacy	1/1/1999	12/31/2018	12,093	27,924.08	27.71	7,774.30		1,082.75
0107	-0600	Tom Thumb #522	12/1/1998	1/31/2024	29,779	23,841.25	9.61	2,026.67			BRS	12/1/2013	27,267.04	10.99
											BRS	6/1/2014	37,683.71	15.19
											BRS	12/1/2018	41,452.08	16.70
											BRS	12/1/2023	45,597.29	18.37
0107	-0650	J. Renee Shoes & More	1/1/2004	1/31/2014	2,881	6,002.08	25.00	1,852.13		280.08	BRS	2/1/2013	6,122.13	25.50
0107	-0700	Chico’s FAS, Inc	9/27/2004	9/30/2014	6,670	18,898.33	34.00	4,150.46		357.92
0107	-0800	U.S.P.O. 482270-025	7/1/2009	6/30/2014	4,360	6,703.50	18.45
0107	-0850	Best Thai	10/1/2011	9/30/2016	633	844.00	16.00	406.91		92.75
0107	-0900	Dallas Summer Musicals, Inc.	9/1/2004	1/31/2012	3,869	2,829.71	8.78	2,487.29		248.58
0107	-1200	Barnes & Noble Bookseller	10/19/2005	7/31/2015	25,628	40,625.00	19.02
0107	-1500	Pinkberry	11/13/2009	11/30/2014	956	2,629.00	33.00	614.56		119.67	BRS	11/13/2012	2,708.67	34.00
											BRS	11/13/2013	2,788.33	35.00
0107	-1600	Merge	10/20/2007	10/31/2012	2,154	5,026.00	28.00	1,384.73		219.50

Database:		HSMI	Rent Roll									Page:	2
Bldg Status:		ALL	Preston Royal Shopping Center									Date:	10/10/2012
			10/10/2012									Time:	12:30 PM
Bldg Id-Suit Id		Occupant Name	Rent Start	Expiration	GLA Sqft	Monthly Base Rent	Annual Rate PSF	Monthly Cost Recovery	Expense Stop	Monthly Other Income	------------ Future Rent Increases ------------
											Cat	Date	Monthly Amount	PSF
0107	-1700	Deluxe Nail Salon	7/16/2009	7/31/2014	1,937	4,842.50	30.00	1,245.29		201.42
0107	-1750	Dynasty Cleaners	11/1/1995	10/31/2012	936	2,145.00		601.71		78.00
0107	-1800	Spec’s Family Partners, Ltd.	6/23/2012	6/30/2022	9,918	23,142.00	28.00	6,376.04		866.50	BRS	6/23/2017	24,795.00	30.00
0107	-1810	Papa John’s USA, Inc.	9/1/2012	8/31/2017	1,460	4,258.33	35.00	934.40		121.67	BRS	9/1/2013	4,386.08	36.05
											BRS	9/1/2014	4,519.92	37.15
											BRS	9/1/2015	4,653.75	38.25
											BRS	9/1/2016	4,793.67	39.40
0107	-1825	Garnett, Phil	1/1/2011	12/31/2015	817	1,497.83	22.00	136.17		40.00	BRC	1/1/2013	1,565.92	23.00
											BRC	1/1/2014	1,634.00	24.00
											BRC	1/1/2015	1,702.08	25.00
0107	-1840	Preston Royal Realty Company	12/1/2009	12/31/2010	564
0107	-1845	Alphabiotics	6/1/2011	5/31/2016	3,120	4,464.20	17.17	520.00			BRC	6/1/2013	4,508.84	17.34
											BRC	6/1/2014	4,553.92	17.52
											BRC	6/1/2015	4,599.46	17.69
0107	-1846	C.H.A.I.	5/1/2011	4/30/2013	1,931	2,816.05	17.50	321.83
0107	-1847	Eat., Ltd. (Storage)	8/1/2006	6/30/2014	228	200.00	10.53
0107	-1875	Beautiful Skin by Leah	4/1/2011	3/31/2013	433	532.23	14.75	72.17
0107	-1882	Purple Cow (office)	10/1/2011	9/30/2014	673	1,037.54	18.50	112.17			BRC	10/1/2013	1,065.58	19.00
0107	-1884	Henry S. Miller Interests, Inc	12/1/2009	11/30/2014	1,238	1,500.00	14.54
0107	-1890	New Cingular Wireless PCS	12/1/1990	11/30/2015	420	2,060.00	58.86				BRC	12/1/2012	2,121.80	60.62
											BRC	12/1/2013	2,185.45	62.44
											BRC	12/1/2014	2,251.02	64.31
0107	-1900	PRINCI ITALIA	8/27/2011	8/31/2021	3,156	7,495.50	28.50	2,028.93		303.00	BRS	9/1/2013	7,627.00	29.00
											BRS	9/1/2014	7,890.00	30.00
											BRS	9/1/2015	8,284.50	31.50
											BRS	9/1/2016	8,547.50	32.50
											BRS	9/1/2017	8,679.00	33.00
											BRS	9/1/2018	8,942.00	34.00
											BRS	9/1/2019	9,205.00	35.00
											BRS	9/1/2020	9,468.00	36.00
0107	-1950	AT&T Mobility	1/13/2011	1/31/2016	3,120	7,280.00	28.00	2,005.76		40.00
0107	-2000	Omaha Steakshops, Inc.	9/1/1997	6/30/2013	1,562	5,265.90	40.46	1,024.14		170.17
0107	-2050	Short Stop	12/2/2010	12/31/2020	1,354	2,820.83	25.00	914.66		112.83	BRS	12/1/2014	3,046.50	27.00

-72-

Database:		HSMI	Rent Roll									Page:		3
Bldg Status:		ALL	Preston Royal Shopping Center									Date:	10/10/2012
			10/10/2012									Time:	12:30 PM
					GLA Sqft	Monthly Base Rent	Annual Rate PSF	Monthly Cost Recovery	ExpenseStop	Monthly Other Income	------------ Future Rent Increases ------------
Bldg Id-Suit Id		Occupant Name	Rent Start	Expiration							Cat	Date	Monthly Amount	PSF
0107	-2100	Starbucks Coffee Co. #680	1/17/1995	2/28/2015	2,000	5,188.08	31.13	1,351.07		166.67	BRS	12/1/2016	3,272.16	29.00
0107	-2200	Zoe’s Kitchen	10/1/2010	7/31/2019	3,252	8,401.00	31.00	2,196.84		271.00	BRS	8/1/2013	8,672.00	32.00
											BRS	8/1/2014	8,943.00	33.00
											BRS	8/1/2015	9,214.00	34.00
											BRS	8/1/2016	10,135.40	37.40
0107	-2300	Baskin Robbins	9/1/2010	8/31/2012	1,135	2,175.42	23.00	766.75		134.58
0107	-2700	Purple Cow	11/1/2003	10/31/2018	3,148	6,033.67	23.00	2,126.57		302.33	BRS	11/1/2012	6,296.00	24.00
											BRS	11/1/2014	6,558.33	25.00
											BRS	11/1/2016	6,820.67	26.00
0107	-2900	Larry North Fitness	7/29/2006	7/31/2016	10,021	11,691.17	14.00	6,769.40		875.08	BRS	8/1/2013	12,108.71	14.50
											BRS	8/1/2014	12,526.25	15.00
											BRS	8/1/2015	12,943.79	15.50
											BRS	7/1/2016	21,294.63	25.50
0107	-2950	City Vet	5/1/2011	4/30/2016	4,536	9,450.00	25.00	3,064.20		418.00	BRS	5/1/2013	9,639.00	25.50
											BRS	5/1/2014	9,733.50	25.75
											BRS	5/1/2015	9,884.70	26.15
0107	-3050	European Wax Center	6/24/2010	6/30/2015	1,860	4,650.00	30.00	1,256.47		195.00	BRS	6/24/2013	4,805.00	31.00
											BRS	6/24/2014	4,960.00	32.00
0107	-3100	USA Martial Arts & Fitness	1/15/2012	1/31/2017	2,861	6,616.06	27.75	1,932.70		278.42	BRS	2/1/2013	6,813.95	28.58
											BRS	2/1/2014	7,018.99	29.44
											BRS	2/1/2015	7,228.79	30.32
											BRS	2/1/2016	7,445.75	31.23
0107	-3150	Team Sports	10/1/2011	9/30/2016	2,800	6,248.67	26.78	1,891.45		273.33	BRS	10/1/2013	6,435.33	27.58
											BRS	10/1/2014	6,629.00	28.41
											BRS	10/1/2015	6,827.33	29.26
0107	-3175	Creme de la Cookie	5/16/2010	7/31/2013	1,044	2,827.50	32.50	705.24		87.00
0107	-3200	Kidville	1/29/2011	1/31/2018	8,730	13,095.00	18.00	5,897.35		545.63	BRS	2/1/2014	14,550.00	20.00
											BRS	2/1/2016	16,005.00	22.00
0107	-3500	Royal China Restaurant	8/7/2008	8/31/2018	3,892	7,459.67	23.00	2,629.12		364.33	BRS	9/1/2013	7,784.00	24.00
											BRS	9/1/2014	8,108.33	25.00
											BRS	9/1/2015	8,432.67	26.00
											BRS	9/1/2016	8,757.00	27.00
											BRS	9/1/2017	9,081.33	28.00
0107	-3600	Foot Solutions	10/31/2008	10/31/2013	1,981	3,838.19	23.25	1,338.23		205.08	BRS	10/31/2012	3,962.00	24.00
0107	-3800	Copper Lamp	11/24/2003	1/31/2014	6,534	13,612.50	25.00	4,413.87		584.50	BRS	8/1/2013	14,157.00	26.00
0107	-4000	Creative Stitches and gifts	4/25/2005	1/31/2012	2,069	4,138.00	24.00	1,397.65		212.42

-73-

Database:		HSMI	Rent Roll									Page:		4
Bldg Status:		ALL	Preston Royal Shopping Center									Date:	10/10/2012
			10/10/2012									Time:	12:30 PM
					GLA Sqft	Monthly Base Rent	Annual Rate PSF	Monthly Cost Recovery	ExpenseStop	Monthly Other Income	------------ Future Rent Increases ------------
Bldg Id-Suit Id		Occupant Name	Rent Start	Expiration							Cat	Date	Monthly Amount	PSF
0107	-4100	Vital Force Wellness	9/1/2006	8/31/2009	647	754.83	14.00	63.43
0107	-4150	Doughery’s Pharmacy (office)	6/15/2011	6/30/2013	320	266.67	10.00	53.33
0107	-4200	North Dallas Medical Group (2)	8/30/2012	8/31/2015	286	381.33	16.00	193.05			BRC	8/1/2013	393.25	16.50
											BRC	8/1/2014	405.17	17.00
0107	-4300	North Dallas Medical Group	2/25/2011	2/28/2014	616	847.00	16.50	416.09			BRC	3/1/2013	872.67	17.00
0107	-4400	Classic Custom Hair Design	1/1/2012	12/31/2014	762	1,047.75	16.50	514.75			BRC	1/1/2013	1,016.00	16.00
0107	-4500	National Council of Jewish	1/1/1997	12/31/2011	308	282.33	11.00
0107	-4700	Radio Shack #018184	6/1/2003	5/31/2014	2,504	5,164.50	24.75	1,591.76		150.20
0107	-4900	Kids Cooking Co. / Toy Maven	7/11/2005	10/31/2012	6,263	10,657.54	20.42	4,041.63		538.58
0107	-5000	Wild About Flowers	7/20/2004	7/31/2013	2,227	4,546.79	24.50	1,504.41		256.25
0107	-5100	Hollywood Nails	9/20/2004	9/30/2014	1,881	4,232.25	27.00	1,270.69		202.00	BRS	10/1/2013	4,389.00	28.00
0107	-5300	Cantina Laredo	1/27/1998	1/31/2013	6,000	13,750.00	27.50	3,818.07		391.76
0107	-5400	Premier Sports Chiropractic	3/16/2009	11/30/2012	1,190	2,380.00	24.00	803.88		99.17
0107	-5700	Sport Clips	9/1/2004	8/31/2014	865	2,234.58	31.00	584.31		112.08	BRS	9/1/2013	2,306.67	32.00
0107	-5750	Smashing Times	6/1/2012	5/31/2013	831	1,662.00	24.00	561.34		109.25
0107	-5800	Ken Man’s Shop	9/19/1993	9/30/2013	3,316	6,079.33	22.00	2,240.02		310.75
0107	-5950	FedEx Kinko’s	6/30/2006	8/31/2013	1,650	3,712.50	27.00	1,114.60		137.50
0107	-6000	White Selection	9/15/2000	1/31/2016	2,410	5,623.33	28.00	1,628.00		240.83	BRS	1/1/2014	5,824.17	29.00
0107	-6200	Hale’s Dispensing Opticians	6/1/2002	5/31/2013	1,538	3,537.06	27.60	1,039.00		128.17
0107	-6300	Einstein Bros. Bagels #3558	12/7/2010	12/31/2020	2,040	4,590.00	27.00	1,378.09		170.00	BRS	1/1/2016	4,930.00	29.00
											BRS	1/1/2017	5,100.00	30.00
											BRS	1/1/2018	5,270.00	31.00
											BRS	1/1/2019	5,440.00	32.00
											BRS	1/1/2020	5,610.00	33.00
0107	-6350	Lucy’s Tailor	9/1/2012	8/31/2017	492	1,517.00	37.00	330.46		61.50
0107	-6400	Preston Royal Cleaners	9/1/2012	8/31/2017	650	2,004.17	37.00	436.58		81.25

-74-

Database:	HSMI		Rent Roll									Page:			5
Bldg Status:	ALL		Preston Royal Shopping Center									Date:		10/10/2012
			10/10/2012									Time:		12:30 PM
						GLA Sqft	Monthly Base Rent	Annual Rate PSF	Monthly Cost Recovery	Expense Stop	Monthly Other Income	------Future Rent Increases------
Bldg Id-Suit Id	Occupant Name	Rent Start			Expiration							Cat	Date	Monthly Amount	PSF
0107 -6600	Chase Bank		1/1/2008		1/31/2008	0					750.00
Totals:	Occupied Sqft:		97.26	%	66 Units	223,620	410,693.50		101,903.91		13,373.42
Leased/Unoccupied Sqft:					0 Units	0
	Vacant Sqft:		2.74	%	3 Units	6,300
	Total Sqft:				69 Units	229,920	410,693.50
Total Preston Royal Shopping Center:
	Occupied Sqft:		97.26	%	66 Units	223,620	410,693.50		101,903.91		13,373.42
Leased/Unoccupied Sqft:					0 Units	0
	Vacant Sqft:		2.74	%	3 Units	6,300
	Total Sqft:				69 Units	229,920	410,693.50
Grand Total:
	Occupied Sqft:		97.26	%	66 Units	223,620	410,693.50		101,903.91		13,373.42
Leased/Unoccupied Sqft:					0 Units	0
	Vacant Sqft:		2.74	%	3 Units	6,300
	Total Sqft:				69 Units	229,920	410,693.50

-75-

EXHIBIT 1.46

Special Warranty Deed

AFTER RECORDING RETURN TO:

SPECIAL WARRANTY DEED

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS	§

          THAT, PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Grantor”), for and in consideration of TEN AND 00/100 DOLLARS ($10.00) in cash, and other good and valuable consideration, in hand paid by ______________________ (“Grantee”), whose mailing address is __________________________, receipt and sufficiency of such consideration being hereby acknowledged, has GRANTED, SOLD AND CONVEYED, and by these presents does GRANT, SELL AND CONVEY unto Grantee that certain real property (the “Premises”) being more particularly described in Exhibit A attached hereto and made a part hereof for all purposes, together with (i) any and all rights, privileges, and appurtenances belonging or pertaining to the Premises; (ii) any and all improvements, structures, and fixtures located on, over, and under the Premises; (iii) any and all easements or rights-of-way affecting the Premises and any of Grantor’s rights to use the same; (iv) any and all rights of ingress and egress to and from the Premises and any of Grantor’s rights to use the same; and (v) all right, title, and interest of Grantor, if any, in and to (a) any and all roads (open or proposed) affecting, crossing, fronting, or bounding the Premises, including any awards made or to be made relating thereto including, without limitation, any unpaid awards or damages payable by reason of damages thereto or by reason of a widening of or changing of the grade with respect to the same, (b) any and all air rights, water rights, claims, and permits relating to the Premises, and (c) any and all reversionary interests in and to the Premises (the Premises, together with any and all of the related improvements, rights, privileges, appurtenances, and interests referenced in items (i) through (v) above, (collectively, the “Property”); subject, however, to those matters more particularly described in Exhibit B attached hereto and made a part hereof for all purposes, but only if and to the extent currently in force and applicable (collectively, the “Permitted Exceptions”).

          TO HAVE AND TO HOLD the premises aforesaid with all and singular, the rights, privileges, appurtenances and immunities thereto belonging or in any wise appertaining unto the said Grantee and unto Grantee’s successors and assigns forever, the said Grantor hereby covenanting that the premises are free and clear from any encumbrance done or suffered by Grantor other than the Permitted Exceptions; and that Grantor will warrant and defend the title to said premises unto the said Grantee and unto Grantee’s successors and assigns forever, against the lawful claims and demands of all persons claiming by, through or under Grantor, but not otherwise.

          Grantee, by its acceptance hereof, hereby assumes payment of all standby charges, ad valorem real estate taxes and assessments with respect to the 2012 calendar year and subsequent calendar years, not yet due and payable, each to the extent attributable to all or any portion of the Property.

          IN WITNESS WHEREOF, this instrument has been executed as of (but not necessarily on) this _____ day of ___________________, 2012.

PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer
	By:	SC Preston Royal GP, Inc.,
		a Texas corporation,
		Managing Partner
		By:
			Jacqueline Miller Stewart,
			Vice President

THE STATE OF TEXAS		§
	§
COUNTY OF DALLAS		§

          The foregoing instrument was acknowledged before me this ______ day of _______________, 2012, by Jacqueline Miller Stewart, Vice President of SC Preston Royal GP, Inc., a Texas corporation, in its capacity as Manager Partner of SC Preston Royal, Ltd., a Texas limited partnership, in its capacity as Joint Venturer of Preston Royal Realty Company, a Texas joint venture, on behalf of such joint venture.

Notary:

Printed Name:

Notary Public, State of

My Commission Expires:

-77-

EXHIBIT 1.48

Tenant Estoppel Letter

[BUYER] (“Buyer”)

Preston Royal Realty Company
5959 Royal Lane, Suite 634-205
Dallas, Texas 75230 (“Seller”)

Re: Lease dated __________________, __________ (the “Lease”) executed between _____________________________________________ (“Landlord”), and (“Tenant”), for those premises located at ________________________________________________ comprising approximately _____ square feet.

Gentlemen:

          The undersigned Tenant understands that you or your assigns intend to acquire that property located in Preston Royal Shopping Center, Dallas, Texas (the “Premises”) from Preston Royal Realty Company. The undersigned Tenant does hereby certify to Seller, Buyer and any lender providing financing to Buyer, and their respective successors and assigns, as follows:

A.	The Lease is in full force and effect and has not been modified, supplemented, or amended except as follows:
B.	Tenant does not claim any offsets or credits against rents payable under the Lease.
C.	Tenant does not have any unexpended tenant or other allowance, except as follows: ____________________________________________________. All work to be performed for Tenant under the Lease has been performed as required and accepted by Tenant, except as follows: _________________________________________________________________________________________ _______________________________________________.
D.	Tenant has not paid a security or other deposit with respect to the Lease, except as follows:
E.	Tenant has fully paid rent on account of the month of            . Base Rent is currently payable in monthly installments of $____ (exclusive of Tenant’s share of taxes and operating expenses).
F.	Tenant has not paid any rentals in advance except for the current month of _______ 2012, and has not paid any additional rent in advance except for ____________, 2012.
G.	The term of the Lease commenced as of _______________. The Lease shall remain in full force and effect through               , and the Tenant has no options to renew or extend or terminate the term of the Lease except as expressly provided in the Lease.

-78-

H.	If applicable, Tenant’s base year is ___________.
I.	There exists no right to offset, deduction, credit or defense against the payment of rent or other charges payable under the Lease by Tenant. To the best knowledge and belief of Tenant, there is no default by Landlord under the Lease. Tenant has not been granted any concessions, free rent, rent holidays or other rent relief not set forth in full on the Lease. Landlord’s obligations with regard to any concession, free rent, rent holidays or other rent relief (whether or not set forth in the Lease) arising prior to the date hereof have been satisfied in full.
J.	Tenant’s pro rata share of real property taxes, charges and assessments have been paid through _____________, 2012, Tenant’s pro rata share of insurance has been paid through ______________, 2012, Tenant’s pro rata share of operating expenses has been paid through ________________, 2012. Tenant is not in default under the Lease and is current in the payment of any taxes, utilities, operating expenses, maintenance payments, and any other charges required to be paid by Tenant.
K.	Tenant has not assigned, transferred, or hypothecated the Lease or any interest therein or sublet all or any portion of the Premises.
L.	Except for the Lease, there are no other agreements, written or oral, between Tenant and Landlord with respect to the Lease or the Property.
M.	Tenant acknowledges that the landlord will assign its interest in the Lease to Buyer, and agrees to attorn to Buyer and Buyer’s lender, and to perform all of the Tenant’s obligations as lessee under the Lease including, without limitation, the payment of rent, directly to Buyer, as the landlord under the Lease from and after the date of such assignment.
N.	Except as set forth in the Lease, Tenant has no early termination, expansion, renewal, extension or purchase options under the Lease or otherwise.

Very truly yours,

[TENANT]

By:

Title:

-79-

EXHIBIT 1.50

Tenant Notice

__________, 2012

To The Tenants:

Re:	Preston Road and Royal Lane
	Dallas, Texas

Dear Tenant:

          _____________________________ (“Buyer”) has purchased the captioned property, from PRESTON ROYAL REALTY COMPANY, a Texas joint venture (“Seller”).

          Seller has transferred your security deposit in the general amount of $ ________ (the “Security Deposit”) to Buyer. Buyer has assumed full responsibility for the Security Deposit including the return of the Security Deposit to you at the time and upon the conditions set forth in your lease.

          All rental and other payments that become due under your lease subsequent to the date hereof should be payable to Buyer and sent to _________ as Buyer’s management agent, at the following address:

-80-

Very truly yours,
SELLER:
PRESTON ROYAL REALTY COMPANY,
a Texas joint venture
By:	SC Preston Royal, Ltd.,
	a Texas limited partnership,
	Joint Venturer

By:	SC Preston Royal GP, Inc.,
	a Texas corporation,
	Managing Partner

By:
	Jacqueline Miller Stewart,
	Vice President

BUYER:
	,
By:
Name:
Title:

-81-

EXHIBIT 1.56

Update Certificate

SELLER’S CLOSING CERTIFICATE

          The undersigned hereby certifies to __________________, a _________________, that the representations and warranties contained in Section 6(a) of that certain Purchase and Sale Agreement dated as of October ___, 2012, as same may be amended (the “Agreement”), by and between Preston Royal Realty Company, a Texas joint venture (“Seller”), and ______________________________, remain true, complete and correct in all material respects as of the date hereof. The representations and warranties contained herein are made by Seller to the standard of knowledge, if any and as defined in the Agreement, contained in the Agreement for the applicable representation or warranty.

Dated: _________, 2012	PRESTON ROYAL REALTY COMPANY,
	a Texas joint venture
	By:	SC Preston Royal, Ltd.,
		a Texas limited partnership,
		Joint Venturer

By:	SC Preston Royal GP, Inc.,
	a Texas corporation,
	Managing Partner

By:
	Jacqueline Miller Stewart,
	Vice President

-82-

EXHIBIT 4(a)

Tenant Inducement Costs and Leasing Commissions

1. At Closing, Buyer must reimburse Seller for any of the following amounts (which amounts have not yet been paid to the relevant tenants as of the execution date of this Agreement) which Seller pays to the relevant tenants between the execution date of this Agreement and Closing:

Tenant	Currently Unpaid Amounts (to be paid or reimbursed by Buyer)
Hair Bar (Tenant Improvements + ½ of outside broker’s commission)	$49,468.00
The Joint (Tenant Improvements + ½ of outside broker’s commission)	$17,316.00
TOTAL	$66,784.00

2. At Closing, Buyer must reimburse Seller for the following amounts, which amounts Seller has already paid to the relevant tenants prior to the execution date of this Agreement:

Tenant	Amounts due from Buyer to Seller at Closing
Hair Bar (listing broker’s commission + ½ of outside broker’s commission)	$12,936.00
Premier Chiropractic (Commission)	$4,926.60
The Joint (Listing broker’s commission + ½ of outside broker’s commission)	$6,552.00
Merge (Commission)	$4,135.68
Kids Cooking Company (Commission)	$59,185.35
TOTAL	$87,735.63

3. At Closing, Seller will provide a credit to Buyer for the following amount, to the extent that it has not been paid by Seller to the relevant tenant prior to Closing:

Tenant	Currently Unpaid Amount (to be paid or credited by Seller)
Spec’s Wines, Spirits, and Finer Foods (Tenant Improvements)	$317,376.00
The Joint (Asbestos Abatement)	$10,000.00
TOTAL	$327,376.00

-83-

EXHIBIT 5(a)

Rent Arrearages

None.

-84-

EXHIBIT 6(a)(iv)

Litigation

None.

-85-

EXHIBIT 20(i)

Personal Property

None.

-86-

EX-10.19

EXHIBIT 10.19

This instrument was prepared by:

James C. Wine

Nyemaster Goode

700 Walnut, Suite 1600

Des Moines, Iowa 50309-3956

After recording, return to above address.

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

DEED OF TRUST, SECURITY
AGREEMENT AND FIXTURE FILING

AMREIT PRESTON ROYAL, LP,
a Texas limited partnership,
Borrower,

having an office at
8 Greenway Plaza, Suite 1000
Houston, Texas 77046

to

PETER S. GRAF,
Trustee

for the benefit of
TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY,
a New York corporation,
Lender,

having an office
c/o AEGON USA Realty Advisors, LLC
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5443

effective as of the ___ day of December, 2012 (the “Effective Date”)

Loan Amount: $23,400,000.00
Premises: Preston Royal Village, Dallas County, Dallas, Texas

Deed of Trust and Security Agreement	-1-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

Deed of Trust, Security Agreement and Fixture Filing

This Deed of Trust, Security Agreement and Fixture Filing (this “Deed of Trust”) is made and given as of the Effective Date, by AMREIT PRESTON ROYAL, LP, as grantor, a Texas limited partnership, whose address is 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 (the “Borrower”), to PETER S. GRAF, as trustee, whose address is 2626 Howell Street, Dallas, Texas 75204 (the “Trustee”), for the benefit of TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, as beneficiary, a New York corporation having an office c/o AEGON USA Realty Advisors, LLC, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5443 (the “Lender”). The definitions of capitalized terms used in this Deed of Trust may be found either in Sections 3 or 22 below, or through the cross-references provided in those Sections.

1.	RECITALS
	A.	Under the terms of a commercial Loan Application/Commitment dated November 14, 2012, as amended (the “Commitment”), AEGON USA Realty Advisors, LLC (“AEGON”), as agent for the Lender, agreed to fund a loan in the principal amount of $23,400,000 (the “Loan”).
	B.	The Lender has funded the Loan in the principal amount of $23,400,000 in accordance with the Commitment, and to evidence the Loan, the Borrower has executed and delivered to the Lender a certain Secured Promissory Note, of even date, in the amount of $23,400,000, with a maturity and final payment date of January 1, 2020.
	C.	The Commitment requires that the Loan be secured by all of the Borrower’s existing and after-acquired interest in certain real property and by certain tangible and intangible personal property.

2.	GRANTING CLAUSE
	To secure the repayment of the Indebtedness, any increases, modifications, renewals or extensions of the Indebtedness, and any substitutions for the Indebtedness, as well as the performance of the Borrower’s other Obligations, and in consideration of the sum of ten dollars ($10.00) and other valuable consideration, the receipt and sufficiency of which are acknowledged, the Borrower grants, bargains, warrants, conveys, alienates, releases, assigns, sets over and confirms to the Trustee, in trust with the POWER OF SALE for the benefit of the Lender and to his successors and assigns forever, all of the Borrower’s existing and after acquired interests in the Real Property.
3.	DEFINED TERMS
	The following defined terms are used in this Deed of Trust. For ease of reference, terms relating primarily to the Security Agreement are defined in Subsection 22.1.
	“Affiliate” of any person means any entity controlled by, or under common control with, that person.
	“Appurtenances” means all rights, estates, titles, interests, privileges, easements, tenements, hereditaments, titles, royalties, reversions, remainders and other interests, whether presently held by the Borrower or acquired in the future, that may be conveyed

Deed of Trust and Security Agreement	-2-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

as interests in the Land under the laws of Texas. Appurtenances include the Easements and the Assigned Rights.

“Assigned Rights” means all of the Borrower’s rights, easements, privileges, tenements, hereditaments, contracts, claims, licenses or other interests, whether presently existing or arising in the future. The Assigned Rights include all of the Borrower’s rights in and to:

(i)	any greater estate in the Real Property;
(ii)	insurance policies required to be carried hereunder, including the right to negotiate claims and to receive Insurance Proceeds and unearned insurance premiums (except as expressly provided in Subsection 8.2);
(iii)	Condemnation Proceeds;
(iv)	licenses and agreements permitting the use of sources of groundwater or water utilities, septic leach fields, railroad sidings, sewer lines, and means of ingress and egress;
(v)	drainage over other property;
(vi)	air space above the Land;
(vii)	mineral rights;
(viii)	party walls;
(ix)	vaults and their usage;
(x)	franchises;
(xi)	commercial tort claims that arise during the Loan term in respect of damages to the Real Property or to its operations, in respect of any impairment to the value of the Real Property, or in respect of the collection of any Rents;
(xii)	construction contracts;
(xiii)	roof and equipment guarantees and warranties;
(xiv)	building and development licenses and permits;
(xv)	tax credits or other governmental entitlements, credits or rights, whether or not vested;
(xvi)	licenses and applications (whether or not yet approved or issued);
(xvii)	rights under management and service contracts;
(xviii)	leases of Fixtures; and
(xix)	trade names, trademarks, trade styles, service marks, copyrights, and agreements with architects, environmental consultants, property tax consultants, engineers, and any other third-party contractors whose services benefit the Real Property.

“Assignment of Leases and Rents” means the Loan Document bearing this heading. “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C. Sections 101 et seq., and the regulations promulgated pursuant to those statutes.

“Business Day” means any day when state and federal banks are open for business in Cedar Rapids, Iowa.

“Carveout Guarantee and Indemnity” means that certain “Carveout Guarantee and Indemnity Agreement” entered into by the Carveout Obligor on the date of this Deed of Trust, together with all substitutions, modifications, and amendments.

“Carveout Obligations” means those obligations described in Section 21.

Deed of Trust and Security Agreement	-3-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

“Carveout Obligor” means AmREIT, Inc. Any other Person who expressly assumes liability for the Carveout Obligations during the term of the Loan shall become a “Carveout Obligor” for purposes of this Deed of Trust.

“Carveouts” means those matters from which Carveout Obligations may arise, which are described in Section 21.

“Charges” means all fees, charges, and other things of value, if any, contracted for, charged, received, taken or reserved pursuant to the Note or any of the other Loan Documents in connection with the Loan, and which are treated as interest under applicable law (whether in connection with any voluntary prepayment of the Indebtedness, or otherwise, and including fees for the forbearance of any enforcement action or for the extension or modification of the Loan).

“Condemnation Proceeds” means all money or other property that has been, or is in the future, awarded or agreed to be paid or given in connection with any taking by eminent domain of all or any part of the Real Property (including a taking through the vacation of any street dedication or through a change of grade of such a street), either permanent or temporary, or in connection with any purchase in lieu of such a taking, or as a part of any related settlement, except for the right to condemnation proceeds awarded to the tenant in a separate proceeding in respect of the lost value of the tenant’s leasehold interest, provided that the award does not reduce, directly or indirectly, the award to the owner of the Real Property.

“Curable Non-Monetary Default” means any of the acts, omissions, or circumstances specified in Subsection 10.3 below.

“Default” means any of the acts, omissions, or circumstances specified in Section 10 below.

“Default Rate” means the rate of interest specified as the “Default Rate” in the Note.

“Development Agreements” means all development, utility or similar agreements included in the Permitted Encumbrances.

“Easements” means the Borrower’s existing and future interests in and to the declarations, easements, covenants, and restrictions appurtenant to the Land.

“Environmental Indemnity Agreement” means the Loan Document bearing that heading, together with all substitutions, modifications, and amendments.

“Environmental Laws” means all present and future laws, statutes, ordinances, rules, regulations, orders, guidelines, rulings, decrees, notices and determinations of any Governmental Authority to the extent that they pertain to: (A) the protection of health against environmental hazards; (B) the protection of the environment, including air, soils, wetlands, and surface and underground water, from contamination by any substance that may have any adverse health effect on humans, livestock, fish, wildlife, or plant life, or which may disturb an ecosystem; (C) underground storage tank regulation or removal; (D) wildlife conservation; (E) protection or regulation of natural resources; (F) the protection of wetlands; (G) management, regulation and disposal of solid and hazardous wastes; (H) radioactive materials; (I) biologically hazardous materials; (J) indoor air quality; or (K) the manufacture, possession, presence, use, generation, storage, transportation, treatment, release, emission, discharge, disposal, abatement, cleanup, removal, remediation or handling of any Hazardous Substances. “Environmental Laws” include the Comprehensive Environmental Response, Compensation, and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.

Deed of Trust and Security Agreement	-4-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

§9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Texas Solid Waste Disposal Act (V.T.C.A. Health and Safety Code §361.001 et. seq.), the Texas Water Code (V.T.C.A. §36.001 et seq.), all similar state statutes and local ordinances, and all regulations promulgated under any of those statutes, and all administrative and judicial actions respecting such legislation, all as amended from time to time.

“ESA” means the written environmental site assessment of the Real Property obtained under the terms of the Commitment.

“Escrow Expenses” means those expenses in respect of real and personal property taxes and assessments, Insurance Premiums and such other Impositions as the Lender pays from time to time directly from the Escrow Fund using monies accumulated through the collection of Monthly Escrow Payments.

“Escrow Fund” means the funds deposited by Borrower with the Lender pursuant to Section 9 hereof, as reflected in the accounting entry maintained on the books of the Lender as funds available for the payment of Escrow Expenses under the terms of this Deed of Trust.

“Fixtures” means all materials, supplies, equipment, apparatus and other items now or hereafter attached to or installed on the Land and Improvements in a manner that causes them to become fixtures under the laws of Texas, including all built-in or attached furniture or appliances, elevators, escalators, heating, ventilating and air conditioning system components, emergency electrical generators and related fuel storage or delivery systems, septic system components, storm windows, doors, electrical equipment, plumbing, water conditioning, lighting, cleaning, snow removal, lawn, landscaping, irrigation, security, incinerating, fire-fighting, sprinkler or other fire safety equipment, bridge cranes or other installed materials handling equipment, satellite dishes or other telecommunication equipment, built-in video conferencing equipment, sound systems or other audiovisual equipment, and cable television distribution systems. Fixtures do not include trade fixtures, office furniture and office equipment owned by a tenant who is unrelated to the Borrower, provided such items may be detached and removed by the tenant without damage to the Real Property, other than incidental damage that the tenant is obligated to repair under the terms of its Lease. Fixtures expressly include HVAC, mechanical, security and similar systems of general utility for the operation of the Improvements as leasable commercial real property.

“Governmental Authority” means any political entity with the legal authority to impose any requirement on the Property, including the governments of the United States, the State of Texas, Dallas County, the City of Dallas, and any other entity with jurisdiction to decide, regulate, or affect the ownership, construction, use, occupancy, possession, operation, maintenance, alteration, repair, demolition or reconstruction of any portion or element of the Real Property.

“Hazardous Substance” means any substance the release of or the exposure to which is prohibited, limited or regulated by any Environmental Law, or which poses a hazard to human health, including: (A) any “oil,” as defined by the Federal Water Pollution Control Act and regulations promulgated thereunder (including crude oil or any fraction of crude oil), (B) any radioactive substance and (C) Stachybotrys chartarum or other molds. However, the term “Hazardous Substance” includes neither (A) a substance used in the cleaning and maintenance of the Real Property, if the quantity, storage and manner of its

Deed of Trust and Security Agreement	-5-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

use are customary, prudent, and do not violate applicable law, nor (B) automotive motor oil in immaterial quantities, if leaked from vehicles in the ordinary course of the operation of the Real Property and cleaned up in accordance with reasonable property management procedures and in a manner that violates no applicable law.

“Impositions” means all real and personal property taxes levied against the Property; general or special assessments; ground rent; water, gas, sewer, vault, electric or other utility charges; common area charges; owners’ association dues or fees; fees for any easement, license or agreement maintained for the benefit of the Property; and any and all other taxes, levies, user fees, claims, charges and assessments whatsoever that at any time may be assessed, levied or imposed on the Property or upon its ownership, use, occupancy or enjoyment, and any related costs, interest or penalties. In addition, “Impositions” include all documentary, stamp or intangible personal property taxes that may become due in connection with the Indebtedness, including Indebtedness in respect of any future advance made by the Lender to the Borrower, or that are imposed on any of the Loan Documents.

“Improvements” means, to the extent of the Borrower’s existing and future interest, all buildings and improvements of any kind erected or placed on the Land now or in the future, including the Fixtures, together with all appurtenant rights, privileges, Easements, tenements, hereditaments, titles, reversions, remainders and other interests.

“Indebtedness” means all sums that are owed or become due pursuant to the terms of the Note, this Deed of Trust, or any of the other Loan Documents or any other writing executed by the Borrower relating to the Loan, including scheduled principal payments, scheduled interest payments, default interest, late charges, prepayment premiums, accelerated or matured principal balances, advances, collection costs (including reasonable attorneys’ fees), reasonable attorneys’ fees and costs in enforcing or protecting the Note, this Deed of Trust, or any of the other Loan Documents in any probate, bankruptcy or other proceeding, receivership costs, fees and costs of the Trustee and all other financial obligations of the Borrower incurred in connection with the Loan transaction, provided, however, that this Deed of Trust shall not secure any Loan Document or any particular person’s liabilities or obligations under any Loan Document to the extent that such Loan Document expressly states that it or such particular person’s liabilities or obligations are unsecured by this Deed of Trust. “Indebtedness” shall also include any obligations under agreements executed and delivered by Borrower which specifically provide that such obligations are secured by this Deed of Trust.

“Insurance Premiums” means all premiums or other charges required to maintain in force any and all insurance policies that this Deed of Trust requires that the Borrower maintain.

“Insurance Proceeds” means (A) all proceeds of all insurance now or hereafter carried by or payable to the Borrower with respect to the Real Property, including with respect to the interruption of rents or income derived from the Property, all unearned insurance premiums and all related claims or demands, and (B) all Proceeds (as defined in Subsection 22.1).

“Key Lease” means any Lease that satisfies one or more of the following conditions:

(a)	The Lease is to a tenant who leases or will lease more than 12,000 square feet of the net leasable area of the Improvements, either presently or following the execution of a proposed Lease.
(b)	The Lease is to a tenant whose rental payment(s) under all Leases comprises or will comprise more than 20% of the gross rental income of

Deed of Trust and Security Agreement	-6-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

the Real Property, either presently or following the execution of a proposed Lease.

“Key Principal” means AmREIT, Inc.

“Land” means that certain tract of land located in Dallas County, Texas, which is described on the attached Exhibit A, together with the Appurtenances.

“Leasehold Shopping Center Parcel” means the approximately 7.49 acre parcel of land generally located at 6025 Royal Lane, the leasehold interest which is being acquired by AmREIT Preston Royal NEC, LP concurrently with this Deed of Trust.

“Leases” means all leases, subleases, licenses, concessions, extensions, renewals and other agreements (whether written or oral, and whether presently effective or made in the future) through which the Borrower grants any possessory interest in and to, or any right to occupy or use, all or any part of the Real Property, and any related guaranties.

“Legal Control” means the power, either directly or indirectly, to exercise the authority of the Borrower as owner of the Real Property, either as the majority shareholder of the common stock of a corporation, the sole general partner of a limited partnership, the managing general partner of a general partnership, or the sole manager or sole managing member of a limited liability company, provided the person or entity exercising such authority cannot be divested of such authority without its consent, either directly or indirectly, except for cause.

“Legal Requirements” means all laws, statutes, rules, regulations, ordinances, judicial decisions, administrative decisions, building permits, development permits, certificates of occupancy, or other requirements of any Governmental Authority.

“Loan Documents” means all documents evidencing the Loan or delivered in connection with the Loan, whether entered into at the closing of the Loan or in the future, including, without limitation, the Note, this Deed of Trust, the Assignment of Leases and Rents, the Carveout Guarantee and Indemnity, and the Environmental Indemnity Agreement.

“Maximum Lawful Rate” means the maximum lawful rate of interest that may be contracted for, charged, received or reserved by the Lender in accordance with the applicable laws of the State of Texas (or applicable federal law to the extent that it permits the Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law), taking into account all Charges.

“Monthly Escrow Payment” means the sum of the Monthly Imposition Requirement, the Monthly Insurance Premium Requirement, and the Monthly Reserve Requirement.

“Monthly Imposition Requirement” means one-twelfth (1/12th) of the annual amount that the Lender estimates will be required to permit the timely payment by the Lender of those Impositions that the Lender elects, from time to time, to include in the calculation of the Monthly Imposition Requirement. Such Impositions shall include real and personal property taxes and may include, at the Lender’s sole and absolute discretion, any Impositions that the Borrower has failed to pay on a timely basis during the term of the Loan. The Lender shall base its estimate on the most recent information supplied by the Borrower concerning future Impositions. If the Borrower fails to supply such information or if it is unavailable at the time of estimation, the Lender shall estimate future Impositions using historical information and an annual inflation factor equal to the lesser of five percent (5%) and the maximum inflation factor permitted by law.

“Monthly Insurance Premium Requirement” means one-twelfth (1/12th) of the annual amount that the Lender estimates (based on available historical data and using, if future

Deed of Trust and Security Agreement	-7-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

Insurance Premiums are as yet undeterminable, a five percent (5%) inflation factor) will be required to permit the timely payment of the Insurance Premiums by the Lender.

“Monthly Reserve Requirement” means the monthly payment amount which the Lender estimates will result, over the subsequent twelve (12) months, in the accumulation of a surplus in the Escrow Fund equal to the sum of the Monthly Imposition Requirement and the Monthly Insurance Premium Requirement.

“Note” means the promissory note dated of even date herewith to evidence the Indebtedness in the original principal amount of $23,400,000, together with all extensions, renewals and modifications.

“Notice” means a notice given in accordance with the provisions of Subsection 27.12.

“Obligations” means all of the obligations required to be performed under the terms and conditions of any of the Loan Documents by any Obligor.

“Obligor” means the Borrower, the Carveout Obligor, or any other Person that is liable under the Loan Documents for the payment of any portion of the Indebtedness, or the performance of any other obligation required to be performed under the terms and conditions of any of the Loan Documents, under any circumstances.

“Participations” means participation interests in the Loan Documents granted by the Lender.

“Permitted Control Group Member” shall mean any member of a group comprised of the Key Principal, institutional trustees of estate planning trusts established for the sole benefit of Permitted Control Group Members, and executors of the estates of Permitted Control Group Members.

“Permitted Encumbrances” means (A) the lien of taxes and assessments not yet due and payable and (B) those matters of public record listed as special exceptions or subordinate matters in the Lender’s title insurance policy insuring the priority of this Deed of Trust.

“Permitted Transfer” means a transfer specifically described in Section 14 as permitted.

“Person” means any individual, corporation, limited liability company, partnership, trust, unincorporated association, government, governmental authority or other entity.

“Property” means the Real Property and the Leases, Rents and Personal Property (as such latter term is defined in Subsection 22.1 below).

“Qualified Offer” means a written offer from the Borrower to do whichever of the following the Lender elects: (A) permit an uncontested foreclosure, or (B) deliver a deed in lieu of foreclosure within sixty (60) days of the Lender’s acceptance of the offer. An offer is not a Qualified Offer if the offer is conditioned on any payment by the Lender, on the release of any Obligor from any Obligation, or on any other concession.

“Qualified Passive Interest Transfer” shall have the meaning stated in Section 14.

“Qualified Property Manager” means either (A) a property management company approved in writing by the Lender, or (B) AmREIT Realty Investment Corporation.

“Real Property” means the Land and the Improvements.

“Rents” means all rents, income, receipts, issues and profits and other benefits paid or payable for using, leasing, licensing, possessing, operating from or in, residing in, selling, mining, extracting minerals from, or otherwise enjoying the Real Property, whether presently existing or arising in the future, to which the Borrower may now or hereafter

Deed of Trust and Security Agreement	-8-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	become entitled or may demand or claim from the commencement of the Loan term through the time of the satisfaction of all of the Obligations, including security deposits, amounts drawn under letters of credit securing tenant obligations, minimum rents, additional rents, common area maintenance charges, parking revenues, deficiency rents, termination payments, space contraction payments, damages following default under a Lease, premiums payable by tenants upon their exercise of cancellation privileges, proceeds from lease guarantees, proceeds payable under any policy of insurance covering loss of rents resulting from untenantability caused by destruction or damage to the Real Property, all rights and claims of any kind which the Borrower has or may in the future have against the tenants under the Leases, lease guarantors, or any subtenants or other occupants of the Real Property, all proceeds of any sale of the Real Property in violation of the Loan Documents, any future award granted the Borrower in any court proceeding involving any such tenant in any bankruptcy, insolvency, or reorganization proceedings in any state or federal court, and any and all payments made by any such tenant in lieu of rent.
	“Restoration” means (A) in the case of a casualty resulting in damage to or the destruction of the Improvements, the repair or rebuilding of the Improvements to their original condition, or (B) in the case of the condemnation of a portion of the Real Property, the completion of such work as may be necessary in order to remedy the effects of the condemnation so that the value and income-generating characteristics of the Real Property are restored.
	“Shopping Center” means the Real Property together with the Leasehold Shopping Center Parcel.
	“Termination Payments” means Rents paid to the Borrower in consideration of the Borrower’s release of a party from liability for a contractual or other legal obligation (e.g., lease termination, space contraction, and legal settlement payments). Termination Payments do not include payments of Rents under $250,000 paid pursuant to termination or space contraction options contained in Leases approved by the Lender or in Leases deemed approved or not requiring Lender approval under the Assignment.
4.	TITLE
	The Borrower represents to and covenants with the Lender and with its successors and assigns that, at the point in time of the grant of this Deed of Trust, the Borrower is well seized of good and indefeasible title to the Real Property, in fee simple absolute, subject to no lien or encumbrance except the Permitted Encumbrances. The Borrower warrants this estate and title to the Lender and to its successors and assigns forever, against all lawful claims and demands of all Persons. The Borrower shall maintain mortgagee title insurance issued by a solvent carrier, covering the Real Property in an amount at least equal to the amount of the Loan’s original principal balance. This Deed of Trust is and shall remain a valid and enforceable first mortgage on and security title to the Real Property, and if the validity or enforceability of this first mortgage is attacked by appropriate proceedings, the Borrower shall diligently and continuously defend it through appropriate proceedings. Should the Borrower fail to do so, the Lender may at the Borrower’s expense take all necessary action, including the engagement and compensation of legal counsel, the prosecution or defense of litigation, and the compromise or discharge of claims. THE BORROWER SHALL DEFEND, INDEMNIFY AND HOLD THE LENDER HARMLESS IN ANY SUIT OR PROCEEDING BROUGHT TO CHALLENGE OR ATTACK THE VALIDITY,

Deed of Trust and Security Agreement	-9-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	ENFORCEABILITY OR PRIORITY OF THE LIEN GRANTED BY THIS DEED OF TRUST, WHETHER OR NOT AS THE RESULT OF THE NEGLIGENCE OF LENDER. If a prior construction, mechanics’ or materialmen’s lien on the Real Property arises by operation of statute during any construction or repair of the Improvements, the Borrower shall either cause the lien to be discharged by paying when due any amounts owed to such persons, or shall comply with Section 12 of this Deed of Trust.
5.	REPRESENTATIONS OF THE BORROWER
	The Borrower represents to the Lender as follows:
	5.1	Legal Control
		The Borrower is under the Legal Control of the Key Principal.
	5.2	Formation, Existence, Good Standing
		The Borrower is a limited partnership duly organized, validly existing and in good standing under the laws of Texas.
	5.3	Power and Authority
		The Borrower has full power and authority to carry on its business as presently conducted, to own the Property, to execute and deliver the Loan Documents, and to perform its Obligations.
	5.4	Anti-Terrorism Regulations
		No Borrower, Borrower Affiliate, or person owning an interest in the Borrower or in any Borrower Affiliate, is either a “Specially Designated National” or a “Blocked Person” as those terms are defined in the Office of Foreign Asset Control Regulations (31 CFR Section 500 et seq.).
	5.5	Due Authorization
		The Loan transaction and the performance of all of the Borrower’s Obligations have been duly authorized by all requisite partnership action, and each individual executing any Loan Document on behalf of the Borrower has been duly authorized to do so.
	5.6	No Default or Violations
		The execution and performance of the Borrower’s Obligations will not result in any breach of, or constitute a default under, any contract, agreement, document or other instrument to which the Borrower is a party or by which the Borrower may be bound or affected, and do not and will not violate or contravene any law to which the Borrower is subject; nor do any such other instruments impose or contemplate any obligations which are or will be inconsistent with the Loan Documents.
	5.7	No Further Approvals or Actions Required
		No approval by, authorization of, or filing with any Governmental Authority is necessary in connection with the authorization, execution and delivery of the Loan Documents by the Borrower.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -10-

5.8	Due Execution and Delivery
	Each of the Loan Documents to which the Borrower is a party has been duly executed and delivered on behalf of the Borrower.
5.9	Legal, Valid, Binding and Enforceable
	Each of the Loan Documents to which the Borrower is a party constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.
5.10	Accurate Financial Information
	All financial information furnished by the Borrower to the Lender in connection with the application for the Loan is true, correct and complete in all material respects except as otherwise disclosed to Lender in writing, and there has been no material adverse change in the financial condition of the Borrower since the date of such financial information.
5.11	Compliance with Legal Requirements
	All governmental approvals and licenses required for the conduct of the Borrower’s business and for the maintenance and operation of the Real Property in compliance with applicable law are in full force and effect, and the Real Property is currently being operated in compliance with the Legal Requirements in all material respects.
5.12	Contracts and Franchises
	All contracts and franchises necessary for the conduct of the Borrower’s business and for the operation of the Real Property in accordance with reasonable commercial practice are in force.
5.13	No Condemnation Proceeding
	As of the Effective Date of this Deed of Trust, the Borrower has no knowledge of any present, pending or threatened condemnation proceeding or award affecting the Real Property.
5.14	No Casualty
	As of the Effective Date of this Deed of Trust, no damage to the Real Property by any fire or other casualty has occurred, other than damage that has been completely repaired, except as disclosed to Lender.
5.15	Independence of the Real Property
	The Real Property may be operated independently from other land and improvements not included within or located on the Land, and it is not necessary to own or control any property other than the Real Property in order to comply with the Legal Requirements.
5.16	Complete Lots and Tax Parcels
	The Land is comprised exclusively of tax parcels that are entirely included within the Land, and, if the Land is subdivided, of subdivision lots that are entirely included within the Land.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -11-

5.17	Intentionally Omitted
5.18	Ownership of Fixtures
	The Borrower owns the Fixtures free of any encumbrances, including purchase money security interests, rights of lessors, and rights of sellers under conditional sales contracts or other financing arrangements.
5.19	Commercial Property
	The Real Property is commercial rather than residential, and the Loan has not been made for personal, family or household purposes.
5.20	Real Property is not Homestead Property
	The Real Property is NOT HOMESTEAD PROPERTY of the Borrower or of the spouse of any person named as the Borrower.
5.21	Performance under Development Agreements
	To Borrower’s knowledge, all of the obligations of the owner of the Real Property due under the Development Agreements have been fully, timely and completely performed and such performance has been accepted by the related governmental agency or utility company, and no Governmental Authority has alleged that any default exists under any of the Development Agreements.
5.22	Status of Certain Title Matters
	To Borrower’s knowledge, each of the Easements included within the Appurtenances (a) is valid and in full force and effect and may not be amended or terminated, except for cause, without the consent of the Borrower, (b) has not been amended or supplemented, (c) requires no approval of the Improvements that has not been obtained, (d) is free of defaults or alleged defaults, (e) does not provide for any assessment against the Real Property that will not be paid in full prior to delinquency, and (f) has not been violated by the owner of the Real Property or, to the best of the Borrower’s knowledge, by any tenant of the Real Property.
5.23	No Prohibited Transactions
	The Borrower represents to the Lender that either (a) the Borrower is not an “employee benefit plan” within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is subject to Title I of ERISA, a “plan” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or an entity that is deemed to hold “plan assets” within the meaning of 29 C.F.R. §2510.3-101 of any such employee benefit plan or (b) the execution of the Loan Documents, the acceptance of the Loan by the Borrower and the existence of the Loan will not result in a non-exempt prohibited transaction under §406 of ERISA or Section 4975 of the Code. The Borrower further warrants and covenants that the foregoing representation will remain true during the term of the Loan.
The Lender acknowledges that the Borrower has relied in full or in part on representations from, or on information furnished by, the seller of the Real Property in making the representations of Subsections 5.11 (“Compliance with Legal Requirements”), 5.12 (“Contracts and Franchises”), 5.13 (“No Condemnation Proceeding”), 5.14 (“No Casualty”), 5.21 (“Performance under Development Agreements”), 5.22 (“Status of Certain Title Matters”).

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -12-

6.	COVENANTS
	6.1	Good Standing
		The Borrower shall remain in good standing as a limited partnership under the laws of Texas and shall maintain in force all statements of fictitious name and registrations necessary for the lawful operation of its business in Texas during the term of the Loan.
	6.2	No Default or Violations
		The Borrower shall not enter into any contract, agreement, document or other instrument, if the performance of the Borrower’s Obligations would result in any breach of, or constitute a default under, any such contract, agreement, document or other instrument, or if the contract, agreement, document or other instrument would impose or contemplate any obligations the performance of which would result in a Default under the Loan Documents or would be inconsistent with the performance of the Borrower’s Obligations.
	6.3	Payment and Performance
		The Borrower shall pay the Indebtedness and perform all of its other Obligations, as and when the Loan Documents require such payment and performance.
	6.4	Bankruptcy Remote Entity
		The Borrower has not and will not:
		(i)	engage in any business or activity other than the ownership, operation and maintenance of the Property, and activities incidental thereto;
		(ii)	acquire or own any assets other than (A) the Property, and (B) such incidental Personal Property as may be necessary for the operation of the Property;
		(iii)	merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;
		(iv)	fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents;
		(v)	own any subsidiary, or make any investment in, any Person;
		(vi)	commingle its assets with the assets of any other Person;
		(vii)	incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Indebtedness, unsecured trade payables and unsecured equipment leases (both of which must be incurred in the ordinary course of business relating to the ownership and operation of the Property) provided the same (x) do not exceed at any time in the aggregate a maximum amount of three percent (3%) of the outstanding principal amount of the Note, and (y) are paid within sixty (60) days after the date incurred;
		(viii)	fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person;

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -13-

	(ix)	enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;
	(x)	maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
	(xi)	assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
	(xii)	make any loans or advances to any Person;
	(xiii)	fail to file its own tax returns (unless prohibited by Legal Requirements from doing so);
	(xiv)	fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name or fail to correct any known misunderstanding regarding its separate identity;
	(xv)	fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operation;
	(xvi)	fail to allocate shared expenses (including shared office space) and to use separate stationery, invoices and checks;
	(xvii)	fail to pay its own liabilities (including salaries of its own employees) from its own funds; and
	(xviii)	acquire obligations or securities of its partners, members, shareholders or other Affiliates, as applicable.
6.5	Payment of Impositions
	The Borrower shall pay the Impositions on or before the last day on which they may be paid without penalty or interest, and shall, within thirty (30) days, furnish the Lender with a paid receipt or a cancelled check as evidence of payment. If the Lender does not receive such evidence, the Lender may obtain it directly. If it does so, the Lender will charge the Borrower an administrative fee of $250 for securing the evidence of payment. The payment of this fee shall be a demand obligation of the Borrower. The Borrower may meet the Imposition payment requirements of this Subsection 6.5 by remitting the Monthly Escrow Payments when due, by immediately providing Notice to the Lender of any new Imposition or increased Imposition unknown to the Lender, and by paying to the Lender on demand any amount required to increase the Escrow Fund to an amount sufficient to permit the Lender to pay all Impositions from the Escrow Fund on time. If the Borrower wishes to contest the validity or amount of an Imposition, it may do so by complying with Section 12. If any new Legal Requirement (other than a general tax on income or on interest payments) taxes this Deed of Trust so that the yield on the Indebtedness would be reduced, and the Borrower may lawfully pay the tax or reimburse the Lender for its payment, the Borrower shall do so.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -14-

6.6	Legal Control of the Borrower
	The Borrower shall remain under the Legal Control of the Key Principal during the term of the Loan.
6.7	Management of the Real Property
	The Real Property shall be managed at all times by the Key Principal, by a property management company engaged by the Key Principal to manage the Real Property, or by a Qualified Property Manager.
6.8	Maintenance of the Real Property
	The Borrower shall not commit or permit any waste of the Real Property as a physical or economic asset, and agrees to maintain in good repair the Improvements, including structures, roofs, mechanical systems, parking lots or garages, and other components of the Real Property that are reasonably necessary or desirable for the use of the Real Property, or which the Borrower as landlord under any Lease is required to maintain for the benefit of any tenant. In its performance of this Obligation, the Borrower shall promptly and in a good and workmanlike manner repair or restore, as required under Subsection 6.19, any elements of the Improvements that are damaged or destroyed. The Borrower shall also replace roofs, parking lots, mechanical systems, and other elements of the Improvements requiring periodic replacement. The Borrower shall carry out such replacements no less frequently than would a commercially reasonable owner intending to maintain the maximum income-generating potential of the Real Property over its reasonable economic life. The Borrower shall not, without the prior written consent of the Lender, demolish, reconfigure, or materially alter the structural elements of the Improvements, unless such an action is the obligation of the Borrower under a Lease approved by Lender. The Lender agrees that any request for its consent to such an action shall be deemed given if the Lender does not respond within fifteen (15) Business Days to any written request for such a consent, if the request is accompanied by all materials required to permit the Lender to analyze the proposed action.
6.9	Use of the Real Property
	The Borrower agrees that the Real Property may only be used as a retail property and for no other purpose.
6.10	Legal Requirements
	The Borrower shall maintain in full force and effect all governmental approvals and licenses required for the conduct of the Borrower’s business and for the maintenance and operation of the Real Property in compliance with applicable law, and shall comply with all Legal Requirements relating to the Real Property at all times.
6.11	Contracts and Franchises
	The Borrower shall maintain in force all contracts and franchises necessary for the conduct of the Borrower’s business and for the operation of the Real Property in accordance with good commercial practice.
6.12	Covenants Regarding Certain Title Matters
	The Borrower shall promptly pay, perform and observe all of its obligations under the Easements included within the Appurtenances or under reciprocal

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -15-

	easement agreements, operating agreements, declarations, and restrictive covenants included in the Permitted Encumbrances, shall not modify or consent to the termination of any of them without the prior written consent of the Lender, not to be unreasonably conditioned, withheld, or delayed, shall promptly furnish the Lender with copies of all notices of default under them, and shall cause all covenants and conditions under them and benefiting the Real Property to be fully performed and observed.
6.13	Independence of the Real Property
	The Borrower shall maintain the independence of the Real Property from other land and improvements not included within or located on the Land. In fulfilling this covenant, the Borrower shall neither take any action which would make it necessary to own or control any property other than the Real Property in order to meet the obligations of the landlord under any Lease, or in order to comply with the Legal Requirements, nor take any action which would cause any land or improvements other than the Land and the Improvements to rely upon the Land or the Improvements for those purposes.
6.14	Complete Lots and Tax Parcels
	The Borrower shall take no action that would result in the inclusion of any portion of the Land in a tax parcel or subdivision lot that is not entirely included within the Land.
6.15	Commercial Property
	The Real Property shall be used for commercial rather than for residential, personal, family or household purposes.
6.16	Real Property is not Homestead Property
	The Real Property shall NOT BECOME HOMESTEAD PROPERTY of the Borrower or of the spouse of any person named as the Borrower.
6.17	Performance under Development Agreements
	The Borrower shall fully, timely and completely perform all of the obligations of the owner of the Real Property due under the Development Agreements (in all material respects) and shall cause no default under any of the Development Agreements.
6.18	Status of Certain Title Matters
	The Borrower shall not take or fail to take any action with respect to the Easements included within the Appurtenances or the reciprocal easement agreements, operating agreements, declarations, and restrictive covenants included in the Permitted Encumbrances if, as the result of such an action or failure, the subject Easement or other title matter would (a) be rendered invalid or without force or effect, (b) be amended or supplemented without the consent of the Lender, (c) be placed in default or alleged default, (d) result in any lien against the Real Property, or (e) give rise to any assessment against the Real Property, unless immediately paid in full.
6.19	Restoration upon Casualty or Condemnation
	If a casualty or condemnation occurs, the Borrower shall promptly commence and diligently complete the Restoration of the Real Property, provided the related

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -16-

	Insurance Proceeds or Condemnation Proceeds held by the Lender are available for Restoration under the terms of Sections 8.4 and 8.6.
6.20	Performance of Landlord Obligations
	The Borrower shall perform its obligations as landlord under the Leases and shall neither take any action, nor fail to take any action, if the action or failure would be inconsistent with the commercially reasonable management of the Real Property for the purpose of enhancing its long-term performance and value.
6.21	Financial Reports and Operating Statements

(a)	Maintenance of Books and Records
	During the term of the Loan, the Borrower shall maintain complete and accurate accounting and operational records, including copies of all Leases and other material written contracts relating to the Real Property, copies of all tax statements, and evidence to support the payment of all material property-related expenses.
(b)	Delivery of Financial and Property-Related Information
	Within one hundred twenty (120) days after the end of each of its fiscal years, or, if a Default exists, on demand by the Lender, the Borrower shall deliver to the Lender copies of the financial statements of the Borrower, including balance sheets and earnings statements. Within thirty (30) days after the end of each of its fiscal quarters, or, if a Default exists, on demand by the Lender, the Borrower shall deliver to the Lender (A) a complete and accurate operating statement for the Real Property, and (B) a complete rent roll, all in form satisfactory to the Lender. The operating statement and rent roll must be certified by the Borrower to be true and correct and must include each tenant’s name, unit numbers, square footage occupied and leased, rents, delinquencies, vacancies, and other income received and expenses. In addition, the Borrower shall provide, with such rent rolls or otherwise at the Lender’s reasonable request, the most recent available sales reports in respect of all retail tenants occupying over 12,000 square feet and required to provide such reports under their Leases. If the Borrower fails to deliver the items required in this Subsection, the Lender may engage an accounting firm to prepare the required items. The Borrower shall cooperate fully with any investigative audit required to permit the accounting firm to produce these items, and the fees and expenses incurred in connection with their preparation shall be paid on demand by the Borrower.
(c)	Reporting Format
	The Borrower shall cooperate in providing the reports required above in any industry-standard format that the Lender may designate, provided such reporting format is not cost prohibitive.
(d)	Effect of Failure to Deliver Financial and Property Reports
	If no Default exists and the Borrower or the Carveout Obligor fails to provide the financial and property reports required under this Section before the applicable deadline, the Lender will provide a Notice of this

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -17-

		failure and a thirty (30)-day opportunity to cure before a Default shall exist.
	(e)	Certification of Information
		Lender shall not initially require that the annual financial and operating statements provided under this Subsection be certified by an independent certified public accountant as having been prepared in accordance with generally accepted accounting principles, consistently applied, or, in the case of financial statements prepared on a cash or income tax basis, or of operating statements, as not materially misleading based on an audit conducted in accordance with generally accepted auditing standards. The Borrower shall, however, certify that such statements are true and accurate in all material respects, and the Lender expressly reserves the right to require such a certification by an independent certified public accountant if a Default exists or if the Lender has reason to believe that any previously provided financial or operating statement is misleading in any material respect.
6.22	Estoppel Statements
	Upon request by the Lender, the Borrower shall, within ten (10) Business Days of Notice of the request, furnish to the Lender or to whom it may direct, a written statement acknowledging the amount of the Indebtedness and disclosing all known offsets or defenses exist against the Indebtedness. Thereafter, the Borrower shall be estopped from asserting any other offsets or defenses alleged to have arisen and which should have been known to Borrower prior to the date of the statement.
6.23	Prohibition on Certain Distributions
	If a Default exists under Subsection 10.1 or under any of Subparagraphs (b), (c), (d), (e) or (f) of Subsection 10.2, the Borrower shall not pay any dividend or make any partnership, trust or other distribution, and shall not make any payment or transfer any property in order to purchase, redeem or retire any interest in its beneficial interests or ownership.
6.24	Use of Loan Proceeds
	The Loan proceeds shall be used solely for commercial purposes.
6.25	Prohibition on Cutoff Notices
	The Borrower shall not issue any Notice to the Lender to the effect that liens on the Real Property after the date of the Notice will enjoy priority over the lien of this Deed of Trust.
6.26	Prohibited Person Compliance
	The Borrower warrants, represents and covenants that neither the Borrower nor any Obligor nor any of their respective affiliated entities is or will be an entity or person (i) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”), (ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated Nationals and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website,

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -18-

		http:www.treas.gov/ofac/t11sdn.pdf), (iii) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224, or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in subparts [i] - [iv] above are herein referred to as a “Prohibited Person”). The Borrower covenants and agrees that neither the Borrower, nor any Obligor nor any of their respective affiliated entities will (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services to or for the benefit of a Prohibited Person, or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. The Borrower further covenants and agrees to deliver (from time to time) to the Lender any such certification or other evidence as may be requested by the Lender in its sole and absolute discretion, confirming that (i) neither the Borrower nor any Obligor is a Prohibited Person and (ii) neither the Borrower nor any Obligor has engaged in any business, transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person. Notwithstanding anything contained in the foregoing to the contrary, any representation in this Section as to AmREIT, Inc., is given solely to Borrower’s actual knowledge, and unless otherwise required by law, Borrower shall have no duty to confirm that any shareholder of AmREIT, Inc., is not a Prohibited Person, except with respect to shareholders owning more than a 10% interest in AmREIT, Inc.
7.	INSURANCE REQUIREMENTS
	At all times until the Indebtedness is paid in full, the Borrower shall maintain insurance coverage and administer insurance claims in compliance with this Section.
	7.1	Minimum Required Coverages
		(a)	“All Risk” Property Insurance Coverage
			The Borrower shall maintain property insurance coverage at least equivalent or superior to the Insurance Services Offices (ISO) “Cause of Loss – Special Form” coverage in an amount not less than one hundred percent (100%) of the replacement cost of all insurable elements of the Real Property and of all tangible Personal Property, with coinsurance waived, or if a coinsurance clause is in effect, with an Agreed Amount endorsement acceptable to the Lender. Coverage shall extend to the Real Property and to all tangible Personal Property.
		(b)	Broad Form Boiler and Machinery/HVAC/Equipment Breakdown
			The Borrower shall maintain broad form boiler and machinery coverage, including coverage for resulting loss of income/loss of rents/extra expense if any of the following is located on the Real Property: any boiler or other fired-pressure vessel; any machinery containing pressure; or any machinery generating or transmitting power, including without limitation, centralized HVAC equipment, community water heaters, refrigeration or air conditioning vessels, or pumps.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -19-

(c)	Flood
	If the Real Property is located in a special flood hazard area (SFHA, also known as the 100-year floodplain) according to the most current flood insurance rate map (FIRM) issued by the Federal Emergency Management Agency (FEMA) and if flood insurance is available, the Borrower shall maintain flood insurance coverage on all insurable elements of Real Property and of all tangible Personal Property for one hundred percent (100%) of the replacement cost or the maximum amount available under the National Flood Insurance Program (NFIP), and if available the resulting loss of business income/loss of rents/extra expense.
(d)	Windstorm
	The Borrower shall maintain windstorm coverage that includes all named windstorms. Windstorm coverage may be provided by a policy separate from the other insurance coverage required in this Section.
(e)	Business Interruption/Time Element Coverage
	The Borrower shall maintain a form of business interruption coverage or loss of rents/extra expense for resulting loss of income by a covered peril in the amount of twelve (12) months of one year’s business income from the Property or loss of rents/extra expense.
(f)	Construction-Related Coverage
	During the term of the Loan, while construction of any Improvements is in progress, the Borrower shall maintain Builder’s Risk coverage written on an all risk basis, completed value form, with limits reflecting the total completed value of the structure. Coverage shall extend to all property of the Borrower that is to be used during the excavation and preparation of the site of the Improvements, the construction of the Improvements (whether underground or above-ground) or that is intended to be incorporated into the Improvements, whether located on the Real Property, stored off-site or in transit. The Borrower, the Guarantor, and the general contractor (if it is an entity other than the Borrower) shall be named as insured under liability coverage.
(g)	Comprehensive/General Liability (CGL)
	The Borrower shall maintain commercial general liability coverage for not less than $1,000,000 combined single limit per occurrence and general aggregate limit of $2,000,000.
(h)	Umbrella/Excess Liability
	The Borrower shall maintain umbrella or excess liability coverage in an amount reasonably determined by the Lender, but in no event less than $1,000,000 per occurrence and in the aggregate. Umbrella or excess coverage should follow form to the underlying coverage.
(i)	Elective or Additional Coverages
	The Lender may require additional insurance coverages or endorsements reasonably appropriate to the property type and site location and available at commercially reasonable rates. Additional coverages may

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -20-

		include earthquake, mine subsidence, sinkhole, personal property, supplemental liability, or coverages of other property-specific risks.
7.2	Blanket Coverage
	The Borrower may satisfy the requirements of this Section through a so-called “blanket insurance policy” if (a) the policy includes limits by property location and (b) the Lender determines, in the exercise of its sole and absolute discretion, that the amount of such coverage is sufficient in light of the other risks and properties insured under the blanket policy. The Obligation to provide any policy or coverage under this Section may be satisfied by the policy or coverage carried by the tenant under an approved Key Lease, provided such policy or coverage is primary and noncontributing; and further provided that, in the case of such tenant’s property policy, the Borrower is named as an additional named insured or as an additional insured, and the Lender is named as first mortgagee, or, in the case of such tenant’s liability insurance policy, the Borrower and the Lender are named as additional insureds.
7.3	How the Lender Shall Be Named
	On all property insurance policies and coverages required under this Section (including coverage against loss of business income, also known as business income/loss of rents/extra expense), the Lender must be named as “first mortgagee” under a standard mortgagee clause and as a “loss payee” under a loss payee endorsement or a Lenders Loss Payable endorsement. On the Builder’s Risk and Commercial General Liability policies, the Lender must be named as an “additional insured.” The Lender shall be referred to verbatim as follows: “Transamerica Financial Life Insurance Company and its successors, assigns, and affiliates; as their interest may appear; c/o AEGON USA Realty Advisors, LLC; Mortgage Loan Dept.; 4333 Edgewood Rd., NE; Cedar Rapids, Iowa 52499-5443.”
7.4	Rating
	Each insurance carrier providing insurance required under this Section must have, independently of its parent’s or any reinsurer’s rating, a Best’s Rating of A-, and a Financial Size Rating of X or better, as reported in the most current issue of Best’s Insurance Guide, or as reported by Best on its internet web site.
7.5	Deductible
	The maximum deductible on each required coverage or policy is $100,000.
7.6	Notices, Changes and Renewals
	All policies must require the insurance carrier to give the Lender a minimum of ten (10) days’ notice in the event of modification, cancellation or termination for nonpayment of premium and a minimum of thirty (30) days’ notice of cancellation or nonrenewal, or as required under state law. Prior to each policy renewal, the Borrower shall report to the Lender all sublimits, margin clauses and other conditions and endorsements that reduce the coverages required in this Section and changes to deductibles for sub-limited coverages, self-insured retentions, fronting arrangements, or other endorsements or conditions that require the Borrower to retain additional risk. The Borrower shall report to the Lender immediately any facts known to the Borrower that may adversely affect the appropriateness or enforceability of any insurance contract, including,

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -21-

	without limitation, changes in the ownership or occupancy of the Real Property, any hazard to the Real Property and any matters that may give rise to any claim. No fewer than thirty (30) days prior to expiration of any policy required under this Section, the Borrower shall provide either (a) an original or certified copy of the renewed policy, or (b) a certificate of insurance, including an Acord 28 (real property), Acord 27 (personal property) or Acord 25 (liability) certificate, or another document satisfactory to the Lender conferring on the Lender the rights and privileges of mortgagee. If the Borrower meets the foregoing requirement under clause (b), the Borrower shall supply an original or certified copy of the original policy within ninety (90) days. All certificates, documents, and original or certified copies of policies must (i) name the Borrower as a named insured or as an additional insured, (ii) include the complete and accurate property address, (iii) show that the applicable coverage or endorsement is in full force and effect, (iv) convey all of the insured’s rights and privileges under the policy to the mortgagee (Lender), (v) include the Lender as loss payee (for business interruption coverages), and (vi) include the Lender as additional insured (for liability coverages).
7.7	Unearned Premiums
	If this Deed of Trust is foreclosed, the Lender may at its discretion cancel any of the insurance policies required under this Section and apply any unearned premiums to the Indebtedness.
7.8	Forced Placement of Insurance
	If the Borrower fails to comply with the requirements of this Section, the Lender may, at its discretion, procure any required insurance. Any premiums paid for such insurance, or the allocable portion of any premium paid by the Lender under a blanket policy for such insurance, shall be a demand obligation under this Deed of Trust, and any unearned premiums under such insurance shall comprise Insurance Proceeds and therefore a portion of the Property.
7.9	Insurance Disclosure Notice
	TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE: (A) BORROWER IS REQUIRED TO (i) KEEP THE PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED HEREIN; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED HEREIN; AND (iii) NAME LENDER AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS PROVIDED HEREIN; (B) SUBJECT TO THE PROVISIONS HEREOF, BORROWER MUST, IF REQUIRED BY LENDER, DELIVER TO LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF INSURANCE PREMIUMS; AND (C) SUBJECT TO THE PROVISIONS HEREOF, IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN THE FOREGOING SUBPARTS (A) OR (B), LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER’S EXPENSE.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -22-

8.	INSURANCE AND CONDEMNATION PROCEEDS
	8.1	Provisions of APproved Key Leases to Govern
		The Lender agrees to permit the use of Insurance Proceeds and Condemnation Proceeds by the Borrower to meet its obligations as landlord under any Key Lease approved by the Lender at the time of the origination of the Loan or during the Loan term to effect the Restoration of the premises, provided (a) no Default exists, (b) the Lender may hold the Insurance Proceeds or Condemnation Proceeds and condition their disbursement as described in Subsections 8.6 and 8.8, and (c) the tenant under the related Key Lease confirms to the Lender in writing that it is committed to pay full Rent following the completion of the Restoration. The remaining provisions of this Section shall apply to the extent that they are consistent with the terms of the approved Key Lease.
	8.2	Adjustment and Compromise of Claims and Awards
		The Borrower may settle any insurance claim or condemnation proceeding if the effect of the casualty or the condemnation may be remedied for $60,000 or less. If a greater sum is required, the Borrower may not settle any such claim or proceeding without the advance written consent of the Lender. If a Default exists, the Borrower may not settle any insurance claim or condemnation proceeding without the advance written consent of the Lender.
	8.3	Direct Payment to the Lender of Proceeds
		If the Insurance Proceeds received in connection with a casualty or the Condemnation Proceeds received in respect of a condemnation exceed $700,000, or if there is a Default, then such proceeds shall be paid directly to the Lender. The Lender shall have the right to endorse instruments which evidence proceeds that it is entitled to receive directly.
	8.4	Availability to the Borrower of Proceeds
		Insurance Proceeds and Condemnation Proceeds shall be paid to the Lender for use in accordance with Subsection 8.5, unless the amount received is less than $700,000, in which case the Borrower shall have the right to use the Insurance Proceeds and Condemnation Proceeds to carry out the Restoration of the Real Property, subject to the conditions set forth in Subsections 8.6, 8.7, and 8.8.
		If the amount received in respect of a casualty or condemnation equals or exceeds $700,000, and if the Loan-to-Value ratio of the Property on completion will be sixty-five percent (65%) or less, as determined by the Lender in its discretion based on its estimate of the market value of the Real Property, the Lender shall receive such Insurance Proceeds or Condemnation Proceeds directly and hold them in a fund for Restoration subject to the conditions set forth in Subsections 8.6, 8.7, and 8.8 of this Section. If the Lender’s estimate of the market value of the Real Property implies a Loan-to-Value ratio of over 65%, and the Borrower disagrees with the Lender’s estimate, the Borrower may require that the Lender engage an independent appraiser (the “Fee Appraiser”) to prepare and submit to AEGON a full narrative appraisal report estimating the market value of the Real Property. The Fee Appraiser shall be certified in Texas and shall be a member of a national appraisal organization that has adopted the Uniform Standards of Professional Appraisal Practice (USPAP) established by the Appraisal Standards Board of the Appraisal Foundation. The Fee Appraiser

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -23-

	will be required to use assumptions and limiting conditions established by the Lender prior to the funding of the Loan and to prepare the appraisal in conformity with the Lender’s Appraisal Guidelines. For purposes of this Section, the independent appraiser’s value conclusion shall be binding on both the Lender and the Borrower. The Borrower shall have the right to make a prepayment of the Loan, without premium, sufficient to achieve this Loan-to-Value ratio. The independent fee appraisal shall be at the Borrower’s expense, and the Borrower shall pay to the Lender an administrative fee of $2,500 in connection with its review. The Lender may require that the Borrower deposit $10,000 with the Lender as security for these expenses or may pay the Fee Appraiser’s and administrative fees from the proceeds at its sole discretion.
8.5	Lender’s Use of Proceeds
	Unless the Borrower has the right to use the Insurance Proceeds or the Condemnation Proceeds under the foregoing paragraphs, the Lender may, in its sole and absolute discretion, either apply them to the Loan balance or disburse them for the purposes of repair and reconstruction, or to remedy the effects of the condemnation. No prepayment premium will be charged on Insurance Proceeds or Condemnation Proceeds applied to reduce the principal balance of the Loan.
8.6	Conditions to Availability of Proceeds
	The Lender shall have no obligation to release Insurance Proceeds or Condemnation Proceeds to the Borrower, and may hold such amounts as additional security for the Loan, if (a) a Default exists, (b) the Lender has delivered to the Borrower Notice of any act, omission or circumstance that will, if uncured, become a Default, and the required cure has not been effected or (c) if the Insurance Proceeds or Condemnation Proceeds received by the Lender and any other funds deposited by the Borrower with the Lender are insufficient, as determined by the Lender in its reasonable discretion, to complete the Restoration. If a Default exists, the Lender may at its sole and absolute discretion apply such Insurance Proceeds and Condemnation Proceeds to the full or partial cure of the Default.
8.7	Gross Up of Restoration Fund; Permitted Mezzanine Financing
	If the Lender determines that the Insurance Proceeds or Condemnation Proceeds received in respect of a casualty or a condemnation, as the case may be, would be insufficient to permit the Borrower to effect the Restoration, then the Borrower shall deposit in the Restoration Fund such additional funds as the Lender determines are necessary to effect the Restoration. The Lender agrees to permit the Borrower to secure mezzanine financing in order to meet its obligation under this Subsection. The mezzanine loan may be secured by a pledge of interests in the Borrower, subject to an inter-creditor agreement on market terms for securitized loans.
8.8	Draw Requirements
	If the amount of Insurance Proceeds or Condemnation Proceeds exceed $700,000, the Borrower’s right to receive Insurance Proceeds and Condemnation Proceeds held by the Lender under this Section shall be conditioned on the Lender’s approval of plans and specifications for the Restoration. Each draw, except the last, shall be in the minimum amount of $50,000. Draw requests shall be accompanied by customary evidence of construction completion, and by

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -24-

		endorsements to the Lender’s mortgagee title insurance coverage insuring the absence of construction, mechanics’ or materialmen’s liens. Draws based on partial completion of the Restoration shall be subject to a ten percent (10%) holdback. All transactional expenses shall be paid by the Borrower.
9.	ESCROW FUND
	The Borrower shall pay the Monthly Escrow Payment on the first (1st) day of every month, commencing with the month in which the first regular payment of principal and interest is due. The Lender shall hold Monthly Escrow Payments in a non-interest-bearing fund from which the Lender will pay on a timely basis those Escrow Expenses that the Lender has anticipated will become payable on a regular basis during the Loan’s term, and on which the Lender has based its determination of the Monthly Imposition Requirement, the Monthly Insurance Premium Requirement and the Monthly Reserve Requirement. The Escrow Fund will be maintained as an accounting entry in the Lender’s general account, where it may be commingled with the Lender’s other funds. The Lender may reanalyze the projected Escrow Expenses from time to time and shall advise the Borrower of any change in the amount of the Monthly Escrow Payment. Upon the foreclosure of this Deed of Trust, the delivery of a deed in lieu of foreclosure, or the payoff of the Loan, the Lender shall apply amounts in the Escrow Fund, net of accrued Escrow Expenses, to the Indebtedness. The Lender shall remit any amounts in excess of the Indebtedness to the Borrower.
10.	DEFAULT
	10.1	Payment Defaults
		A “Default” shall exist without Notice upon the occurrence of any of the following events:
		(a)	Scheduled Payments
			Subject to the terms of the Note, Borrower’s failure to pay, or to cause to be paid, (i) any regular monthly payment of principal and interest under the Note, together with any required Monthly Escrow Payment, on or before the tenth (10th) day of the month in which it is due or (ii) any other scheduled payment under the Note, this Deed of Trust or any other Loan Document.
		(b)	Payment at Maturity
			The Borrower’s failure to pay, or to cause to be paid, the Indebtedness when the Loan matures by acceleration under Section 16, because of a transfer or encumbrance under Section 13, or by lapse of time.
		(c)	Demand Obligations
			The Borrower’s failure to pay, or to cause to be paid, within five (5) Business Days of the Lender’s demand, any other amount required under the Note, this Deed of Trust or any of the other Loan Documents.
	10.2	Incurable Non-Monetary Default
		A Default shall exist upon any of the following (each of which is an “Incurable Non-Monetary Default”):

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -25-

	(a)	Material Untruth or Misrepresentation
		The Lender’s discovery that any representation made by the Borrower in any Loan Document was materially untrue or misleading when made, if the misrepresentation either was intentional or is not capable of being cured as described in Subsection 10.3(a) below.
	(b)	Due on Sale or Encumbrance
		The occurrence of any sale, conveyance, transfer or vesting that would result in the Loan becoming immediately due and payable at the Lender’s option under Section 13.
	(c)	Voluntary Bankruptcy Filing
		The filing by the Borrower of a petition in bankruptcy or for relief from creditors under any present or future law that affords general protection from creditors.
	(d)	Insolvency
		The failure of the Borrower generally to pay its debts as they become due, its admission in writing to an inability so to pay its debts, the making by the Borrower of a general assignment for the benefit of creditors, or a judicial determination that the Borrower is insolvent.
	(e)	Receivership
		The appointment of a receiver or trustee to take possession of any of the assets of the Borrower.
	(f)	Levy or Attachment
		The taking or seizure of any material portion of the Property under levy of execution or attachment.
	(g)	Lien
		The filing against the Real Property of any lien or claim of lien for the performance of work or the supply of materials, or the filing of any federal, state or local tax lien against the Borrower, or against the Real Property, unless the Borrower promptly complies with Section 12 of this Deed of Trust.
	(h)	Defaults under other Loan Documents
		The existence of any default under any other Loan Document, provided any required Notice of such default has been given and any applicable cure period has expired.
	(i)	Dissolution or Liquidation
		The Borrower shall initiate or suffer the commencement of a proceeding for its dissolution or liquidation, and such proceeding shall not be dismissed within ninety (90) days, or the Borrower shall cease to exist as a legal entity (unless resulting in a Permitted Transfer).
10.3	Curable Non-Monetary Default
	A Default shall exist, following the cure periods specified below, under the following circumstances:

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -26-

(a)	Unintentional Misrepresentations that are Capable of Being Cured
	A “Default” shall exist, with Notice, if the Lender discovers that the Borrower has unintentionally made any material misrepresentation that is capable of being cured, unless the Borrower promptly commences and diligently pursues a cure of the misrepresentation approved by the Lender, and completes the cure within sixty (60) days. Any such cure shall place the Lender in the risk position that would have existed had the false representation been true when made. If the Borrower has relied in full or in part on representations from, or on information furnished by, the seller of the Real Property as described in the last sentence of Section 5.23, and the representation is capable of being cured as described above, the misrepresentation shall be considered curable for purposes of this paragraph.
(b)	Involuntary Bankruptcy or Similar Filing
	The Borrower becomes the subject of any petition or action seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief, or that may result in a composition of its debts, provide for the marshaling of the Borrower’s assets for the satisfaction of its debts, or result in the judicially ordered sale of the Borrower’s assets for the purpose of satisfying its obligations to creditors, unless a motion for the dismissal of the petition or other action is filed within twenty (20) days and results in its dismissal within ninety (90) days of the filing of the petition or other action.
(c)	Entry of a Material Judgment
	Any judgment is entered against the Borrower or any other Obligor, and the judgment may materially and adversely affect the value, use or operation of the Real Property, unless the judgment is satisfied within twenty (20) Days.
(d)	Failure to provide Financial and Property Reports
	If the Borrower or the Carveout Obligor fails to provide the financial and property reports required under this Deed of Trust or the Carveout Guarantee and Indemnity, as the case may be, before the applicable deadline, unless such failure within thirty (30) days after such notice
(e)	Other Defaults
	The Borrower fails to observe any promise or covenant made in this Deed of Trust, unless the failure results in a Default described elsewhere in this Section 13, provided the Lender delivers written Notice to the Borrower of the existence of such an act, omission or circumstance, and that such an act, omission or circumstance shall constitute a Default under the Loan Documents unless the Borrower promptly initiates an effort to cure the potential Default, pursues the cure diligently and continuously, and succeeds in effecting the cure within one hundred twenty (120) days of its receipt of Notice. The Lender shall afford the Borrower an additional period of one hundred twenty (120) days in cases where construction or repair is needed to cure the potential Default, and the cure cannot be completed within the first one hundred twenty (120)

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -27-

day cure period. During the cure period, the Borrower has the obligation to provide on demand satisfactory documentation of its effort to cure, and, upon completion, evidence that the cure has been achieved. All notice and cure periods provided in this Deed of Trust shall run concurrently with any notice or cure periods provided by law and in any of the other Loan Documents.

11.	RIGHT TO CURE
	The Lender shall have the right to cure any Default. The expenses of doing so shall be part of the Indebtedness, and the Borrower shall pay them to the Lender on demand.
12.	CONTEST RIGHTS
	The Borrower may secure the right to contest Impositions and construction, mechanics’ or materialmen’s liens, through appropriate proceedings conducted in good faith, by either (A) depositing with the Lender an amount equal to one hundred twenty five percent (125%) of the amount of the Imposition or the lien, or (B) obtaining and maintaining in effect a bond issued by a surety acceptable to the Lender, in an amount equal to the greater of (i) the amount of a required deposit under clause (A) above and (ii) the amount required by the surety or by the court in order to obtain a court order staying the foreclosure of the lien pending resolution of the dispute, and releasing the lien of record. The proceeds of such a bond must be payable directly to the Lender. The surety issuing such a bond must be acceptable to the Lender in its sole discretion. After such a deposit is made or bond issued, the Borrower shall promptly commence the contest of the lien and continuously pursue that contest in good faith and with reasonable diligence. If the contest of the related Imposition or lien is unsuccessful, any deposits or bond proceeds shall be used to pay the Imposition or to satisfy the obligation from which the lien has arisen. Any surplus shall be refunded to the Borrower.
13.	DUE ON TRANSFER OR ENCUMBRANCE
	Upon the sale or transfer of any portion of the Real Property or any other conveyance, transfer or vesting of any direct or indirect interest in the Borrower or the Property, including (i) the direct or indirect transfer of, or the granting of a security interest in, the ownership of the Borrower or the voting rights in the Borrower, (ii) any encumbrance (other than a Permitted Encumbrance) of the Real Property (unless the Borrower contests the encumbrance in compliance with Section 12) and (iii) the lease, license or granting of any security interest in the Personal Property, the Indebtedness shall, at the Lender’s option, become immediately due and payable upon Notice to the Borrower, unless the sale, conveyance, transfer or vesting is a Permitted Transfer or is permitted by Section 8.7. Notwithstanding the foregoing, the issuance or transfer of equity securities of AmREIT, Inc., or the issuance or transfer of securities that are convertible into equity securities of AmREIT, Inc., that in either case may be lawfully traded in public securities markets shall be deemed not to be a transfer of an indirect interest in the Borrower.
14.	DUE ON SALE EXCEPTIONS
	The following transfers and encumbrances shall constitute Permitted Transfers:

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -28-

14.1	Permitted Transfer to an Approved Purchaser
	The Borrower shall have the right, on one occasion during the term of the Loan, to sell or transfer the Property in a transaction approved by the Lender. The Lender agrees that such a transfer shall be a Permitted Transfer if the following conditions are satisfied:
	(a)	No Default
		No Default shall exist, and no act, omission or circumstance shall exist which, if uncured following Notice and the passage of time, would become a Default.
	(b)	Request and Supporting Materials
		The Lender shall receive a written request for its approval at least ninety (90) days before the proposed transfer. The request shall specify the identity of the proposed transferee and the purchase price and other terms of the transaction, shall include a copy of the proposed contract of sale, and shall be accompanied by the financial statements, tax returns, and organizational documents of the proposed transferee and its principals.
	(c)	Criteria to be Considered
		The ownership structure, financial strength, credit history and demonstrated property management expertise of the proposed transferee and its principals shall be satisfactory to the Lender in its sole discretion. The Lender expressly reserves the right to withhold its approval of the proposed transfer if the proposed transferee or any of its principals is or has been the subject of any bankruptcy, insolvency, or similar proceeding.
	(d)	Assumption Agreement
		Under the terms of the proposed transfer, the proposed transferee shall assume the Loan, without modification, under the terms of an assumption agreement and additional documentation satisfactory to the Lender in form and substance. Under the assumption agreement, the transferee shall provide a representation as to the purchase price paid for the Real Property.
	(e)	Liability for Carveout Obligations
		Under the terms of the assumption agreement and additional documentation, liability for Carveout Obligations arising both before and after the date of the transfer and assumption shall be retained or assumed by the parties satisfactory to the Lender. Notwithstanding the foregoing, Borrower and Carveout Obligor shall be released from liability for Carveout Obligations arising on or after the date of the transfer and assumption; provided that in any action to enforce the liability of Borrower and/or Carveout Obligor for Carveout Obligations, Borrower and/or Carveout Obligor shall have the burden of proving when the Carveout Obligations in question arose.
	(f)	Title Insurance Endorsement
		The Borrower shall agree to provide an endorsement to the Lender’s mortgagee title insurance policy, insuring the continued validity and priority of this Deed of Trust following the assumption.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -29-

		(g)	Assumption Fee
			The Lender shall receive an assumption fee of one percent (1%) of the outstanding balance of the Loan , and the Borrower shall agree to reimburse the Lender’s out-of-pocket expenses incurred in connection with the proposed transfer, including title updates and endorsement charges, recording fees, any applicable taxes and attorneys’ fees, regardless of whether the transfer is consummated.
	14.2	Permitted Transfers of Certain Passive Interests
		Any transfer of direct or indirect interests in the Borrower that meets the requirements of this Sub-section (a “Qualified Passive Interest Transfer”) shall be a Permitted Transfer, and no transfer fee, assumption fee, processing fee or document review fee shall be charged in connection with the transfer. The requirements are the following:
		(a)	Notice
			The Borrower shall deliver advance notice of the proposed transfer, together with evidence reasonably satisfactory to the Lender that the proposed transfer would meet the requirements of this Section. Such evidence shall include a narrative description and detailed pre- and post-transfer organizational charts of the Borrower.
		(b)	Absence of Default
			No Default shall exist at the time of the transfer.
		(c)	Absence of Violation
			The proposed transfer shall not result in any violation of the covenants of the Loan Documents relating to the management of the Real Property and Legal Control of the Borrower.
		(d)	Legal Control
			The Carveout Obligor shall exercise Legal Control of the Borrower after the transfer.
	14.3	Transaction Costs
		The Borrower shall pay all out-of-pocket expenses incurred by the Lender in the review and processing of a proposed or completed Permitted Transfer regardless of whether the Permitted Transfer is carried out.
15.	NOTICE OF ASSIGNMENT OF LEASES AND RENTS
	Under the Assignment of Leases and Rents, the Borrower has assigned to the Lender, and to its successors and assigns, all of the Borrower’s right and title to, and interest in, the Leases, including all rights under the Leases and all benefits to be derived from them. The rights assigned include all authority of the Borrower to modify or terminate Leases, or to exercise any remedies, and the benefits assigned include all Rents. This assignment is present, but under the terms of the Assignment of Leases and Rents, the Lender has granted the Borrower a conditional license to collect and use the Rents, and to exercise the rights assigned, in a manner consistent with the Obligations, all as more particularly set forth in the Assignment of Leases and Rents. The Lender may, however, terminate the

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -30-

	license by written Notice to the Borrower or a tenant under a Lease on certain conditions set forth in the Assignment of Leases and Rents.
16.	ACCELERATION
	If a Default exists, the Lender may, at its option, declare the unpaid principal balance of the Note to be immediately due and payable, together with all accrued interest on the Indebtedness, all costs of collection (including reasonable attorneys’ fees and expenses) and all other charges due and payable by the Borrower under the Note or any other Loan Document. If the subject Default has arisen from a failure by the Borrower to make a regular monthly payment of principal and interest, the Lender shall not accelerate the Indebtedness unless the Lender shall have given the Borrower a cure period of at least three (3) Business Days following Notice of its intent to do so.
	If the subject Default is curable and non-monetary in nature, the Lender shall exercise its option to accelerate only by giving Notice of acceleration to the Borrower. The Lender shall not give any such Notice of acceleration until (a) the Borrower has been given any required Notice of the prospective Default and (b) any applicable cure period has expired. Except as expressly described in this Section, no notice of acceleration shall be required in order for the Lender to exercise its option to accelerate the Indebtedness in the event of Default.
17.	RIGHTS OF ENTRY AND TO OPERATE
	17.1	Entry on Real Property
		If a Default exists, the Lender may, to the extent permitted by law, enter upon the Real Property and take exclusive possession of the Real Property and of all books, records and accounts, all without Notice and without being guilty of trespass, but subject to the rights of tenants in possession under the Leases. If the Borrower remains in possession of all or any part of the Property after Default and without the Lender’s prior written consent, the Lender may, without Notice to the Borrower, invoke any and all legal remedies to dispossess the Borrower, including specifically one or more actions for forcible entry and detainer, trespass to try title and writ of restitution.
	17.2	Operation of Real Property
		Following Default, the Lender may, subject to applicable law, hold, lease, manage, operate or otherwise use or permit the use of the Real Property, either itself or by other persons, firms or entities, in such manner, for such time and upon such other terms as the Lender may deem to be prudent under the circumstances (making such repairs, alterations, additions and improvements thereto and taking any and all other action with reference thereto, from time to time, as the Lender deems prudent), and apply all Rents and other amounts collected by the Lender in accordance with the provisions of the Assignment of Leases and Rents.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -31-

18.	RECEIVERSHIP
	Following Default, the Lender may apply to a court of competent jurisdiction for the appointment of a receiver of the Property, ex parte without Notice to the Borrower, whether or not the value of the Property exceeds the Indebtedness, whether or not waste or deterioration of the Real Property has occurred, and whether or not other arguments based on equity would justify the appointment. The Borrower irrevocably, with knowledge and for valuable consideration, consents to such an appointment. Any such receiver shall have all the rights and powers customarily given to receivers in Texas, including the rights and powers granted to the Lender by this Deed of Trust, the power to maintain, lease, operate, market and sell the Real Property on terms approved by the court, and the power to collect the Rents and apply them to the Indebtedness or otherwise as the court may direct. Once appointed, a receiver may at the Lender’s option remain in place until the Indebtedness has been paid in full.
19.	FORECLOSURE; POWER OF SALE
	19.1	Availability of Remedies
		Upon Default, the Lender may immediately proceed to foreclose the lien of this Deed of Trust, against all or part of the Property, or to sell the Property, by judicial or nonjudicial foreclosure in accordance with the laws of Texas and may pursue any other remedy available to commercial mortgage lenders under the laws of Texas.
	19.2	Public Sale
		Trustee is hereby authorized and empowered, and it shall be Trustee’s special duty, upon such request of Lender, to sell the Property, or any part thereof, at public auction to the highest bidder for cash, with or without having taken possession of same. Any such sale (including notice thereof) shall comply with the applicable requirements, at the time of the sale, of Section 51.002 of the Texas Property Code or, if and to the extent such statute is not then in force, with the applicable requirements, at the time of the sale, of the successor statute or statutes, if any, governing sales of Texas real property under powers of sale conferred by deeds of trust. If there is no statute in force at the time of the sale governing sales of Texas real property under powers of sale conferred by deeds of trust, such sale shall comply with applicable law, at the time of the sale, governing sales of Texas real property under powers of sale conferred by deeds of trust.
	19.3	Right to Require Proof of Financial Ability and/or Cash Bid
		At any time during the bidding, the Trustee may require a bidding party (A) to disclose its full name, state and city of residence, occupation, and specific business office location, and the name and address of the principal the bidding party is representing (if applicable), and (B) to demonstrate reasonable evidence of the bidding party’s financial ability (or, if applicable, the financial ability of the principal of such bidding party), as a condition to the bidding party submitting bids at the foreclosure sale. If any such bidding party (the “Questioned Bidder”) declines to comply with the Trustee’s requirement in this regard, or if such Questioned Bidder does respond but the Trustee, in Trustee’s sole and absolute discretion, deems the information or the evidence of the financial ability of the Questioned Bidder (or, if applicable, the principal of such

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -32-

	bidding party) to be inadequate, then the Trustee may continue the bidding with reservation; and in such event (1) the Trustee shall be authorized to caution the Questioned Bidder concerning the legal obligations to be incurred in submitting bids, and (2) if the Questioned Bidder is not the highest bidder at the sale, or if having been the highest bidder the Questioned Bidder fails to deliver the cash purchase price payment promptly to the Trustee, all bids by the Questioned Bidder shall be null and void. The Trustee may, in Trustee’s sole and absolute discretion, determine that a credit bid may be in the best interest of the Borrower and Lender, and elect to sell the Property for credit or for a combination of cash and credit; provided, however, that the Trustee shall have no obligation to accept any bid except an all cash bid. In the event the Trustee requires a cash bid and cash is not delivered within a reasonable time after conclusion of the bidding process, as specified by the Trustee, but in no event later than 3:45 p.m. local time on the day of sale, then said contingent sale shall be null and void, the bidding process may be recommenced, and any subsequent bids or sale shall be made as if no prior bids were made or accepted.
19.4	Sale Subject to Unmatured Indebtedness
	In addition to the rights and powers of sale granted under the preceding provisions of this subsection, if default is made in the payment of any installment of the Indebtedness, Lender may, at Lender’s option, at once or at any time thereafter while any matured installment remains unpaid, without declaring the entire Indebtedness to be due and payable, orally or in writing direct Trustee to enforce this trust and to sell the Property subject to such unmatured Indebtedness and to the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of such unmatured Indebtedness, in the same manner, all as provided in the preceding provisions of this subsection. Sales made without maturing the Indebtedness may be made hereunder whenever there is a default in the payment of any installment of the Indebtedness, without exhausting the power of sale granted hereby, and without affecting in any way the power of sale granted under this subsection, the unmatured balance of the Indebtedness or the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of the Indebtedness.
19.5	Partial Foreclosure
	Sale of a part of the Property shall not exhaust the power of sale, but sales may be made from time to time until the Indebtedness is paid and the Obligations are performed and discharged in full. It is intended by each of the foregoing provisions of this subsection that Trustee may, after any request or direction by Lender, sell not only the Land and the Improvements, but also the Fixtures and Personal Property and other interests constituting a part of the Property or any part thereof, along with the Land and the Improvements or any part thereof, as a unit and as a part of a single sale, or may sell at any time or from time to time any part or parts of the Property separately from the remainder of the Property. It shall not be necessary to have present or to exhibit at any sale any of the Property.
19.6	Trustee’s Deeds
	After any sale under this subsection, Trustee shall make good and sufficient deeds, assignments, and other conveyances to the purchaser or purchasers thereunder in the name of Borrower, conveying the Property or any part thereof

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -33-

	so sold to the purchaser or purchasers with general warranty of title by Borrower. It is agreed that in any deeds, assignments or other conveyances given by Trustee, any and all statements of fact or other recitals therein made as to the identity of Lender, the occurrence or existence of any Default, the notice of intention to accelerate, or acceleration of, the maturity of the Indebtedness, the request to sell, notice of sale, time, place, terms and manner of sale, and receipt, distribution, and application of the money realized therefrom, the due and proper appointment of a substitute trustee, and without being limited by the foregoing, any other act or thing having been duly done by or on behalf of Lender or by or on behalf of Trustee, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state true, correct, and complete facts and are without further question to be so accepted, and Borrower does hereby ratify and confirm any and all acts that Trustee may lawfully do in the premises by virtue hereof.
19.7	Waiver of Deficiency Statute
	In the event of an interest in any of the Property is foreclosed upon pursuant to a judicial or nonjudicial foreclosure sale, Borrower agrees as follows. Notwithstanding the provisions of Sections 51.003, 51.004, and 51.005 of the Texas Property Code (as the same may be amended from time to time), and to the extent permitted by law, Borrower agrees that Lender shall be entitled to seek a deficiency judgment from Borrower and any other party obligated on the indebtedness secured hereby equal to the difference between the amount owing on the indebtedness secured hereby and the amount for which the Property was sold pursuant to judicial or nonjudicial foreclosure sale, but not for an amount in excess of the Carveout Obligations. Borrower expressly recognizes that this section constitutes a waiver of the above-cited provisions of the Texas Property Code which would otherwise permit Borrower and other persons against whom recovery of deficiencies is sought or Obligor independently (even absent the initiation of deficiency proceedings against them) to present competent evidence of the fair market value of the Property as of the date of the foreclosure sale and offset against any deficiency the amount by which the foreclosure sale price is determined to be less than such fair market value. Borrower further recognizes and agrees that this waiver creates an irrebuttable presumption that the foreclosure sale price is equal to the fair market value of the Property for purposes of calculating deficiencies owed by Borrower, Obligor and others against whom recovery of a deficiency is sought. Alternatively, in the event the waiver provided for above is determined by a court of competent jurisdiction to be unenforceable, the following shall be the basis for the finder of fact’s determination of the fair market value of the Property as of the date of the foreclosure sale in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas Property Code (as amended from time to time): (i) the Property shall be valued in an “as is” condition as of the date of the foreclosure sale, without any assumption or expectation that the Property will be repaired or improved in any manner before a resale of the Property after foreclosure; (ii) the valuation shall be based upon an assumption that the foreclosure purchaser desires a resale of the Property for cash promptly (but no later than twelve (12) months following the foreclosure sale; (iii) all reasonable closing costs customarily borne by the seller in commercial real estate transactions should be deducted from the gross fair market value of the Property, including, without limitation, brokerage commissions, title insurance, a survey of the Property, tax prorations, attorneys’

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -34-

		fees, and marketing costs; (iv) the gross fair market value of the Property shall be further discounted to account for any estimated holding costs associated with maintaining the Property pending sale, including, without limitation, utilities expenses, property management fees, taxes and assessments (to the extent not accounted for in (iii) above), and other maintenance, operational and ownership expenses; and (v) any expert opinion testimony given or considered in connection with a determination of the fair market value of the Property must be given by persons having at least five (5) years experience in appraising property similar to the Property and who have conducted and prepared a complete written appraisal of the Property taking into consideration the factors set forth above.
20.	WAIVERS
	To the maximum extent permitted by law, the Borrower irrevocably and unconditionally WAIVES and RELEASES any present or future rights (a) of reinstatement or redemption (b) that may exempt the Property from any civil process, (c) to appraisal or valuation of the Property, (d) to extension of time for payment, (e) that may subject the Lender’s exercise of its remedies to the administration of any decedent’s estate or to any partition or liquidation action, (f) to any homestead and exemption rights provided by the Constitution and laws of the United States and of Texas, (g) to notice of acceleration or notice of intent to accelerate (other than as expressly stated herein), and (h) that in any way would delay or defeat the right of the Lender to cause the sale of the Real Property for the purpose of satisfying the Indebtedness. The Borrower agrees that the price paid at a lawful foreclosure sale, whether by the Lender or by a third party, and whether paid through cancellation of all or a portion of the Indebtedness or in cash, shall conclusively establish the value of the Real Property.
	BORROWER expressly WAIVES and RELINQUISHES any right or remedy which it may have or be able to assert by reason of the provisions of Chapter 34 of the Business and Commerce Code of the State of Texas pertaining to the rights and remedies of sureties. To the maximum extent permitted by applicable law, BORROWER hereby WAIVES and RELEASES all rights, remedies, claims and defenses based upon or related to Sections 51.003, 51.004 and 51.005 of the Property Code of the State of Texas to the extent the same pertain or may pertain to any enforcement of this Deed of Trust.
	The foregoing waivers shall apply to and bind any party assuming the Obligations of the Borrower under this Deed of Trust.
21.	EXCULPATION CLAUSE AND CARVEOUT OBLIGATIONS
	The Lender agrees that it shall not seek to enforce any monetary judgment with respect to any Obligation against the Borrower except through recourse to the Property, unless the Obligation from which the judgment arises is a Carveout Obligation. The Carveout Obligations include (a) the obligation to repay any portion of the Indebtedness that arises because the Lender has advanced funds or incurred expenses in respect of any of the “Carveouts” (as defined below), (b) the obligation to repay the entire Indebtedness, if the Lender’s exculpation of the Borrower from personal liability under this Section has become void as set forth below, (c) the obligation to indemnify the Lender in respect of its actual damages suffered in connection with a Carveout, and (d) the obligation to defend and hold the Lender harmless from and against any claims, judgments, causes of action or proceedings arising from a Carveout. The Carveouts are:

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -35-

(a)	Fraud or material written misrepresentation.
(b)	Waste of the Property (which shall include damage, destruction or disrepair of the Real Property caused by a willful act or grossly negligent omission of the Borrower, but shall exclude ordinary wear and tear in the absence of gross negligence).
(c)	Misappropriation of tenant security deposits (including proceeds of tenant letters of credit), Insurance Proceeds or Condemnation Proceeds.
(d)	Failure to turn over to the Lender all tenant security deposits and tenant letters of credit required to be held by the Borrower under the terms of the Leases on or prior to the date on which the Lender receives title to the Real Property following the foreclosure of its lien or by delivery of the deed in lieu of foreclosure.
(e)	Failure to pay property taxes, assessments or other lienable Impositions to the taxing authority prior to their due date or to the Lender to the extent such impositions have accrued on the date the Lender receives title to the Real Property following the foreclosure of its lien or by delivery of the deed in lieu of foreclosure.
(f)	Failure to maintain insurance coverage in accordance with the Loan Documents, provided that any coverage furnished by a Key Tenant (or any other Person) will not impair, alter or diminish the insurance requirements under the Loan Documents and will not modify this subpart (f), or failure to pay insurance proceeds to the Lender in accordance with the Loan Documents, even if a Key Lease provides otherwise.
(g)	The cost to the Lender of the forced placement of insurance, as permitted under the Loan Documents.
(h)	Failure to pay to the Lender all Termination Payments that are required to be paid to Lender pursuant to the Loan Documents.
(i)	Failure to pay to the Lender all Rents, income and profits, net of reasonable and customary operating expenses, received in respect of a period when the Loan is in Default.
(j)	The reasonable out-of-pocket expenses of enforcing the Loan Documents following Default, not including expenses incurred after the Lender has received a Qualified Offer.
(k)	Executing, terminating or amending a Lease in violation of the Loan Documents.
(l)	Any liability of the Borrower under the Environmental Indemnity Agreement.
(m)	Loss or damage suffered by the Lender as a result of: (i) Lender’s inability to perform an obligation under a Lease without breaching the Lease, or its inability to exercise a right under a Lease, in either case to the extent resulting from any reference made by the Lease to the “Shopping Center” to the extent “Shopping Center” includes the Leasehold Shopping Center Parcel; (ii) the exercise by a tenant of a right under a Lease that the tenant would have been unable to exercise but for any reference made by the Lease to the “Shopping Center” to the extent

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -36-

“Shopping Center” includes the Leasehold Shopping Center Parcel, or (iii) the performance by Lender of an obligation under a Lease that the Lender would not have been required to perform, but for any reference made by the Lease to the “Shopping Center” to the extent “Shopping Center” includes the Leasehold Shopping Center Parcel.

The Lender’s exculpation of the Borrower from personal liability for the repayment of the Indebtedness evidenced by this Note shall be void without Notice if the Borrower (A) voluntarily grants a lien on the Property in violation of the Deed of Trust, or (B) files a voluntary petition for reorganization under Title 11 of the United States Code (or under any other present or future law, domestic or foreign, relating to bankruptcy, insolvency, reorganization proceedings or otherwise similarly affecting the rights of creditors), and has not made a Qualified Offer prior to the filing. After the Lender accepts a Qualified Offer, default by the Borrower in fulfilling the terms of the accepted offer shall trigger personal liability for the entire Indebtedness.

22.	SECURITY AGREEMENT AND FIXTURE FILING
	22.1	Definitions
		“Accounts” shall have the definition assigned in the UCC.
		“Bank” shall have the definition assigned in the UCC.
		“Chattel Paper” shall have the definition assigned in the UCC.
		“Deposit Account” shall have the definition assigned in the UCC.
		“Document” shall have the definition assigned in the UCC.
		“Equipment” shall have the definition assigned in the UCC.
		“Financing Statements” shall have the definition assigned in the UCC.
		“General Intangibles” shall have the definition assigned in the UCC.
		“Goods” shall have the definition assigned in the UCC. “Goods” include all detached Fixtures, items of Personal Property that may become Fixtures, property management files, accounting books and records, reports of consultants relating to the Real Property, site plans, test borings, environmental or geotechnical surveys, samples and test results, blueprints, construction and shop drawings, and plans and specifications.
		“Instrument” shall have the definition assigned in the UCC.
		“Investment Property” shall have the definition assigned in the UCC.
		“Letter of Credit” shall have the definition assigned in the UCC.
		“Letter of Credit Rights” shall have the definition assigned in the UCC.
		“Money Collateral” means all money received in respect of Rents.
		“Personal Property” means Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, General Intangible Collateral, Goods, Instruments, Investment Property, Letter of Credit Rights, Letters of Credit, and Money Collateral, all as now owned or hereafter acquired by the Borrower.
		“Proceeds” shall have the definition assigned in the UCC.
		“UCC” means the Uniform Commercial Code as adopted in Texas.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -37-

22.2	Creation of Security Interest
	This Deed of Trust shall be self-operative and shall constitute a security agreement pursuant to the provisions of the UCC with respect to the Personal Property. The Borrower, as debtor, hereby grants the Lender, as secured party, for the purpose of securing the Indebtedness, a security interest in the Borrower’s interest in all Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment Collateral, General Intangibles, Goods, Instruments, Investment Property, Letter of Credit Rights, Letter of Credit, and money, in the accessions, additions, replacements, substitutions and Proceeds of any of the foregoing items of collateral arising from or relating to the Real Property. Upon Default, the Lender shall have the rights and remedies of a secured party under the UCC as well as all other rights and remedies available at law or in equity, and, at the Lender’s option, the Lender may also invoke the remedies provided elsewhere in this Deed of Trust as to such Property. The Borrower and the Lender agree that the rights granted to the Lender as secured party under this Section 22 are in addition to rather than a limitation on any of the Lender’s other rights under this Deed of Trust with respect to the Property.
22.3	Filing Authorization
	The Borrower irrevocably authorizes the Lender to file, in the appropriate locations for filings of UCC financing statements in any jurisdictions as the Lender in good faith deems appropriate, such financing statements and amendments as the Lender may require in order to perfect or continue this security interest, or in order to prevent any filed financing statement from becoming misleading or from losing its perfected status.
22.4	Additional Searches and Documentation
	The Borrower shall provide to the Lender upon request, certified copies of any searches of UCC records deemed necessary or appropriate by the Lender to confirm the first-priority status of its security interest in the Personal Property, together with copies of all documents or records evidencing security interests disclosed by such searches, provided, however, that prior to the occurrence of a Default, Lender shall not make such request more than one (1) time per year.
22.5	Costs
	The Borrower shall pay all filing fees and costs and all reasonable costs and expenses of any record searches (or their continuations) as the Lender may reasonably require.
22.6	Representations, Warranties and Covenants of the Borrower
	(a)	Ownership of the Personal Property
		All of the Personal Property is, and shall during the term of the Loan continue to be, owned by the Borrower, and is not the subject matter of any lease, control agreement or other instrument, agreement or transaction whereby any ownership, security or beneficial interest in the Personal Property is held by any person or entity other than the Borrower, subject only to (1) the Lender’s security interest, (2) the rights of tenants occupying the Property pursuant to Leases approved by the Lender, and (3) the Permitted Encumbrances.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -38-

		(b)	No Other Identity
			The Borrower represents and warrants that the Borrower has not used or operated under any other name or identity for at least five (5) years. The Borrower covenants and agrees that Borrower will furnish Lender with notice of any change in its name, form of organization, or state of organization within thirty (30) days prior to the effective date of any such change.
		(c)	Location of Equipment
			All Equipment is located upon the Land.
		(d)	Removal of Goods
			The Borrower will not remove or permit to be removed any item included in the Goods from the Land, unless the same is replaced immediately with unencumbered Goods (1) of a quality and value equal or superior to that which it replaces and (2) which is located on the Land. All such replacements, renewals, and additions shall become and be immediately subject to the security interest of this Deed of Trust.
		(e)	Proceeds
			The Borrower may, without the Lender’s prior written consent, dispose of Goods in the ordinary course of business, provided that, following the disposition, the perfection of the Lender’s security interest in the Proceeds of the disposition will continue under § 9-315 (d) of the UCC. The Borrower shall not, without the Lender’s prior written consent, dispose of any Personal Property in any other manner, except in compliance with Paragraph (d) of this Subsection 22.6.
	22.7	Fixture Filing
		This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Clerk of Dallas County, Texas, with respect to any and all fixtures comprising Property. The “debtor” is AmREIT Preston Royal, LP, a limited partnership organized under Texas law; the “secured party” is Transamerica Financial Life Insurance Company, a New York corporation; the collateral is as described in Subsection 22.2 above and the granting clause of this Deed of Trust; and the addresses of the debtor and secured party are the addresses stated in Subsection 27.12 of this Deed of Trust for Notices to such parties. The organizational identification number of the debtor is 801673731. The owner of record of the Real Property is AmREIT Preston Royal, LP. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to Subsection (e) of Section 9.103 of the Texas Business and Commerce Code, as amended.
23.	ENVIRONMENTAL MATTERS
	23.1	Representations
		The Borrower represents as follows:
		(a)	No Hazardous Substances
			To the best of the Borrower’s knowledge as a duly diligent property owner, and except as disclosed in the ESA, no release of any Hazardous

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -39-

		Substance has occurred on or about the Real Property in a quantity or at a concentration level that (i) violates any Environmental Law, or (ii) requires reporting to any regulatory authority or may result in any obligation to remediate under any Environmental Law.
	(b)	Absence of Mold Contamination
		To the best of the Borrower’s knowledge, the amount of mold present in the air within the Improvements and the extent of mold growth on the elements of the Improvements are no greater than normal in buildings free of moisture intrusion. No mold-related tenant complaint or legal proceeding relating to the Improvements exists, except as otherwise disclosed to Lender in writing
	(c)	Compliance with Environmental Laws
		The Real Property and its current use and presently anticipated uses comply with all Environmental Laws, including those requiring permits, licenses, authorizations, and other consents and approvals.
	(d)	No Actions or Proceedings
		To the best of Borrower’s knowledge as a duly diligent property owner, no Governmental Authority or agency has commenced any action, proceeding or investigation based on any suspected or actual violation of any Environmental Law on or about the Real Property. To the best of the Borrower’s knowledge as a duly diligent property owner, no such authority or agency has threatened to commence any such action, proceeding, or investigation.
23.2	Environmental Covenants
	The Borrower covenants as follows:
	(a)	Compliance with Environmental Laws
		The Borrower shall, and the Borrower shall cause all employees, agents, contractors, and tenants of the Borrower and any other persons present on or occupying the Real Property to, keep and maintain the Real Property in compliance with all Environmental Laws.
	(b)	Notices, Actions and Claims
		The Borrower shall immediately advise the Lender in writing of (i) any notices from any governmental or quasi-governmental agency or authority of violation or potential violation of any Environmental Law received by the Borrower, (ii) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened pursuant to any Environmental Law, (iii) all claims made or threatened by any third party against the Borrower or the Real Property relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Substances, and (iv) discovery by the Borrower of any occurrence or condition on any real property adjoining or in the vicinity of the Real Property that creates a foreseeable risk of contamination of the Real Property by or with Hazardous Substances.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -40-

23.3	The Lender’s Right to Control Claims
	The Lender shall have the right (but not the obligation) to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Substances and to have its related and reasonable attorneys’ and consultants’ fees paid by the Borrower upon demand.
23.4	Indemnification
	THE BORROWER SHALL BE SOLELY RESPONSIBLE FOR, AND SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE LENDER, THE TRUSTEE, AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, FROM AND AGAINST, ANY CLAIM, JUDGMENT, LOSS, DAMAGE, DEMAND, COST, EXPENSE OR LIABILITY OF WHATEVER KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, DIRECTLY OR INDIRECTLY ARISING OUT OF OR ATTRIBUTABLE TO THE USE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE (WHETHER PRIOR TO OR AFTER THE EFFECTIVE DATE OF THIS DEED OF TRUST) OF HAZARDOUS SUBSTANCES ON, IN, UNDER OR ABOUT THE REAL PROPERTY (WHETHER BY THE BORROWER, A PREDECESSOR IN TITLE, ANY TENANT, OR ANY EMPLOYEES, AGENTS, CONTRACTOR OR SUBCONTRACTORS OF ANY OF THE FOREGOING OR ANY THIRD PERSONS AT ANY TIME OCCUPYING OR PRESENT ON THE REAL PROPERTY), INCLUDING: (I) PERSONAL INJURY; (II) DEATH; (III) DAMAGE TO PROPERTY; (IV) ALL CONSEQUENTIAL DAMAGES; (V) THE COST OF ANY REQUIRED OR NECESSARY REPAIR, CLEANUP OR DETOXIFICATION OF THE REAL PROPERTY, INCLUDING THE SOIL AND GROUND WATER THEREOF, AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL OR OTHER REQUIRED PLANS; (VI) DAMAGE TO ANY NATURAL RESOURCES; AND (VII) ALL REASONABLE COSTS AND EXPENSES INCURRED BY THE LENDER OR THE TRUSTEE IN CONNECTION WITH CLAUSES (I) THROUGH (VI), INCLUDING REASONABLE ATTORNEYS’ AND CONSULTANTS’ FEES; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO PRECLUDE THE BORROWER FROM SEEKING INDEMNIFICATION FROM, OR OTHERWISE PROCEEDING AGAINST, ANY THIRD PARTY INCLUDING ANY TENANT OR PREDECESSOR IN TITLE TO THE REAL PROPERTY, AND FURTHER PROVIDED THAT THIS INDEMNIFICATION WILL NOT EXTEND TO (A) MATTERS CAUSED BY THE LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (B) MATTERS ARISING FROM A RELEASE OF HAZARDOUS SUBSTANCES WHICH OCCURS AFTER THE LENDER HAS TAKEN POSSESSION OF THE REAL PROPERTY, SO LONG AS THE BORROWER HAS NOT CAUSED THE RELEASE THROUGH ANY ACT OR OMISSION.
	THE COVENANTS, AGREEMENTS, AND INDEMNITIES SET FORTH IN THIS SECTION SHALL BE BINDING UPON THE BORROWER AND ITS HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, AND SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS, FORECLOSURE OF THE REAL PROPERTY, AND THE BORROWER’S

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -41-

		GRANTING OF A DEED TO THE REAL PROPERTY IN LIEU OF FORECLOSURE. PAYMENT SHALL NOT BE A CONDITION PRECEDENT TO THIS INDEMNITY. ANY COSTS OR EXPENSES INCURRED BY THE LENDER OR THE TRUSTEE FOR WHICH THE BORROWER IS RESPONSIBLE OR FOR WHICH THE BORROWER HAS INDEMNIFIED THE LENDER SHALL BE PAID TO THE LENDER ON DEMAND, WITH INTEREST AT THE DEFAULT RATE FROM THE DATE INCURRED BY THE LENDER UNTIL PAID IN FULL, AND SHALL BE SECURED BY THIS DEED OF TRUST. WITHOUT THE PRIOR WRITTEN CONSENT OF THE LENDER, THE BORROWER SHALL NOT ENTER INTO ANY SETTLEMENT AGREEMENT, CONSENT DECREE, OR OTHER COMPROMISE IN RESPECT TO ANY CLAIMS RELATING TO HAZARDOUS SUBSTANCES.
	23.5	Environmental Audits
		If a Default exists, or at any time the Lender has reason to believe that a release of Hazardous Substances may have occurred or may be likely to occur, the Lender may require that the Borrower retain, or the Lender may retain directly, at the sole cost and expense of the Borrower, a licensed geologist, industrial hygienist or an environmental consultant acceptable to the Lender to conduct an environmental assessment or audit of the Real Property. In the event that the Lender makes a reasonable determination of the need for an environmental assessment or audit, the Lender shall inform the Borrower in writing that such a determination has been made and, if requested to do so by the Borrower, give the Borrower a written explanation of that determination before the assessment or audit is conducted. The Borrower shall afford any person conducting an environmental assessment or audit access to the Real Property and all materials reasonably requested. The Borrower shall pay on demand the cost and expenses of any environmental consultant engaged by the Lender under this Subsection. The Borrower shall, at the Lender’s request and at the Borrower’s sole cost and expense, take such investigative and remedial measures, as the Lender determines to be necessary to address any condition discovered by the assessment or audit so that (i) the Real Property shall be in compliance with all Environmental Laws, (ii) the condition of the Real Property shall not constitute any identifiable risk to human health or to the environment, and (iii) the value of the Real Property shall not be affected by the presence of Hazardous Substances.
24.	CONCERNING THE TRUSTEE
	24.1	No Liability
		The Trustee will not be liable for any error of judgment or act, or be otherwise responsible or accountable under any circumstances. If the Trustee or anyone acting by virtue of the Trustee’s powers enters the Real Property, the Trustee will not be personally liable for debts contracted or for liability or damages incurred in the management or operation of the Real Property. The Trustee will have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by the Trustee or believed by the Trustee in good faith to be genuine. The Trustee will be entitled to reimbursement for expenses actually incurred by the Trustee in the performance of the Trustee’s duties and to reasonable compensation for services rendered. The

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -42-

		Borrower shall, from time to time, pay compensation due the Trustee under this Deed of Trust and reimburse the Trustee for and save and hold the Trustee harmless from and against any and all loss, cost, liability, damage and expense whatsoever incurred by the Trustee in the performance of the Trustee’s duties.
	24.2	Retention of Money
		All money received by the Trustee must, until used or applied, be held in trust for the purposes for which it was received, but need not be segregated in any manner from any other money (except to the extent required by law) and the Trustee will have no liability for interest on any money received.
	24.3	Successor Trustees
		The Trustee may resign by giving notice of such resignation in writing to the Lender. If the Trustee dies, resigns or becomes disqualified from acting in the execution of this Trust or fails or refuses to exercise the same when requested by the Lender so to do or if for any reason and without cause the Lender prefers to appoint a substitute trustee to act instead of the original Trustee, or any prior successor or substitute trustee, the Lender will have full power to appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall succeed to all the estates, rights, powers and duties of the Trustee.
	24.4	Succession Instruments
		Any new Trustee appointed will, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of the Trustee’s predecessor. Upon the written request of the Lender or of any successor trustee, the former Trustee shall execute and deliver an instrument transferring to such successor Trustee all the estates, properties, rights, powers and trusts of the former Trustee, and shall duly assign, transfer and deliver any of the property and money held by the former Trustee to the successor Trustee so appointed in the former Trustee’s place.
	24.5	Performance of Duties by Agents
		The Trustee may authorize one or more parties to act on the Trustee’s behalf to perform the Trustee’s ministerial functions, including, without limitation, the transmittal and posting of any notices.
25.	AGREEMENT CONCERNING INTEREST
	25.1	Savings Clause
		It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the Note or the Indebtedness (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law). If the applicable law is ever judicially interpreted so as to render usurious any amount (i) contracted for, taken, reserved or received pursuant to the Note, any of the other Loan Documents or any communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (ii) contracted for, charged, taken, reserved or received by reason of the Lender’s exercise of the option to

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -43-

	accelerate the maturity of the Note and/or the Indebtedness, or (iii) Borrower will have paid or Lender will have received by reason of any prepayment by Borrower of the Note and/or the Indebtedness, then it is Borrower’s and Lender’s express intent that all amounts charged in excess of the Maximum Lawful Rate shall be automatically cancelled, ab initio, and all amounts in excess of the Maximum Lawful Rate theretofore collected by Lender shall be credited on the principal balance of the Note and/or the Indebtedness (or, if the Note and all Indebtedness have been or would thereby be paid in full, refunded to Borrower), and the provisions of the Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if the Note has been paid in full before the end of the stated term of the Note, then Borrower and Lender agree that Lender shall, with reasonable promptness after Lender discovers or is advised by Borrower that interest was received in an amount in excess of the Maximum Lawful Rate, either refund such excess interest to Borrower and/or credit such excess interest against the Note and/or any Indebtedness then owing by Borrower to Lender. Borrower hereby agrees that as a condition precedent to any claim or counterclaim (in which event such proceeding shall be abated for such time period) seeking usury penalties against Lender, Borrower will provide written Notice to Lender, advising Lender in reasonable detail of the nature and amount of the violation, and the Lender shall have sixty (60) days after receipt of the Notice to correct such usury violation, if any, by either refunding such excess interest to Borrower or crediting such excess interest against the Note and/or the Indebtedness then owing by Borrower to Lender. All sums contracted for, charged, taken, reserved or received by Lender for the use, forbearance or detention of any debt evidenced by the Note and/or the Indebtedness shall, to the extent permitted by applicable law, be amortized or spread, using the actuarial method, throughout the stated term of the Note and/or the Indebtedness (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of the Note and/or the Indebtedness does not exceed the Maximum Lawful Rate from time to time in effect and applicable to the Note and/or the Indebtedness for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the Note and/or any of the Indebtedness. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.
25.2	Ceiling Election
	To the extent that the Lender is relying on Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate payable on the Indebtedness, the Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent federal law permits the Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law, the Lender will rely on federal law instead of such Chapter 303 for the purpose of determining the Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, the Lender may, at

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -44-

		its option and from time to time, utilize any other method of establishing the Maximum Lawful Rate under such Chapter 303 or under other applicable law by giving notice, if required, to the Borrower as provided by applicable law now or hereafter in effect.
26.	LOAN INFORMATION
	26.1	Dissemination of Information
		In connection with any transfer of the Loan or Participation, the Lender may forward any documents and information that the Lender now has or acquires in the future concerning the Loan, including the financial statements of any Obligor, sales reports on retail tenants, and such other information as may be reasonably related to the Obligors, the Property or the Leases to any transferee or prospective transferee of the Loan or Participation, or other party involved in the transaction, or to any of their consultants, attorneys, advisors or other representatives, and the Borrower waives any legal right it may have to prohibit such disclosure.
	26.2	Cooperation
		The Borrower, any guarantor and any Carveout Obligor shall cooperate with the Lender in connection with any transfer of the Loan or any Participation. The Borrower agrees to provide to the Lender or to any persons to whom the Lender may disseminate such information, at the Lender’s request, financial statements of Obligors, an estoppel certificate, sales reports on retail tenants, and such other documents as may be reasonably related to any Obligor, the Property, or the Leases, including, without limitation, any historical information on the Real Property that is in the Borrower’s possession or is reasonably obtainable by the Borrower.
	26.3	Reserves/Escrows
		The Lender shall have the right, if required by the transferee of the Loan or any Participation, to cause funds held by the Lender in escrow or as reserves to be transferred to deposit or investment accounts at creditworthy financial institutions, to be held or used in accordance with the Loan Documents.
27.	MISCELLANEOUS
	27.1	Successors and Assigns
		All of the terms of the Loan Documents shall apply to, be binding upon and inure to the benefit of the heirs, personal representatives, successors and assigns of the Obligors, or to the holder of the Note, as the case may be.
	27.2	Survival of Obligations
		Each and all of the Obligations shall continue in full force and effect until the latest of (a) the date the Indebtedness has been paid in full and the Obligations have been performed and satisfied in full, (b) the last date permitted by law for bringing any claim or action with respect to which the Lender may seek payment or indemnification in connection with the Loan Documents, and (c) the date on which any claim or action for which the Lender seeks payment or

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -45-

	indemnification is fully and finally resolved and, if applicable, any compromise thereof of judgment or award thereon is paid in full.
27.3	Further Assurances
	The Borrower, upon the request of the Lender or the Trustee, shall complete, execute, acknowledge, deliver and record or file such further instruments and do such further acts as may be necessary to carry out more effectively the purposes of this Deed of Trust, to subject any property intended to be covered by this Deed of Trust to the mortgage and security interests it creates, to place third parties on notice of the mortgage and security interests, or to correct any defects which may be found in any Loan Document.
27.4	Right of Inspection
	The Lender shall have the right from time to time, upon reasonable advance notice to the Borrower, to enter onto the Real Property for the purpose of inspecting and reporting on its physical condition, tenancy and operations.
27.5	Expense Indemnification
	The Borrower shall pay all filing and recording fees, documentary stamps, intangible taxes, and all expenses incident to the execution and acknowledgment of this Deed of Trust, the Note or any of the other Loan Documents, any supplements, amendments, renewals or extensions of any of them, or any instrument entered into under Subsection 27.3. The Borrower shall pay or reimburse the Lender, upon demand, for all costs and expenses, including appraisal and reappraisal costs of the Property and reasonable attorneys’ and legal assistants’ fees, which the Lender may incur in connection with enforcement proceedings under the Note, this Deed of Trust, or any of the other Loan Documents (including all fees and costs incurred in enforcing or protecting the Note, this Deed of Trust, or any of the other Loan Documents in any bankruptcy proceeding), and attorneys’ and legal assistants’ fees incurred by the Lender in any other suit, action, legal proceeding or dispute of any kind in which the Lender is made a party or appears as party plaintiff or defendant, affecting the Indebtedness, the Note, this Deed of Trust, any of the other Loan Documents, or the Property, or required to protect or sustain this Deed of Trust. The Borrower shall be obligated to pay (or to reimburse the Lender) for such fees, costs and expenses and shall indemnify and hold the Lender and the Trustee harmless from and against any and all loss, cost, expense, liability, damage and claims and causes of action, including attorneys’ fees, incurred or accruing by reason of the Borrower’s failure to promptly repay any such fees, costs and expenses. If any suit or action is brought to enforce or interpret any of the terms of this Deed of Trust (including any effort to modify or vacate any automatic stay or injunction, any trial, any appeal, any petition for review or any bankruptcy proceeding), the Lender shall be entitled to recover all expenses reasonably incurred in preparation for or during the suit or action or in connection with any appeal of the related decision, whether or not taxable as costs. Such expenses include reasonable attorneys’ fees, witness fees (expert or otherwise), deposition costs, copying charges and other expenses. Whether or not any court action is involved, all reasonable expenses, including the costs of searching records, obtaining title and credit reports, appraisals, environmental assessments, surveying costs, title insurance premiums, trustee fees, and other reasonable attorneys’ fees, incurred by the Lender that are necessary at any time in the Lender’s opinion for the

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -46-

	protection of its interest or enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest from the date of expenditure until repaid at the interest rate as provided in the Note.
27.6	General Indemnification
	The Borrower shall indemnify, defend and hold the Lender harmless against: (i) any and all claims for brokerage, leasing, finder’s or similar fees which may be made relating to the Real Property or the Indebtedness and (ii) any and all liability, obligations, losses, damages, penalties, claims, actions, suits costs and expenses (including the Lender’s reasonable attorneys’ fees, together with reasonable appellate counsel fees, if any) of whatever kind or nature which may be asserted against, imposed on or incurred by the Lender in connection with the Indebtedness, this Deed of Trust, the Real Property or any part thereof, or the operation, maintenance and/or use thereof, or the exercise by the Lender of any rights or remedies granted to it under this Deed of Trust or pursuant to applicable law; provided, however, that nothing herein shall be construed to obligate the Borrower to indemnify, defend and hold harmless the Lender from and against any of the foregoing which is imposed on or incurred by the Lender by reason of the Lender’s willful misconduct or gross negligence.
27.7	Recording and Filing
	The Borrower shall cause this Deed of Trust and all amendments, supplements, and substitutions to be recorded, filed, re-recorded and re-filed in such manner and in such places as the Lender may reasonably request. The Borrower will pay all recording filing, re-recording and re-filing taxes, fees and other charges.
27.8	No Waiver
	No deliberate or unintentional failure by the Lender to require strict performance by the Borrower of any Obligation shall be deemed a waiver, and the Lender shall have the right at any time to require strict performance by the Borrower of any Obligation.
27.9	Covenants Running with the Land
	All Obligations are intended by the parties to be and shall be construed as covenants running with the Land.
27.10	Severability
	The Loan Documents are intended to be performed in accordance with, and only to the extent permitted by, all applicable Legal Requirements. Any provision of the Loan Documents that is prohibited or unenforceable in any jurisdiction shall nevertheless be construed and given effect to the extent possible. The invalidity or unenforceability of any provision in a particular jurisdiction shall neither invalidate nor render unenforceable any other provision of the Loan Documents in that jurisdiction, and shall not affect the validity or enforceability of that provision in any other jurisdiction. If a provision is held to be invalid or unenforceable as to a particular person or under a particular circumstance, it shall nevertheless be presumed valid and enforceable as to others, or under other circumstances.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -47-

27.11	Entire Agreement
	The Loan Documents contain the entire agreements between the parties relating to the financing of the Real Property, and all prior agreements which are not contained in the Loan Documents, other than the Environmental Indemnity Agreement, are terminated. The Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. The Loan Documents may be amended, revised, waived, discharged, released or terminated only by a written instrument or instruments executed by the party against whom enforcement of the amendment, revision, waiver, discharge, release or termination is asserted. Any alleged amendment, revision, waiver, discharge, release or termination that is not so documented shall be null and void.
27.12	Notices
	In order for any demand, consent, approval or other communication to be effective under the terms of this Deed of Trust, “Notice” must be provided under the terms of this Subsection. All Notices must be in writing. Notices may be (a) delivered by hand, (b) transmitted by facsimile (with a duplicate copy sent by first class mail, postage prepaid), (c) sent by certified or registered mail, postage prepaid, return receipt requested, or (d) sent by reputable overnight courier service, delivery charges prepaid. Notices shall be addressed as set forth below:
	If to the Lender:
	Transamerica Financial Life Insurance Company
	c/o AEGON USA Realty Advisors, LLC
	4333 Edgewood Road, N.E.
	Cedar Rapids, Iowa 52499-5443
	Attn: Mortgage Loan Department
	Reference: Loan #10512155
	Fax Number: (319) 355-2277
	If to the Borrower:
	AmREIT Preston Royal, LP
	8 Greenway Plaza, Suite 1000
	Houston, Texas 77046
	Fax Number: (713) 850-0498
	With a copy to:
	Bass, Berry & Sims PLC
	100 Peabody Place, Suite 900
	Memphis, Tennessee 38103
	Attn: Gil Uhlhorn
	Fax Number: (866) 393-1959
	If to the Trustee:
	Peter S. Graf
	2626 Howell Street
	Dallas, Texas 75204
	Fax Number: (214) 754-7768

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -48-

	Notices delivered by hand or by overnight courier shall be deemed given when actually received or when refused by their intended recipient. Notices sent by facsimile will be deemed delivered when a legible copy has been received (provided receipt has been verified by telephone confirmation or one of the other permitted means of giving Notices under this Subsection). Mailed Notices shall be deemed given on the date of the first attempted delivery (whether or not actually received). The Lender or the Borrower may change its address for Notice by giving at least fifteen (15) Business Days’ prior Notice of such change to the other party.
27.13	Counterparts
	This Deed of Trust may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute but one instrument.
27.14	Choice of Law
	This Deed of Trust shall be interpreted, construed, applied, and enforced according to, and will be governed by, the laws of Texas, without regard to any choice of law principle which, but for this provision, would require the application of the law of another jurisdiction and regardless of where executed or delivered, where payable or paid, where any cause of action accrues in connection with this transaction, where any action or other proceeding involving the Loan is instituted, or whether the laws of Texas otherwise would apply the laws of another jurisdiction.
27.15	Forum Selection
	The Borrower agrees that the sole and exclusive forum for the determination of any action relating to the validity and enforceability of the Note, this Deed of Trust and the other Loan Documents, and any other instruments securing the Note shall be either in an appropriate court of the State of Texas or the applicable United States District Court.
27.16	Sole Benefit
	This Deed of Trust and the other Loan Documents have been executed for the sole benefit of the Borrower and the Lender and the successors and assigns of the Lender. No other party shall have rights thereunder or be entitled to assume that the parties thereto will insist upon strict performance of their mutual obligations hereunder, any of which may be waived from time to time. The Borrower shall have no right to assign any of its rights under the Loan Documents to any party whatsoever.
27.17	Release of Claims
	The Borrower hereby RELEASES, DISCHARGES and ACQUITS forever the Lender and the Trustee and their officers, directors, trustees, agents, employees and counsel (in each case, past, present or future) from any and all Claims existing as of the Effective Date (or the date of actual execution hereof by the Borrower, if later). As used herein, the term “Claim” shall mean any and all liabilities, claims, defenses, demands, actions, causes of action, judgments, deficiencies, interest, liens, costs or expenses (including court costs, penalties, attorneys’ fees and disbursements, and amounts paid in settlement) of any kind and character whatsoever, including claims for usury, breach of contract, breach

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -49-

	of commitment, negligent misrepresentation or failure to act in good faith, in each case whether now known or unknown, suspected or unsuspected, asserted or unasserted or primary or contingent, and whether arising out of written documents, unwritten undertakings, course of conduct, tort, violations of laws or regulations or otherwise.
27.18	No Partnership
	Nothing contained in the Loan Documents is intended to create any partnership, joint venture or association between the Borrower and the Lender, or in any way make the Lender a co-principal with the Borrower with reference to the Property.
27.19	Payoff Procedures
	If the Borrower pays or causes to be paid to the Lender all of the Indebtedness, then the Trustee’s interest in the Real Property shall cease, and upon receipt by the Lender of such payment, the Lender shall either (a) cancel this Deed of Trust or (b) assign the Loan Documents and endorse the Note (in either case without recourse or warranty of any kind) to a takeout lender, upon payment (in the latter case) of an administrative fee of $1500 plus all out-of-pocket expenses incurred by the Lender in connection with such cancellation or assignment.
27.20	Future Advances
	Under the terms of this Deed of Trust, “Indebtedness” includes any and all indebtedness owed by the Borrower to the Lender, any and all obligations of the Borrower to the Lender, and any and all liabilities of the Borrower to the Lender, regardless of the kind or character of such indebtedness, obligations or liabilities, if they relate to the Loan or to the Real Property in any way, and regardless of whether they arise now or in the future, are absolute or contingent, secured or unsecured, due or not due, arise by operation of law or by contract, are direct or indirect, primary or secondary, joint, several, joint and several, fixed or contingent, or are secured or unsecured by additional or different security or securities, and regardless of whether the indebtedness, obligations or liabilities are of the Borrower directly or arise through its participation in any form of business or economic association or transaction, whether as a partner, joint venturer, trustee, principal, surety, endorser, guarantor, accommodation party or otherwise. However, this Deed of Trust shall not secure any such other indebtedness, obligation or liability with respect to which the Lender is by applicable law prohibited from obtaining a lien on real estate, nor shall this definition operate or be effective to constitute or require any assumption or payment by any person, in any way, of any debt or obligation of any other person to the extent that the same would violate or exceed the limit provided in any applicable usury or other law.
27.21	Defeasance
	This Deed of Trust is made upon the conditions that if (a) all of the Indebtedness and Obligations, including all future advances and other future indebtednesses, obligations and liabilities included therein, are paid and performed in full, (b) the Borrower reimburses the Lender for any amounts the Lender shall have paid in respect of liens, Impositions, prior mortgages, insurance premiums, repairing or maintaining the Real Property, performing the Borrower’s obligations under any Lease, performing the Borrower’s obligations with respect to environmental matters, and for any other advancements hereunder, and interest thereon, (c) the

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -50-

	Borrower fulfills all of the Borrower’s other Obligations, (d) the Lender has no obligation to extend any further credit to or for the account of the Borrower, and (e) no contingent liability of the Borrower secured by this Deed of Trust then exists, this conveyance shall be null and void upon the filing by the Lender of the written instrument of termination described in Section 27.22.
27.22	Satisfaction of Deed of Trust
	This Deed of Trust and the Lender’s security interest under this Deed of Trust in the Real Property will not be terminated until a written mortgage satisfaction instrument executed by one of the Lender’s officers is filed for record in the county in which the Land is located. Except as otherwise expressly provided in this Deed of Trust, no satisfaction of this Deed of Trust shall in any way affect or impair the representations, warranties, agreements or other obligations of the Borrower or the powers, rights and remedies of the Lender under this Deed of Trust with respect to any transaction or event occurring prior to such satisfaction, all of which shall survive such satisfaction.
27.23	Date of Deed of Trust
	The date of this Deed of Trust is intended as a date for the convenient identification of this Deed of Trust and is not intended to indicate that this Deed of Trust was executed and delivered on that date.
27.24	Interpretation
	(a)	Headings and General Application
		The section, subsection, paragraph and subparagraph headings of this Deed of Trust are provided for convenience of reference only and shall in no way affect, modify or define, or be used in construing, the text of the sections, subsections, paragraphs or subparagraphs. If the text requires, words used in the singular shall be read as including the plural, and pronouns of any gender shall include all genders.
	(b)	Sole Discretion
		The Lender may take any action or decide any matter under the terms of this Deed of Trust or of any other Loan Document (including any consent, approval, acceptance, option, election or authorization) in its sole and absolute discretion, for any reason or for no reason, unless the related Loan Document contains specific language to the contrary. Any approval or consent that the Lender might withhold may be conditioned in any way.
	(c)	Result of Negotiations
		This Deed of Trust and all other Loan Documents result from negotiations between the Borrower and the Lender and from their mutual efforts. Therefore, it shall be so construed, and not as though it had been prepared solely by the Lender.
	(d)	Reference to Particulars
		The scope of a general statement made in this Deed of Trust or in any other Loan Document shall not be construed as having been reduced through the inclusion of references to particular items that would be included within the statement’s scope. Therefore, unless the relevant provision of a Loan Document contains specific language to the contrary,

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -51-

		the term “include” shall mean “include, but shall not be limited to” and the term “including” shall mean “including, without limitation.”
27.25	Joint and Several Liability
	If there is more than one individual or entity executing this Deed of Trust as the Borrower, liability of such individuals and entities under this Deed of Trust shall be joint and several.
27.26	Time of Essence
	Time is of the essence of each and every covenant, condition and provision of this Deed of Trust to be performed by the Borrower.
27.27	Jury Waiver
	THE BORROWER AND BY ITS ACCEPTANCE HEREOF, THE LENDER, HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (I) UNDER THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT OR (II) ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT, AND THE BORROWER AND BY ITS ACCEPTANCE HEREOF, THE LENDER, AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY.
27.28	Renewal, Extension, Modification and Waiver
	The Lender, at its option, may at any time renew or extend this Deed of Trust, the Note or any other Loan Document. The Lender may enter into a modification of any Loan Document or of the Environmental Indemnity Agreement without the consent of any person not a party to the document being modified. The Lender may waive any covenant or condition of any Loan Document or of the Environmental Indemnity Agreement, in whole or in part, at the request of any person then having an interest in the Property or in any way liable for any part of the Indebtedness. The Lender may take, release, or resort to any security for the Note and the Obligations and may release any party primarily or secondarily liable on any Loan Document or on the Environmental Indemnity Agreement, all without affecting any liability not expressly released in writing by the Lender.
27.29	Cumulative Remedies
	Every right and remedy provided in this Deed of Trust shall be cumulative of every other right or remedy of the Lender, whether conferred by law or by grant or contract, and may be enforced concurrently with any such right or remedy. The acceptance of the performance of any obligation to cure any Default shall not be construed as a waiver of any rights with respect to any other past, present or future Default. No waiver in a particular instance of the requirement that any Obligation be performed shall be construed as a waiver with respect to any other Obligation or instance.
27.30	No Obligation to Marshal Assets
	No holder of any deed of trust, security interest or other encumbrance affecting all or any portion of the Real Property, which encumbrance is inferior to the

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -52-

	mortgage and security interest of this Deed of Trust, shall have any right to require the Lender to marshal assets.
27.31	Transfer of Ownership
	The Lender may, without notice to the Borrower, deal with any person in whom ownership of any part of the Real Property has vested, without in any way vitiating or discharging the Borrower from liability for any of the Obligations.
27.32	Notice of Indemnification
	THE BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT CONTAINS INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTIONS 4, 21, 23.4, 27.5, and 27.6.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -53-

IN WITNESS WHEREOF, the Borrower has caused this Deed of Trust to be duly executed on the date of the acknowledgement of the Borrower’s signature below, to be effective as of the Effective Date.

		AMREIT PRESTON ROYAL, LP, a Texas limited partnership
		By:	AmREIT Preston Royal GP, LLC, a Texas limited liability company
			By:	/s/ Brett Treadwell
			Name:		Brett Treadwell
			Title:		Vice President
STATE OF           Texas	)
	)ss.
COUNTY OF           Harris	)

          The foregoing instrument was acknowledged before me on this 7th day of December, 2012, by Brett Treadwell, the Vice President of AmREIT Preston Royal GP, LLC, a Texas limited liability company, as general partner of AMREIT PRESTON ROYAL, LP, a Texas limited partnership, on behalf of the limited partnership.

/s/ Deborah Korkmas
Notary Public in and for the State of		Texas
Printed Name:	Deborah Korkmas
My Commission Expires:		5-12-2013

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -54-

Exhibit A

Tract 1 (Preston Royal No. 1):

All that certain lot, tract, or parcel of land situated in the John W. Smith Survey, Abstract Number 1336, Dallas County, Texas, and being all of a called 8.217 acre tract of Sand described in a deed to Preston Royal Realty Company, as recorded in Document Number 200600021970, Deed Records, Dallas County, Texas, the subject tract being more particularly described as follows;

BEGINNING at an “X” cut set in the West line of Preston Road for the Northeast corner of the herein described tract, the Northeast corner of said 8.217 acre tract and the Southeast corner of a 15’ alley in Block C of Preston Royal No. 1, an addition to the City of Dallas, according to the plat thereof recorded in Volume 8, Page 383, Plat Records, Dallas County, Texas, from which a capped iron rod found stamped “Arthur” for the Southeast corner of Lot 10 in said Block C bears North 00 degrees 01 minutes 15 seconds East, a distance of 15.00 feet;

THENCE South with the West line of said Road and the most Northerly East line of said 8.217 acre tract, a distance of 481.15 feet to an “X” cut set for the most Easterly Southeast corner thereof and the apparent Northeast corner of a tract of land described in deed to Hal Winfield Padgett, Jr., as recorded in Volume 82207, Page 232, Deed Records, Dallas County, Texas;

THENCE North 89 degrees 50 minutes 00 seconds West with the apparent North line thereof and the most Easterly South line of said 8.217 acre tract, a distance of 100.00 feet to a PK nail set for an inner ell corner thereof and the apparent Northwest corner of said Padgett tract;

THENCE South with the apparent West line thereof and the most Southerly East line of said 8.217 acre tract, a distance of 120.00 feet to an “X” cut set on the North line of Royal Lane for the most Southerly Southeast corner thereof;

THENCE South 89 degrees 50 minutes 00 seconds West with the North line of said Lane and the South line of said 8.217 acre tract, a distance of 121.00 feet to a PK nail set for an inner ell corner thereof;

THENCE South with an East line of said 8.217 acre tract and a West line of said Lane, a distance of 5.00 feet to an “X” cut set for corner on the South line of said 8.217 acre tract and the North line of said Lane;

THENCE North 89 degrees 50 minutes 00 seconds West with the North line thereof and the South line of said 8.217 acre tract, a distance of 390.45 feet to an “X” cut set for the Southwest corner thereof and the Southeast corner of a tract of land described in a deed to St. Lukes Episcopal Church, as recorded in Document Number 2002-1756115, Deed Records, Dallas County, Texas;

THENCE North 00 degrees 02 minutes 25 seconds East with the East line thereof and the West line of said 8.217 acre tract, a distance of 609.82 feet to an “X” cut set in the South line of said alley for the Northeast corner of said St. Lukes tract and the Northwest corner of said 8.217 acre tract;

THENCE South 89 degrees 29 minutes 20 seconds East with the North line thereof and the South line of said alley, a distance of 611.04 feet to the PLACE OF BEGINNING and enclosing 8.23 acres of land more or less.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -55-

Tract 2 (Easement Estate):

Non-exclusive easement estate appurtenant to Tract 1, in and to the following described property created pursuant to that certain Reciprocal Easement Agreement dated December __, 2012, by and between AmREIT Preston Royal, LP and AmREIT Preston Royal NEC, LP, recorded as Document Number 2012_____________, Official Public Records of Dallas County, Texas:

All that certain lot, tract, or parcel of land situated in the James Thomas Survey, Abstract Number 1485, Dallas County, Texas, and being all of a called 7.49 acre tract of land described in a deed to Preston Royal Realty Company, as recorded in Volume 80110, Page 428, Deed Records, Dallas County, Texas, the subject tract being more particularly described as follows;

BEGINNING at an “X” cut set in the East line of Preston Road for the Northwest corner of the herein described tract, the Northwest corner of said 7.49 acre tract and being the most Westerly Southwest corner of a 15’ alley in Block No. 1 of Preston Royal No. 2, an addition to the City of Dallas, according to the plat thereof recorded in Volume 10, Page 59, Plat Records, Dallas County, Texas;

THENCE South 89 degrees 45 minutes 09 seconds East with the North line of said 7.49 acre tract and the South line of said alley, a distance of 363.76 feet to a capped iron rod set at the beginning of a curve to the right having a radius of 44.50 feet and a chord bearing and distance of South 67 degrees 19 minutes 09 seconds East, 33.96 feet;

THENCE Southeasterly, along the arc of said curve, the Northeast line of said 7.49 acre tract and the Southwest line of said alley, an arc distance of 34.85 feet to a capped iron rod set at the end of said curve;

THENCE South 44 degrees 53 minutes 09 seconds East with the Northeast line of said 7.49 acre tract and the Southwest line of said alley, a distance of 284.46 feet to a capped iron rod set at the beginning of a curve to the right having a radius of 50.00 feet and a chord bearing and distance of South 22 degrees 25 minutes 22 seconds East, 38.21 feet;

THENCE Southeasterly, along the arc of said curve, the Northeast line of said 7.49 acre tract and the Southwest line of said alley, an arc distance of 39.21 feet to a capped iron rod set at the end of said curve;

THENCE South 00 degrees 02 minutes 25 seconds West with the East line of said 7.49 acre tract and the West line of said alley, at a distance of 355.83 feet passing an “X” cut found for the Northeast corner of an Easement for road purposes, as recorded in Volume 283, Page 865, Deed Records, Dallas County, Texas, continuing along said course, a total distance of 360.82 feet to a point in the North line of Royal Lane for the Southeast corner of said 7.49 acre tract and the most Southerly Southwest corner of said alley, from which a 1/2” iron rod found for the Southwest corner of Lot 6 in Block 2 of said addition bears North 88 degrees 07 minutes 48 seconds East, a distance of 14.95 feet;

THENCE North 89 degrees 45 minutes 09 seconds West with the North line of said Lane and the most Easterly South line of said 7.49 acre tract, a distance of 485.16 feet to a point for the most Southerly Southwest corner thereof and the apparent Southeast corner of a tract of land described in a deed to Humble Oil and Refining Company, as recorded in Volume 71123, Page 14, Deed Records, Dallas County, Texas;

THENCE North with the apparent East line thereof and the most Southerly West line of said 7.49 acre tract, at a distance of 4.78 feet passing an “X” cut found for the Northwest corner of said

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -56-

Road Easement, continuing along said course, a total distance of 156.29 feet to an “X” cut set for an inner ell corner of said 7.49 acre tract and the apparent Northeast corner of said Humble tract;

THENCE North 89 degrees 52 minutes 00 seconds West with the apparent North line thereof and the most Westerly South line of said 7.49 acre tract, a distance of 125.00 feet to a capped iron rod set in the East line of said Preston Road for the most Westerly Southwest corner thereof and the apparent Northwest corner of said Humble tract;

THENCE North with the East line of said Road and the most Northerly West line of said 7.49 acre tract, a distance of 453.67 feet to the PLACE OF BEGINNING and enclosing 7.49 acres of land more or less.

Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 -57-

EX-10.20

EXHIBIT 10.20

$23,400,000.00	December ____, 2012
	(the “Effective Date”)

Secured Promissory Note

FOR VALUE RECEIVED, the undersigned, AMREIT PRESTON ROYAL, LP, a Texas limited partnership, whose address is 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 (the “Borrower”), promises to pay Twenty-Three Million Four Hundred Thousand Dollars and No Cents ($23,400,000.00), together with interest according to the terms of this Secured Promissory Note (this “Note”), to the order of TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, a New York corporation (together with any future holder, the “Lender”), whose address is c/o AEGON USA Realty Advisors, LLC, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5443. Capitalized terms used but not defined in this Note shall have the meanings assigned to them in the Deed of Trust, as defined in Section 12 below.

1.	CONTRACT INTEREST RATE
	The principal balance of this Note shall bear interest at the rate of the lesser of (i) Three and Twenty-One One Hundredths percent (3.21%) per annum (the “Note Rate”) and (ii) the Maximum Lawful Rate (as defined in Section 24.1 below). Interest shall accrue based on twelve thirty-day months.
2.	SCHEDULED PAYMENTS
	2.1	Prepayment of Interest for the Month of Funding
		Unless the funding of the loan evidenced by this Note (together with all additional charges, advances and accruals, the “Loan”) occurs on the first day of a calendar month, the Borrower shall prepay, on the date of the funding, interest due from the date of the funding through and including the last day of the calendar month in which the funding occurs.
	2.2	Monthly Payments
		On the first day of February, 2013 and on the first day of each subsequent calendar month through December, 2019, the Borrower shall pay an installment in the amount of One Hundred One Thousand Three Hundred Twenty-Five Dollars and Twenty-Eight Cents ($101,325.28). Monthly installments of principal and interest shall be made when due, regardless of the prior acceptance by the Lender of unscheduled payments.
	2.3	Final Payment
		The Loan shall mature on the first day of January, 2020 (the “Maturity Date”), when the Borrower shall pay its entire principal balance, together with all accrued interest and any other amounts owed by the Borrower under this Note or under any of the other documents entered into now or in the future in connection with the Loan (the “Loan Documents”).

Promissory Note	-1-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

3.	BALLOON PAYMENT ACKNOWLEDGMENT
	The Borrower acknowledges that the scheduled monthly payments referred to in Section 2.2 will not amortize fully the principal sum of this Note over its term, resulting in a “balloon” payment at maturity. Any future agreement to extend this Note or refinance the Indebtedness it evidences may be made only by means of a writing executed by a duly authorized officer of the Lender.
4.	APPLICATION OF MONTHLY PRINCIPAL AND INTEREST PAYMENTS
	When the Lender receives a monthly principal and interest payment, the Lender shall apply it first to interest in arrears for the previous month and then to the amortization of the principal amount of this Note, unless other amounts are then due under this Note or the other Loan Documents. If other amounts are due when a regular monthly payment is received, the Lender shall apply the payment first to accrued interest and then, at its discretion, either to those other amounts or to principal.
5.	DEFAULT INTEREST
	If a Default exists (as defined in Section 9 below) the outstanding principal balance of this Note shall, at the option of the Lender, bear interest at a rate (the “Default Rate”) equal to the lesser of (i) eighteen percent (18%) per annum and (ii) the Maximum Lawful Rate. If interest has accrued at the Default Rate during any period, the difference between such accrued interest and interest which would have accrued at the Note Rate during such period shall be payable on demand. If a court of competent jurisdiction determines that any interest charged has exceeded the maximum rate allowed by law, the excess of the amount collected over the legal rate of interest will be applied to the Indebtedness as a principal prepayment without premium, retroactively, as of the date of receipt, or returned to the Borrower if the Indebtedness has been fully paid.
6.	LATE CHARGE
	If the Lender does not receive any scheduled monthly principal and interest payment on or before the tenth (10th) day of the calendar month in which it is due, the Lender will send the Borrower written Notice that a late charge equal to five percent (5%) of the late payment has accrued. The Borrower shall pay any such late charge on or before the tenth day of the calendar month following the month during which the late payment was scheduled to have been received.
7.	PREPAYMENT
	This Note is closed to prepayment prior to and during the first twelve (12) full calendar months of its term (the “Lock Period”). Thereafter, the principal balance of this Note may be prepaid upon not less than thirty (30) days’ prior written Notice to the Lender. At the time of any prepayment, the Borrower shall pay all accrued interest on the principal balance of this Note and all other sums due to the Lender under the Loan Documents. In addition, unless the prepayment is a “Permitted Par Prepayment” (as defined in Section 8 below), the Borrower shall remit together with any prepayment a premium (the “Prepayment Premium Amount”) equal to the greater of (A) one percent (1%) of the

Promissory Note	-2-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	prepayment and (B) the amount (the “Yield Protection Amount”) calculated in accordance with the next succeeding paragraph of this Note.
	Unless the one percent minimum prepayment premium applies, the “Prepayment Premium Amount” is the amount by which the present value of scheduled Loan payments (the “Total Present Value”) on the prepaid indebtedness exceeds the prepaid amount. To determine the Total Present Value, each of the scheduled payments to be made under the terms of this Note, including the “balloon” payment due at this Note’s maturity, shall be discounted to its present value as of the prepayment date. For this purpose, the Lender shall use a discount rate equal to (a) the interest rate on a hypothetical instrument which, assuming monthly compounding of interest, would produce a yield (as calculated by Merrill Lynch (or the Lender’s choice of another dealer in U.S. Treasury Securities) and as reported by Bloomberg, L.P.) equal to the interpolated average yield of U.S. Treasury Securities having the same average life as the remaining average life of the Loan (the “Prepayment Treasury Rate”), plus (b) fifty (50) basis points. The Prepayment Treasury Rate shall be determined as of two (2) Business Days (as defined in the Deed of Trust) before the date of the prepayment. The sum of these present value amounts equals the Total Present Value of a prepayment in full. If the prepayment is a partial prepayment, the Total Present Value equals the sum of these present value amounts multiplied by a fraction, the numerator of which is the principal amount to be prepaid and the denominator of which is the principal balance of the Loan as of the date of prepayment.
	Voluntary partial prepayments shall be prohibited.
8.	PERMITTED PAR PREPAYMENTS
	The Lender shall not charge a prepayment premium on certain prepayments (the “Permitted Par Prepayments”). Permitted Par Prepayments include:
	(a)	any prepayment in full of the Loan made no more than ninety (90) days before the Maturity Date; and
	(b)	any prepayment made as the result of the Lender’s election to apply insurance or condemnation proceeds to the principal balance of this Note or to achieve any required loan to value ratio that is a prerequisite to the Borrower’s rights to obtain and to use such proceeds.
9.	DEFAULT
	A default on this Note (“Default”) shall exist if (a) the Lender fails to receive any required installment of principal and interest on or before the tenth (10th) day of the calendar month in which it is due, (b) the Borrower fails to pay the matured balance of this Note on the Maturity Date or (c) a “Default” exists as defined in any other Loan Document. If a Default exists and the Lender engages counsel to collect any amount due under this Note or if the Lender is required to protect or enforce this Note in any probate, bankruptcy or other proceeding, then any expenses incurred by the Lender in respect of the engagement, including the reasonable fees and reimbursable expenses of counsel and including such costs and fees which relate to issues that are particular to any given proceeding, shall constitute indebtedness evidenced by this Note, shall be payable on demand, and shall bear interest at the Default Rate. Such fees and expenses include those incurred in connection with any action against the Borrower for a deficiency judgment after a foreclosure or trustee’s sale of the Real Property under the Deed of Trust,

Promissory Note	-3-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	including all of the Lender’s reasonable attorneys’ fees, property appraisal costs and witness fees.
10.	ACCELERATION
	If a Default exists, the Lender may, at its option, declare the unpaid principal balance of this Note to be immediately due and payable, together with all accrued interest on the Indebtedness, all costs of collection (including reasonable attorneys’ fees and expenses) and all other charges due and payable by the Borrower under this Note or any other Loan Document. If the subject Default has arisen from a failure by the Borrower to make a regular monthly payment of principal and interest, the Lender shall not accelerate the Indebtedness unless the Lender shall have given the Borrower at least three (3) Business Days’ advance Notice of its intent to do so.
	Notwithstanding the foregoing, if the subject Default is a Curable Non-Monetary Default (as defined in the Deed of Trust), the Lender shall exercise its option to accelerate only by delivering Notice of acceleration to the Borrower. The Lender shall not deliver any such Notice of acceleration until (a) the Borrower has been given any required Notice of the prospective Default and (b) any applicable cure period has expired.
	Except as expressly described in this Section, no Notice of acceleration shall be required in order for the Lender to exercise its option to accelerate the Indebtedness in the event of Default.
11.	PREPAYMENT FOLLOWING ACCELERATION
	Any Default resulting in the acceleration of the Indebtedness evidenced by this Note shall be presumed to be an attempt to avoid the provisions of Section 7 of this Note, which prohibit prepayment or condition the Lender’s obligation to accept prepayment on the payment of a prepayment premium. Accordingly, if the Indebtedness is accelerated, any amounts tendered to repay the accelerated Indebtedness, or realized by the Lender through its remedies following acceleration, shall be subject to either (a) if the prepayment is tendered or realized during the Lock Period, a premium equal to the greater of (x) ten percent (10%) of the amount so tendered or realized and (y) the prepayment premium that would have been applicable under Section 7 (calculated from the date of acceleration through the Maturity Date), or (b) if the prepayment is tendered or realized thereafter, the prepayment premium that would have been applicable under Section 7 in respect of a voluntary prepayment (calculated from the date of acceleration through the Maturity Date).
12.	SECURITY
	This Note is secured by a Deed of Trust, Security Agreement and Fixture Filing (the “Deed of Trust”) of even date herewith granted by the Borrower to Peter S. Graf, the Trustee, for the benefit of the Lender, conveying certain real property (the “Real Property”) located in the City of Dallas, Dallas County, Texas, and granting a security interest in certain fixtures and personal property, and by an Assignment of Leases and Rents of even date herewith made by the Borrower to the Lender, assigning the landlord’s interest in all present and future leases (the “Leases”) of all or any portion of the Real Property encumbered by the Deed of Trust. Reference is made to the Loan Documents for a description of the security and rights of the Lender. This reference shall

Promissory Note	-4-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	not affect the unconditional obligation of the Borrower to repay the Loan in accordance with its terms.
13.	RECOURSE TO BORROWER
	The Lender agrees that it shall not seek to enforce any monetary judgment with respect to the Indebtedness evidenced by this Note against the Borrower except through recourse to the Property (as defined in the Deed of Trust), unless the obligation from which the judgment arises is one of the “Carveout Obligations” defined in Section 14.
14.	CARVEOUT OBLIGATIONS
	The “Carveout Obligations” are (a) the obligation to repay any portion of the Indebtedness evidenced by this Note that arises because the Lender has advanced funds or incurred expenses in respect of any of the “Carveouts” (as defined below), (b) the obligation to repay the entire Indebtedness evidenced by this Note, if the Lender’s exculpation of the Borrower from personal liability under this Section has become void as set forth below, (c) the obligation to indemnify the Lender in respect of its actual damages suffered in connection with any of the Carveouts, and (d) the obligation to defend and hold the Lender harmless from and against any claims, judgments, causes of action or proceedings arising from any of the Carveouts. The “Carveouts” are:
	(a)	Fraud or material written misrepresentation.
	(b)	Waste of the Property (which shall include damage, destruction or disrepair of the Real Property caused by a willful act or grossly negligent omission of the Borrower, but shall exclude ordinary wear and tear in the absence of gross negligence).
	(c)	Misappropriation of tenant security deposits (including proceeds of tenant letters of credit), Insurance Proceeds or Condemnation Proceeds.
	(d)	Failure to turn over to the Lender all tenant security deposits and tenant letters of credit required to be held by the Borrower under the terms of the Leases on or prior to the date on which the Lender receives title to the Real Property following the foreclosure of its lien or by delivery of the deed in lieu of foreclosure.
	(e)	Failure to pay property taxes, assessments or other lienable Impositions to the taxing authority prior to the date when payment becomes delinquent or to the Lender to the extent such impositions have accrued on the date the Lender receives title to the Real Property following the foreclosure of its lien or by delivery of the deed in lieu of foreclosure.
	(f)	Failure to maintain insurance coverage in accordance with the Loan Documents, provided that any coverage furnished by a Key Tenant (or any other Person) will not impair, alter or diminish the insurance requirements under the Loan Documents and will not modify this subpart (f), or failure to pay insurance proceeds to the Lender in accordance with the Loan Documents, even if a Key Lease provides otherwise.
	(g)	The cost to the Lender of the forced placement of insurance, as permitted under the Loan Documents.

Promissory Note	-5-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	(h)	Failure to pay to the Lender all Termination Payments, that are required to be paid to Lender pursuant to the Loan Documents.
	(i)	Failure to pay to the Lender all Rents, income and profits, net of reasonable and customary operating expenses, received in respect of a period when the Loan is in Default.
	(j)	The reasonable out-of-pocket expenses of enforcing the Loan Documents following Default, not including expenses incurred after the Lender has received a Qualified Offer.
	(k)	Executing, terminating or amending a Lease in violation of the Loan Documents.
	(l)	Any liability of the Borrower under the Environmental Indemnity Agreement.
	(m)	Loss or damage suffered by the Lender as a result of: (i) Lender’s inability to perform an obligation under a Lease without breaching the Lease, or its inability to exercise a right under a Lease, in either case to the extent resulting from any reference made by the Lease to the “Shopping Center” to the extent “Shopping Center” includes the Leasehold Shopping Center Parcel; (ii) the exercise by a tenant of a right under a Lease that the tenant would have been unable to exercise but for any reference made by the Lease to the “Shopping Center” to the extent “Shopping Center” includes the Leasehold Shopping Center Parcel, or (iii) the performance by Lender of an obligation under a Lease that the Lender would not have been required to perform, but for any reference made by the Lease to the “Shopping Center” to the extent “Shopping Center” includes the Leasehold Shopping Center Parcel.
The Lender’s exculpation of the Borrower from personal liability for the repayment of the Indebtedness evidenced by this Note shall be void without Notice if the Borrower (A) voluntarily grants a lien on the Property in violation of the Deed of Trust, or (B) files a voluntary petition for reorganization under Title 11 of the United States Code (or under any other present or future law, domestic or foreign, relating to bankruptcy, insolvency, reorganization proceedings or otherwise similarly affecting the rights of creditors), and has not made a Qualified Offer prior to the filing. After the Lender accepts a Qualified Offer, default by the Borrower in fulfilling the terms of the accepted offer shall trigger personal liability for the entire Indebtedness.
15.	SEVERABILITY
	If any provision of this Note is held to be invalid, illegal or unenforceable in any respect, or operates, or would if enforced operate to invalidate this Note, then that provision shall be deemed null and void. Nevertheless, its nullity shall not affect the remaining provisions of this Note, which shall in no way be affected, prejudiced or disturbed.
16.	WAIVER
	Except to the extent that such rights are expressly provided in this Note, the Borrower waives demand, presentment for payment, notice of intent to accelerate, notice of acceleration, protest, notice of protest, dishonor and of nonpayment and any and all lack of diligence or delays in collection or enforcement of this Note. Without affecting the

Promissory Note	-6-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	liability of the Borrower under this Note, the Lender may release any of the Property, grant any indulgence, forbearance or extension of time for payment, or release any other person now or in the future liable for the payment or performance of any obligation under this Note or any of the Loan Documents.
	The Borrower further (a) waives any homestead or similar exemption; (b) waives any statute of limitation; (c) agrees that the Lender may, without impairing any future right to insist on strict and timely compliance with the terms of this Note, grant any number of extensions of time for the scheduled payments of any amounts due, and may make any other accommodation with respect to the Indebtedness evidenced by this Note; (d) waives any right to require a marshaling of assets; and (e) to the extent not prohibited by applicable law, waives the benefit of any law or rule of law intended for its advantage or protection as a debtor or providing for its release or discharge from liability under this Note, excepting only the defense of full and complete payment of all amounts due under this Note and the Loan Documents.
17.	VARIATION IN PRONOUNS
	All the terms and words used in this Note, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context or sense of this Note or any paragraph or clause herein may require, the same as if such word had been fully and properly written in the correct number and gender.
18.	WAIVER OF JURY TRIAL
	THE BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS NOTE OR ANY OTHER LOAN DOCUMENT OR (B) ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENT, AND THE BORROWER AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY.
19.	OFFSET RIGHTS
	In addition to all liens upon and rights of setoff against the money, securities, or other property of the Borrower given to the Lender by law, the Lender shall have a lien upon and a right of setoff against all money, securities, and other property of the Borrower, now or hereafter in possession of or on deposit with the Lender, whether held in a general or special account or deposit, or safe-keeping or otherwise, and, following a Default, every such lien and right of setoff may be exercised without demand upon, or notice to the Borrower. No lien or right of setoff shall be deemed to have been waived by any act or conduct on the part of the Lender, or by any neglect to exercise such right of setoff or to enforce such lien, or by any delay in so doing, and every right of setoff and lien shall continue in full force and effect until such right of setoff or lien is specifically waived or released by an instrument in writing executed by the Lender.

Promissory Note	-7-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

20.	COMMERCIAL LOAN
	The Borrower hereby represents and warrants to the Lender that the Loan was made for commercial or business purposes, and that the funds evidenced by this Note will be used solely in connection with such purposes.
21.	REPLACEMENT OR BIFURCATION OF NOTE
	If this Note is lost or destroyed, the Borrower shall, at the Lender’s request, execute and return to the Lender a replacement promissory note identical to this Note, provided the Lender delivers to the Borrower an affidavit to the foregoing effect. Upon delivery of the executed replacement note, the Lender shall indemnify the Borrower from and against its actual damages suffered as a result of the existence of two Notes evidencing the same obligation. No replacement of this Note under this Section shall result in a novation of the Borrower’s obligations under this Note. In addition, the Lender may at its sole and absolute discretion require that the Borrower execute and deliver two separate promissory notes, which shall replace this Note as evidence of the Borrower’s obligations. The two replacement notes shall, taken together, evidence the exact obligations set forth in this Note. The replacement notes shall be independently transferable. If this Note is so replaced, the Lender shall return this Note to the Borrower marked to evidence its cancellation.
22.	GOVERNING LAW
	This Note shall be construed and enforced according to, and governed by, the laws of Texas without reference to conflicts of laws provisions which, but for this provision, would require the application of the law of any other jurisdiction.
23.	TIME OF ESSENCE
	In the performance of the Borrower’s obligations under this Note, time is of the essence.
24.	AGREEMENT CONCERNING INTEREST
	24.1	Definitions
		As used in this Note, the term “Maximum Lawful Rate” shall mean the maximum lawful rate of interest which may be contracted for, charged, taken, received or reserved by Lender in accordance with the applicable laws of the State of Texas (or applicable federal law, if it permits a higher rate). “Charges” means all fees, charges, and any other things of value, if any, that are contracted for, charged, received, taken or reserved pursuant to this Note, any of the other Loan Documents, or any other conversation or writing between the Lender and the Borrower in connection with the Loan (whether in connection with the acceleration by the Lender of the maturity of the Indebtedness, in connection with any voluntary prepayment of the Indebtedness, or otherwise, and including fees for the forbearance of any enforcement action or for the extension or modification of the Loan) which are treated as interest under applicable law. The term “Indebtedness” shall mean any and all debt paid or payable by the Borrower to the Lender pursuant to this Note, the Loan Documents or any other

Promissory Note	-8-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	communication or writing by or between the Borrower and the Lender relating to the Loan.
24.2	Savings Clause
	It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the Note or the Indebtedness (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law). If the applicable law is ever judicially interpreted so as to render usurious any amount (i) contracted for, taken, reserved or received pursuant to the Note, any of the other Loan Documents or any communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (ii) contracted for, charged, taken, reserved or received by reason of the Lender’s exercise of the option to accelerate the maturity of the Note and/or the Indebtedness, or (iii) Borrower will have paid or Lender will have received by reason of any prepayment by Borrower of the Note and/or the Indebtedness, then it is Borrower’s and Lender’s express intent that all amounts charged in excess of the Maximum Lawful Rate shall be automatically cancelled, ab initio, and all amounts in excess of the Maximum Lawful Rate theretofore collected by Lender shall be credited on the principal balance of the Note and/or the Indebtedness (or, if the Note and all Indebtedness have been or would thereby be paid in full, refunded to Borrower), and the provisions of the Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if the Note has been paid in full before the end of the stated term of the Note, then Borrower and Lender agree that Lender shall, with reasonable promptness after Lender discovers or is advised by Borrower that interest was received in an amount in excess of the Maximum Lawful Rate, either refund such excess interest to Borrower and/or credit such excess interest against the Note and/or any Indebtedness then owing by Borrower to Lender. Borrower hereby agrees that as a condition precedent to any claim or counterclaim (in which event such proceeding shall be abated for such time period) seeking usury penalties against Lender, Borrower will provide written Notice to Lender, advising Lender in reasonable detail of the nature and amount of the violation, and the Lender shall have sixty (60) days after receipt of the Notice to correct such usury violation, if any, by either refunding such excess interest to Borrower or crediting such excess interest against the Note and/or the Indebtedness then owing by Borrower to Lender. All sums contracted for, charged, taken, reserved or received by Lender for the use, forbearance or detention of any debt evidenced by the Note and/or the Indebtedness shall, to the extent permitted by applicable law, be amortized or spread, using the actuarial method, throughout the stated term of the Note and/or the Indebtedness (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of the Note and/or the Indebtedness does not exceed the Maximum Lawful Rate from time to time in effect and applicable to the Note and/or the Indebtedness for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and

Promissory Note	-9-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

		revolving triparty accounts) apply to the Note and/or any of the Indebtedness. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.
	24.3	Ceiling Election
		To the extent that the Lender is relying on Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate payable on the Indebtedness, the Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent federal law permits the Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law, the Lender will rely on federal law instead of such Chapter 303 for the purpose of determining the Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, the Lender may, at its option and from time to time, utilize any other method of establishing the Maximum Lawful Rate under such Chapter 303 or under other applicable law by giving notice, if required, to the Borrower as provided by applicable law now or hereafter in effect.
25.	NO ORAL AGREEMENTS
	THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT OF THE BORROWER AND THE LENDER AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE LOAN AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE BORROWER AND THE LENDER. THERE ARE NO ORAL AGREEMENTS BETWEEN THE BORROWER AND THE LENDER. THE PROVISIONS OF THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED OR REVISED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE BORROWER AND THE LENDER.

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the Effective Date.

AMREIT PRESTON ROYAL, LP, a Texas limited partnership
By:	AmREIT Preston Royal GP, LLC, a Texas limited liability company
	By:	/s/ Brett Treadwell
	Name:			Brett Treadwell
	Title:		Vice President

Promissory Note	-10-
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

EX-21.1

EXHIBIT 21.1

AMREIT, INC. SUBSIDIARIES

410 Blanco GP, LLC

410 Blanco, LP

5115 Buffalo Speedway, LP

AAA CTL Notes 1 Corporation

AAA CTL Notes, Ltd.

AmREIT 500 Lamar GP, LLC

AmREIT 500 Lamar, LP

AmREIT 5402 Westheimer GP, LLC

AmREIT 5402 Westheimer, LP

AmREIT Alpharetta Commons GP, LLC

AmREIT Alpharetta Commons, LP

AmREIT Brookwood Village GP, LLC

AmREIT Brookwood Village, LP

AmREIT Construction Company, LLC

AmREIT Construction Management, LLC (formerly ARIC SPE 1, LLC)

AmREIT Courtyard GP, LLC

AmREIT Courtyard, LP

AmREIT C-Ranch, LP

AmREIT Fidelity Corporation

AmREIT GC Houston GP, LLC

AmREIT GC Houston, LP

AmREIT Hanover I Corp.

AmREIT I-45 Southpoint GP, LLC

AmREIT I-45 Southpoint, LP

AmREIT Income & Growth Corporation

AmREIT MacArthur Pad Sites GP, LLC

AmREIT MacArthur Pad Sites, LP

AmREIT MacArthur Park GP, LLC

AmREIT MacArthur Park, LP

AmREIT Market at Lake Houston GP, LLC

AmREIT Market at Lake Houston, LP

AmREIT Monthly Income & Growth Corporation

AmREIT Monthly Income & Growth II Corporation

AmREIT Monthly Income & Growth III Corporation

AmREIT Monthly Income & Growth IV Corporation

AmREIT Operating Corporation

AmREIT Operating Partnership, LP (formerly REITPlus Operating Partnership, LP)

AmREIT Opportunity Corporation

AmREIT Plaza in the Park, LP

AmREIT Preston Royal GP, LLC

AmREIT Preston Royal, LP

AmREIT Preston Royal NEC-GP, LLC

AmREIT Preston Royal NEC, LP

AmREIT Realty Investment Corporation

AmREIT Riverwalk GP, Inc.

AmREIT Riverwalk, LP

AmREIT Securities Company

AmREIT Shadow Creek Acquisition, LLC

AmREIT SPE 1, Inc.

AmREIT SPE 4, LLC

AmREIT SPE 5, LLC

AmREIT SPE 6, LLC

AmREIT SPE 7, LLC

AmREIT SPF Shadow Creek GP, LLC

AmREIT TRS, Inc. (formerly REITPlus TRS, Inc.)

AmREIT Uptown Dallas GP, Inc.

AmREIT Uptown Dallas, LP

AmREIT Uptown Houston GP, LLC

AmREIT Uptown Houston, LP

AmREIT Uptown Park GP, Inc.

AmREIT Uptown Park, LP

AmREIT Westheimer Gessner GP, LLC

AmREIT Westheimer Gessner, LP

AmREIT Woodlake Holdco, LLC

AmREIT Woodlake Pointe GP, LLC

AmREIT Woodlake Pointe I, LP

AmREIT Zarzamora GP, LLC

AmREIT Zarzamora, LP

ARIC/Prairieland III, LLC

REITPlus Advisor, Inc.

REITPlus Holdings, LLC

Shadow Creek Holding Company LLC

Sugar Land IHOP, LP

Sugar Land Plaza, LP

EX-31.1

EXHIBIT 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, H. Kerr Taylor, certify that:
	1.	I have reviewed this Annual Report on Form 10-K of AmREIT, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
		(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 22, 2013		/s/ H. Kerr Taylor
		H. Kerr Taylor
		Chairman of the Board of Directors, President, and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Chad C. Braun, certify that:
	1.	I have reviewed this Annual Report on Form 10-K of AmREIT, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
		(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 22, 2013		/s/ Chad C. Braun
		Chad C. Braun
		Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of AmREIT, Inc. (the “Company”) on Form 10-K for the year ended December, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, H. Kerr Taylor, Chief Executive Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company that, to my knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 22, 2013	/s/ H. Kerr Taylor
		H. Kerr Taylor
		Chairman of the Board of Directors, President, and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of AmREIT, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chad C. Braun, Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company, that, to my knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 22, 2013	/s/ Chad C. Braun
		Chad C. Braun
		Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary

XML

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $) Share data in Thousands, unless otherwise specified	1 Months Ended		12 Months Ended							12 Months Ended					12 Months Ended		1 Months Ended	12 Months Ended			12 Months Ended
	May 31, 2012	May 31, 2011	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009	Dec. 31, 2010 Continuing Operations [Member]	Dec. 31, 2010 Discontinued Operations [Member]	Dec. 31, 2011 Notes Receivable [Member]	Dec. 31, 2010 Notes Receivable [Member]	Dec. 31, 2012 Notes Receivable [Member]	Dec. 31, 2010 Non-Core Real Estate Assets [Member] property	Dec. 31, 2010 Two Non-Core Real Estate Assets [Member] property	Aug. 31, 2011 AIGF [Member]	Dec. 31, 2012 AIGF [Member]	Dec. 31, 2010 AIGF [Member]	Dec. 31, 2012 MacArthur Park, Texas [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Minimum [Member] Buildings [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 Maximum [Member] Buildings [Member]	Dec. 31, 2012 Maximum [Member] Site Improvements [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage rents			$ 631,000		$ 425,000		$ 555,000
Lease termination fees income			0		131,000		15,000
Lease termination fees in other income							0
Estimated useful life in years																						39 years		50 years	20 years
Asset impairment charges							1,300,000			2,300,000	1,200,000				2,300,000	1,200,000			500,000
Number of real estate properties															4	2
Impairment recovery of notes receivable	229,000	229,000			1,100,000													214,000
Due from sale of land			2,500,000
Proceeds from borrower of notes receivable	1,000,000	1,000,000	1,175,000		1,071,000												2,300,000
Notes receivables from tenants														259,000
Proceeds from sale of investment property							4,608,000
Recognized compensation cost related to restricted stock			815,000		548,000
Unrecognized compensation cost related to restricted stock			7,100,000
Weighted average period for unrecognized compensation cost in years			6 years 9 months 18 days
Percentage of tax rate to the profit margin			1.00%
Percentage of standard deduction on total revenue			30.00%
Percentage of taxable income to be distributed to stockholders			90.00%
Interest rate swap, notional amount					17,000,000		17,000,000
Interest rate swap, fixed interest rate					5.11%		5.11%
Interest paid related to swap					356,000		359,000
Notes receivable, fair value					3,300,000
Grant date fair value of shares of restricted stock, vested			678,000		804,000
Vesting period																					3 years		10 years
Bad debt expense			19,000									99,000
Ownership interest																				70.00%
Lease renewal term			5 years
Period of time from the date of development completion			1 year
Filing registration statement cost					914,000
Operating lease term																					1 year		25 years
Impairment recovery																		100,000
Allowance for uncollectible notes receivable			1,134,000		1,780,000		2,068,000		1,025,000			29,000		45,000
Bad debt recoveries													(71,000)
Issuance costs			5,400,000
Weighted average number of shares outstanding			13,120	[1]	11,384	[1]	11,336	[1]
Gain on sale of real estate acquired for resale, net of taxes			$ 0		$ 417,000		$ 5,726,000

[1] Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359, 207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

XML

Acquired Lease Intangibles (Schedule Of Acquired Lease Intangible Assets And Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Acquired Lease Intangibles [Line Items]
Acquired lease intangibles, net	$ 15,976	$ 10,139
Acquired below-market lease intangibles, net	3,507	2,021
In-Place Leases [Member]
Acquired Lease Intangibles [Line Items]
Acquired lease intangible assets	28,179	22,720
Acquired lease intangible assets, accumulated depreciation	(14,096)	(12,978)
Above-Market Leases [Member]
Acquired Lease Intangibles [Line Items]
Acquired lease intangible assets	3,774	2,247
Acquired lease intangible assets, accumulated depreciation	(1,881)	(1,850)
Below-Market Leases [Member]
Acquired Lease Intangibles [Line Items]
Acquired lease intangible liabilities	6,286	4,623
Acquired lease intangible liabilities, accumulated amortization	$ (2,779)	$ (2,602)

XML

Real Estate Acquisitions, Dispositions And Discontinued Operations (Schedule Of Discontinued Operations) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Real Estate Acquisitions, Dispositions And Discontinued Operations [Abstract]
Rental income from operating leases		$ 201,000	$ 642,000
Earned income from direct financing leases			1,405,000
Total revenues		201,000	2,047,000
General and administrative		(5,000)	(63,000)
Property expense		2,000	5,000
Construction costs			3,000
Legal and professional		42,000	23,000
Depreciation and amortization		13,000	51,000
Impairment - properties			1,219,000
Total expenses		52,000	1,238,000
Operating income		149,000	809,000
Gain on sale of real estate acquired for investment			1,216,000
Interest and other income		4,000	19,000
State income taxes		(5,000)	(462,000)
Interest expense			926,000
Income (loss) from discontinued operations, net of taxes		148,000	656,000
Gain on sale of real estate acquired for resale, net of taxes	0	417,000	5,726,000
Income from discontinued operations		$ 565,000	$ 6,382,000
Basic and diluted income from discontinued operations per share		$ 0.05	$ 0.56

XML

Concentrations (Summary Of Base Rents Generated By Tenants) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Concentration Risk [Line Items]
Base rent generated by top ten tenants	$ 8,739		$ 7,522		$ 5,746
Kroger [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	2,116		2,116		2,192
Landry's Seafood House [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	1,257	[1]	1,143	[1]	843	[1]
CVS/Pharmacy [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	1,222		1,115		922
H-E-B [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	1,110		938
Publix [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	781	[2]	332	[2]
Hard Rock Cafe [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	497		497		497
TGI Friday's [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	459		451		451
The Container Store [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	448	[3]	89	[3]
Golden Corral [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	427		419		419
Champps Americana [Member]
Concentration Risk [Line Items]
Base rent generated by top ten tenants	$ 422		$ 422		$ 422

[1] Includes tenants owned by Landry's, including Landry's Seafood House, McCormick & Schmicks, Mortons and The Grotto.

[2] Publix, a regional grocer, is the anchor tenant at Alpharetta Commons, which was acquired in July 2011.

[3] Rent commenced on a new lease with The Container Store in Houston, Texas in November 2011.

XML

Acquired Lease Intangibles (Schedule Of Acquired Lease Intangible Amortization Details) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
In-Place Leases [Member]
Acquired Lease Intangibles [Line Items]
Amortization	$ 2,061	$ 2,117	$ 1,409
Above-Market Leases [Member]
Acquired Lease Intangibles [Line Items]
Amortization	95	108	104
Below-Market Leases [Member]
Acquired Lease Intangibles [Line Items]
Amortization	$ 292	$ 274	$ 300

XML

Real Estate Acquisitions, Dispositions And Discontinued Operations (Schedule Of Assets And Liabilities Acquired) (Details) (USD $)	Dec. 31, 2012
Land	$ 9,056,000
Buildings	49,887,000
Tenant improvements	953,000
Acquired lease intangibles, net	7,993,000
Deferred costs, net	234,000
Other assets	10,000
Notes payable	(23,400,000)
Accounts payable and other liabilities	(195,000)
Acquired below-market lease intangibles, net	(1,778,000)
Net cash paid for the acquisition of investment properties	42,760,000	[1]
Revolving credit facility	75,000,000
Preston Royal Northwest Corner [Member]
Land	9,056,000
Buildings	24,535,000
Tenant improvements	520,000
Acquired lease intangibles, net	4,333,000
Deferred costs, net	157,000
Notes payable	(23,400,000)
Accounts payable and other liabilities	(66,000)
Acquired below-market lease intangibles, net	(1,159,000)
Net cash paid for the acquisition of investment properties	13,976,000	[1]
Preston Royal Northeast Corner [Member]
Buildings	25,352,000
Tenant improvements	433,000
Acquired lease intangibles, net	3,660,000
Deferred costs, net	77,000
Other assets	10,000
Accounts payable and other liabilities	(129,000)
Acquired below-market lease intangibles, net	(619,000)
Net cash paid for the acquisition of investment properties	$ 28,784,000	[1]

[1] The $42,760 of net cash paid for the acquisition for the Preston Royal Village Shopping Center was funded with approximately $12.3 million (including acquisition costs of $687) from cash on hand and approximately $31.2 million in borrowings from our $75 Million Facility

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Stockholders' Equity And Noncontrolling Interest (Tables)

12 Months Ended

Dec. 31, 2012

Stockholders' Equity And Noncontrolling Interest [Abstract]

Summary Of Restricted Share Activity

	2012				2011
			Weighted				Weighted
	Non-vested		average grant		Non-vested		average grant
	Shares		date fair value		Shares		date fair value
Beginning of period		207,199	$	17.88		215,588	$	17.56
Granted		376,970		13.91		42,500		17.94
Vested		(41,653)		16.28		(48,280)		16.66
Forfeited		-		-		(2,609)		16.74
End of period		542,516	$	15.24		207,199	$	17.88

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Summary Of Quarterly Financial Data (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Quarterly Information [Abstract]
Revenues	$ 11,360	$ 10,027	$ 9,861	$ 10,060	$ 9,765	$ 9,632	$ 9,067	$ 8,534	$ 41,308	$ 36,915	$ 33,374
Net income available to AmREIT stockholders	$ 734	$ 1,023	$ 1,446	$ 1,257	$ 1,220	$ 1,118	$ 566	$ 1,336
Net income per share - basic and diluted	$ 0.04	$ 0.07	$ 0.12	$ 0.10	$ 0.11	$ 0.10	$ 0.04	$ 0.12	$ 0.32	$ 0.31	$ (0.04)

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Fair Value Measurements (Narrative) (Details) (USD $)	1 Months Ended		12 Months Ended				12 Months Ended		1 Months Ended	12 Months Ended
	May 31, 2012	May 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Level 2 [Member]	Dec. 31, 2010 Non-Core Real Estate Assets [Member] property	Dec. 31, 2010 Two Non-Core Real Estate Assets [Member] property	Aug. 31, 2011 AIGF [Member]	Dec. 31, 2012 AIGF [Member]	Dec. 31, 2010 AIGF [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Asset impairment charges					$ 1,300,000		$ 2,300,000	$ 1,200,000			$ 500,000
Number of real estate properties							4	2
Note receivable			33,500,000		4,600,000
Impairment recovery of notes receivable	229,000	229,000		1,100,000						214,000
Notes receivable, fair value				3,300,000		3,288,000
Proceeds from borrower of notes receivable	1,000,000	1,000,000	1,175,000	1,071,000					2,300,000
Revolving credit facility			$ 75,000,000

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Segment Reporting (Narrative) (Details)	12 Months Ended
	Dec. 31, 2012 item
Segment Reporting Information [Line Items]
Number of high net worth investment funds	4
Number of joint ventures	3
Maximum [Member] | Advised Funds [Member]
Segment Reporting Information [Line Items]
Average holding period of advised funds (in years)	4 years
Minimum [Member] | Advised Funds [Member]
Segment Reporting Information [Line Items]
Average holding period of advised funds (in years)	2 years

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Summary Of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary Of Significant Accounting Policies [Abstract]

Schedule Of Future Minimum Rental Payments For Operating Leases

		Minimum
Year Ending December 31,		base rents
2013	$	30,493
2014		28,124
2015		23,114
2016		18,641
2017		13,849
Thereafter		47,230
	$	161,451

Schedule Of Allowances For Uncollectible Accounts Related To Tenant Receivables

	Year Ended December 31,
	2012		2011		2010
Beginning balance	$	1,780	$	2,068	$	1,025
Additional reserves		523		540		1,579
Collections/reversals		(479)		(788)		(360)
Write-offs		(690)		(40)		(176)
Ending balance	$	1,134	$	1,780	$	2,068

Schedule Of Notes Receivable Due From Related Parties

	December 31, 2012						December 31, 2011
	Face				Carrying		Face				Carrying
Related Party	Amount		Reserve (1)		Amount		Amount		Reserve (1)		Amount
AIGF	$	-	$	-	$	-	$	2,488	$	(619)	$	1,869
MIG III		3,729		(373)		3,356		3,218		(356)		2,862
MIG IV		3,658		(266)		3,392		2,026		(244)		1,782
Total	$	7,387	$	(639)	$	6,748	$	7,732	$	(1,219)	$	6,513

______________

(1) A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

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Investments In Advised Funds (Summary Of Financial Information Of Advised Fund) (Details)	Dec. 31, 2012
Limited Partner [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.40%
Limited Partner [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.60%
Limited Partner [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.10%
Limited Partner [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.60%
Limited Partner [Member] | 8% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	99.00%	[1]
Limited Partner [Member] | 8% LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	99.00%	[1]
Limited Partner [Member] | 10% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	90.00%	[1]
Limited Partner [Member] | 10% LP Preference [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	99.00%	[1]
Limited Partner [Member] | 12% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	80.00%	[1]
Limited Partner [Member] | 12% LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	85.00%	[1]
Limited Partner [Member] | 40% Catch Up LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	0.00%	[1]
Limited Partner [Member] | 40% Catch Up LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	0.00%	[1]
Limited Partner [Member] | 40% Catch Up LP Preference [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	0.00%	[1]
Limited Partner [Member] | 40% Catch Up LP Preference [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	0.00%	[1]
Limited Partner [Member] | 8.5% LP Preference [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	99.00%	[1]
Limited Partner [Member] | LP Preference, Thereafter [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	60.00%	[1]
Limited Partner [Member] | LP Preference, Thereafter [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	60.00%	[1]
Limited Partner [Member] | LP Preference, Thereafter [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	60.00%	[1]
Limited Partner [Member] | LP Preference, Thereafter [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	60.00%	[1]
General Partner [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.00%
General Partner [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.00%
General Partner [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.00%
General Partner [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Interest	1.00%
General Partner [Member] | 8% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	1.00%	[1]
General Partner [Member] | 8% LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	1.00%	[1]
General Partner [Member] | 10% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	10.00%	[1]
General Partner [Member] | 10% LP Preference [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	1.00%	[1]
General Partner [Member] | 12% LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	20.00%	[1]
General Partner [Member] | 12% LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	15.00%	[1]
General Partner [Member] | 40% Catch Up LP Preference [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	100.00%	[1]
General Partner [Member] | 40% Catch Up LP Preference [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	100.00%	[1]
General Partner [Member] | 40% Catch Up LP Preference [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	100.00%	[1]
General Partner [Member] | 40% Catch Up LP Preference [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	100.00%	[1]
General Partner [Member] | 8.5% LP Preference [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	1.00%	[1]
General Partner [Member] | LP Preference, Thereafter [Member] | MIG [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	40.00%	[1]
General Partner [Member] | LP Preference, Thereafter [Member] | MIG II [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	40.00%	[1]
General Partner [Member] | LP Preference, Thereafter [Member] | MIG III [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	40.00%	[1]
General Partner [Member] | LP Preference, Thereafter [Member] | MIG IV [Member]
Schedule of Equity Method Investments [Line Items]
Sharing Ratios	40.00%	[1]

[1] Using MIG as an example of how the sharing ratios and LP preference provisions are applied, the LPs share in 99% of the cash distributions until they receive an 8% preferred return. The LPs share in 90% of the cash distributions until they receive a 10% preferred return and so on.

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Summary Of Significant Accounting Policies (Schedule Of Notes Receivable Due From Related Parties) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012		Dec. 31, 2011
Summary Of Significant Accounting Policies [Line Items]
Face Amount	$ 7,387	[1]	$ 7,732
Reserve	(639)	[1]	(1,219)	[1]
Carrying Amount	6,748	[1]	6,513
AIGF [Member]
Summary Of Significant Accounting Policies [Line Items]
Face Amount		[1]	2,488
Reserve		[1]	(619)	[1]
Carrying Amount		[1]	1,869
Excess loss recognized on equity investment exceed basis	0		55
MIG III [Member]
Summary Of Significant Accounting Policies [Line Items]
Face Amount	3,729	[1]	3,218
Reserve	(373)	[1]	(356)	[1]
Carrying Amount	3,356	[1]	2,862
Excess loss recognized on equity investment exceed basis	373		356
MIG IV [Member]
Summary Of Significant Accounting Policies [Line Items]
Face Amount	3,658	[1]	2,026
Reserve	(266)	[1]	(244)	[1]
Carrying Amount	3,392	[1]	1,782
Excess loss recognized on equity investment exceed basis	$ 266		$ 244

[1] A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266 for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

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Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation (Activity Within Real Estate And Accumulated Deprecation) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation [Abstract]
Balance	$ 325,032,826	$ 279,313,444	$ 283,809,070
Acquisitions / additions	62,890,931	47,982,336	10,794,709
Disposals	(398,121)	(2,262,954)	(11,048,686)
Impairment			(4,241,649)
Balance	387,525,636	325,032,826	279,313,444
Balance	33,864,944	28,619,710	24,934,167
Disposals	(335,424)	(196,747)	(451,194)
Impairment			(754,486)
Depreciation expense	6,291,003	5,441,981	4,891,223
Balance	$ 39,820,523	$ 33,864,944	$ 28,619,710

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Summary Of Segment Results

			Advisory Services
For the Year Ended December 31, 2012			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	37,251	$	187	$	-	$	37,438
Advisory services income - related
party		-		3,248		622		3,870
Total revenue		37,251		3,435		622		41,308
General and administrative		2,321		4,303		109		6,733
Property expense		9,870		21		-		9,891
Legal and professional		833		83		3		919
Real estate commissions		-		387		-		387
Acquisition fees		687		-		-		687
Depreciation and amortization		8,861		23		-		8,884
Impairment recovery -
notes receivable		(443)		-		-		(443)
Total expenses		22,129		4,817		112		27,058
Interest expense		(10,251)		-		-		(10,251)
Other income/(expense)		690		9		(238)		461
Income (loss) from continuing
operations	$	5,561	$	(1,373)	$	272	$	4,460

			Advisory Services
For the Year Ended December 31, 2011			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	32,798	$	197	$	-	$	32,995
Advisory services income - related
party		147		2,578		1,064		3,789
Lease termination fee income		131		-		-		131
Total revenue		33,076		2,775		1,064		36,915
General and administrative		2,213		3,701		135		6,049
Property expense		7,724		46		-		7,770
Legal and professional		877		65		3		945
Real estate commissions		2		340		-		342
Acquisition costs		229		-		-		229
Depreciation and amortization		8,233		24		-		8,257
Impairment recovery -
notes receivable		(1,071)		-		-		(1,071)
Total expenses		18,207		4,176		138		22,521
Interest expense		(9,971)		-		-		(9,971)
Other income/(expense)		(505)		142		(385)		(748)
Income (loss) from continuing
operations	$	4,393	$	(1,259)	$	541	$	3,675

			Advisory Services
For the Year Ended December 31, 2010			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	28,959	$	196	$	-	$	29,155
Advisory services income - related
party		10		2,714		1,480		4,204
Lease termination fee income		-		15		-		15
Total revenue		28,969		2,925		1,480		33,374
General and administrative		1,995		3,806		143		5,944
Property expense		8,292		22		-		8,314
Legal and professional		1,169		(13)		9		1,165
Real estate commissions		9		182		-		191
Acquisition costs		12		-		-		12
Depreciation and amortization		6,594		40		-		6,634
Impairment - properties		864		1,404		-		2,268
Impairment -
notes receivable		1,800		-		-		1,800
Total expenses		20,735		5,441		152		26,328
Interest expense		(9,541)		-		-		(9,541)
Other income/(expense)		2,496		1,156		(1,234)		2,418
Income (loss) from continuing
operations	$	1,189	$	(1,360)	$	94	$	(77)

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Investments In Advised Funds (Combined Condensed Statements Of Operations Of Advised Funds) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Investments In Advised Funds [Abstract]
Total Revenue	$ 16,885	$ 18,259	$ 18,778
Interest	7,362	8,189	9,342
Depreciation and amortization	7,574	7,904	15,797
Other	7,419	11,851	10,864
Total Expense	22,355	27,944	36,003
Net loss	(5,470)	(9,685)	(17,225)
AmREIT share of Net loss	$ (238)	$ (384)	$ (1,186)

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Earnings Per Share (Schedule Of Computation Of Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Earnings Per Share [Abstract]
Income from continuing operations attributable to common stockholders									$ 4,460		$ 3,675		$ (77)
Less: Dividends attributable to unvested restricted stockholders									(287)		(166)		(194)
Less: Income attributable to non-controlling interests													(173)
Basic and Diluted - Income from continuing operations									4,173		3,509		(444)
Basic and Diluted - Income from discontinued operations											565		6,382
Net income attributable to common stockholders after allocation to participating securities									$ 4,173		$ 4,074		$ 5,938
Weighted average shares of common stock used to compute net income per share, basic and diluted									13,120	[1]	11,384	[1]	11,336	[1]
Income from continuing operations attributable to common stockholders	$ 0.04	$ 0.07	$ 0.12	$ 0.10	$ 0.11	$ 0.10	$ 0.04	$ 0.12	$ 0.32		$ 0.31		$ (0.04)
Income from discontinued operations attributable to common stockholders											$ 0.05		$ 0.56
Net income attributable to common stockholders									$ 0.32		$ 0.36		$ 0.52
Nonvested restricted shares									359		207		216

[1] Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359, 207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

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Notes Payable (Scheduled Principal Repayments On Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
2013	$ 1,590
2014	2,301
2015	86,299
2016	69,225
2017	1,403
Beyond five years	57,443
Unamortized debt premiums	318
Total	218,579	201,658
Scheduled Principal Payments [Member]
Debt Instrument [Line Items]
2013	1,590
2014	2,301
2015	2,371
2016	1,794
2017	1,403
Beyond five years	3,605
Total	13,064
Term-Loan Maturities [Member]
Debt Instrument [Line Items]
2015	83,928
2016	67,431
Beyond five years	53,838
Unamortized debt premiums	318
Total	$ 205,515

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Real Estate Acquisitions, Dispositions And Discontinued Operations (Pro Forma Results Of Operations In Connection With Acquisitions) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Historical Results [Member]
Total revenues	$ 41,308	$ 36,915
Net income available to stockholders	4,460	4,240
Pro Forma Adjustments [Member]
Total revenues	47,927	45,064
Net income available to stockholders	4,594	2,472
Pro Forma Adjustments [Member] | Preston & Royal Village [Member]
Total revenues	6,619	6,567
Net income available to stockholders	134	(1,473)
Pro Forma Adjustments [Member] | Market At Lake Houston, Texas [Member]
Total revenues		315
Net income available to stockholders		(66)
Pro Forma Adjustments [Member] | Brookwood Village, Georgia [Member]
Total revenues		350
Net income available to stockholders		(23)
Pro Forma Adjustments [Member] | Alpharetta Commons, Georgia [Member]
Total revenues		917
Net income available to stockholders		$ (206)

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2012 Offering

12 Months Ended

Dec. 31, 2012

2012 Offering [Abstract]

2012 Offering

3. 2012 OFFERING

On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we created a new class of common stock, par value $0.01 per share,  titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. See Note 10 for further discussion of the rights of our Class A and Class B common stock.All Class A share amounts and related per share data included in the consolidated financial statements and related footnotes have been presentedto reflect the reverse stock split.

On August 1, 2012, we completed the sale of 3,650,000 shares of our Class B common stock and simultaneously listed our Class B common stock on the NYSE under the symbol “AMRE.” We received net proceeds of approximately $46.3 million, which were used to repay $45.3 million of mortgage debt, including the $25 Million Facility. See Note 8 for a further discussion of our notes payable.On August 24, 2012, we sold an additional 503,226 shares of our Class B common stock to our underwriters at the offering price pursuant to the exercise of the underwriters’ over-allotment option. We received net proceeds of approximately $6.5 million from the sale of the additional shares. In addition, we issued 312,499 shares of restricted Class B common stock to our officers and directors in connection with our 2012 Offering that will vest over a ten-year period.

As of December 31, 2012, we had a total of 16,123,288 shares of common stock outstanding as follows:

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Line Items]
Percentage of distribution of taxable income	90.00%
Real estate assets, tax	$ 407,000,000	$ 336,900,000
Real estate assets, book base	387,500,000	325,000,000
Effective federal tax rate			(70.00%)
Statutory tax rate	34.00%		34.00%
Income tax provision	248,000	262,000	1,515,000
Applicable tax rate	1.00%
Standard deduction percentage	30.00%
Gross deferred tax asset	3,000,000	2,900,000
Texas Margin Tax [Member]
Income Taxes [Line Items]
Income tax provision	$ 248,000	$ 267,000	$ 320,000

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2012 Offering (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended			0 Months Ended								0 Months Ended			0 Months Ended	12 Months Ended
	Aug. 24, 2012	Jul. 23, 2012 item	Dec. 31, 2012	Jul. 23, 2012 Class A Common Stock [Member]	Dec. 31, 2012 Class A Common Stock [Member]	Dec. 31, 2011 Class A Common Stock [Member]	Dec. 31, 2012 Class B Common Stock [Member]	Aug. 24, 2012 Class B Common Stock [Member]	Aug. 01, 2012 Class B Common Stock [Member]	Jul. 23, 2012 Class B Common Stock [Member]	Dec. 31, 2011 Class B Common Stock [Member]	Aug. 24, 2012 Restricted Common Class B [Member]	Dec. 31, 2012 Restricted Common Class B [Member]	Aug. 01, 2012 Previous Facility [Member]	Aug. 01, 2012 IPO [Member]	Dec. 31, 2012 IPO [Member]	Aug. 01, 2012 IPO [Member] Class B Common Stock [Member]
Two Thousand Twelve Offering [Line Items]
Common stock, par value		$ 0.01		$ 0.01	$ 0.01	$ 0.01	$ 0.01			$ 0.01	$ 0.01
Reverse stock split				1-for-2 reverse stock split
Reverse stock split conversion ratio		0.5
Common stock, shares issued					11,657,563	11,598,959	4,465,725	503,226	3,650,000		0	312,499	312,499				3,650,000
Net proceeds from IPO	$ 6.5														$ 46.3
Repayments of mortgage debt															45.3
Common stock, shares outstanding			16,123,288		11,657,563	11,598,959	4,465,725				0
Restricted common stock vesting period												10 years				10 years
Revolving credit facility			$ 75.0											$ 25.0

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Acquired Lease Intangibles (Tables)

12 Months Ended

Dec. 31, 2012

Acquired Lease Intangibles [Abstract]

Schedule Of Acquired Lease Intangible Assets And Liabilities

	December 31,
	2012		2011
Acquired lease intangible assets:
In-place leases	$	28,179	$	22,720
In-place leases – accumulated amortization		(14,096)		(12,978)
Above-market leases		3,774		2,247
Above-market leases – accumulated amortization		(1,881)		(1,850)
Acquired leases intangibles, net	$	15,976	$	10,139
Acquired lease intangible liabilities:
Below-market leases	$	6,286	$	4,623
Below-market leases – accumulated amortization		(2,779)		(2,602)
Acquired below-market lease intangibles, net	$	3,507	$	2,021

Schedule Of Acquired Lease Intangible Amortization Details

	Presentation	2012		2011		2010
In-place leases	amortization expense	$	2,061	$	2,117	$	1,409
Above-market leases	reduction of rental income	$	95	$	108	$	104
Below-market leases	increase in rental income	$	292	$	274	$	300

Schedule Of Estimated Amortization And Rental Income

	Amortization expense		Rental income (above
Year Ending December 31,	(in place lease value)		and below market rent)
2013	$	3,638	$	469
2014		2,831		405
2015		2,162		304
2016		1,528		75
2017		927		33
	$	11,086	$	1,286

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Investments In Advised Funds (Tables)

12 Months Ended

Dec. 31, 2012

Investments In Advised Funds [Abstract]

Schedule Of Ownership And Returns Of Advised Funds

			Sharing Ratios(1)
Advised Fund	LP interest	GP interest	LP	GP	LP Preference
MIG	1.40%	1.00%	99%	1%	8%
			90%	10%	10%
			80%	20%	12%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG II	1.60%	1.00%	99%	1%	8%
			85%	15%	12%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG III	1.10%	1.00%	99%	1%	10%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG IV	1.60%	1.00%	99%	1%	8.50%
			0%	100%	40% Catch Up
			60%	40%	Thereafter

______________

(1) Using MIG as an example of how the sharing ratios and LP preference provisions are applied, the LPs share in 99% of the cash distributions until they receive an 8% preferred return. The LPs share in 90% of the cash distributions until they receive a 10% preferred return and so on.

Combined Condensed Balance Sheets Of Advised Funds

Combined Balance Sheets		As of December 31,
		2012	2011
Assets
	Property, net	$          185,821	$          200,806
	Cash	10,182	8,604
	Notes receivable	312	77
	Other assets	41,938	43,752
	Total Assets	238,253	253,239
Liabilities and partners' capital
	Notes payable(1)	122,882	130,739
	Other liabilities	18,654	19,435
	Partners capital	96,717	103,065
	Total Liabilities and Partners' Capital	$          238,253	$          253,239
AmREIT share of Partners' Capital		$              7,953	$              8,322

_______________

(1) Includes $7,387and $7,732 payable to us as of December 31, 2012 and 2011, respectively.

Combined Condensed Statements Of Operations Of Advised Funds

Combined Statements of Operations		Year Ended December 31,
		2012	2011	2010
Revenue
	Total Revenue	$            16,885	$            18,259	$           18,778
Expense
	Interest	7,362	8,189	9,342
	Depreciation and amortization	7,574	7,904	15,797
	Other	7,419	11,851	10,864
	Total Expense	22,355	27,944	36,003
Net loss		$            (5,470)	$            (9,685)	$          (17,225)
AmREIT share of Net loss		$               (238)	$               (384)	$            (1,186)

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Acquired Lease Intangibles (Schedule Of Estimated Amortization And Rental Income) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 30,493
2014	28,124
2015	23,114
2016	18,641
2017	13,849
Thereafter	47,230
Total	161,451
In-Place Leases [Member]
2013	3,638
2014	2,831
2015	2,162
2016	1,528
2017	927
Total	11,086
Below-Market Leases [Member] | Above-Market Leases [Member]
2013	469
2014	405
2015	304
2016	75
2017	33
Total	$ 1,286

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2012 Offering (Schedule Of Common Stock) (Details)	0 Months Ended
	Jul. 23, 2012	Dec. 31, 2012	Dec. 31, 2011
Two Thousand Twelve Offering [Line Items]
Common stock, shares outstanding		16,123,288
Reverse stock split conversion ratio	0.5
Class A Common Stock [Member]
Two Thousand Twelve Offering [Line Items]
Common stock, shares outstanding		11,657,563	11,598,959
Reverse stock split	1-for-2 reverse stock split
Class B Common Stock [Member]
Two Thousand Twelve Offering [Line Items]
Common stock, shares outstanding		4,465,725	0

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilities And Related Valuation Inputs Within The Fair Value Hierarchy To Measure Fair Values

December 31, 2012	Level 1		Level 2		Level 3
Fixed-rate notes payable	$	-	$	196,112	$	-
December 31, 2011	Level 1		Level 2		Level 3
Notes receivable	$	-	$	3,288	$	-
Fixed-rate notes payable	$	-	$	150,839	$	-

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Notes Payable (Tables)

12 Months Ended

Dec. 31, 2012

Notes Payable [Abstract]

Components Of Outstanding Debt

	December 31, 2012		December 31, 2011
Fixed-rate mortgage loans	$	185,079	$	141,373
Variable-rate unsecured loans -
$75.0 Million Facility		33,500		-
Variable-rate secured loans -
$25.0 Million Facility		-		19,345
Other		-		40,940
Total	$	218,579	$	201,658

Scheduled Principal Repayments On Notes Payable

Year Ending December 31,	Scheduled Principal Payments		Term-Loan Maturities		Total Payments
2013	$	1,590	$	-	$	1,590
2014		2,301		-		2,301
2015		2,371		83,928		86,299
2016		1,794		67,431		69,225
2017		1,403		-		1,403
Beyond five years		3,605		53,838		57,443
Unamortized debt premiums	$	-	$	318	$	318
Total		13,064		205,515		218,579

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Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. The consolidated financial statements include our accounts as well as the accounts of any subsidiaries in which we have a controlling financial interest. Investments in joint ventures and partnerships, where we have the ability to exercise significant influence but do not exercise financial and operating control, are accounted for using the equity method. The significant accounting policies of our non-consolidated entities are consistent with those of our subsidiaries in which we have a controlling financial interest. As of December 31, 2012, we did not have any interests in variable interest entities. All significant inter-company accounts and transactions have been eliminated through consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of demand deposits at commercial banks and money market funds.

Financial Instruments

Our consolidated financial instruments consist of cash and cash equivalents, tenant and accounts receivable, accounts receivable – related party, notes receivable, notes receivable – related party, notes payable and accounts payable and other liabilities. Except for the notes payable, the carrying values are representative of the fair values due to the short term nature of the instruments and/or due to impairments. Our notes payable consist of both variable-rate and fixed-rate notes. The fair value of the variable-rate notes, includingour $75 Million Facility,approximate their carrying values. See Note 7 for further discussion of the fair value of our notes payable.

Revenue Recognition

Rental income from operating leases – We lease space to tenants under agreements with varying terms. Our leases are accounted for as operating leases, and, although certain leases of the properties provide for tenant occupancy during periods for which no rent is due and/or for changes in the minimum lease payments over the terms of the leases, revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, possession or control occurs on the lease commencement date. In all cases, we have determined that we are the owner of any tenant improvements that we fund pursuant to the lease terms. In cases where significant tenant improvements are made prior to lease commencement, the leased asset is considered to be the finished space, and revenue recognition therefore begins when the improvements are substantially complete. A substantial portion of our revenue is earned from operating leases. Our operating leases range from one to 25 years and generally include one or more five year renewal options. A summary of minimum future base rentals to be received, exclusive of any renewals, under non-cancelable operating leases in existence at December 31, 2012 is as follows (in thousands):

		Minimum
Year Ending December 31,		base rents
2013	$	30,493
2014		28,124
2015		23,114
2016		18,641
2017		13,849
Thereafter		47,230
	$	161,451

Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Additionally, certain of our lease agreements contain provisions that grant additional rents based upon tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. During the years ended December 31, 2012, 2011 and 2010, we recognized percentage rents of $631,000, $425,000 and $555,000, respectively. Accrued rents are included in tenant and accounts receivable, net.

Lease termination income – We recognize lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets. During the years ended December 31, 2012, 2011 and 2010, we recognized lease termination fees of $0, $131,000 and $0, respectively.

Advisory services income – related party – We provide various real estate services, including development, construction management, property management, leasing and brokerage. The fees for these services are recognized as services are provided and are generally calculated as a percentage of revenues earned or to be earned or of property cost, as appropriate. We also earn asset management fees from certain of the Advised Funds for facilitating the deployment of capital and for monitoring the real estate investments. Asset management fees are calculated as a percentage of equity under management. See Note 12 for a detail of our advisory services income – related party.

Discontinued Operations

Our properties generally have operations and cash flows that can be clearly distinguished from the rest of the Company.  The operations and gains on sales reported in discontinued operations include those properties that have been sold and for which operations and cash flows have been clearly distinguished.  The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties and business has been reclassified as discontinued operations in the accompanying statements of operations.  See Note 4 for additional information related to our discontinued operations.

Gains on Sale of Real Estate

Gains and losses on sales of real estate are not recognized under the full accrual method until certain criteria are met. Gains relating to transactions that do not meet the criteria for full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate under the circumstances. During the years ended December 31, 2012, 2011 and 2010, we recognized gains on sales of real estate of $0, $417,000 and $5.7 million, respectively, which are included in income from discontinued operations.

Real Estate Investments

Development Properties – Expenditures related to the development of real estate are capitalized as part of construction in progress, which includes carrying charges, primarily interest, real estate taxes and loan acquisition costs, and direct and indirect development costs related to buildings under construction. The capitalization of such costs ceases at the earlier of one year from the date of completion of major construction or when the property, or any completed portion, becomes available for occupancy. We capitalize costs associated with pending acquisitions of raw land once the acquisition of the property is determined to be probable. We did not capitalize any interest or taxes during the years ended December 31, 2012, 2011 and 2010.  

Acquired Properties and Acquired Intangibles – We account for operating real estate acquisitions as an acquisition of a business as we believe most operating real estate meets the definition of a “business” under GAAP. Accordingly, we allocate the purchase price of acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values. Identifiable intangibles include amounts allocated to acquired above and below market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include (i) an estimate of carrying costs during the expected lease-up periods, considering market conditions, and (ii) costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to in-place lease value and above and below-market leases are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Below market leases include fixed-rate renewal periods where we believe the renewal is reasonably assured. Premiums or discounts on debt are amortized to interest expense over the remaining term of such debt. Costs related to acquiring operating properties are expensed as incurred. See Note 4 for additional information related to our acquisition of the Preston Royal Village Shopping Center during 2012.

Depreciation – Depreciation is computed using the straight-line method over an estimated useful life, generally, 39 to 50 years for buildings, up to 20 years for site improvements and over the term of the lease for tenant improvements. Leasehold estate properties, which are properties where we own the building and improvements and are subject to a ground lease because we do not own the related ground, are amortized over the life of the ground lease.

Impairment – We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment of value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the property, with the carrying value of the individual property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. We did not recognize any impairment charges during the years ended December 31, 2012 and 2011.  During the year ended December 31, 2010, we recognized an impairment charge of $2.3 million on four properties that represented non-core real estate assets and $1.2 million on two non-core real estate assets reported in discontinued operations. 

Investments in Advised Funds

Our  investments in our Advised Funds are accounted for under the equity method because we exercise significant influence over such entities.  We record our percentage interest in the earnings and losses of these entities in our statement of operations on a net basis as prescribed under GAAP. See Note 5 for further disclosure related to our Advised Funds.

Tenant and Accounts Receivable

Included in tenant and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of tenant and accounts receivables is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels and current economic trends. Bad debt expenses and any recoveries related to tenant receivables are included in property expense, and bad debt expenses and any related recoveries on other accounts receivable are included in general and administrative expense.

The table below summarizes the activity within our allowance for uncollectible accounts for tenant receivables (in thousands):

	Year Ended December 31,
	2012		2011		2010
Beginning balance	$	1,780	$	2,068	$	1,025
Additional reserves		523		540		1,579
Collections/reversals		(479)		(788)		(360)
Write-offs		(690)		(40)		(176)
Ending balance	$	1,134	$	1,780	$	2,068

Notes Receivable

Included in notes receivable is a $2.5 million note due from the sale of a tract of land adjacent to our Uptown Plaza – Dallas property located outside of downtown Dallas, Texas. The note matured unpaid on December 31, 2010, and we recorded a $1.3 million impairment to reduce the value of the note to the fair value of the underlying collateral. During 2011, we recorded an impairment recovery of $1.1 million to reflect payments received on this note. Also during 2011, we entered into a new agreement with the borrower and extended the note to June 30, 2014. In May 2012, the borrower made a $1.0 million payment, and we recorded an additional impairment recovery of $229,000. The fair value of the underlying collateral now exceeds the remaining note balance.

Also included in notes receivable is approximately $259,000 in notes receivable from various tenants. An allowance for the uncollectible portion of notes receivable from tenants is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2012 and December 31, 2011, we had an allowance for uncollectible notes receivable from tenants of $45,000 and $29,000, respectively. During the years ended December 31, 2012 and 2010, we recorded bad debt expense related to tenant notes receivable of $19,000 and $99,000.During the year ended December 31, 2011, we recordedbad debt recoveries of $71,000.

Notes Receivable – Related Party

Included in notes receivable – related party are loans made to certain of our affiliated Advised Funds related to the acquisition or development of properties and the deferral of asset management fees. These loans bear interest at LIBOR plus a spread and are due upon demand. The notes are secured by the Advised Funds’ ownership interests in various unencumbered properties. The following is a summary of the notes receivable due from related parties (in thousands):

	December 31, 2012						December 31, 2011
	Face				Carrying		Face				Carrying
Related Party	Amount		Reserve (1)		Amount		Amount		Reserve (1)		Amount
AIGF	$	-	$	-	$	-	$	2,488	$	(619)	$	1,869
MIG III		3,729		(373)		3,356		3,218		(356)		2,862
MIG IV		3,658		(266)		3,392		2,026		(244)		1,782
Total	$	7,387	$	(639)	$	6,748	$	7,732	$	(1,219)	$	6,513

______________

(1) A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

We recorded a $500,000 impairment on the note from AIGF during 2010. As a result, we ceased recording interest income on the note due from AIGF, and interest accruals were recorded directly to the reserve balance. In August 2012, we received approximately $2.3 million as final payment of the AIGF note receivable and related accrued interest. During 2012, we recorded $100,000 in interest income and $214,000 in impairment recovery. The remaining balance, which had previously been reserved, was written off as uncollectible.

Offering Costs

Issuance costs incurred for the purposes of raising capital through the sale of common stock are treated as a reduction of stockholders’ equity. During 2012, we incurred underwriting commissions, legal, accounting and other offering-related costs of approximately $5.4 million in connection with our 2012 Offering.

During 2011, we initiated plans for the public sale of our common stock, and we incurred $914,000 of costs; however, market volatility and uncertainty prevented us from proceeding with the offering at that time.  Accordingly, at December 31, 2011, the costs incurred no longer met the criteria for capitalization under GAAP and were expensed.

Deferred Compensation Incentive Plan

Our 1999 Flexible Incentive Plan is designed to attract and retain the services of our directors and employees that we consider essential to our long-term growth and success. As such, it is designed to provide them with the opportunity to own shares of our restricted common stock. All long-term compensation awards are designed to vest over a period of three to ten years and promote retention of our team. See also Note 10.

Income Taxes

Federal–We have elected to be taxed as a REIT under the Internal Revenue Code and are, therefore, not subject to Federal income taxes to the extent of dividends paid, provided we meet all conditions specified by the Internal Revenue Code for retaining our REIT status. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our stockholders and meet certain income source and investment restriction requirements.  Our stockholders must report their share of income distributed in the form of dividends.  However, ARIC, our real estate development and operating business, is a fully integrated and wholly-owned business consisting of brokers and real estate professionals that provide development, acquisition, brokerage, leasing, construction, asset and property management services to our portfolio of assets and Advised Funds as well as to third parties. ARIC and our wholly-owned corporations that serve as the general partners of our Advised Funds are treated as taxable REIT subsidiaries for federal income tax purposes and are not subject to the REIT exemption above.

State–The Texas Margin Tax is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not designed as an income tax, we believe it meets the requirements of an income tax for financial reporting under GAAP.

To the extent we are subject to federal and state income taxes, we account for income taxes under the asset and liability method. See also Note 9.

Derivative Financial Instruments

We do not have any derivative financial instruments as of December 31, 2012 or December 31, 2011. Our use of derivative financial instruments to date has been limited to the use of interest rate swaps to mitigate our interest rate risk on variable-rate debt. The impact of derivative accounting is immaterial to our consolidated financial statements. We do not use derivative financial instruments for trading or speculative purposes. GAAP requires that all derivative instruments, whether designated in hedging relationships or not, be recorded on the balance sheet at their fair value. Gains or losses resulting from changes in the values of those derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. Changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income, or OCI, while the ineffective portion of the derivative’s change in fair value is recognized in the income statement. As the hedge transactions settle, gains and losses associated with the transaction are reclassified out of OCI and into earnings. We assess, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items.

During the years ended December 31, 2011 and 2010, we had an interest rate swap with a notional amount of $17 million and a fixed rate of 5.11% hedging our variable-rate loan on our MacArthur Park property. The swap matured on December 1, 2011. We designated this interest rate swap as a cash flow hedge for financial reporting purposes and therefore recorded any changes in its fair value to other comprehensive income. The swap settled monthly with an amount paid to or received from our counterparty, which was recorded as an adjustment to interest expense. During the years ended December 31, 2011 and 2010, we paid $356,000and $359,000, respectively, related to this swap.

Subsequent Events

Except as disclosed in Note 4 of this Annual Report related to the potential sale of our 70% ownership interest in our MacArthur Park property to a joint venture, we did not have any material subsequent events as of the date of this filing that impacted our consolidated financial statements.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Tax Expense (Benefit) Attributable To Continuing Operations And Discontinued Operations

	Year ended December 31,
	2012		2011		2010
Federal - current	$	(443)	$	(219)	$	(31)
Federal - deferred		38		30		(819)
State - current		281		267		346
Valuation allowance		372		189		2,482
Total income tax expense (benefit)	$	248	$	267	$	1,978

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Summary Of Significant Accounting Policies (Schedule Of Future Minimum Rental Payments For Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Summary Of Significant Accounting Policies [Abstract]
2013	$ 30,493
2014	28,124
2015	23,114
2016	18,641
2017	13,849
Thereafter	47,230
Total	$ 161,451

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Acquired Lease Intangibles (Narrative) (Details)	12 Months Ended
	Dec. 31, 2012
Minimum [Member]
Acquired Lease Intangibles [Line Items]
Amortization period of acquired lease intangible assets	1 month
Maximum [Member]
Acquired Lease Intangibles [Line Items]
Amortization period of acquired lease intangible assets	25 years

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Segment Reporting (Summary Of Segment Results) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Rental income from operating leases									$ 37,438,000	$ 32,995,000	$ 29,155,000
Advisory services income - related party									3,870,000	3,789,000	4,204,000
Lease termination fees income									0	131,000	15,000
Total revenue	11,360,000	10,027,000	9,861,000	10,060,000	9,765,000	9,632,000	9,067,000	8,534,000	41,308,000	36,915,000	33,374,000
General and administrative									6,733,000	6,049,000	5,944,000
Property expense									9,891,000	7,770,000	8,314,000
Legal and professional									919,000	945,000	1,165,000
Real estate commissions									387,000	342,000	191,000
Acquisition costs									687,000	229,000	12,000
Depreciation and amortization									8,884,000	8,257,000	6,634,000
Impairment - properties											2,268,000
Impairment recovery - notes receivable									(443,000)	(1,071,000)	1,800,000
Total expenses									27,058,000	22,521,000	26,328,000
Interest expense									(10,251,000)	(9,971,000)	(9,541,000)
Other income/(expense)									461,000	(748,000)	2,418,000
Income (loss) from continuing operations									4,460,000	3,675,000	(77,000)
Portfolio [Member]
Segment Reporting Information [Line Items]
Rental income from operating leases									37,251,000	32,798,000	28,959,000
Advisory services income - related party										147,000	10,000
Lease termination fees income										131,000
Total revenue									37,251,000	33,076,000	28,969,000
General and administrative									2,321,000	2,213,000	1,995,000
Property expense									9,870,000	7,724,000	8,292,000
Legal and professional									833,000	877,000	1,169,000
Real estate commissions										2,000	9,000
Acquisition costs									687,000	229,000	12,000
Depreciation and amortization									8,861,000	8,233,000	6,594,000
Impairment - properties											864,000
Impairment recovery - notes receivable									(443,000)	(1,071,000)	1,800,000
Total expenses									22,129,000	18,207,000	20,735,000
Interest expense									(10,251,000)	(9,971,000)	(9,541,000)
Other income/(expense)									690,000	(505,000)	2,496,000
Income (loss) from continuing operations									5,561,000	4,393,000	1,189,000
Advisory Services [Member] | Real Estate Operating And Development [Member]
Segment Reporting Information [Line Items]
Rental income from operating leases									187,000	197,000	196,000
Advisory services income - related party									3,248,000	2,578,000	2,714,000
Lease termination fees income											15,000
Total revenue									3,435,000	2,775,000	2,925,000
General and administrative									4,303,000	3,701,000	3,806,000
Property expense									21,000	46,000	22,000
Legal and professional									83,000	65,000	(13,000)
Real estate commissions									387,000	340,000	182,000
Depreciation and amortization									23,000	24,000	40,000
Impairment - properties											1,404,000
Total expenses									4,817,000	4,176,000	5,441,000
Other income/(expense)									9,000	142,000	1,156,000
Income (loss) from continuing operations									(1,373,000)	(1,259,000)	(1,360,000)
Advisory Services [Member] | Advised Funds [Member]
Segment Reporting Information [Line Items]
Advisory services income - related party									622,000	1,064,000	1,480,000
Total revenue									622,000	1,064,000	1,480,000
General and administrative									109,000	135,000	143,000
Legal and professional									3,000	3,000	9,000
Total expenses									112,000	138,000	152,000
Other income/(expense)									(238,000)	(385,000)	(1,234,000)
Income (loss) from continuing operations									$ 272,000	$ 541,000	$ 94,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012		Dec. 31, 2011
ASSETS
Land	$ 147,460		$ 138,404
Buildings	222,679		172,146
Tenant improvements	17,386		14,483
Real estate investments at cost, gross	387,525		325,033
Less accumulated depreciation and amortization	(39,820)		(33,865)
Real estate investments at cost, net	347,705		291,168
Acquired lease intangibles, net	15,976		10,139
Investments in Advised Funds	7,953		8,322
Net real estate investments	371,634		309,629
Cash and cash equivalents	2,992		1,050
Tenant and accounts receivable, net	5,566		4,340
Accounts receivable - related party, net	821		645
Notes receivable, net	2,731		3,412
Notes receivable - related party, net	6,748	[1]	6,513
Deferred costs, net	3,696		2,887
Other assets	3,206		2,134
TOTAL ASSETS	397,394		330,610
Liabilities:
Notes payable	218,579		201,658
Accounts payable and other liabilities	9,593		8,007
Acquired below-market lease intangibles, net	3,507		2,021
TOTAL LIABILITIES	231,679		211,686
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued
Capital in excess of par value	245,403		192,005
Accumulated distributions in excess of earnings	(79,850)		(73,197)
TOTAL STOCKHOLDERS' EQUITY	165,715		118,924
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	397,394		330,610
Class A Common Stock [Member]
Stockholders' equity:
Common stock	117		116
Class B Common Stock [Member]
Stockholders' equity:
Common stock	$ 45

[1] A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266 for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

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Real Estate Acquisitions, Dispositions And Discontinued Operations (Narrative) (Details) (USD $)	1 Months Ended	12 Months Ended				0 Months Ended					1 Months Ended		1 Months Ended			12 Months Ended			0 Months Ended
	Jan. 31, 2013	Dec. 31, 2012		Dec. 31, 2011 property	Dec. 31, 2010	Feb. 25, 2011 Market At Lake Houston, Texas [Member] item sqft acre	May 10, 2011 Brookwood Village, Georgia [Member] sqft	Jul. 29, 2011 Alpharetta Commons, Georgia [Member] sqft	Dec. 12, 2012 Preston & Royal Village [Member] sqft	Dec. 09, 2010 500 Lamar, Texas [Member] sqft	Jan. 31, 2013 MacArthur Park, Texas [Member]	Dec. 31, 2012 MacArthur Park, Texas [Member]	Jan. 31, 2013 MacArthur Park Phase I, Texas [Member]	Jan. 24, 2013 MacArthur Park Phase I, Texas [Member]	Jan. 24, 2013 MacArthur Park Phase I, Texas [Member] Institutional Joint Venture Partner [Member]	Dec. 31, 2012 General Partner [Member]	Dec. 31, 2012 General Partner [Member] MIG [Member]	Dec. 31, 2012 General Partner [Member] MIG III [Member]	Dec. 09, 2010 Minimum [Member] 500 Lamar, Texas [Member] sqft	Dec. 09, 2010 Maximum [Member] 500 Lamar, Texas [Member] sqft	Dec. 31, 2012 Wholly Owned Properties [Member] sqft
Business Acquisition [Line Items]
Number of advised funds own property						2
Remaining lease term on the ground lease									27 years
Revolving credit facility		$ 75,000,000
Square footage of acquired property						101,791	28,774	94,544	230,000	12,795											1,500,000
Acres of land acquired						13.86
Percentage of property leased						100.00%	96.00%	100.00%	97.30%
Percentage of property occupied										100.00%
Spaces of local boutique tenants																			1,000	2,500
Property acquired		42,760,000	[1]			20,100,000		18,800,000	66,200,000
Property acquired by cash paid						4,400,000	10,600,000	5,400,000	12,300,000	4,600,000
Property acquired through assumption of mortgage debt						15,700,000
Property acquired morgage loan payable								12,500,000	23,400,000	1,800,000
Percentage of interest in advised funds																1.00%
Ownership interest													30.00%		70.00%		1.00%	1.00%
Acquisition costs		687,000		229,000	12,000
Number of non-core, single-tenant assets sold				2
Gain on sale of single-tenant assets		0		417,000	5,726,000
Proceeds from sale joint venture	35,400,000
Cash paid for joint venture													26,200,000
Acquisition costs of joint venture									687,000
Borrowings for acquisition									31,200,000					43,900,000
Net real estate investments		371,634,000		309,629,000								43,200,000
Repayments of mortgage debt											8,800,000
Defeasance penalty											$ 2,200,000

[1] The $42,760 of net cash paid for the acquisition for the Preston Royal Village Shopping Center was funded with approximately $12.3 million (including acquisition costs of $687) from cash on hand and approximately $31.2 million in borrowings from our $75 Million Facility

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net income	$ 4,460	$ 4,240	$ 6,305
Adjustments to reconcile net income to net cash provided by operating activities:
Proceeds from sale of real estate acquired for resale		2,457	886
Gain on sale of real estate acquired for resale		(549)	(5,384)
Gain on sale of real estate acquired for investment			(1,216)
Gain on debt extinguishment			(5,374)
Impairment - properties			3,487
Impairment (recovery) - notes receivable	(443)	(1,071)	1,800
Bad debt expense (recoveries)	44	(322)	1,265
Loss from Advised Funds	238	384	1,186
Cash receipts for related party fees	17	14	(166)
Depreciation and amortization	9,336	8,575	6,934
Amortization of deferred compensation	815	561	442
Distributions from Advised Funds			11
Decrease (increase) in tenant and accounts receivable	(1,500)	1,177	(1,272)
Increase in accounts receivable - related party	(1,946)	(64)	(369)
Cash receipts from direct financing leases more than income recognized			237
Decrease in other assets	(1,157)	489	2,310
Increase (decrease) in accounts payable and other liabilities	1,466	605	(1,404)
Net cash provided by operating activities	11,330	16,496	9,678
Cash flows from investing activities:
Improvements to real estate, including leasing costs	(3,827)	(4,492)	(1,963)
Net cash paid for acquisition of investment properties	(42,760)	(21,594)	(2,760)
Additions to furniture, fixtures and equipment	(18)	(47)	(74)
Notes receivable collections	1,175	1,071
Investments in and advances to Advised Funds	(1,421)	(3,353)	(2,338)
Distributions and payments from Advised Funds	3,284	1,016	2,107
Proceeds from sale of real estate acquired for resale			14,053
Proceeds from sale of investment property			4,608
Residual economic interest paid			(2,866)
Cash deposited with a qualified intermediary			(12,804)
Cash received from qualified intermediary		9,370	3,434
Net cash provided by (used in) investing activities	(43,567)	(18,029)	1,397
Cash flows from financing activities:
Proceeds from notes payable	59,100	35,870	32,423
Payments of notes payable	(65,457)	(24,577)	(32,536)
Payments for financing costs	(980)	(88)	(478)
Issuance costs	(5,449)
Retirement of shares of common stock	(68)
Purchase of treasury stock			(48)
Distributions to noncontrolling interests			(438)
Common dividends paid	(11,113)	(9,277)	(10,384)
Net cash provided by (used in) financing activities	34,179	1,928	(11,487)
Net increase in cash and cash equivalents	1,942	395	(412)
Cash and cash equivalents, beginning of period	1,050	655	1,067
Cash and cash equivalents, end of period	2,992	1,050	655
Supplemental schedule of cash flow information:
Interest	9,716	9,260	10,149
Taxes	229	566	382
Deferred compensation recorded upon issuance of restricted shares of common stock	5,299	762	1,669
Reclassification of tenant and accounts receivable to notes receivable	284
Reclassification of accounts receivable - related party to notes receivable - related party	1,770
Assumption of debt associated with the acquisition of operating properties	23,400	28,510	1,800
Class A Common Stock [Member]
Cash flows from financing activities:
Issuance of shares of common stock			(26)
Class B Common Stock [Member]
Cash flows from financing activities:
Issuance of shares of common stock	$ 58,146

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Notes Payable (Narrative) (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	12 Months Ended		1 Months Ended				1 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2011	Dec. 31, 2012	Jul. 31, 2011 Alpharetta Commons, Georgia [Member]	Feb. 29, 2012 Brookwood Village, Georgia [Member]	Jun. 30, 2011 Brookwood Village, Georgia [Member]	Feb. 28, 2011 Market At Lake Houston, Texas [Member]	Dec. 31, 2011 MacArthur Park, Texas [Member]	Aug. 31, 2011 Uptown Plaza Dallas, Texas [Member]	Aug. 31, 2012 Uptown Plaza Dallas, Texas [Member]	Dec. 31, 2012 Preston & Royal Village [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]
Revolving credit facility		$ 75.0
Available under facility		26.9
Weighted average interest rate		4.80%
Secured credit facility extension	12 months
Interest rate of LIBOR plus spread											2.05%	2.75%
Notes payable term				10 years
Notes payable bearing interest rate				5.40%					4.25%	3.21%
Long term financing			12.5		7.4	15.7	16.6		14.0	23.4
Maximum debt service coverage ratio												1.50
Amortization period of payments of principal and interest				30 years				30 years		30 years
Threshold of other defaulted indebtedness that causes default of credit facility		1.0
Line of credit facility term		3 years
Line of credit facility maximum borrowing capacity under accordion feature		$ 150.0
Period for replacement of member of executive management team		90 days

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Schedule Of Details Of Income And Administrative Cost Reimbursements

	Year Ended December 31,
		2012		2011		2010
Real estate fee income(1)		$	3,005	$	2,491	$	2,375
Asset management fee income(2)			622		1,064		1,480
Construction management fee income(3)			243		234		349
Advisory services income - related party		$	3,870	$	3,789	$	4,204
Reimbursements of administrative costs		$	855	$	885	$	1,009

______________

(1) We earn real estate fee income by providing property acquisition, leasing and property management services to our Advised Funds. We own 100% of the entities that serve as the general partner for the funds.

(2) We earn asset management fees from our Advised Funds for providing accounting related and investor relation services, facilitating the deployment of capital and other services provided in conjunction with operating the funds.

(3)We earn construction management fees by managing construction and tenant build-out projects on behalf of our Advised Funds.

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Stockholders' Equity And Noncontrolling Interest (Schedule Of Restricted Stock Activity) (Details) (Imported) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity And Noncontrolling Interest [Abstract]
Beginning of period, Non-vested shares	207,199	215,588
Beginning of period, Weighted average grant date fair value	$ 17.88	$ 17.56
Granted, Non-vested shares	376,970	42,500
Granted, Weighted average grant date fair value	$ 13.91	$ 17.94
Vested, Non-vested shares	(41,653)	(48,280)
Vested, Weighted average grant date fair value	$ 16.28	$ 16.66
Forfeited, Non-vested shares		(2,609)
Forfeited, Weighted average grant date fair value		$ 16.74
End of period, Non-vested shares	542,516	207,199
End of period, Weighted average grant date fair value	$ 15.24	$ 17.88

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Quarterly Information

12 Months Ended

Dec. 31, 2012

Quarterly Information [Abstract]

Quarterly Information

16.SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)

Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2012 and 2011 (amounts in thousands, except per share data):

	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
For the Year Ended December 31, 2012
Revenues	$	10,060	$	9,861	$	10,027	$	11,360
Net income available to AmREIT stockholders	$	1,257	$	1,446	$	1,023	$	734
Net income per share - basic and diluted	$	0.10	$	0.12	$	0.07	$	0.04
For the Year Ended December 31, 2011
Revenues	$	8,534	$	9,067	$	9,632	$	9,765
Net income available to AmREIT stockholders	$	1,336	$	566	$	1,118	$	1,220
Net income per share - basic and diluted	$	0.12	$	0.04	$	0.10	$	0.11

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Concentrations (Tables)

12 Months Ended

Dec. 31, 2012

Concentrations [Abstract]

Schedule Of Base Rents Generated By Significant Tenants

	Year Ended December 31,
	2012		2011		2010
Kroger	$	2,116	$	2,116	$	2,192
Landry’s (1)		1,257		1,143		843
CVS/pharmacy		1,222		1,115		922
H-E-B		1,110		938		-
Publix(2)		781		332		-
Hard Rock Café		497		497		497
TGI Friday’s		459		451		451
The Container Store(3)		448		89		-
Golden Corral		427		419		419
Champps Americana		422		422		422
	$	8,739	$	7,522	$	5,746

______________

(1)Includes tenants owned by Landry's, including Landry's Seafood House, McCormick & Schmicks, Mortons and The Grotto.

(2)Publix, a regional grocer, is the anchor tenant at Alpharetta Commons, which was acquired in July 2011.

(3)Rent commenced on a new lease with The Container Store in Houston, Texas in November 2011.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2012

Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation

Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. The consolidated financial statements include our accounts as well as the accounts of any subsidiaries in which we have a controlling financial interest. Investments in joint ventures and partnerships, where we have the ability to exercise significant influence but do not exercise financial and operating control, are accounted for using the equity method. The significant accounting policies of our non-consolidated entities are consistent with those of our subsidiaries in which we have a controlling financial interest. As of December 31, 2012, we did not have any interests in variable interest entities. All significant inter-company accounts and transactions have been eliminated through consolidation.

Use Of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash And Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of demand deposits at commercial banks and money market funds.

Financial Instruments

Financial Instruments

Our consolidated financial instruments consist of cash and cash equivalents, tenant and accounts receivable, accounts receivable – related party, notes receivable, notes receivable – related party, notes payable and accounts payable and other liabilities. Except for the notes payable, the carrying values are representative of the fair values due to the short term nature of the instruments and/or due to impairments. Our notes payable consist of both variable-rate and fixed-rate notes. The fair value of the variable-rate notes, includingour $75 Million Facility,approximate their carrying values. See Note 7 for further discussion of the fair value of our notes payable.

Revenue Recognition

Revenue Recognition

Rental income from operating leases – We lease space to tenants under agreements with varying terms. Our leases are accounted for as operating leases, and, although certain leases of the properties provide for tenant occupancy during periods for which no rent is due and/or for changes in the minimum lease payments over the terms of the leases, revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, possession or control occurs on the lease commencement date. In all cases, we have determined that we are the owner of any tenant improvements that we fund pursuant to the lease terms. In cases where significant tenant improvements are made prior to lease commencement, the leased asset is considered to be the finished space, and revenue recognition therefore begins when the improvements are substantially complete. A substantial portion of our revenue is earned from operating leases. Our operating leases range from one to 25 years and generally include one or more five year renewal options. A summary of minimum future base rentals to be received, exclusive of any renewals, under non-cancelable operating leases in existence at December 31, 2012 is as follows (in thousands):

		Minimum
Year Ending December 31,		base rents
2013	$	30,493
2014		28,124
2015		23,114
2016		18,641
2017		13,849
Thereafter		47,230
	$	161,451

Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Additionally, certain of our lease agreements contain provisions that grant additional rents based upon tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. During the years ended December 31, 2012, 2011 and 2010, we recognized percentage rents of $631,000, $425,000 and $555,000, respectively. Accrued rents are included in tenant and accounts receivable, net.

Lease termination income – We recognize lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets. During the years ended December 31, 2012, 2011 and 2010, we recognized lease termination fees of $0, $131,000 and $0, respectively.

Advisory services income – related party – We provide various real estate services, including development, construction management, property management, leasing and brokerage. The fees for these services are recognized as services are provided and are generally calculated as a percentage of revenues earned or to be earned or of property cost, as appropriate. We also earn asset management fees from certain of the Advised Funds for facilitating the deployment of capital and for monitoring the real estate investments. Asset management fees are calculated as a percentage of equity under management. See Note 12 for a detail of our advisory services income – related party.

Discontinued Operations

Discontinued Operations

Our properties generally have operations and cash flows that can be clearly distinguished from the rest of the Company.  The operations and gains on sales reported in discontinued operations include those properties that have been sold and for which operations and cash flows have been clearly distinguished.  The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties and business has been reclassified as discontinued operations in the accompanying statements of operations.  See Note 4 for additional information related to our discontinued operations.

Gains On Sale Of Real Estate

Gains on Sale of Real Estate

Gains and losses on sales of real estate are not recognized under the full accrual method until certain criteria are met. Gains relating to transactions that do not meet the criteria for full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate under the circumstances. During the years ended December 31, 2012, 2011 and 2010, we recognized gains on sales of real estate of $0, $417,000 and $5.7 million, respectively, which are included in income from discontinued operations.

Real Estate Investments

Real Estate Investments

Development Properties – Expenditures related to the development of real estate are capitalized as part of construction in progress, which includes carrying charges, primarily interest, real estate taxes and loan acquisition costs, and direct and indirect development costs related to buildings under construction. The capitalization of such costs ceases at the earlier of one year from the date of completion of major construction or when the property, or any completed portion, becomes available for occupancy. We capitalize costs associated with pending acquisitions of raw land once the acquisition of the property is determined to be probable. We did not capitalize any interest or taxes during the years ended December 31, 2012, 2011 and 2010.  

Acquired Properties and Acquired Intangibles – We account for operating real estate acquisitions as an acquisition of a business as we believe most operating real estate meets the definition of a “business” under GAAP. Accordingly, we allocate the purchase price of acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values. Identifiable intangibles include amounts allocated to acquired above and below market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include (i) an estimate of carrying costs during the expected lease-up periods, considering market conditions, and (ii) costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to in-place lease value and above and below-market leases are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Below market leases include fixed-rate renewal periods where we believe the renewal is reasonably assured. Premiums or discounts on debt are amortized to interest expense over the remaining term of such debt. Costs related to acquiring operating properties are expensed as incurred. See Note 4 for additional information related to our acquisition of the Preston Royal Village Shopping Center during 2012.

Depreciation – Depreciation is computed using the straight-line method over an estimated useful life, generally, 39 to 50 years for buildings, up to 20 years for site improvements and over the term of the lease for tenant improvements. Leasehold estate properties, which are properties where we own the building and improvements and are subject to a ground lease because we do not own the related ground, are amortized over the life of the ground lease.

Impairment – We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment of value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the property, with the carrying value of the individual property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. We did not recognize any impairment charges during the years ended December 31, 2012 and 2011.  During the year ended December 31, 2010, we recognized an impairment charge of $2.3 million on four properties that represented non-core real estate assets and $1.2 million on two non-core real estate assets reported in discontinued operations. 

Investments In Advised Funds

Investments in Advised Funds

Our  investments in our Advised Funds are accounted for under the equity method because we exercise significant influence over such entities.  We record our percentage interest in the earnings and losses of these entities in our statement of operations on a net basis as prescribed under GAAP. See Note 5 for further disclosure related to our Advised Funds.

Tenant And Accounts Receivable

Tenant and Accounts Receivable

Included in tenant and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of tenant and accounts receivables is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels and current economic trends. Bad debt expenses and any recoveries related to tenant receivables are included in property expense, and bad debt expenses and any related recoveries on other accounts receivable are included in general and administrative expense.

The table below summarizes the activity within our allowance for uncollectible accounts for tenant receivables (in thousands):

	Year Ended December 31,
	2012		2011		2010
Beginning balance	$	1,780	$	2,068	$	1,025
Additional reserves		523		540		1,579
Collections/reversals		(479)		(788)		(360)
Write-offs		(690)		(40)		(176)
Ending balance	$	1,134	$	1,780	$	2,068

Notes Receivable

	Year Ended December 31,
	2012		2011		2010
Beginning balance	$	1,780	$	2,068	$	1,025
Additional reserves		523		540		1,579
Collections/reversals		(479)		(788)		(360)
Write-offs		(690)		(40)		(176)
Ending balance	$	1,134	$	1,780	$	2,068

Notes Receivable

Included in notes receivable is a $2.5 million note due from the sale of a tract of land adjacent to our Uptown Plaza – Dallas property located outside of downtown Dallas, Texas. The note matured unpaid on December 31, 2010, and we recorded a $1.3 million impairment to reduce the value of the note to the fair value of the underlying collateral. During 2011, we recorded an impairment recovery of $1.1 million to reflect payments received on this note. Also during 2011, we entered into a new agreement with the borrower and extended the note to June 30, 2014. In May 2012, the borrower made a $1.0 million payment, and we recorded an additional impairment recovery of $229,000. The fair value of the underlying collateral now exceeds the remaining note balance.

Also included in notes receivable is approximately $259,000 in notes receivable from various tenants. An allowance for the uncollectible portion of notes receivable from tenants is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2012 and December 31, 2011, we had an allowance for uncollectible notes receivable from tenants of $45,000 and $29,000, respectively. During the years ended December 31, 2012 and 2010, we recorded bad debt expense related to tenant notes receivable of $19,000 and $99,000.During the year ended December 31, 2011, we recordedbad debt recoveries of $71,000.

Notes Receivable - Related Party

Notes Receivable – Related Party

Included in notes receivable – related party are loans made to certain of our affiliated Advised Funds related to the acquisition or development of properties and the deferral of asset management fees. These loans bear interest at LIBOR plus a spread and are due upon demand. The notes are secured by the Advised Funds’ ownership interests in various unencumbered properties. The following is a summary of the notes receivable due from related parties (in thousands):

	December 31, 2012						December 31, 2011
	Face				Carrying		Face				Carrying
Related Party	Amount		Reserve (1)		Amount		Amount		Reserve (1)		Amount
AIGF	$	-	$	-	$	-	$	2,488	$	(619)	$	1,869
MIG III		3,729		(373)		3,356		3,218		(356)		2,862
MIG IV		3,658		(266)		3,392		2,026		(244)		1,782
Total	$	7,387	$	(639)	$	6,748	$	7,732	$	(1,219)	$	6,513

______________

(1) A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

We recorded a $500,000 impairment on the note from AIGF during 2010. As a result, we ceased recording interest income on the note due from AIGF, and interest accruals were recorded directly to the reserve balance. In August 2012, we received approximately $2.3 million as final payment of the AIGF note receivable and related accrued interest. During 2012, we recorded $100,000 in interest income and $214,000 in impairment recovery. The remaining balance, which had previously been reserved, was written off as uncollectible.

Offering Costs

Offering Costs

Issuance costs incurred for the purposes of raising capital through the sale of common stock are treated as a reduction of stockholders’ equity. During 2012, we incurred underwriting commissions, legal, accounting and other offering-related costs of approximately $5.4 million in connection with our 2012 Offering.

During 2011, we initiated plans for the public sale of our common stock, and we incurred $914,000 of costs; however, market volatility and uncertainty prevented us from proceeding with the offering at that time.  Accordingly, at December 31, 2011, the costs incurred no longer met the criteria for capitalization under GAAP and were expensed.

Deferred Compensation Incentive Plan

Deferred Compensation Incentive Plan

Our 1999 Flexible Incentive Plan is designed to attract and retain the services of our directors and employees that we consider essential to our long-term growth and success. As such, it is designed to provide them with the opportunity to own shares of our restricted common stock. All long-term compensation awards are designed to vest over a period of three to ten years and promote retention of our team. See also Note 10.

Income Taxes

Income Taxes

Federal–We have elected to be taxed as a REIT under the Internal Revenue Code and are, therefore, not subject to Federal income taxes to the extent of dividends paid, provided we meet all conditions specified by the Internal Revenue Code for retaining our REIT status. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our stockholders and meet certain income source and investment restriction requirements.  Our stockholders must report their share of income distributed in the form of dividends.  However, ARIC, our real estate development and operating business, is a fully integrated and wholly-owned business consisting of brokers and real estate professionals that provide development, acquisition, brokerage, leasing, construction, asset and property management services to our portfolio of assets and Advised Funds as well as to third parties. ARIC and our wholly-owned corporations that serve as the general partners of our Advised Funds are treated as taxable REIT subsidiaries for federal income tax purposes and are not subject to the REIT exemption above.

State–The Texas Margin Tax is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not designed as an income tax, we believe it meets the requirements of an income tax for financial reporting under GAAP.

To the extent we are subject to federal and state income taxes, we account for income taxes under the asset and liability method. See also Note 9.

Derivative Financial Instruments

Derivative Financial Instruments

We do not have any derivative financial instruments as of December 31, 2012 or December 31, 2011. Our use of derivative financial instruments to date has been limited to the use of interest rate swaps to mitigate our interest rate risk on variable-rate debt. The impact of derivative accounting is immaterial to our consolidated financial statements. We do not use derivative financial instruments for trading or speculative purposes. GAAP requires that all derivative instruments, whether designated in hedging relationships or not, be recorded on the balance sheet at their fair value. Gains or losses resulting from changes in the values of those derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. Changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income, or OCI, while the ineffective portion of the derivative’s change in fair value is recognized in the income statement. As the hedge transactions settle, gains and losses associated with the transaction are reclassified out of OCI and into earnings. We assess, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items.

During the years ended December 31, 2011 and 2010, we had an interest rate swap with a notional amount of $17 million and a fixed rate of 5.11% hedging our variable-rate loan on our MacArthur Park property. The swap matured on December 1, 2011. We designated this interest rate swap as a cash flow hedge for financial reporting purposes and therefore recorded any changes in its fair value to other comprehensive income. The swap settled monthly with an amount paid to or received from our counterparty, which was recorded as an adjustment to interest expense. During the years ended December 31, 2011 and 2010, we paid $356,000and $359,000, respectively, related to this swap.

Subsequent Events

Subsequent Events

Except as disclosed in Note 4 of this Annual Report related to the potential sale of our 70% ownership interest in our MacArthur Park property to a joint venture, we did not have any material subsequent events as of the date of this filing that impacted our consolidated financial statements.

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Related Party Transactions (Schedule Of Details Of Income And Administrative Cost Reimbursements) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Related Party Transactions [Abstract]
Real estate fee income	$ 3,005	[1]	$ 2,491	[1]	$ 2,375	[1]
Asset management fee income	622	[2]	1,064	[2]	1,480	[2]
Construction management fee income	243	[3]	234	[3]	349	[3]
Advisory service income - related party	3,870		3,789		4,204
Reimbursements of administrative costs	$ 855		$ 885		$ 1,009
Percentage of general partner interest	100.00%

[1] We earn real estate fee income by providing property acquisition, leasing and property management services to our Advised Funds. We own 100% of the entities that serve as the general partner for the funds.

[2] We earn asset management fees from our Advised Funds for providing accounting related and investor relation services, facilitating the deployment of capital and other services provided in conjunction with operating the funds.

[3] We earn construction management fees by managing construction and tenant build-out projects on behalf of our Advised Funds.

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Our Business And Our Recent History

12 Months Ended

Dec. 31, 2012

Our Business And Our Recent History [Abstract]

Our Business And Our Recent History

1. OUR BUSINESS AND OUR RECENT HISTORY

Our Business

We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. We seek to own properties in major cities in the United States that contain submarkets with characteristics comparable to our existing markets. Our shopping centers are often anchored by strong national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. Our remaining tenants consist primarily of specialty retailers and national and local restaurants. Over our 29-year history, we have acquired, owned and operated retail properties across 19 states. We have elected to be taxed as a REIT for federal income tax purposes.

Our investment focus is predominantly concentrated in the affluent, high-growth submarkets of Houston, Dallas, San Antonio, Austin and Atlanta (collectively,our Core Markets), which represent five of the top population and job growth markets in the United States. We believe these metropolitan areas are compelling real estate markets given their favorable demographics, robust job growth and large and diverse economies. The primary economic drivers in these markets are transport and utilities (including energy), government (including defense), education and healthcare, professional and business services, and leisure and hospitality. We intend to continue to acquire additional properties within our Core Markets. Our targeted properties will include premier retail frontage locations in high-traffic, highly populated, affluent areas with high barriers to entry.

As of December 31, 2012, our portfolio consisted of 32 wholly-owned properties with approximately 1.5 million square feet of GLA. In addition to our portfolio, we have an advisory services business that provides a full suite of real estate services to the properties within our wholly-owned portfolio as well as to seven real estate funds in which we have varying ownership interests and that we manage on behalf of institutional and individual high-net-worth investors, which we collectively refer to as our Advised Funds. The investment strategy of the Advised Funds is focused upon the development and re-development of retail and mixed-use properties situated on premium-quality locations. As of December 31, 2012, our Advised Funds held all or a portion of ownership in 17 properties.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Common stock, shares outstanding	16,123,288
Class A Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	11,657,563	11,598,959
Common stock, shares outstanding	11,657,563	11,598,959
Class B Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	4,465,725	0
Common stock, shares outstanding	4,465,725	0

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Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

11.EARNINGS PER SHARE

We report both basic and diluted EPS using the two-class method as required under GAAP. The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes either two or more classes of common stock or includes common stock and participating securities. The two-class method determines EPS based on distributed earnings (i.e. dividends declared on common stock and any participating securities) and undistributed earnings. Our unvested shares of restricted stock contain rights to receive non-forfeitable dividends and thus are participating securities. Undistributed losses are not allocated to participating securities under the two-class method unless the participating security has a contractual obligation to share in losses on a basis that is objectively determinable. Pursuant to the two-class method, our unvested shares of restricted stock have not been allocated any undistributed losses.

As further described in Note 3, we completed a one-for-two reverse stock split of our Class A common stock on July 23, 2012 in connection with our 2012 Offering. Accordingly, all Class A share amounts and related per share data, including our EPS data below have been presentedto reflect the reverse stock split. The following table provides a

reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic and diluted EPS under the two-class method (in thousands, except per share amounts):

	For the Year Ended December 31,
	2012		2011		2010
Continuing Operations
Income from continuing operations attributable
to common stockholders	$	4,460	$	3,675	$	(77)
Less: Dividends attributable to unvested
restricted stockholders		(287)		(166)		(194)
Less: Income attributable to
non-controlling interests		-		-		(173)
Basic and Diluted — Income from
continuing operations		4,173		3,509		(444)
Discontinued Operations
Basic and Diluted — Income from
discontinued operations		-		565		6,382
Net income attributable to common
stockholders after allocation to
participating securities	$	4,173	$	4,074	$	5,938
Number of Shares:
Basic and Diluted — Weighted average shares
outstanding(1)		13,120		11,384		11,336
Basic and Diluted Earnings Per Share
Income from continuing operations attributable
to common stockholders	$	0.32	$	0.31	$	(0.04)
Income from discontinued operations
attributable to common stockholders		-		0.05		0.56
Net income attributable to common
stockholders	$	0.32	$	0.36	$	0.52

______________

(1)Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359,  207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2012	Feb. 20, 2013 Class A Common Stock [Member]	Feb. 20, 2013 Class B Common Stock [Member]
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Entity Registrant Name	AmREIT, Inc.
Entity Central Index Key	0001397807
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding			11,657,563	4,465,725
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float		$ 0

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

12.RELATED PARTY TRANSACTIONS

See Note 5 regarding investments in our Advised Funds, Note 2 regarding notes receivable from affiliates and Note 4 for a discussion of our acquisition of The Market at Lake Houston.

The table below details our income and administrative cost reimbursements from the Advised Funds for the years endedDecember 31, 2012 and 2011 (in thousands):

	Year Ended December 31,
		2012		2011		2010
Real estate fee income(1)		$	3,005	$	2,491	$	2,375
Asset management fee income(2)			622		1,064		1,480
Construction management fee income(3)			243		234		349
Advisory services income - related party		$	3,870	$	3,789	$	4,204
Reimbursements of administrative costs		$	855	$	885	$	1,009

______________

(1) We earn real estate fee income by providing property acquisition, leasing and property management services to our Advised Funds. We own 100% of the entities that serve as the general partner for the funds.

(2) We earn asset management fees from our Advised Funds for providing accounting related and investor relation services, facilitating the deployment of capital and other services provided in conjunction with operating the funds.

(3)We earn construction management fees by managing construction and tenant build-out projects on behalf of our Advised Funds.

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Consolidated Statements Of Operations (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Revenues:
Rental income from operating leases	$ 37,438,000		$ 32,995,000		$ 29,155,000
Advisory services income - related party	3,870,000		3,789,000		4,204,000
Lease termination income	0		131,000		15,000
Total revenues	41,308,000		36,915,000		33,374,000
Expenses:
General and administrative	6,733,000		6,049,000		5,944,000
Property expense	9,891,000		7,770,000		8,314,000
Legal and professional	919,000		945,000		1,165,000
Real estate commissions	387,000		342,000		191,000
Acquisition costs	687,000		229,000		12,000
Depreciation and amortization	8,884,000		8,257,000		6,634,000
Impairment - properties					2,268,000
Impairment recovery - notes receivable	(443,000)		(1,071,000)		1,800,000
Total expenses	27,058,000		22,521,000		26,328,000
Operating income	14,250,000		14,394,000		7,046,000
Other income (expense):
Interest and other income	485,000		493,000		459,000
Interest and other income - related party	462,000		319,000		274,000
Gain on debt extinguishment					5,374,000
Loss from Advised Funds	(238,000)		(384,000)		(1,186,000)
State income taxes	(248,000)		(262,000)		(1,515,000)
Interest expense	(10,251,000)		(9,971,000)		(9,541,000)
Issuance costs			(914,000)
Debt prepayment penalties					988,000
Income (loss) from continuing operations	4,460,000		3,675,000		(77,000)
Income (loss) from discontinued operations, net of taxes			565,000		6,382,000
Net income	4,460,000		4,240,000		6,305,000
Net loss attributable to non-controlling interest					(173,000)
Net income available to AmREIT stockholders	$ 4,460,000		$ 4,240,000		$ 6,132,000
Net income per share of common stock - basic and diluted
Net income per share - basic and diluted	$ 0.32		$ 0.31		$ (0.04)
Income from discontinued operations			$ 0.05		$ 0.56
Net income	$ 0.32		$ 0.36		$ 0.52
Weighted average shares of common stock used to compute net income per share, basic and diluted	13,120	[1]	11,384	[1]	11,336	[1]
Distributions per share of common stock	$ 0.80		$ 0.80		$ 0.90

[1] Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359, 207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

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Acquired Lease Intangibles

12 Months Ended

Dec. 31, 2012

Acquired Lease Intangibles [Abstract]

Acquired Lease Intangibles

6. ACQUIRED LEASE INTANGIBLES

We identify and record the value of acquired lease intangibles at the property acquisition date. Such intangibles include the value of acquired in-place leases and above and below-market leases. Acquired lease intangibles are amortized over the leases’ remaining terms, which generally range from one month to 25 years. Below market lease amortization includes fixed-rate renewal periods where we believe the tenant is reasonably compelled to renew the lease.

Balance Sheet Presentation

Total in-place and above and below-market lease amounts and their respective accumulated amortization as of December 31, 2012 and December 31, 2011 are as follows (in thousands):

	December 31,
	2012		2011
Acquired lease intangible assets:
In-place leases	$	28,179	$	22,720
In-place leases – accumulated amortization		(14,096)		(12,978)
Above-market leases		3,774		2,247
Above-market leases – accumulated amortization		(1,881)		(1,850)
Acquired leases intangibles, net	$	15,976	$	10,139
Acquired lease intangible liabilities:
Below-market leases	$	6,286	$	4,623
Below-market leases – accumulated amortization		(2,779)		(2,602)
Acquired below-market lease intangibles, net	$	3,507	$	2,021

Income Statement Presentation

The following table details our amortization related to in-place leases and above and below-market leases as well as the presentation of such amounts in our consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 (in thousands):

	Presentation	2012		2011		2010
In-place leases	amortization expense	$	2,061	$	2,117	$	1,409
Above-market leases	reduction of rental income	$	95	$	108	$	104
Below-market leases	increase in rental income	$	292	$	274	$	300

The estimated aggregate amortization amounts from acquired lease intangibles for each of the next five years are as follows (in thousands):

	Amortization expense		Rental income (above
Year Ending December 31,	(in place lease value)		and below market rent)
2013	$	3,638	$	469
2014		2,831		405
2015		2,162		304
2016		1,528		75
2017		927		33
	$	11,086	$	1,286

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Investments In Advised Funds

12 Months Ended

Dec. 31, 2012

Investments In Advised Funds [Abstract]

Investments In Advised Funds

5. INVESTMENTS IN ADVISED FUNDS

As of December 31, 2012, our Advised Funds included four high net worth investment funds, one institutional joint venture with J.P. Morgan Investment Management, one institutional joint venture with AEW Capital and one joint venture with two of our high net worth investment funds, MIG III and MIG IV. Our Advised Funds are accounted for under the equity method as we exercise significant influence over, but do not control, the investee. We record our pro rata share of income or loss from the underlying entities based on our ownership interest.

High Net Worth Investment Funds

In August 2012, AIGF, one of our high net worth investment funds, sold its remaining real estate asset, and the fund has been liquidated. We received approximately $2.3 million as final payment of AIGF’s note receivable and related accrued interest. See also “Notes Receivable – Related Party” in Note 2 above.

Our remaining four high net worth investment funds are limited partnerships, wherein each of the unrelated limited partners have the right, with or without cause, to remove and replace the general partner by a vote of the unrelated limited partners owning a majority of the outstanding units. These high net worth investment funds were formed to develop, own, manage and add value to properties with an average holding period of two to four years. Our interests in these limited partnerships range from 2.1% to 3.0%. As a sponsor of our Advised Funds, we maintain a 1% general partner interest in each of the Advised Funds. The funds are typically structured such that the limited partners receive 99% of the available cash flow until 100% of their original invested capital has been returned and a preferred return has been met. Once the preferred return has been met, the general partner begins sharing in the available cash flow at various promoted levels. Our Advised Funds are designed to have a finite life with a specified liquidation commencement date, which may be extended dependent upon approval from the majority of the limited partners. Once the liquidation commencement begins, we, as general partner, will begin to actively market all operating properties, complete all development and redevelop projects and wind up operations in an orderly fashion, which may take months or years to complete. 

MIG – MIGC, our wholly-owned subsidiary, invested $200,000 as a limited partner and $1,000 as a general partner in MIG. We currently own a 1.4% limited partner interest in MIG. MIG was originally scheduled to begin liquidation in November 2009; however, the liquidation commencement date has been extended to March 2013, pursuant to the approval of a majority of the limited partners. We expect MIG to be liquidated over the next 12-24 months. Pursuant to the MIG limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC as, if and when the annual return thresholds have been achieved by the limited partners.

MIG II – MIGC II, our wholly-owned subsidiary, invested $400,000 as a limited partner and $1,000 as a general partner in MIG II. We currently own a 1.6% limited partner interest in MIG II. MIG II was originally scheduled to begin liquidation in March 2011; however, the liquidation commencement date has been extended to March 2013, pursuant to the approval of a majority of the limited partners. We expect MIG II to be liquidated over the next 12-24 months. Pursuant to the MIG II limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC II as, if and when the annual return thresholds have been achieved by the limited partners.

MIG III – MIGC III, our wholly-owned subsidiary, invested $800,000 as a limited partner and $1,000 as a general partner in MIG III. We currently own a 1.1% limited partner interest in MIG III. MIG III’s liquidation date commenced on October 31, 2012. During the liquidation stage, we cannot reinvest net proceeds from the sales of properties without limited partner approval. As we stabilize and sell the properties, we will either be presenting, to the extent available, additional investment opportunities to the limited partners or will be distributing to them the net proceeds received from the sales of the properties. Pursuant to the MIG III limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC III as, if and when the annual return thresholds have been achieved by the limited partners.

MIG IV – MIGC IV, our wholly-owned subsidiary, invested $800,000 as a limited partner and $1,000 as a general partner in MIG IV. We currently own a 1.6% limited partner interest in MIG IV. MIG IV is scheduled to commence liquidation in November 2013; however, we may extend the liquidation commencement date, subject to approval by a majority of the limited partners. During the liquidation stage, we cannot reinvest net proceeds from the sales of properties without limited partner approval. As we stabilize and sell the properties, we will either be presenting, to the extent available, additional investment opportunities to the limited partners or will be distributing to them the net proceeds received from the sales of the properties. Pursuant to the MIG IV limited partnership agreement, net sales proceeds from its liquidation will be allocated to the limited partners and to MIGC IV as, if and when the annual return thresholds have been achieved by the limited partners.

The following table sets forth certain interest and sharing information for the MIG, MIG II, MIG III and MIG IV Advised Funds:

			Sharing Ratios(1)
Advised Fund	LP interest	GP interest	LP	GP	LP Preference
MIG	1.40%	1.00%	99%	1%	8%
			90%	10%	10%
			80%	20%	12%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG II	1.60%	1.00%	99%	1%	8%
			85%	15%	12%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG III	1.10%	1.00%	99%	1%	10%
			0%	100%	40% Catch Up
			60%	40%	Thereafter
MIG IV	1.60%	1.00%	99%	1%	8.50%
			0%	100%	40% Catch Up
			60%	40%	Thereafter

______________

(1) Using MIG as an example of how the sharing ratios and LP preference provisions are applied, the LPs share in 99% of the cash distributions until they receive an 8% preferred return. The LPs share in 90% of the cash distributions until they receive a 10% preferred return and so on.

Joint Ventures

AmREIT Woodlake, L.P. – In 2007, we invested $3.4 million in AmREIT Woodlake L.P., for a 30% limited partnership interest. AmREIT Woodlake, L.P. was formed in 2007 to acquire, lease and manage Woodlake Square, a grocery-anchored shopping center located in Houston, Texas. In June 2008, we sold two-thirds (a 20% limited partnership interest) of our interest in Woodlake Square to MIG IV. Pursuant to the purchase agreement, the interest in the property was sold at its carrying value, resulting in no gain or loss to us. In July 2010, we and our affiliated partners entered into a joint venture with a third-party institutional partner wherein the partner acquired a 90% interest in the joint venture. As a result of this transaction, we, MIG III and MIG IV now hold a 1%, 3% and 6% interest in Woodlake Square, respectively. Our combined 10% ownership carries a promoted interest in profits and cash flows once an 11.65% return is met on the project.

AmREIT Westheimer Gessner, L.P. – In 2007, we invested $3.8 million in AmREIT Westheimer Gessner, LP, for a 30% limited partner interest in the partnership. AmREIT Westheimer Gessner, L.P. was formed in 2007 to acquire, lease and manage the Woodlake Pointe Shopping Center, a shopping center located on the west side of Houston, Texas. In June 2008, we sold two-thirds of our interest (a 20% limited partner interest) in the Woodlake Pointe Shopping Center to MIG IV. Pursuant to the purchase agreement, our interest in the property was sold at its carrying value, resulting in no gain or loss to us. We, MIG III and MIG IV now hold a 10%, 30% and 40% interest, respectively, in the Woodlake Pointe Shopping Center.  

AmREIT SPF Shadow Creek, L.P. – In 2009, we acquired a 10% investment in AmREIT SPF Shadow Creek, L.P., which was formed to acquire, lease and manage Shadow Creek Ranch, a shopping center located in Pearland, Texas. The investment was recorded at $5.8 million on the date of the acquisition, net of acquisition costs of $441,000, which were recorded as an other-than-temporary impairment. MIG IV and a third party institutional joint venture partner own the remaining 10% and 80% ownership interests, respectively.

Combined condensed financial information for the Advised Funds (at 100%) is summarized as follows (in thousands):

Combined Balance Sheets		As of December 31,
		2012	2011
Assets
	Property, net	$          185,821	$          200,806
	Cash	10,182	8,604
	Notes receivable	312	77
	Other assets	41,938	43,752
	Total Assets	238,253	253,239
Liabilities and partners' capital
	Notes payable(1)	122,882	130,739
	Other liabilities	18,654	19,435
	Partners capital	96,717	103,065
	Total Liabilities and Partners' Capital	$          238,253	$          253,239
AmREIT share of Partners' Capital		$              7,953	$              8,322

_______________

(1) Includes $7,387and $7,732 payable to us as of December 31, 2012 and 2011, respectively.

Combined Statements of Operations		Year Ended December 31,
		2012	2011	2010
Revenue
	Total Revenue	$            16,885	$            18,259	$           18,778
Expense
	Interest	7,362	8,189	9,342
	Depreciation and amortization	7,574	7,904	15,797
	Other	7,419	11,851	10,864
	Total Expense	22,355	27,944	36,003
Net loss		$            (5,470)	$            (9,685)	$          (17,225)
AmREIT share of Net loss		$               (238)	$               (384)	$            (1,186)

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Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation

12 Months Ended

Dec. 31, 2012

Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation [Abstract]

Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation

AmREIT, Inc and Subsidiaries

SCHEDULE III – Consolidated Real Estate Owned and Accumulated Depreciation

For the Year Ended December 31, 2012

	Initial Cost			Total Cost
			Cost
			Capitalized
			Subsequent to
	Building and		Acquisition	Building and			Accumulated	Date	Encumbrances
Property Description	Improvements	Land	(Note A)	Improvements	Land	Total	Depreciation	Acquired	(Note B)
SHOPPING CENTERS
500 Lamar, Texas	1,640,623	2,530,178	18,614	1,659,237	2,530,178	4,189,415	139,188	12/09/10	1,630,349
Alpharetta Commons, Georgia	12,901,200	4,663,425	12,459	12,913,659	4,663,425	17,577,084	555,832	07/29/11	12,230,985
Bakery Square, Texas	4,806,518	4,325,612	13,313	4,809,957	4,335,486	9,145,443	1,156,902	07/21/04	2,018,947
Brookwood Village, Georgia	6,195,376	3,355,689	56,342	6,251,718	3,355,689	9,607,408	325,981	05/10/11	7,270,792
Cinco Ranch, Texas	11,558,491	2,666,534	100,996	11,657,795	2,668,226	14,326,021	2,905,340	07/01/04	9,750,000
Courtyard Square, Texas	1,777,161	4,133,641	30,293	1,790,342	4,150,752	5,941,095	467,197	06/15/04	-
Lake Woodlands Plaza, Texas	2,385,103	1,366,452	1,301,317	3,683,807	1,369,065	5,052,872	1,521,311	06/03/98	-
Market at Lake Houston, Texas	13,351,264	3,740,540	29,874	13,381,137	3,740,540	17,121,677	753,397	02/25/11	15,675,000
MacArthur Park, Texas	32,299,035	15,583,628	2,674,320	34,973,353	15,583,629	50,556,983	8,655,873	12/27/04	6,613,001
Plaza in the Park, Texas	17,375,782	13,257,976	657,737	18,029,703	13,261,792	31,291,495	4,464,233	07/01/04	23,250,000
Preston Royal East, Texas	25,785,057	-	-	25,785,057	-	25,785,057	115,239	12/12/12	-
Preston Royal West, Texas	25,054,873	9,055,941	-	25,054,873	9,055,941	34,110,814	81,995	12/12/12	23,400,000
Riverwalk, Texas	17,148,688	7,979,779	377,763	17,517,262	7,988,968	25,506,230	3,519,342	09/30/05	20,000,000
Sugar Land Plaza, Texas	3,016,816	1,280,043	286,176	3,302,993	1,280,043	4,583,035	1,251,905	07/01/98	-
Terrace Shops, Texas	2,544,592	2,212,278	192,866	2,737,458	2,212,278	4,949,736	641,903	12/15/03	-
Uptown Park, Texas	27,060,070	36,976,809	2,395,078	29,566,856	36,865,101	66,431,957	8,180,551	06/01/05	49,000,000
Uptown Plaza Dallas, Texas	14,129,798	9,295,665	130,603	14,259,839	9,296,227	23,556,066	2,903,216	03/30/06	13,922,436
Uptown Plaza, Texas	4,887,774	7,796,383	275,296	5,163,070	7,796,383	12,959,453	1,293,202	12/10/03	-
Total Shopping Centers	223,918,221	130,220,573	8,553,046	232,538,116	130,153,724	362,691,839	38,932,605		184,761,510
SINGLE TENANT
Citibank, Texas	-	1,318,418	165,743	50,943	1,433,217	1,484,161	23,379	12/17/04	-
CVS Pharmacy, Texas	-	2,665,332	23,663	-	2,688,995	2,688,995	n/a	01/10/03	-
Golden Corral, Texas	1,093,139	718,702	(687,192)	584,497	540,152	1,124,649	42,654	07/23/02	-
Golden Corral, Texas	1,290,347	553,006	(660,126)	744,607	438,620	1,183,227	63,458	07/23/02	-
Smokey Bones, Georgia	-	773,800	(60,414)	-	713,386	713,386	n/a	12/18/98	-
Sunbelt Rental, Illinois	-	402,080	651,283	832,395	220,968	1,053,363	52,536	05/23/07	-
TGI Friday's, Maryland	-	1,473,613	860	-	1,474,473	1,474,473	n/a	09/16/03	-
TGI Friday's, Texas	1,425,843	611,075	39,894	1,453,769	623,043	2,076,812	389,846	07/23/02	-
Woodlands Ring Road, Texas	-	8,957,570	4,077,161	3,861,079	9,173,652	13,034,731	316,044	12/01/07	-
Total Single Tenant	3,809,329	17,473,596	3,550,872	7,527,290	17,306,507	24,833,797	887,918		-
Total	$               227,727,550	$              147,694,169	$               12,103,918	$            240,065,406	$            147,460,231	$              387,525,636	$             39,820,523		$          184,761,510
Note A - The negative balance for costs capitalized subsequent to acquisition could be the result of out-parcels sold, tenant activity or reductions in our investments in properties accounted for as direct financing leases.
Note B -  The notes secured by the Cinco Ranch and Plaza in the Park properties contain a cross-collateralization clause whereas an event of default on one note constitutes an event of default on both notes.

Activity within real estate and accumulated depreciation during the three years ended December 31, 2011 is as follows:
		Accumulated
	Cost	Depreciation
Balance at December 31, 2009	$               283,809,070	$                24,934,167
Acquisitions / additions	10,794,709	-
Disposals	(11,048,686)	(451,194)
Impairment	(4,241,649)	(754,486)
Depreciation expense	-	4,891,223
Balance at December 31, 2010	$               279,313,444	$                28,619,710
Acquisitions / additions	47,982,336	-
Disposals	(2,262,954)	(196,747)
Impairment	-
Depreciation expense	-	5,441,981
Balance at December 31, 2011	$               325,032,826	$                33,864,944
Acquisitions / additions	62,890,931	-
Disposals	(398,121)	(335,424)
Impairment	-	-
Depreciation expense	-	6,291,003
Balance at December 31, 2012	$               387,525,636	$                39,820,523

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Concentrations

12 Months Ended

Dec. 31, 2012

Concentrations [Abstract]

Concentrations

13.CONCENTRATIONS

As of December 31, 2012,  two properties individually accounted for more than 10% of our consolidated total assets – Uptown Park in Houston, Texas and MacArthur Park in Dallas, Texas, which accounted for 15.7% and 12.7% of total assets, respectively. Consistent with our strategy of investing in geographic areas that we know well, 19 of our properties are located in the Houston metropolitan area. These Houston properties represent 63.0%, 64.2% and 62.9% of our rental income for the years ended December 31, 2012, 2011 and 2010, respectively. Houston is Texas’ largest city and the fourth largest city in the United States.

Following are the base revenues generated by our top ten tenants for the years ended December 31, 2012, 2011 and 2010 (in thousands):

	Year Ended December 31,
	2012		2011		2010
Kroger	$	2,116	$	2,116	$	2,192
Landry’s (1)		1,257		1,143		843
CVS/pharmacy		1,222		1,115		922
H-E-B		1,110		938		-
Publix(2)		781		332		-
Hard Rock Café		497		497		497
TGI Friday’s		459		451		451
The Container Store(3)		448		89		-
Golden Corral		427		419		419
Champps Americana		422		422		422
	$	8,739	$	7,522	$	5,746

______________

(1)Includes tenants owned by Landry's, including Landry's Seafood House, McCormick & Schmicks, Mortons and The Grotto.

(2)Publix, a regional grocer, is the anchor tenant at Alpharetta Commons, which was acquired in July 2011.

(3)Rent commenced on a new lease with The Container Store in Houston, Texas in November 2011.

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

9. INCOME TAXES

Non-taxable Operations

We have elected to be treated as a REIT for federal income tax purposes. To maintain our REIT status, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. As a REIT, we generally are not subject to federal income tax on our REIT taxable income that we currently distribute to our stockholders. If we fail to maintain our status as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. Even if we qualify for taxation as a REIT, we may be subject to some federal, state and local taxes on our income or property. In addition, the income of any taxable REIT subsidiary that we own will be subject to taxation at regular corporate rates.

As of December 31, 2012, the gross tax and book bases of real estate assets were $407.0 million and $387.5 million, respectively. As of December 31, 2011, the gross tax and book bases of real estate assets were $336.9 million and $325.0 million, respectively. 

Taxable Operations

Income tax expense (benefit) attributable to the continuing and discontinued operations of our taxable REIT subsidiaries for the years ended December 31, 2012, 2011 and 2010 consists of the following and is included in income tax expense (benefit) or in discontinued operations as appropriate (in thousands):

	Year ended December 31,
	2012		2011		2010
Federal - current	$	(443)	$	(219)	$	(31)
Federal - deferred		38		30		(819)
State - current		281		267		346
Valuation allowance		372		189		2,482
Total income tax expense (benefit)	$	248	$	267	$	1,978

Our effective federal tax rate differs from the statutory tax rate of 34% for the years ended December 31, 2012 and 2011 as a result of the offsetting change in our valuation allowance. Our income taxes for the years ended December 31, 2012 and 2011, primarily relate to the Texas Margin Tax discussed below. Our effective federal tax rate of (70)% differs from the statutory tax rate of 34% for the year ended December 31, 2010 as a result of the valuation allowance that we recorded on our deferred tax assets as of December 31, 2010.  No other significant permanent differences exist between book and taxable income of the taxable REIT subsidiaries. 

Texas Margin Tax

We have recorded an income tax provision of $248,000, $267,000 and $320,000, respectively, for the Texas Margin Tax for the years ended December 31, 2012, 2011 and 2010. The Texas Margin Tax is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not designed as an income tax, we believe that the Texas Margin Tax meets the requirements of an income tax for financial reporting purposes under GAAP. 

Deferred Tax Assets and Valuation Allowance

Our taxable REIT subsidiaries had a gross deferred tax asset of $3.0 million and $2.9 million as of December 31, 2012 and 2011, respectively. Our deferred tax assets primarily relate to net operating loss carryforwards, impairments taken on certain of our non-core, single-tenant properties located in tertiary markets as well as to fees received from transactions with our Advised Funds. The impairments are not deductible for tax purposes until realized upon disposition of the properties, and the fees from our Advised Funds have been subject to tax, but have been deferred for financial reporting purposes.  

To the extent that we have deferred tax assets at period end, we will determine whether it is more likely than not that we will generate sufficient future taxable income in order to realize those assets. In making that determination, we will consider our current financial position, our results of operations for the current and preceding years, and our expectation of future operations. As of December 31, 2012 and 2011, our deferred tax assets were fully offset by a valuation allowance as we believe they are not more likely than not to be realized.

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Notes Payable (Components Of Outstanding Debt) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Total	$ 218,579	$ 201,658
Fixed-Rate Mortgage Loans [Member]
Debt Instrument [Line Items]
Total	185,079	141,373
$75.0 Million Facility [Member]
Debt Instrument [Line Items]
Total	33,500
$25.0 Million Facility [Member]
Debt Instrument [Line Items]
Total		19,345
Variable-Rate Secured Loans [Member]
Debt Instrument [Line Items]
Total		$ 40,940

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Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. FAIR VALUE MEASUREMENTS

GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. GAAP requires the use of observable market data, when available, in making fair value measurements. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of ours. When market data inputs are unobservable, we utilize inputs that we believe reflect our best estimate of the assumptions market participants would use in pricing the asset or liability. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access.

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 – Unobservable inputs for the asset or liability, which are typically based on the company’s own assumptions, as there is little, if any, related market activity.

The following table presents our assets and liabilities and related valuation inputs within the fair value hierarchy utilized to measure fair value as of December 31, 2012, and December 31, 2012 (in thousands):

December 31, 2012	Level 1		Level 2		Level 3
Fixed-rate notes payable	$	-	$	196,112	$	-
December 31, 2011	Level 1		Level 2		Level 3
Notes receivable	$	-	$	3,288	$	-
Fixed-rate notes payable	$	-	$	150,839	$	-

Notes Receivable

During 2010, we recorded an impairment of $1.3 million on a $4.6 million note receivable related to the sale of a tract of land adjacent to our Uptown Plaza – Dallas property. During 2011, we recorded an impairment recovery of $1.1 million to reflect payments received on this note. As of December 31, 2011, the fair value of the note was $3.3 million based on an average, per-acre price of vacant tracts of land recently sold near downtown Dallas, Texas. In May 2011, the borrower made a $1.0 million payment, and we recorded an additional impairment recovery of $229,000. As of December 31, 2012, the fair value of the underlying collateral exceeded the carrying value of the note. We have concluded that our valuation of the seller-financing note as ofDecember 31, 2011 is classified in Level 2 of the fair value hierarchy.

Notes Payable

Our notes payable consist of both variable-rate and fixed-rate notes; however, our only variable rate debt as of December 31, 2012 was the $75 Million Facility, which is a variable rate plus an applicable margin (see Note 8). We recently entered into the $75 Million Facility and therefore believe that the applicable margin represents the best estimate of fair value and, accordingly, its fair value is equal to its carrying value of $33.5 million as of December 31, 2012. In determining the fair value of our fixed-rate notes, we determine the appropriate Treasury Bill Rate based on the remaining time to maturity for each of the debt instruments. We then add the appropriate yield spread to the Treasury Bill Rate. The yield spread is a risk premium estimated by investors to account for credit risk involved in debt financing. The spread is typically estimated based on the property type and loan-to-value ratio of the debt instrument. The result is an estimate of the market interest rate a typical investor would expect to receive given the underlying subject asset (property type) and remaining time to maturity. We believe the fair value of our notes payable is classified in Level 2 of the fair value hierarchy. Fixed-rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time of acquisition.

Real Estate Investments and Impairment

We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. We did not recognize any impairment charges related to any of our properties during the years ended December 31, 2012 and 2011. During the year ended December 31, 2010, we discovered a negative trend in the market for non-credit, single tenant assets, which triggered an impairment analysis. As a result, we recognized an impairment charge of $2.3 million on four properties that represent non-core real estate assets and $1.2 million on two non-core real estate assets reported in discontinued operations. Both the estimated undiscounted cash flow analysis and fair value determination were based upon various factors that required complex and subjective judgments to be made by management. We determined the fair value of the properties by applying an income method using assumptions that include projecting lease-up periods, holding periods, cap rates, rental rates, operating expenses, lease terms, tenant credit-worthiness, tenant improvement allowances, terminal sales value and certain macroeconomic factors among other assumptions to be made for each property as well as certain macroeconomic factors.

Notes Receivable – Related Party

During the year ended December 31, 2010, we approved a plan to begin liquidating the assets owned by AIGF.  Using valuation techniques similar to those used for our own properties (described in the “Real Estate Investments and Impairment” paragraph above), we determined likely terminal values for these properties and assessed the likelihood that we would be able to recover the carrying value of our note receivable from AIGF after it settles its obligations with its other creditors. Accordingly, we recorded an impairment of $500,000 to reduce the carrying value of our notes receivable – related party. During the year ended December 31, 2012, we recorded an impairment recovery of $214,000 to reflect payments received on this note. AIGF has been liquidated, and we will receive no further payments on this note receivable.

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Notes Payable

12 Months Ended

Dec. 31, 2012

Notes Payable [Abstract]

Notes Payable

8. NOTES PAYABLE

Our outstanding debt as of December 31, 2012, and December 31, 2012, consisted of the following (in thousands):

	December 31, 2012		December 31, 2011
Fixed-rate mortgage loans	$	185,079	$	141,373
Variable-rate unsecured loans -
$75.0 Million Facility		33,500		-
Variable-rate secured loans -
$25.0 Million Facility		-		19,345
Other		-		40,940
Total	$	218,579	$	201,658

As of December 31, 2012, the$75 Million Facility was our primary source of additional credit. Our $25 Million Facility was terminated concurrent with our 2012 Offering as further discussed in Note 2. The $75 Million Facility has a term of three years and has an accordion feature that may allow us to increase the availability by $75 Million to $150.0 million provided we are not in default and certain conditions are met. During 2012, we utilized the $75 Million Facility to fund a portion of the Preston Royal Village Shopping Center acquisition. We expect to use the $75 Million Facility for general corporate purposes including debt financing, property acquisitions, new construction, renovations, expansions, tenant improvement costs and equity investments.

The $75 Million Facility bears interest at LIBOR plus a margin of 205 basis points to 275 basis points, depending on our leverage ratio, and matures in August 2015. The amount available for us to borrow under the $75 Million Facility at any given time will be subject to the lesser of the unencumbered asset property value at such time, the maximum commitment amount at such time or an amount that results in a debt service coverage ratio for the four preceding calendar quarters of 1.50 to 1.0.

Our ability to borrow under the $75 Million Facility is subject to our ongoing compliance with a number of customary restrictive covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, a maximum recourse debt ratio, a minimum net worth and maximum dividend payout ratio. We also covenant that certain changes in our executive management team will not occur unless the departing executive management team member is replaced by a party reasonably acceptable to the administrative agent within 90 days of such departure. Additionally, it will constitute an event of default under the $75 Million Facility if we default on any of our other indebtedness that equals or exceeds $1.0 million, including any indebtedness we have guaranteed. As of December 31, 2012, our availability under our $75 Million Facility was approximately $26.9 million based upon the value of our unencumbered asset pool.

Our acquisition of the Preston Royal Shopping Center and our anticipated joint venture with an institutional joint venture partner (see Note 4) are expected to positively impact our future liquidity and availability under our $75 Million Facility on a net basis. Our borrowing base available will be increased as we add the Preston Royal East property to our unencumbered asset pool and as we pay down our outstanding debt under our $75 million Facility with proceeds received from our potential MacArthur Park joint venture.  This increase will be partially offset by a reduction of our available borrowing base as we remove the MacArthur Park asset from our unencumbered asset pool. 

As of December 31, 2012, the weighted average interest rate on our fixed-rate debt was 4.8%, and the weighted average remaining life of such debt was 4.5 years.

Additional debt transactions in 2012 and 2011 were as follows:

2012

· On December 12, 2012 we purchased the Preston Royal West property with a fixed rate mortgage of $23.4 million. The note bears interest at 3.21% with monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due January 1, 2020.

· In August 2012, we refinanced the debt securing our Uptown Plaza–Dallas property in the amount of $14.0 million. The new loan bears a fixed interest rate of 4.25% and includes monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due August 10, 2022.

· In February 2012, we refinanced the mortgage on our Brookwood Village property with a 10-year note that bears interest at 5.4% with monthly payments of principal and interest assuming 30-year amortization period with a final lump sum payment due February10, 2022.  

2011

· In February 2011, we assumed a $15.7 million mortgage in connection with our acquisition of The Market at Lake Houston property in Houston, Texas.

· In June 2011, we entered into a loan for $7.4 million that is secured by our Brookwood Village property. We refinanced this loan in February 2012 as discussed above.

· In July 2011, we entered into a mortgage loan for $12.5 million to finance the acquisition of our Alpharetta Commons property.

· In December 2011, we exercised a 12-month extension option on a $16.6 million loan secured by our MacArthur Park property. We have one 12-month extension option remaining on this loan subject to certain covenants.

As of December 31, 2012, scheduled principal payments on notes payable and the $75 Million Facility were as follows (in thousands):

Year Ending December 31,	Scheduled Principal Payments		Term-Loan Maturities		Total Payments
2013	$	1,590	$	-	$	1,590
2014		2,301		-		2,301
2015		2,371		83,928		86,299
2016		1,794		67,431		69,225
2017		1,403		-		1,403
Beyond five years		3,605		53,838		57,443
Unamortized debt premiums	$	-	$	318	$	318
Total		13,064		205,515		218,579

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Stockholders' Equity And Noncontrolling Interest

12 Months Ended

Dec. 31, 2012

Stockholders' Equity And Noncontrolling Interest [Abstract]

Stockholders' Equity And Noncontrolling Interest

10.STOCKHOLDERS’ EQUITY

Common Stock

On July 23, 2012, we amended our charter to (i) rename all of the issued and unissued shares of our common stock, par value $0.01 per share to “Class A common stock,” (ii) effect a 1-for-2 reverse stock split of our Class A common stock, and (iii) change the par value of our Class A common stock to $0.01 per share after the reverse stock split. In addition, we filed articlessupplementary to our charter that created a new class of common stock, par value $0.01 per share, titled “Class B common stock.” The rights of the Class A common stockholders did not change with the change in the title of the class. Each share of Class B common stock has the following rights: 

• the right to vote together with Class A common stockholders on all matters on which holders of our Class A and Class B common stock are entitled to vote;

• one vote with respect to all matters voted upon by our Class A and Class B common stockholders;

• the right to receive distributions equal to any distributions declared on shares of our Class A common stock; and

• liquidation rights equal to the liquidation rights of each share of Class A common stock.

All Class A share amounts and related per share data included in this Annual Report have been presented to reflect the reverse stock split.

In accordance with the amendments to our charter on July 23, 2012, we are authorized to issue 1,050,000,000 shares of capital stock consisting of 100,000,000 shares of Class A common stock, par value $0.01 per share, 900,000,000 shares of Class B common stock, par value $0.01 per share and 50,000,000 shares of preferred stock, par value $0.01 per share. As further described in Note 3, we completed the sale of 3,650,000 shares of our Class B common stock on August 1, 2012 in connection with our offering and sold an additional 503,226 shares of Class B common stock on August 24, 2012 pursuant to the exercise of the underwriters’ over-allotment option. In connection with our 2012 Offering, we also issued 312,499 shares of restricted Class B common stock to our officers and directors that will vest over a ten-year period.

As of December 31, 2012 and December 31, 2011, there were 11,657,563 and 11,598,959 shares of our Class A common stock and 4,465,725 and 0 shares of our Class B common stock issued and outstanding, respectively. Our payment of any future dividends to our common stockholders is dependent upon applicable legal and contractual restrictions, as well as our earnings and financial needs.

Equity Incentive Plan

Our 1999 Flexible Incentive Plan is designed to attract and retain the services of our directors and employees that we consider essential to our long-term growth and success. As such, it is designed to provide them with the opportunity to own shares of our restricted common stock. All long-term compensation awards are designed to vest over a period of three to ten years and promote retention of our team. Effective July 23, 2012, we amended the 1999 Flexible Incentive Plan to provide that all future awards are in, or related to, shares of our Class B common stock.

Restricted Stock Issuances

Deferred compensation includes grants of restricted stock to our directors and officers as a form of long-term compensation. The share grants vest over a period of three to ten years. We determine the fair value of the restricted stock as the number of shares awarded multiplied by the fair value per share of our common stock on the grant date. We amortize such fair value ratably over the vesting periods of the respective awards.

The following table presents restricted share activity during the years ended December 31, 2012 and 2011:

	2012				2011
			Weighted				Weighted
	Non-vested		average grant		Non-vested		average grant
	Shares		date fair value		Shares		date fair value
Beginning of period		207,199	$	17.88		215,588	$	17.56
Granted		376,970		13.91		42,500		17.94
Vested		(41,653)		16.28		(48,280)		16.66
Forfeited		-		-		(2,609)		16.74
End of period		542,516	$	15.24		207,199	$	17.88

The weighted average, per share grant date value of shares of restricted stock issued during the years ended December 31, 2012 and 2011 was $13.91 and $17.94, respectively. The total grant date fair value of shares vested during the years ended December 31, 2012 and 2011 was $678,000 and $804,000 respectively. Total compensation cost recognized related to restricted stock during years ended December 31, 2012 and 2011, was $815,000 and $548,000, respectively. As of December 31, 2012, total unrecognized compensation cost related to restricted stock was $7.1 million, and the weighted average period over which we expect this cost to be recognized is 6.8 years.

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Stockholders' Equity And Noncontrolling Interest (Narrative) (Details) (Imported) (USD $)	12 Months Ended			0 Months Ended								0 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Jul. 23, 2012	Jul. 23, 2012 Class A Common Stock [Member]	Dec. 31, 2012 Class A Common Stock [Member]	Dec. 31, 2011 Class A Common Stock [Member]	Dec. 31, 2012 Class B Common Stock [Member]	Aug. 24, 2012 Class B Common Stock [Member]	Aug. 01, 2012 Class B Common Stock [Member]	Jul. 23, 2012 Class B Common Stock [Member]	Dec. 31, 2011 Class B Common Stock [Member]	Aug. 24, 2012 Restricted Common Class B [Member]	Dec. 31, 2012 Restricted Common Class B [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 IPO [Member]	Aug. 01, 2012 IPO [Member] Class B Common Stock [Member]
Stockholders Equity [Line Items]
Common stock, par value			$ 0.01	$ 0.01	$ 0.01	$ 0.01	$ 0.01			$ 0.01	$ 0.01
Reverse stock split				1-for-2 reverse stock split
Common stock, voting rights per share	one vote with respect to all matters voted upon by our Class A and Class B common stockholders
Capital stock, shares authorized	1,050,000,000
Common stock, shares authorized					100,000,000	100,000,000	900,000,000				900,000,000
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value	$ 0.01	$ 0.01
Common stock, shares issued					11,657,563	11,598,959	4,465,725	503,226	3,650,000		0	312,499	312,499				3,650,000
Restricted common stock vesting period												10 years				10 years
Common stock, shares outstanding	16,123,288				11,657,563	11,598,959	4,465,725				0
Vesting period related to restricted stock awards														3 years	10 years
Grant date fair value of shares of restricted stock, vested	$ 678,000	$ 804,000
Recognized compensation cost related to restricted stock	815,000	548,000
Unrecognized compensation cost related to restricted stock	$ 7,100,000
Weighted average period for unrecognized compensation cost in years	6 years 9 months 18 days
Weighted average per share grant date value	$ 13.91	$ 17.94

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Earnings Per Share (Narrative) (Details)	0 Months Ended
	Jul. 23, 2012 item
Reverse stock split conversion ratio	0.5
Class A Common Stock [Member]
Reverse stock split	1-for-2 reverse stock split

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Income Taxes (Income Tax Expense (Benefit) Attributable To Continuing Operations And Discontinued Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Abstract]
Federal - current	$ (443)	$ (219)	$ (31)
State - current	281	267	346
Federal - deferred	38	30	(819)
Valuation allowance	372	189	2,482
Total income tax expense (benefit)	$ 248	$ 267	$ 1,978

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Schedule Of Computation Of Basic And Diluted Earnings Per Share

	For the Year Ended December 31,
	2012		2011		2010
Continuing Operations
Income from continuing operations attributable
to common stockholders	$	4,460	$	3,675	$	(77)
Less: Dividends attributable to unvested
restricted stockholders		(287)		(166)		(194)
Less: Income attributable to
non-controlling interests		-		-		(173)
Basic and Diluted — Income from
continuing operations		4,173		3,509		(444)
Discontinued Operations
Basic and Diluted — Income from
discontinued operations		-		565		6,382
Net income attributable to common
stockholders after allocation to
participating securities	$	4,173	$	4,074	$	5,938
Number of Shares:
Basic and Diluted — Weighted average shares
outstanding(1)		13,120		11,384		11,336
Basic and Diluted Earnings Per Share
Income from continuing operations attributable
to common stockholders	$	0.32	$	0.31	$	(0.04)
Income from discontinued operations
attributable to common stockholders		-		0.05		0.56
Net income attributable to common
stockholders	$	0.32	$	0.36	$	0.52

______________

(1)Weighted average shares outstanding do not include unvested shares of restricted stock totaling 359,  207 and 216 for the years ended December 31, 2012, 2011 and 2010, respectively.

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Investments In Advised Funds (Combined Condensed Balance Sheets Of Advised Funds) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012		Dec. 31, 2011
Investments In Advised Funds [Abstract]
Property, net	$ 185,821		$ 200,806
Cash	10,182		8,604
Notes receivable	312		77
Other assets	41,938		43,752
Total Assets	238,253		253,239
Notes payable	122,882	[1]	130,739	[1]
Other liabilities	18,654		19,435
Partners capital	96,717		103,065
Total Liabilities and Partners' Capital	238,253		253,239
AmREIT share of Partners' Capital	7,953		8,322
Payable amount to AmREIT	$ 7,387	[2]	$ 7,732

[1] Includes $7,387and $7,732 payable to us as of December 31, 2012 and 2011, respectively.

[2] A portion of these reserve balances represents the amount by which losses recognized on our equity investment in the entity exceeds our basis in the equity investment. GAAP provides that, to the extent that such an ‘excess loss’ exists and we have made an additional investment in the entity via a loan, that excess loss should be recorded as a reduction in the basis of the loan. Included in the reserve balances for the AIGF, MIG III and MIG IV loans are $0, $373 and $266 for such losses as of December 31, 2012, and $55, $356 and $244 for such losses as of December 31, 2011, respectively. We do not believe that these reserves are indicative of the ultimate collectability of these receivables.

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Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

15.SEGMENT REPORTING

We assess our business based upon the nature of operations. Our reportable segments presented are our portfolio segment and our advisory services segment, which includes our real estate operating and development business and our Advised Funds, which are segments where separate financial information is both available, and revenue and operating performance is evaluated regularly by senior management in deciding how to allocate resources and in assessing performance. However, this operating performance data might not be indicative of what a third party would assess or evaluate for purposes of determining fair value of our segments.

Portfolio Segment

Our portfolio segment consists of our portfolio of single and multi-tenant shopping center projects. Expenses for this segment include depreciation, interest, legal cost directly related to the portfolio of properties and property level expenses. Substantially all of our consolidated assets are in this segment.

Advisory Services Segments

Our advisory services segments consist of our real estate operating and development business as well as our Advised Funds. The real estate operating and development business is a fully integrated and wholly-owned business consisting of brokers and real estate professionals that provide development, acquisition, brokerage, leasing, and asset and property management services to our portfolio and Advised Funds. Our Advised Funds include four high net worth investment funds that have sold limited partnership interests to retail investors to develop, own, manage and add value to properties with an average holding period of two to four years and three joint ventures with institutional investors.

Segment results for the years ended December 31, 2012, 2011 and 2010,  were as follows (in thousands):

			Advisory Services
For the Year Ended December 31, 2012			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	37,251	$	187	$	-	$	37,438
Advisory services income - related
party		-		3,248		622		3,870
Total revenue		37,251		3,435		622		41,308
General and administrative		2,321		4,303		109		6,733
Property expense		9,870		21		-		9,891
Legal and professional		833		83		3		919
Real estate commissions		-		387		-		387
Acquisition fees		687		-		-		687
Depreciation and amortization		8,861		23		-		8,884
Impairment recovery -
notes receivable		(443)		-		-		(443)
Total expenses		22,129		4,817		112		27,058
Interest expense		(10,251)		-		-		(10,251)
Other income/(expense)		690		9		(238)		461
Income (loss) from continuing
operations	$	5,561	$	(1,373)	$	272	$	4,460

			Advisory Services
For the Year Ended December 31, 2011			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	32,798	$	197	$	-	$	32,995
Advisory services income - related
party		147		2,578		1,064		3,789
Lease termination fee income		131		-		-		131
Total revenue		33,076		2,775		1,064		36,915
General and administrative		2,213		3,701		135		6,049
Property expense		7,724		46		-		7,770
Legal and professional		877		65		3		945
Real estate commissions		2		340		-		342
Acquisition costs		229		-		-		229
Depreciation and amortization		8,233		24		-		8,257
Impairment recovery -
notes receivable		(1,071)		-		-		(1,071)
Total expenses		18,207		4,176		138		22,521
Interest expense		(9,971)		-		-		(9,971)
Other income/(expense)		(505)		142		(385)		(748)
Income (loss) from continuing
operations	$	4,393	$	(1,259)	$	541	$	3,675

			Advisory Services
For the Year Ended December 31, 2010			Real Estate Operating and		Advised
	Portfolio		Development		Funds		Total
Rental income from operating
leases	$	28,959	$	196	$	-	$	29,155
Advisory services income - related
party		10		2,714		1,480		4,204
Lease termination fee income		-		15		-		15
Total revenue		28,969		2,925		1,480		33,374
General and administrative		1,995		3,806		143		5,944
Property expense		8,292		22		-		8,314
Legal and professional		1,169		(13)		9		1,165
Real estate commissions		9		182		-		191
Acquisition costs		12		-		-		12
Depreciation and amortization		6,594		40		-		6,634
Impairment - properties		864		1,404		-		2,268
Impairment -
notes receivable		1,800		-		-		1,800
Total expenses		20,735		5,441		152		26,328
Interest expense		(9,541)		-		-		(9,541)
Other income/(expense)		2,496		1,156		(1,234)		2,418
Income (loss) from continuing
operations	$	1,189	$	(1,360)	$	94	$	(77)

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2012 Offering (Tables)

12 Months Ended

Dec. 31, 2012

2012 Offering [Abstract]

Schedule Of Common Stock

Shares of Class A common stock (adjusted for the one-for-two reverse stock split)	11,657,563
Shares of Class B common stock issued in connection with our 2012 Offering	4,465,725
Total shares of common stock outstanding subsequent to our 2012 Offering	16,123,288

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Investments In Advised Funds (Narrative) (Details) (USD $)	1 Months Ended		12 Months Ended			1 Months Ended		12 Months Ended																	12 Months Ended								12 Months Ended
	May 31, 2012	May 31, 2011	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010	Aug. 31, 2011 AIGF [Member]	Dec. 31, 2012 AmREIT SPF Shadow Creek Limited Partner [Member] MIG IV [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Limited Partner [Member] MIG [Member]	Dec. 31, 2012 Limited Partner [Member] MIG II [Member]	Dec. 31, 2012 Limited Partner [Member] MIG III [Member]	Dec. 31, 2012 Limited Partner [Member] MIG IV [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Woodlake Limited Partner [Member]	Aug. 31, 2008 Limited Partner [Member] AmREIT Woodlake Limited Partner [Member]	Dec. 31, 2007 Limited Partner [Member] AmREIT Woodlake Limited Partner [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Woodlake Limited Partner [Member] MIG III [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Woodlake Limited Partner [Member] MIG IV [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member]	Aug. 31, 2010 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member]	Dec. 31, 2007 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member] MIG III [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member] MIG IV [Member]	Dec. 31, 2012 Limited Partner [Member] AmREIT Westheimer Gessner Limited Partner [Member] AmREIT Inc., MIG III, And MIG IV [Member]	Dec. 31, 2009 Limited Partner [Member] AmREIT SPF Shadow Creek Limited Partner [Member]	Dec. 31, 2012 General Partner [Member]	Dec. 31, 2012 General Partner [Member] MIG [Member]	Dec. 31, 2012 General Partner [Member] MIG II [Member]	Dec. 31, 2012 General Partner [Member] MIG III [Member]	Dec. 31, 2012 General Partner [Member] MIG IV [Member]	Sep. 30, 2010 Third-Party Institutional Partner [Member] AmREIT Woodlake Limited Partner [Member]	Dec. 31, 2012 Third-Party Institutional Partner [Member] AmREIT SPF Shadow Creek Limited Partner [Member]	Dec. 31, 2012 J.P. Morgan Investment Managment [Member] item	Dec. 31, 2012 AEW Capital [Member] item	Dec. 31, 2012 Advised Funds [Member] Maximum [Member]	Dec. 31, 2012 Advised Funds [Member] Minimum [Member]
Related Party Transaction [Line Items]
Number of high net worth investment funds			4
Number of institutional joint venture																																	1	1
Number of joint venture with high net worth investment funds			1
Number of high net worth investment funds with joint venture			2
Notes receivable collections	$ 1,000,000	$ 1,000,000	$ 1,175,000	$ 1,071,000		$ 2,300,000
Average holding period of advised funds (in years)																																			4 years	2 years
Percentage of interest in limited partnership								3.00%	2.10%
Percentage of interest in advised funds																										1.00%
Percentage of available cash flow received by limited partners			99.00%
Percentage of original invested capital			100.00%
Investments in advised funds			7,953,000	8,322,000						200,000	400,000	800,000	800,000			3,400,000					3,800,000				5,800,000		1,000	1,000	1,000	1,000
Ownership interest							10.00%			1.40%	1.60%	1.10%	1.60%	1.00%		30.00%	3.00%	6.00%	10.00%		30.00%	30.00%	40.00%	10.00%	10.00%		1.00%	1.00%	1.00%	1.00%	90.00%	80.00%
Percentage of ownership interests sold															20.00%					20.00%
Percentage of return on project														11.65%
Acquisition costs			$ 687,000	$ 229,000	$ 12,000																				$ 441,000

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Summary Of Significant Accounting Policies (Schedule Of Allowances For Uncollectible Accounts Related To Tenant Receivables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Summary Of Significant Accounting Policies [Abstract]
Beginning balance	$ 1,780	$ 2,068	$ 1,025
Additional reserves	523	540	1,579
Collections/reversals	(479)	(788)	(360)
Write-offs	(690)	(40)	(176)
Ending balance	$ 1,134	$ 1,780	$ 2,068

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Consolidated Statements Of Stockholders' Equity (USD $) In Thousands	Class A Common Stock [Member] Common Stock [Member]	Class B Common Stock [Member] Common Stock [Member]	Capital In Excess Of Par Value [Member]	Accumulated Distributions In Excess Of Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Non-controlling Interest [Member]	Total
Balance at Dec. 31, 2009	$ 115		$ 191,090	$ (63,908)	$ (384)		$ 265	$ 127,178
Net income				6,305				6,305
Net loss attributable to noncontrolling interest				(173)			173	173
Change in fair value of hedge liability					38			38
Deferred compensation			(1,669)					(1,669)
Issuance of shares of common stock for deferred compensation	1		1,622			115		1,738
Amortization of deferred compensation			442					442
Repurchase of shares of Class A common stock						(143)		(143)
Distributions				10,384			438	10,822
Balance at Dec. 31, 2010	116		191,485	(68,160)	(346)	(28)		123,067
Net income				4,240				4,240
Change in fair value of hedge liability					346			346
Deferred compensation			(762)					(762)
Issuance of shares of common stock for deferred compensation			762					762
Amortization of deferred compensation			561					561
Forfeitures of shares of common stock			30			(43)		(13)
Retirement of AmREIT common shares			(71)			71
Distributions				9,277				9,277
Balance at Dec. 31, 2011	116		192,005	(73,197)				118,924
Net income				4,460				4,460
Deferred compensation			(5,299)					(5,299)
Issuance of shares of common stock for deferred compensation	1	3	5,295					5,299
Issuance of shares of common stock		42	52,655					52,697
Amortization of deferred compensation			815					815
Retirement of AmREIT common shares			(68)					(68)
Distributions				11,113				11,113
Balance at Dec. 31, 2012	$ 117	$ 45	$ 245,403	$ (79,850)				$ 165,715

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Real Estate Acquisitions, Dispositions And Discontinued Operations

12 Months Ended

Dec. 31, 2012

Real Estate Acquisitions, Dispositions And Discontinued Operations [Abstract]

Real Estate Acquisitions, Dispositions And Discontinued Operations

4. REAL ESTATE ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS

Acquisitions

Preston & Royal Village–On December 12, 2012, we purchased thePreston Royal Village Shopping Center, a retail shopping center containing approximately 230,000 square feet of gross leasable area located in Dallas, Texas, for a purchase price of $66.2million, exclusive of closing costs. The property, originally built in 1956 and 1959, is comprised of a fee simple interest on the northwest corner portion and a ground leasehold interest on the northeast corner portion, with 27 years remaining on the ground lease. Collectively, the two corners are currently 97.3% leased with major tenants including Tom Thumb, Barnes & Noble and Chico’s. We account for each corner as a separate property for accounting and reporting purposes.The purchase price was funded through a combination of cash on hand, draws on our $75 Million Facility and $23.4 million in mortgage financing on the property.

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 acquisition of investment Preston & Royal Village during 2012 (in thousands):

		Preston Royal West		Preston Royal East		Total
Assets:
	Land	$	9,056	$	-	$	9,056
	Buildings		24,535		25,352		49,887
	Tenant improvements		520		433		953
	Acquired lease intangibles, net		4,333		3,660		7,993
	Deferred costs, net		157		77		234
	Other assets		-		10		10
Liabilities:
	Notes payable		(23,400)		-		(23,400)
	Accounts payable and other liabilities		(66)		(129)		(195)
	Acquired below-market lease intangibles, net		(1,159)		(619)		(1,778)
Net cash paid for the acquisition of investment
properties(1)		$	13,976	$	28,784	$	42,760

______________

(1) The $42,760 of net cash paid for the acquisition for the Preston Royal Village Shopping Center was funded with approximately $12.3 million (including acquisition costs of $687) from cash on hand and approximately $31.2 million in borrowings from our $75 Million Facility.

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 the$25 Million Facility.

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 $25 Million Facility and a mortgage loan of $12.5 million.

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.

Pro Forma Results of Acquisitions

The table below presents our pro forma results of operations for the years ended December 31, 2012 and 2011, for all of our acquisitions assuming that we acquired the Preston Royal Village Shopping Center, The Market at Lake Houston, Brookwood Village and Alpharetta Commons on January 1, 2011 (in thousands):

			Pro forma adjustments to historical results
	Historical		Preston &		Market at		Brookwood		Alpharetta		Pro forma
	results		Royal Village		Lake Houston		Village		Commons		results
Year Ended December 31, 2012
Total revenues	$	41,308	$	6,619	$	-	$	-	$	-	$	47,927
Net income available to
stockholders	$	4,460	$	134	$	-	$	-	$	-	$	4,594
Year Ended December 31, 2011
Total revenues	$	36,915	$	6,567	$	315	$	350	$	917	$	45,064
Net income available to
stockholders	$	4,240	$	(1,473)	$	(66)	$	(23)	$	(206)	$	2,472

The financial resultsfrom the Preston Royal Village Shopping Center since the date of its acquisition on December 12, 2012 were not material to our results of operations.

Dispositions and Discontinued Operations

Our properties generally have operations and cash flows that can be clearly distinguished from the rest of ourcompany. The operations and gains on sales reported in discontinued operations include those properties that have been sold and for which operations and cash flows have been clearly distinguished. The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties and business has been reclassified as discontinued operations in the accompanying statements of operations.

During 2011, we sold two non-core, single-tenant properties to a third party. The following table is a summary of our discontinued operations for the years ended December 31, 2012, 2011 and 2010 (in thousands, except for per share data):

	Twelve months ended December 31,
	2012		2011		2010
Revenues:
Rental income from operating leases	$	-	$	201	$	642
Earned income from direct financing leases		-		-		1,405
Total revenues		-		201		2,047
Expenses:
General and administrative		-		(5)		(63)
Property expense		-		2		5
Construction costs		-		-		3
Legal and professional		-		42		23
Depreciation and amortization		-		13		51
Impairment - properties		-		-		1,219
Total expenses		-		52		1,238
Operating income		-		149		809
Other income (expense):
Gain on sale of real estate acquired for investment		-		-		1,216
Interest and other income		-		4		19
State income taxes		-		(5)		(462)
Interest expense		-		-		(926)
Income (loss) from discontinued operations, net
of taxes	$	-	$	148	$	656
Gain on sale of real estate acquired for resale, net
of taxes		-		417		5,726
Income from discontinued operations	$	-	$	565	$	6,382
Basic and diluted income from discontinued operations
per share	$	-	$	0.05	$	0.56

Subsequent Event – Joint Venture Agreement

On January 24, 2013, we entered into a joint venture agreement with an institutional joint venture partner to form a joint venture through our contribution of our MacArthur Park property to a newly-organized single purpose entity as well as the acquisition by the joint venture of the contiguous property to the north (“MacArthur Park Phase I”), excluding Target. an institutional joint venture partner will contribute cash for a 70% interest in the joint venture. The joint venture would concurrently purchase MacArthur Park Phase I, currently owned by an unrelated third party, for approximately $26.2 million and place mortgage financing on the entire combined property of approximately $43.9 million. The joint venture will fully repay the MacArthur Park debt of approximately $8.8 million (including a $2.2 million defeasance penalty).  At the conclusion of this transaction, we will hold a 30% ownership interest in the joint venture and receive net cash proceeds of approximately $35.4 million which will be used to repay borrowings under our $75 Million Facility.  We will continue to manage and lease MacArthur Park on behalf of the joint venture and we retain a right of first offer to acquire the project in the future, after a lock out period. We expect this transaction to close in March 2013; however, closing is subject to customary closing conditions and we can make no assurances of when or if this joint venture will actually be formed and capitalized. 

After closing this transaction, our 30% retained ownership will grant us the ability to exercise significant influence over the operation and management of the property; however,our retained ownership of the property will no longer qualify for consolidation under GAAP. Therefore, we expect to deconsolidate our MacArthur Park asset on the closing date and account for our ownership under the equity method of accounting on a prospective basis. Our net real estate investments owned by our MacArthur Park property were approximately $43.2 million as of December 31, 2012. Additionally, our significant continuing involvement in MacArthur Park precludes us from treating our contribution of the property to the joint venture as discontinued operations. Accordingly, MacArthur Park’s operating results will continue to be reported as a component of our income from continuing operations. We expect to record a gain of approximately $10 million to $12 million upon the sale of 70% of the MacArthur Park assets to the joint venture.

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Fair Value Measurements (Schedule Of Assets And Liabilities And Related Valuation Inputs Within The Fair Value Hierarchy To Measure Fair Values) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes receivable		$ 3,300
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes receivable
Fixed-rate notes payable
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes receivable		3,288
Fixed-rate notes payable	196,112	150,839
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes receivable
Fixed-rate notes payable

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Concentrations (Narrative) (Details)	12 Months Ended
	Dec. 31, 2012 property	Dec. 31, 2011	Dec. 31, 2010
Concentration Risk [Line Items]
Number of properties accounting for more than 10% of consolidated total assets	2
Percentage of individual property to total assets	10.00%
Uptown Park, Texas [Member]
Concentration Risk [Line Items]
Percentage of individual property to total assets	15.70%
MacArthur Park In Irving, Texas [Member]
Concentration Risk [Line Items]
Percentage of individual property to total assets	12.70%
Houston Properties [Member]
Concentration Risk [Line Items]
Number of operating properties	19
Percentage of individual income on base rental income	63.00%	64.20%	62.90%

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Real Estate Acquisitions, Dispositions And Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2012

Real Estate Acquisitions, Dispositions And Discontinued Operations [Abstract]

Schedule Of Assets And Liabilities Acquired

		Preston Royal West		Preston Royal East		Total
Assets:
	Land	$	9,056	$	-	$	9,056
	Buildings		24,535		25,352		49,887
	Tenant improvements		520		433		953
	Acquired lease intangibles, net		4,333		3,660		7,993
	Deferred costs, net		157		77		234
	Other assets		-		10		10
Liabilities:
	Notes payable		(23,400)		-		(23,400)
	Accounts payable and other liabilities		(66)		(129)		(195)
	Acquired below-market lease intangibles, net		(1,159)		(619)		(1,778)
Net cash paid for the acquisition of investment
properties(1)		$	13,976	$	28,784	$	42,760

______________

The $42,760 of net cash paid for the acquisition for the Preston Royal Village Shopping Center was funded with approximately $12.3 million (including acquisition costs of $687) from cash on hand and approximately $31.2 million in borrowings from our $75 Million Facility

Pro Forma Results Of Operations In Connection With Acquisitions

			Pro forma adjustments to historical results
	Historical		Preston &		Market at		Brookwood		Alpharetta		Pro forma
	results		Royal Village		Lake Houston		Village		Commons		results
Year Ended December 31, 2012
Total revenues	$	41,308	$	6,619	$	-	$	-	$	-	$	47,927
Net income available to
stockholders	$	4,460	$	134	$	-	$	-	$	-	$	4,594
Year Ended December 31, 2011
Total revenues	$	36,915	$	6,567	$	315	$	350	$	917	$	45,064
Net income available to
stockholders	$	4,240	$	(1,473)	$	(66)	$	(23)	$	(206)	$	2,472

Schedule Of Discontinued Operations

	Twelve months ended December 31,
	2012		2011		2010
Revenues:
Rental income from operating leases	$	-	$	201	$	642
Earned income from direct financing leases		-		-		1,405
Total revenues		-		201		2,047
Expenses:
General and administrative		-		(5)		(63)
Property expense		-		2		5
Construction costs		-		-		3
Legal and professional		-		42		23
Depreciation and amortization		-		13		51
Impairment - properties		-		-		1,219
Total expenses		-		52		1,238
Operating income		-		149		809
Other income (expense):
Gain on sale of real estate acquired for investment		-		-		1,216
Interest and other income		-		4		19
State income taxes		-		(5)		(462)
Interest expense		-		-		(926)
Income (loss) from discontinued operations, net
of taxes	$	-	$	148	$	656
Gain on sale of real estate acquired for resale, net
of taxes		-		417		5,726
Income from discontinued operations	$	-	$	565	$	6,382
Basic and diluted income from discontinued operations
per share	$	-	$	0.05	$	0.56

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Schedule III - Consolidated Real Estate Owned And Accumulated Depreciation (Real Estate and Accumulated Depreciation, By Property) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	$ 227,727,550
Initial Cost - Land	147,694,169
Costs Capitalized Subsequent to Acquisition	12,103,918
Total cost building and improvements	240,065,406
Total cost land	147,460,231
Total Cost - Total	387,525,636
Accumulated Depreciation	39,820,523
Encumbrances	184,761,510
500 Lamar, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	1,640,623
Initial Cost - Land	2,530,178
Costs Capitalized Subsequent to Acquisition	18,614
Total cost building and improvements	1,659,237
Total cost land	2,530,178
Total Cost - Total	4,189,415
Accumulated Depreciation	139,188
Date Acquired	Dec. 09, 2010
Encumbrances	1,630,349
Alpharetta Commons, Georgia [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	12,901,200
Initial Cost - Land	4,663,425
Costs Capitalized Subsequent to Acquisition	12,459
Total cost building and improvements	12,913,659
Total cost land	4,663,425
Total Cost - Total	17,577,084
Accumulated Depreciation	555,832
Date Acquired	Jul. 29, 2011
Encumbrances	12,230,985
Bakery Square, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	4,806,518
Initial Cost - Land	4,325,612
Costs Capitalized Subsequent to Acquisition	13,313
Total cost building and improvements	4,809,957
Total cost land	4,335,486
Total Cost - Total	9,145,443
Accumulated Depreciation	1,156,902
Date Acquired	Jul. 21, 2004
Encumbrances	2,018,947
Brookwood Village, Georgia [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	6,195,376
Initial Cost - Land	3,355,689
Costs Capitalized Subsequent to Acquisition	56,342
Total cost building and improvements	6,251,718
Total cost land	3,355,689
Total Cost - Total	9,607,408
Accumulated Depreciation	325,981
Date Acquired	May 10, 2011
Encumbrances	7,270,792
Cinco Ranch, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	11,558,491
Initial Cost - Land	2,666,534
Costs Capitalized Subsequent to Acquisition	100,996
Total cost building and improvements	11,657,795
Total cost land	2,668,226
Total Cost - Total	14,326,021
Accumulated Depreciation	2,905,340
Date Acquired	Jul. 01, 2004
Encumbrances	9,750,000
Courtyard Square, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	1,777,161
Initial Cost - Land	4,133,641
Costs Capitalized Subsequent to Acquisition	30,293
Total cost building and improvements	1,790,342
Total cost land	4,150,752
Total Cost - Total	5,941,095
Accumulated Depreciation	467,197
Date Acquired	Jun. 15, 2004
Lake Woodlands Plaza, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	2,385,103
Initial Cost - Land	1,366,452
Costs Capitalized Subsequent to Acquisition	1,301,317
Total cost building and improvements	3,683,807
Total cost land	1,369,065
Total Cost - Total	5,052,872
Accumulated Depreciation	1,521,311
Date Acquired	Jun. 03, 1998
Market At Lake Houston, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	13,351,264
Initial Cost - Land	3,740,540
Costs Capitalized Subsequent to Acquisition	29,874
Total cost building and improvements	13,381,137
Total cost land	3,740,540
Total Cost - Total	17,121,677
Accumulated Depreciation	753,397
Date Acquired	Feb. 25, 2011
Encumbrances	15,675,000
MacArthur Park, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	32,299,035
Initial Cost - Land	15,583,628
Costs Capitalized Subsequent to Acquisition	2,674,320
Total cost building and improvements	34,973,353
Total cost land	15,583,629
Total Cost - Total	50,556,983
Accumulated Depreciation	8,655,873
Date Acquired	Dec. 27, 2004
Encumbrances	6,613,001
Plaza In The Park, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	17,375,782
Initial Cost - Land	13,257,976
Costs Capitalized Subsequent to Acquisition	657,737
Total cost building and improvements	18,029,703
Total cost land	13,261,792
Total Cost - Total	31,291,495
Accumulated Depreciation	4,464,233
Date Acquired	Jul. 01, 2004
Encumbrances	23,250,000
Preston Royal East [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	25,785,057
Total cost building and improvements	25,785,057
Total Cost - Total	25,785,057
Accumulated Depreciation	115,239
Date Acquired	Dec. 12, 2012
Preston Royal West [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	25,054,873
Initial Cost - Land	9,055,941
Total cost building and improvements	25,054,873
Total cost land	9,055,941
Total Cost - Total	34,110,814
Accumulated Depreciation	81,995
Date Acquired	Dec. 12, 2012
Encumbrances	23,400,000
Riverwalk, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	17,148,688
Initial Cost - Land	7,979,779
Costs Capitalized Subsequent to Acquisition	377,763
Total cost building and improvements	17,517,262
Total cost land	7,988,968
Total Cost - Total	25,506,230
Accumulated Depreciation	3,519,342
Date Acquired	Sep. 30, 2005
Encumbrances	20,000,000
Sugar Land Plaza, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	3,016,816
Initial Cost - Land	1,280,043
Costs Capitalized Subsequent to Acquisition	286,176
Total cost building and improvements	3,302,993
Total cost land	1,280,043
Total Cost - Total	4,583,035
Accumulated Depreciation	1,251,905
Date Acquired	Jul. 01, 1998
Terrace Shops, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	2,544,592
Initial Cost - Land	2,212,278
Costs Capitalized Subsequent to Acquisition	192,866
Total cost building and improvements	2,737,458
Total cost land	2,212,278
Total Cost - Total	4,949,736
Accumulated Depreciation	641,903
Date Acquired	Dec. 15, 2003
Uptown Park, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	27,060,070
Initial Cost - Land	36,976,809
Costs Capitalized Subsequent to Acquisition	2,395,078
Total cost building and improvements	29,566,856
Total cost land	36,865,101
Total Cost - Total	66,431,957
Accumulated Depreciation	8,180,551
Date Acquired	Jun. 01, 2005
Encumbrances	49,000,000
Uptown Plaza Dallas, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	14,129,798
Initial Cost - Land	9,295,665
Costs Capitalized Subsequent to Acquisition	130,603
Total cost building and improvements	14,259,839
Total cost land	9,296,227
Total Cost - Total	23,556,066
Accumulated Depreciation	2,903,216
Date Acquired	Mar. 30, 2006
Encumbrances	13,922,436
Uptown Plaza, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	4,887,774
Initial Cost - Land	7,796,383
Costs Capitalized Subsequent to Acquisition	275,296
Total cost building and improvements	5,163,070
Total cost land	7,796,383
Total Cost - Total	12,959,453
Accumulated Depreciation	1,293,202
Date Acquired	Dec. 10, 2003
Shopping Centers [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	223,918,221
Initial Cost - Land	130,220,573
Costs Capitalized Subsequent to Acquisition	8,553,046
Total cost building and improvements	232,538,116
Total cost land	130,153,724
Total Cost - Total	362,691,839
Accumulated Depreciation	38,932,605
Encumbrances	184,761,510
Citibank, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	1,318,418
Costs Capitalized Subsequent to Acquisition	165,743
Total cost building and improvements	50,943
Total cost land	1,433,217
Total Cost - Total	1,484,161
Accumulated Depreciation	23,379
Date Acquired	Dec. 17, 2004
CVS Pharmacy, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	2,665,332
Costs Capitalized Subsequent to Acquisition	23,663
Total cost land	2,688,995
Total Cost - Total	2,688,995
Date Acquired	Jan. 10, 2003
Golden Corral, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	1,093,139
Initial Cost - Land	718,702
Costs Capitalized Subsequent to Acquisition	(687,192)
Total cost building and improvements	584,497
Total cost land	540,152
Total Cost - Total	1,124,649
Accumulated Depreciation	42,654
Date Acquired	Jul. 23, 2002
Golden Corral Texas 2 [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	1,290,347
Initial Cost - Land	553,006
Costs Capitalized Subsequent to Acquisition	(660,126)
Total cost building and improvements	744,607
Total cost land	438,620
Total Cost - Total	1,183,227
Accumulated Depreciation	63,458
Date Acquired	Jul. 23, 2002
Smokey Bones, Georgia [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	773,800
Costs Capitalized Subsequent to Acquisition	(60,414)
Total cost land	713,386
Total Cost - Total	713,386
Date Acquired	Dec. 18, 1998
Sunbelt Rental, Illinois [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	402,080
Costs Capitalized Subsequent to Acquisition	651,283
Total cost building and improvements	832,395
Total cost land	220,968
Total Cost - Total	1,053,363
Accumulated Depreciation	52,536
Date Acquired	May 23, 2007
TGI Friday's, Maryland [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	1,473,613
Costs Capitalized Subsequent to Acquisition	860
Total cost land	1,474,473
Total Cost - Total	1,474,473
Date Acquired	Sep. 16, 2003
TGI Friday's, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	1,425,843
Initial Cost - Land	611,075
Costs Capitalized Subsequent to Acquisition	39,894
Total cost building and improvements	1,453,769
Total cost land	623,043
Total Cost - Total	2,076,812
Accumulated Depreciation	389,846
Date Acquired	Jul. 23, 2002
Woodlands Ring Road, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Land	8,957,570
Costs Capitalized Subsequent to Acquisition	4,077,161
Total cost building and improvements	3,861,079
Total cost land	9,173,652
Total Cost - Total	13,034,731
Accumulated Depreciation	316,044
Date Acquired	Dec. 01, 2007
Single Tenant [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial Cost - Buildings and Improvements	3,809,329
Initial Cost - Land	17,473,596
Costs Capitalized Subsequent to Acquisition	3,550,872
Total cost building and improvements	7,527,290
Total cost land	17,306,507
Total Cost - Total	24,833,797
Accumulated Depreciation	$ 887,918

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Our Business And Our Recent History (Narrative) (Details)	12 Months Ended
	Dec. 31, 2012 state item
Real Estate Properties [Line Items]
Number of top population and job growth markets	5
Number of states in which entity historically operates	19
Real Estate Funds [Member]
Real Estate Properties [Line Items]
Number of real estate properties	17
Number of real estate funds	7
Wholly Owned Properties [Member]
Real Estate Properties [Line Items]
Number of real estate properties	32
Square feet of GLA	1,500,000

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Commitments And Contingencies

12 Months Ended

Dec. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

14.COMMITMENTS AND CONTINGENCIES

As the owner or operator of real property, we may incur liability based on various property conditions and may be subject to liability for personal injury or property damage sustained as a result. We maintain sufficient comprehensive, general liability and extended insurance coverage as deemed necessary with respect to our properties. In addition, we may be potentially liable for costs and damages related to environmental matters. In particular, we are subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. There are no material legal proceedings pending against us, and we are not aware of any pending environmental proceedings with respect to our properties that would have a material adverse effect on our consolidated financial statements.