##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   COMMISSION FILE NUMBER
    001-16785
 American Spectrum Realty,
    Inc.
 (Exact name of Registrant as
    specified in its charter)
  State of Maryland(State or other jurisdiction
    of
    incorporation or organization)

52-2258674(I.R.S. Employer
    Identification No.)5850 San Felipe, Suite 450
    Houston, Texas(Address of principal
    executive offices)

77057(Zip Code)   (713) 706-6200
 (Registrants telephone
    number, including area code)
  Securities registered under Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value

American Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K o
  Rule 12b-2
  o o o þ
   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE:




---



##### 





TABLE OF
    CONTENTS
  
  PageNo.PART IItem 1

Business


3Item 1A

Risk Factors


6Item 1B

Unresolved Staff Comments


8Item 2

Properties


9Item 3

Legal Proceedings


12Item 4

Submission of Matters to a Vote of Security
    Holders


12PART IIItem 5

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


13Item 6

Selected Financial Data


14Item 7

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


14Item 8

Financial Statements and Supplementary Data


19Item 9

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


19Item 9A(T)

Controls and Procedures


19Item 9B

Other Information


20PART IIIItem 10

Directors, Executive Officers and Corporate
    Governance


20Item 11

Executive Compensation


20Item 12

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


20Item 13

Certain Relationships and Related Transactions,
    and Director Independence


20Item 14

Principal Accountant Fees and Services


20PART IVItem 15

Exhibits and Financial Statement Schedules


21Significant Subsidiaries of the CompanyHein & Associates, LLP Consent - Form 10-KCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906   2




---



##### Table of Contents



PART I  ITEM 1.
    BUSINESS  General
    Description of Business
             3




---



##### Table of Contents



Business
    Objectives and Strategy
      Opportunities to Acquire Undervalued and Undermanaged
    Properties.
  Competitive Advantages.
  
    strong local market expertise;
    long-standing relationships with tenants, real estate brokers,
    institutions and other owners of real estate in each local
    market;
    fully integrated real estate operations which allow quick
    response to acquisition opportunities;
    access to capital markets at competitive rates as a public
    company;
    ability to acquire properties in exchange for ASR shares or
    OP Units which may make it a more attractive purchaser when
    compared to purchasers who are not similarly structured or are
    unable to make similar use of equity to purchase properties.  Property Management Strategies.
  Managing and Monitoring Investments.
 4




---



##### Table of Contents



Competition
    Employees
  on-site
  Environmental
    Matters
       5




---



##### Table of Contents



Insurance
      Capital
    Expenditures
    Acquisitions
    Dispositions
    Company
    Website
  Form 10-K, Form 10-Q Form 8-K
  ITEM 1A.
    RISK
    FACTORS  The
    Companys high level of debt increases its risk of default
    and may have a negative impact on the results of operations.
    This could adversely affect the Companys ability to make
    distributions and the market price of its Common
    Stock.
   6




---



##### Table of Contents



The
    Company may need to refinance mortgage loans and sell properties
    to meet its obligations.
  and/or
  There
    are risks inherent in the Companys acquisition and
    development strategy. The Company may not make profitable
    investments.
    The
    Company has a history of losses. The Company cannot assure the
    stockholders that it will become profitable in the
    future.
    Real
    property investments entail risk. The Companys properties
    may not be profitable, may not result in distributions and/or
    may depreciate.
  Properties acquired by the
    Company: and/or
  The
    Company may not be able to enter into favorable leases upon the
    expiration of current leases and on current vacant
    space.
    The
    Company may invest in joint ventures, which adds another layer
    of risk to its business.
   7




---



##### Table of Contents



tenants-in-common tenancy-in-common,
  The
    Company could incur unforeseen environmental
    liabilities.
    The
    Company faces intense competition in all of its
    markets.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   8




---



##### Table of Contents



ITEM 2.
    PROPERTIES  The
    Location and Type of the Companys Properties
  and/or
  Total Gross


Percent ofLeasable


Gross


Rented





Rent perArea


Leasable Area


Square


Annualized


SquareProperty/State

Type

(Square Feet)


Occupied(1)


Feet


Net Rent(2)


Foot(3)(In thousands)Arizona/California Region7700 Irvine Center, CA

Office


209,115



81%



168,422


$
4,870


$
28.91Bristol Bay, CA

Office


50,073



88%



44,223



1,108



25.07Creekside Office, CA

Office


47,810



37%



17,789



432



24.26Pacific Spectrum, AZ

Office


71,025



89%



63,455



974



15.34Arizona/California Region Total




378,023



78%



293,889



7,384



25.12Upper Midwest RegionNorthwest Corporate Center, MO

Office


86,561



84%



72,662



1,193



16.42Morenci Professional Park, IN

Industrial


105,600



86%



91,200



536



5.88Upper Midwest Region Total




192,161



85%



163,862



1,729



10.55Carolina RegionColumbia, SC (sold in Feb. 2008)

Retail


58,783



95%



55,704


$
311


$
5.59Carolina Region Total




58,783



95%



55,704



311



5.59Texas Region888 Sam Houston Parkway, TX

Office


45,485



84%



38,401


$
556


$
14.48800 Sam Houston Parkway, TX

Office


42,653



82%



35,157



478



13.6111500 Northwest Freeway, TX

Office


81,127



88%



71,179



1,079



15.165450 Northwest Central, TX

Office


56,228



89%



50,552



767



15.175850 San Felipe, TX

Office


101,882



91%



93,008



1,594



17.148100 Washington, TX

Office


44,060



45%



21,082



273



12.958300 Bissonnet, TX

Office


90,921



81%



73,918



881



11.9212000 Westheimer, TX

Office


57,962



90%



52,077



841



16.1516350 Park Ten Place, TX

Office


72,620



95%



69,642



1,141



16.3816360 Park Ten Place, TX

Office


68,334



100%



68,334



1,098



16.072401 Fountainview, TX

Office


174,223



92%



160,456



2,760



17.202470 Gray Falls Drive, TX

Office


41,273



89%



36,785



517



14.052855 Mangum, TX

Office


72,051



86%



62,225



914



14.6914741 Yorktown, TX

Office


93,912



100%



93,912



850



9.051501 Mockingbird, TX

Office


70,255



94%



65,919



896



13.596420 Richmond Atrium, TX

Office


77,490



87%



67,586



982



14.536430 Richmond Atrium, TX

Office


44,198



86%



38,109



544



14.28Northwest Spectrum Plaza, TX

Retail


48,000



78%



37,440



272



7.28Windrose, TX(4)

Retail


28,000



0%











Beltway Industrial, TX

Industrial


389,720



82%



319,860



1,648



5.15Southwest Pointe, TX

Industrial


101,156



92%



92,906



658



7.09Technology, TX

Industrial


118,413



86%



102,153



571



5.59Texas Region Total




1,919,963



86%



1,650,701



19,320



11.70Total/Weighted Average




2,548,930



85%



2,164,156


$
28,744


$
13.28     (1)
    
    Includes gross leasable area for leases that have been executed
    and have commenced as of December 31, 2007.(2)
    
    Represents base rent at December 31, 2007 for occupied
    square footage.(3)
    
    Represents Annualized Net Rent divided by Rented Square Feet.(4)
    
    Project is under development. 9




---



##### Table of Contents



Office
    Properties
        OFFICE
    PROPERTIES
  LEASE
    EXPIRATIONS
  Rented Square


Annual Base


Percentage of TotalNumber of


Footage Subject


Rent Under


Annual Base RentExpiring


to Expiring


Expiring


Represented byExpiration  Year

Leases


Leases


Leases


Expiring Leases(1)(In thousands)2008(2)


298



349,985


$
6,088



23
%2009


207



318,906



5,878



22
%2010


152



327,554



6,312



23
%2011


49



163,031



3,199



12
%2012


27



112,227



1,854



7
%Thereafter


18



245,686



3,519



13
%Total


751



1,517,389
(3)

$
26,850
(4)


100
%     (1)
    
    Annual base rent expiring during each period, divided by total
    annual base rent (both adjusted for contractual increases).(2)
    
    Includes leases that have initial terms of less than one year.(3)
    
    This figure is based on square footage actually occupied (which
    excludes vacant space), which accounts for the difference
    between this figure and total gross leasable area (which
    includes vacant space).(4)
    
    This figure is based on square footage actually occupied and
    incorporates contractual rent increases arising after 2007, and
    thus differs from annualized net rent in the preceding table,
    which is based on 2007 rents.  Industrial
    Properties
   10




---



##### Table of Contents



INDUSTRIAL
    PROPERTIES
  LEASE
    EXPIRATIONS
  Rented Square


Annual Base


Percentage of TotalNumber of


Footage Subject


Rent Under


Annual Base RentExpiring


to Expiring


Expiring


Represented byExpiration Year

Leases


Leases


Leases


Expiring Leases(1)(In thousands)2008(2)


66



280,937


$
3,053



57
%2009


37



134,546



936



18
%2010


30



141,196



976



18
%2011


10



20,637



139



3
%2012


4



22,600



200



4
%Thereafter


1



3,000



5



0
%Total


148



602,916
(3)

$
5,309
(4)


100
%     (1)
    
    Annual base rent expiring during each period, divided by total
    annual base rent (both adjusted for contractual increases).(2)
    
    Includes leases that have initial terms of less than one year.(3)
    
    This figure is based on square footage actually occupied (which
    excludes vacant space), which accounts for the difference
    between this figure and total gross leasable area (which
    includes vacant space).(4)
    
    This figure is based on square footage actually leased and
    incorporates contractual rent increases arising after 2007, and
    thus differs from annualized net rent in the table under
    The Location and Type of the Companys
    Properties, which is based on 2007 rents.  Retail
    Properties
   11




---



##### Table of Contents



RETAIL
    PROPERTIES
  LEASE
    EXPIRATIONS
  Rented Square


Annual Base


Percentage of TotalNumber of


Footage Subject


Rent Under


Annual Base RentExpiring


to Expiring


Expiring


Represented byExpiration Year

Leases


Leases


Leases


Expiring Leases(1)(In thousands)2008(2)









$




0
%2009


2



15,238



118



14
%2010


4



28,400



351



42
%2011


4



17,000



170



20
%2012


2



6,373



76



9
%Thereafter


2



24,333



127



15
%Total


14



91,344
(3)

$
842
(4)


100
%     (1)
    
    Annual base rent expiring during each period, divided by total
    annual base rent (both adjusted for contractual increases).(2)
    
    Includes leases that have initial terms of less than one year.(3)
    
    This figure is based on square footage actually occupied (which
    excludes vacant space), which accounts for the difference
    between this figure and total gross leasable area (which
    includes vacant space).(4)
    
    This figure is based on square footage actually occupied and
    incorporates contractual rent increases arising after 2007, and
    thus differs from annualized net rent in the table under
    The Location and Type of the Companys
    Properties, which is based on 2007 rents.  ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   12




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    Common StockHigh


Low2007First Quarter

$
28.75


$
23.26Second Quarter


27.77



20.75Third Quarter


20.79



17.70Fourth Quarter


23.75



16.752006First Quarter

$
19.00


$
13.90Second Quarter


24.25



16.40Third Quarter


24.90



21.05Fourth Quarter


24.99



20.25   Holders
    Distributions
    th
  Company
    Sales of Equity Securities
          Number of SecuritiesRemaining AvailableNumber of Securities

Weighted Average

for Future Issuanceto be Issued

Per Share

Under Equity CompensationUpon Exercise of

Exercise Price of

Plan (Excluding SecuritiesOutstanding Options

Outstanding Options

Reflected in First Column)32,813


$
22.80



114,626  13




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
              CRITICAL
    ACCOUNTING POLICIES
   14




---



##### Table of Contents




    Certain leases provide for tenant occupancy during periods for
    which no rent is due or where minimum rent payments increase
    during the term of the lease. The Company records rental income
    for the full term of each lease on a straight-line basis.
    Accordingly, a receivable, if deemed collectible, is recorded
    from tenants equal to the excess of the amount that would have
    been collected on a straight-line basis over the amount
    collected and currently due (Deferred Rent Receivable). When a
    property is acquired, the term of existing leases is considered
    to commence as of the acquisition date for purposes of this
    calculation.
    Many of the Companys leases provide for Common Area
    Maintenance (CAM)/Escalations (ESC) as
    the additional tenant revenue amounts due to the Company in
    addition to base rent. CAM/ESC represents increases in certain
    property operating expenses (as defined in each respective lease
    agreement) over the actual operating expense of the property in
    the base year. The base year is stated in the lease agreement;
    typically, the year in which the lease commenced. Generally,
    each tenant is responsible for his prorated share of increases
    in operating expenses. Tenants are billed an estimated CAM/ESC
    charge based on the budgeted operating expenses for the year.
    Within 90 days after the end of each fiscal year, a
    reconciliation and true up billing of CAM/ESC charges is
    performed based on actual operating expenses.
    Rental properties are stated at cost, net of accumulated
    depreciation, unless circumstances indicate that cost, net of
    accumulated depreciation, cannot be recovered, in which case the
    carrying value of the property is reduced to estimated fair
    value. Estimated fair value (i) is based upon the
    Companys plans for the continued operation of each
    property and (ii) is computed using estimated sales price,
    as determined by prevailing market values for comparable
    properties
    and/or the
    use of capitalization rates multiplied by annualized net
    operating income based upon the age, construction and use of the
    building. The fulfillment of the Companys plans related to
    each of its properties is dependent upon, among other things,
    the presence of economic conditions which will enable the
    Company to continue to hold and operate the properties prior to
    their eventual sale. Due to uncertainties inherent in the
    valuation process and in the economy, the actual results of
    operating and disposing of the Companys properties could
    be materially different than current expectations.
    Gains on property sales are accounted for in accordance with the
    provisions of SFAS No. 66, Accounting for Sales
    of Real Estate. Gains are recognized in full when real
    estate is sold, provided (i) the gain is determinable, that
    is, the collectibility of the sales price is reasonably assured
    or the amount that will not be collectible can be estimated, and
    (ii) the earnings process is virtually complete, that is,
    the Company is not obligated to perform significant activities
    after the sale to earn the gain. Losses on property sales are
    recognized immediately.  RESULTS
    OF OPERATIONS
  Comparison
    of the year ended December 31, 2007 to the year ended
    December 31, 2006
    Variance2007


2006


$


%Rental revenue

$
30,300,000


$
25,200,000



5,100,000



20.2
%Operating expenses:Property operating expenses


13,681,000



11,826,000



1,855,000



15.7
%General and administrative


3,470,000



3,468,000



2,000



.06
%Depreciation and amortization


13,204,000



10,870,000



2,334,000



21.5
%Interest expense


12,087,000



9,668,000



2,419,000



25.0
%  15




---



##### Table of Contents



Rental revenue.
  Property operating expenses.
  General and administrative.
  Depreciation and amortization.
  Interest expense.
  Income taxes.
  Minority interest.
 16




---



##### Table of Contents



Loss on extinguishment of debt.
  Discontinued operations.
    Year Ended


Year EndedDecember 31, 2007


December 31, 2006Rental revenue

$
360


$
727Total expenses


(390
)


(887
)Gain on extinguishment of debt






1,849(Loss) income from discontinued operations before gain on sale
    and share of minority interest


(30
)


1,689Gain on sale of discontinued operations






22,349Income tax benefit (expense)


12



(10,344
)Minority interest from discontinued operations


2



(1,824
)(Loss) income from discontinued operations

$
(16
)

$
11,870   LIQUIDITY
    AND CAPITAL RESOURCES
      Years Ended December 31,2007


2006Non-Cash Items:Depreciation and amortization

$
13,339


$
11,094Loss (gain) on extinguishment of debt


2,413



(1,282
)Stock-based compensation expense


49



51Minority interest


(1,308
)


937Deferred income taxes


(4,330
)


6,297Deferred rental income


(65
)


(291
)Amortization of loan premiums


(273
)


(440
)  17




---



##### Table of Contents



lease-up lease-up
    INFLATION
   18




---



##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K.
  ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Form 10-K.
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f).
   19




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   20




---



##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Page No.(a)



(1)


Financial StatementsReport of Independent Registered Public Accounting Firm


22Consolidated Balance Sheets at December 31, 2007 and 2006


23Consolidated Statements of Operations for the years ended December 31, 2007 and 2006


24Consolidated Statements of Stockholders Equity for the years ended December 31, 2007 and 2006


25Consolidated Statements of Cash Flows for the years ended December 31, 2007 and 2006


26Notes to Consolidated Financial Statements


27(2)


Financial Statement SchedulesSchedule II  Valuation and Qualifying Accounts


46Schedule III  Real Estate and Accumulated
    Depreciation


47(3)


Exhibits to Financial StatementsThe Exhibit Index attached hereto is hereby incorporated by
    reference to this Item.


51On November 6, 2007, a report on
    Form 8-K
    was filed with respect to Item 5.02.On November 7, 2007, a report on
    Form 8-K
    was filed with respect to Item 2.02.(b)






Exhibits  21




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                    22




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  CONSOLIDATED BALANCE SHEETS
  December 31,


December 31,2007


2006(Restated)(Dollars in thousands,except share amounts)ASSETSReal estate held for investment

$
238,053


$
208,599Accumulated depreciation


(48,757
)


(37,592
)Real estate held for investment, net


189,296



171,007Real estate held for sale


1,996



2,021Cash and cash equivalents


847



1,166Restricted cash


3,565



Tenant and other receivables, net of allowance for doubtful
    accounts of $186 and $228, respectively


561



449Deferred rents receivable


1,589



1,533Investment in management company


4,000



4,000Prepaid and other assets, net


10,932



10,006Total Assets

$
212,786


$
190,182LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Notes payable, including premiums of $64 and $1,460, respectively

$
186,824


$
152,794Liabilities related to real estate held for sale


2,318



2,299Accounts payable


2,822



2,446Deferred tax liability


1,777



6,244Accrued and other liabilities


8,457



5,507Total Liabilities


202,198



169,290Minority interest


4,522



5,981Commitments and Contingencies (Note 14):Stockholders Equity:Preferred stock, $.01 par value; authorized,
    25,000,000 shares, none issued and outstanding






Common stock, $.01 par value; authorized,
    100,000,000 shares; issued, 1,613,554 and
    1,606,179 shares, respectively; outstanding, 1,378,214 and
    1,346,429 shares, respectively


16



16Additional paid-in capital


46,693



46,553Accumulated deficit


(37,557
)


(28,783
)Treasury stock, at cost, 235,340 and 226,750 shares,
    respectively


(3,086
)


(2,875
)Total Stockholders Equity


6,066



14,911Total Liabilities and Stockholders Equity

$
212,786


$
190,182    23




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Years Ended December 31,2007


2006(Restated)(Dollars in thousands,except per share amounts)REVENUES:Rental revenue

$
30,300


$
25,200Interest and other income


173



501Total revenues


30,473



25,701EXPENSES:Property operating expense


13,681



11,826General and administrative


3,470



3,468Depreciation and amortization


13,204



10,870Interest expense


12,087



9,668Total expenses


42,442



35,832OTHER LOSS:Loss on extinguishment of debt


(2,413
)


(567
)Total other loss


(2,413
)


(567
)Loss from continuing operations before deferred income tax
    benefit and minority interest


(14,382
)


(10,698
)Deferred income tax benefit


4,318



4,047Loss from continuing operations before minority interest


(10,064
)


(6,651
)Minority interest (share from continuing operations)


1,306



887Loss from continuing operations


(8,758
)


(5,764
)Discontinued operations:Loss from operations


(30
)


(160
)Gain on sale of discontinued operations






22,349Gain on extinguishment of debt






1,849Income tax benefit (expense)


12



(10,344
)Minority interest


2



(1,824
)(Loss) income from discontinued operations


(16
)


11,870Net (loss) income

$
(8,774
)

$
6,106Basic and diluted per share data:Loss from continuing operations

$
(6.37
)

$
(4.15
)(Loss) income from discontinued operations


(0.01
)


8.55Net (loss) income

$
(6.38
)

$
4.40Basic and diluted weighted average shares used


1,375,708



1,386,328    24




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  AdditionalCommon


Common


Paid-In


Accumulated


Treasury


TotalShares


Stock


Capital


Deficit


Stock


Equity(In thousands, except share amounts)Balance, January 1, 2006


1,598,615


$
16


$
46,367


$
(34,889
)

$
(2,480
)

$
9,014Conversion of operating partnership units to common stock


1,940







63











63Common stock repurchase


















(395
)


(395
)Acquisition of minority interest in the operating partnership










9











9Exercise of stock options


5,624







63











63Stock-based compensation










51











51Net income (restated)














6,106







6,106Balance, December 31, 2006 (restated)


1,606,179


$
16


$
46,553


$
(28,783
)

$
(2,875
)

$
14,911Common stock repurchase


















(211
)


(211
)Issuance of common stock to officers and directors


4,750Restricted stock forfeited


(500
)Acquisition of minority interest in the operating partnership










6











6Exercise of stock options


3,125







85











85Stock-based compensation










49











49Net loss














(8,774
)






(8,774
)Balance, December 31, 2007


1,613,554


$
16


$
46,693


$
(37,557
)

$
(3,086
)

$
6,066    25




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006(Restated)(Dollars in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income

$
(8,774
)

$
6,106Adjustments to reconcile net (loss) income to net cash provided
    by (used in) operating activities:Depreciation and amortization


13,339



11,094Gain on sales of real estate assets






(22,349
)Loss (gain) on extinguishment of debt


2,413



(1,282
)Deferred income taxes


(4,330
)


6,297Deferred rental income


(65
)


(291
)Minority interest


(1,308
)


937Stock-based compensation expense


49



51Amortization of note payable premiums, included in interest
    expense


(273
)


(440
)Changes in operating assets and liabilities:(Increase) decrease in tenant and other receivables


(107
)


156Increase in accounts payable


373



50Increase in prepaid and other assets


(1,936
)


(1,355
)Increase in accrued and other liabilities


2,855



1,123Net cash provided by operating activities:


2,236



97CASH FLOWS FROM INVESTING ACTIVITIES:Capital improvements to real estate assets


(4,449
)


(4,933
)Real estate acquisition


(26,140
)


Proceeds received from sales of real estate assets






36,163Net cash (used in) provided by investing activities:


(30,589
)


31,230CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from borrowings


53,560



13,088Proceeds from borrowings  property acquisitions


23,422



Repayment of borrowings  property sales






(26,165
)Repayment of borrowings  refinances


(44,523
)


(10,438
)Repayment of borrowings  scheduled payments


(4,154
)


(1,717
)Repurchase of common stock


(211
)


(395
)Note payments on litigation settlement






(4,877
)Proceeds from exercise of stock options


85



63Acquisition of minority interest in the operating partnership


(145
)


(20
)Net cash provided by (used in) financing activities:


28,034



(30,461
)(Decrease) increase in cash and cash equivalents


(319
)


866Cash and cash equivalents, beginning of year


1,166



300Cash and cash equivalents, end of year

$
847


$
1,166SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest

$
12,081


$
10,056Cash paid for income taxes


348



145SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
    ACTIVITIES:Debt assumed in connection with acquisitions of real estate
    assets

$



$
16,914Borrowings in connection with acquisitions of real estate assets






23,846Conversion of operating partnership units into common stock






63    26




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes
    to Consolidated Financial Statements
  NOTE 1.
    DESCRIPTION
    OF BUSINESS  GENERAL
        NOTE 2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  BASIS OF
    PRESENTATION
      RECLASSIFICATIONS
    USE OF
    ESTIMATES
   27




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NEW
    ACCOUNTING PRONOUNCEMENTS
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of Accounting Research
    Bulletin No. 51
  Fair Value Measurement
  REAL
    ESTATE
  and/or
    Building and Improvements

5 to 40 yearsTenant Improvements

Term of the related leaseFurniture and Equipment

3 to 5 years  28




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  CASH
    EQUIVALENTS
    RESTRICTED
    CASH
  lease-up
  FAIR
    VALUE OF FINANCIAL INSTRUMENTS
    DEFERRED
    FINANCING AND OTHER FEES
    STOCK-BASED
    COMPENSATION
  Share-Based Payment Accounting for Stock-Based
    Compensation Accounting for Stock Issued to
    Employees
  MINORITY
    INTEREST
   29




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  RENTAL
    REVENUE
          NET
    (LOSS) INCOME PER SHARE
  Earnings Per Share,
  INCOME
    TAXES
   30




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement 109
    SEGMENT
    REPORTING
    ALLOWANCE
    FOR DOUBTFUL ACCOUNTS
   31




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 3.
    REAL
    ESTATE    Buildings and





Accumulated


Net RecordedLand


Improvements


Total Cost


Depreciation


Value2007:Office properties

$
44,152


$
149,652


$
193,804


$
42,990


$
150,814Industrial properties


6,999



29,332



36,331



5,227



31,104Retail properties


2,810



4,790



7,600



259



7,341Other






318



318



281



37Total

$
53,961


$
184,092


$
238,053


$
48,757


$
189,2962006:Office properties

$
44,152


$
146,955


$
191,107


$
33,256


$
157,851Industrial properties


3,170



14,031



17,201



4,076



13,125Other






291



291



260



31Total

$
47,322


$
161,277


$
208,599


$
37,592


$
171,007   ACQUISITIONS
  2007.
    2006.
      DISPOSITIONS
  2007.
   32




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2006.
      INTANGIBLE
    ASSETS PURCHASED
      FUTURE
    MINIMUM RENTS
    Future MinimumYear Ending December 31,

Rents2008

$
28,6302009


21,0052010


14,3562011


8,6352012


5,244Thereafter


4,780$
82,650  33




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 4.
    DISCONTINUED
    OPERATIONS  Real
    estate assets held for sale.
      December 31,


December 31,Condensed Consolidated Balance Sheet

2007


2006Real estate

$
1,808


$
1,806Other


188



215Real estate assets held for sale

$
1,996


$
2,021Notes payable, net

$
2,222


$
2,242Accounts payable


12



15Accrued and other liabilities


84



42Liabilities related to real estate held for sale

$
2,318


$
2,299   Net
    (loss) income from discontinued operations.
      Years Ended December 31,Condensed Consolidate Statements of Operations

2007


2006Rental revenue

$
360


$
727Total expenses(1)


(390
)


(887
)Gain on early extinguishment of debt






1,849(Loss) income from discontinued operations before gain on sale
    and income tax benefit (expense)


(30
)


1,689Gain on sale of discontinued operations






22,349Income tax benefit (expense)


12



(10,344
)Minority interest from discontinued operations


2



(1,824
)(Loss) income from discontinued operations

$
(16
)

$
11,870     (1)
    
    Includes interest expense of $162 and $258 for the years ended
    December 31, 2007 and 2006, respectively. Mortgage debt
    related to each of the Companys properties included in
    discontinued operations was individually secured. As such,
    interest expense was based on each propertys respective
    loan. 34




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   NOTE 5.
    INVESTMENT
    IN MANAGEMENT COMPANY        NOTE 6.
    RELATED
    PARTY TRANSACTIONS       35




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 7.
    NOTES PAYABLE    2007


2006Maturity


Principal


Interest


Principal


InterestProperty (Unless Otherwise Noted)

Date


Balance


Rate


Balance


RateFixed RatePacific Spectrum


6/10/2009



5,422



8.02
%


5,500



8.02
%1501 Mockingbird


6/30/2009



304



6.00
%


308



6.00
%6430 Richmond Atrium


6/30/2009



726



5.50
%


736



5.50
%Morenci


12/01/2009



1,617



6.60
%


1,704



6.60
%Bristol Bay


8/1/2011



7,101



7.58
%


7,192



7.58
%Technology


8/1/2011



7,346



7.44
%


7,443



7.44
%Creekside


12/1/2011



5,993



7.17
%


6,074



7.17
%16350 Park Ten Place


5/11/2012



4,586



7.45
%


4,642



7.45
%16360 Park Ten Place


5/11/2012



3,593



7.45
%


3,637



7.45
%2855 Mangum


5/11/2012



2,647



7.45
%


2,680



7.45
%2855 Mangum


5/11/2012



1,531



6.00
%


1,586



6.00
%6430 Richmond Atrium


5/11/2012



2,222



7.45
%


2,249



7.45
%Southwest Pointe


6/1/2012



2,787



7.33
%


2,822



7.33
%16350 Park Ten Place


5/11/2012



506



7.45
%


512



7.45
%16360 Park Ten Place


8/11/2012



397



7.45
%


402



7.45
%11500 Northwest Freeway


6/1/2014



4,208



5.93
%


4,267



5.93
%11500 Northwest Freeway


6/1/2014



304



5.93
%


308



5.93
%5850 San Felipe


8/1/2014



5,258



5.65
%


5,342



5.65
%Northwest Corporate Center


8/1/2014



5,527



6.26
%


5,599



6.26
%14741 Yorktown


9/1/2014



8,600



5.32
%


8,600



5.32
%8100 Washington


2/22/2015



2,266



5.59
%


2,298



5.59
%8300 Bissonnet


5/1/2015



4,662



5.51
%


4,724



5.51
%1501 Mockingbird


7/1/2015



3,332



5.28
%


3,350



5.28
%5450 Northwest Central


9/1/2015



2,715



5.38
%


2,754



5.38
%800 Sam Houston Parkway


12/29/2015



2,420



6.25
%


2,466



6.25
%888 Sam Houston Parkway


12/29/2015



2,420



6.25
%


2,466



6.25
%2401 Fountainview


3/1/2016



12,482



5.82
%


12,640



5.82
%12000 Westheimer


1/1/2017



4,250



5.70
%


4,250



5.70
%Gray Falls


1/1/2017



3,100



5.70
%


3,100



5.70
%6420 Richmond Atrium


6/5/2017



6,400



5.87
%


6,342



5.50
%7700 Building


8/1/2017



45,000



5.99
%


33,147



8.50
%Subtotal


$
159,722






$
149,140Variable RateCorporate  Unsecured(1)


5/31/2008



200



8.25
%


200



9.25
%Corporate  Unsecured


6/12/2008



1,500



8.25
%






Corporate  Secured


10/1/2008



1,951



8.07
%


1,994



8.07
%Beltway Industrial


5/9/2010



17,000



7.64
%






NW Spectrum Plaza


4/19/2012



3,315



7.64
%






Windrose


4/19/2012



3,072



7.64
%






Subtotal


$
27,038






$
2,194Loan Premiums






64







1,460Total


$
186,824






$
152,794     (1)
    
    In March 2008, the lender extended the maturity date of the note
    to May 31, 2010 and funded the Company an additional
    $300,000, which increased the principal balance to $500,000. 36




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     lease-up
                   37




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
                    Year Ending December 31,2008

$
5,5022009


9,6022010


18,8492011


21,2342012


24,580Thereafter


106,993Subtotal


186,760Loan premium, net


64Total

$
186,824  38




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    NOTE 8.
    NET LOSS
    ON EXTINGUISHMENT OF DEBT        NOTE 9.
    MINORITY
    INTEREST        NOTE 10.
    REPURCHASE
    OF COMMON STOCK       39




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 11.
    INCOME
    TAXES    2007


2006Current expense (benefit):Federal






State

$




$




Deferred expense (benefit):Federal

$
(3,864
)

$
(3,569
)State


(454
)


(478
)$
(4,318
)

$
(4,047
)           December 31,


December 31,2007


2006Expected income tax benefit at statutory federal rate

$
(4,890
)

$
(3,195
)State income tax benefit


(575
)


(358
)Income not taxable


(93
)


(130
)Charges not deductible


14



6Minority interest


395



(603
)Losses with no current benefit


1,654



Adjustments to
    true-up
    prior year


(700
)


233Other, net


(123
)


Income tax benefit

$
(4,318
)

$
(4,047
)  40




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,


December 31,2007


2006Deferred tax assets:Net operating losses

$
5,035


$
3,159Allowance for bad debts


69



92Capitalized lease costs






86Total deferred tax asset


5,104



3,337Deferred tax liabilities:Built-in gains


(6,277
)


(8,978
)Straight-line rents receivable


(586
)


(583
)Stock compensation


(18
)


(20
)Total deferred tax liabilities


(6,881
)


(9,581
)Net deferred tax liability

$
(1,777
)

$
(6,244
)     NOTE 12.
    NET
    (LOSS) INCOME PER SHARE    Years Ended December 31,2007


2006Loss from continuing operations

$
(8,758
)

$
(5,764
)Discontinued operations:Loss from discontinued operations


(30
)


(160
)Gain on sale of discontinued operations






22,349Gain on extinguishment of debt






1,849Income tax benefit (expense)


12



(10,344
)Minority interest


2



(1,824
)(Loss) income from discontinued operations


(16
)


11,870Net (loss) income

$
(8,774
)

$
6,106Basic and diluted per share data:Loss from continuing operations

$
(6.37
)

$
(4.15
)Income from discontinued operations


(0.01
)


8.55Net (loss) income

$
(6.38
)

$
4.40Basic weighted average shares used


1,375,708



1,386,328  41




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 13.
    STOCK
    OPTION AND RESTRICTED SHARE PLANS        Stock
    Options
  10-year
  6-year
      Shares


WeightedUnder


Average


Aggregate IntrinsicOption


Exercise Price


ValueOutstanding on January 1, 2007


35,938


$
26.19Granted






Forfeited






Exercised


(3,125
)

$
27.08


$
Outstanding on December 31, 2007


32,813


$
22.80


$
213,129Exercisable as of December 31, 2007


27,813


$
24.07


$
179,142  42




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted Average

WeightedRemaining

AverageNumber

Contractual

ExerciseRange of Exercise Price

Outstanding

Life

Price$ 8.10 - $12.20


14,688



6.3 years


$
10.58$18.25 - $27.16


12,500



6.9 years


$
20.41$60.00 - $60.00


5,625



3.8 years


$
60.00     Weighted Average

WeightedRemaining

AverageNumber

Contractual

ExerciseRange of Exercise Price

Exercisable

Life

Price$ 8.10 - $12.20


13,438



6.2 years


$
10.81$18.25 - $27.16


8,750



6.2 years


$
21.33$60.00 - $60.00


5,625



3.8 years


$
60.00     WeightedAverageGrant DateNonvested Stock Options

Number


Fair ValueNonvested at January 1, 2007


9,374


$
8.48Granted






Vested


4,374


$
7.89Forfeited






Nonvested at December 31, 2007


5,000


$
9.00       Restricted
    Stock
     43




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageNumber of

Grant DateRestricted Stock Awards

Shares

Fair ValueNonvested at January 1, 2007


Granted


4,750


$
22.75Vested


Forfeited


(500
)

$
22.75Nonvested at December 31, 2007


4,250


$
22.75     NOTE 14.
    COMMITMENTS
    AND CONTINGENCIES      NOTE 15.
    RESTATEMENT   44




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    AsPreviouslyReported(1)


Adjustment


RestatedStatement of Operations for the Three Months Ended Dec 31,
    2006Deferred tax benefit

$
1,650


$
(492
)

$
1,158Minority interest


157



64



221Net loss


(2,322
)


(428
)


(2,750
)Basic and diluted earnings per share


(1.68
)


(0.31
)


(1.99
)Statement of Operations for the Year Ended Dec 31, 2006Deferred tax benefit

$
4,539


$
(492
)

$
4,047Minority interest


823



64



887Net income


6,534



(428
)


6,106Basic and diluted earnings per share


4.71



(0.31
)


4.40Balance Sheet as of December 31, 2006Deferred tax liability


5,752



492



6,244Minority interest


6,045



(64
)


5,981Accumulated deficit


(28,355
)


(428
)


(28,783
)Total stockholders equity


15,339



(428
)


14,911Balance Sheet as of September 30, 2007Deferred tax liability


1,704



492



2,196Minority interest


5,050



(64
)


4,986Accumulated deficit


(33,997
)


(428
)


(34,425
)Total stockholders equity


9,613



(428
)


9,185Balance Sheet as of June 30, 2007Deferred tax liability


3,892



492



4,384Minority interest


5,541



(64
)


5,477Accumulated deficit


(30,795
)


(428
)


(31,223
)Total stockholders equity


12,857



(428
)


12,429Balance Sheet as of March 31, 2007Deferred tax liability


5,060



492



5,552Minority interest


5,749



(64
)


5,685Accumulated deficit


(29,492
)


(428
)


(29,920
)Total stockholders equity


14,145



(428
)


13,717     (1)
    
    Certain prior period balances included in As Previously
    Reported have been reclassified from the financial
    statements issued in prior periods with respect to discontinued
    operations for comparability purposes.  NOTE 16.
    SUBSEQUENT
    EVENT   45




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  Column A

Column B

Column C

Column D

Column EAdditionsBalance at

Charged to



BalanceBeginning of

Costs and



at EndDescription

Year(1)

Expenses

Deductions

of Year(Dollars in thousands)Year Ended December 31, 2007Allowance for loss on real estate held for investment

$
472


$



$



$
472Year Ended December 31, 2006Allowance for loss on real estate held for investment

$
472


$



$



$
472     (1)
    
    Valuation allowance of $472 on Columbia Northeast, a retail
    center property in South Carolina, established in 2002 as the
    estimated fair market value declined below book value. The
    property, which was classified as Real estate held for
    sale as of December 31, 2007, was sold on
    February 28, 2008. 46




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  SCHEDULE III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
 DECEMBER
    31, 2007
  Column A

Column B


Column C


Column D


Column ECost capitalized


Gross Amount Carried atInitial Cost to Company(1)


Subsequent to


December 31, 2007 (4)Buildings and


Acquisition (3)





Buildings andDescription

Encumbrances


Land


Improvements


Improvements


Land


Improvements


Total(Dollars in thousands)Office Properties:San Felipe, TX

$
5,258


$
2,290


$
4,290


$
1,021


$
2,290


$
5,311


$
7,601Creekside, CA


5,993



2,790



6,460



316



2,790



6,776



9,566Bristol Bay, CA


7,101



1,620



7,880



1,438



1,620



9,318



10,9387700 Irvine Center, CA


45,000



9,150



40,390



3,347



9,150



43,737



52,887Northwest Corporate Center, MO


5,527



1,550



5,230



1,667



1,550



6,897



8,44716350 Park Ten, TX


5,092



1,174



5,324



491



1,174



5,815



6,98916360 Park Ten, TX


3,990



900



4,192



707



900



4,899



5,799800 Sam Houston Parkway, TX


2,420



1,000



1,121



556



1,000



1,677



2,677888 Sam Houston Parkway, TX


2,420



500



892



367



500



1,259



1,7595450 Northwest Central, TX


2,715



854



2,622



552



854



3,174



4,02812000 Westheimer, TX


4,250



1,878



2,432



1,274



1,878



3,706



5,5848100 Washington, TX


2,266



600



2,317



131



600



2,448



3,0488300 Bissonnet, TX


4,662



1,400



3,990



219



1,400



4,209



5,609Pacific Spectrum, AZ


5,422



1,460



6,880



1,622



1,460



8,502



9,96211500 NW Freeway, TX


4,512



2,278



3,621



419



2,278



4,040



6,31814741 Yorktown, TX


8,600



2,375



9,504



3



2,375



9,507



11,8822855 Mangum, TX


4,178



2,134



3,300



180



2,134



3,480



5,6142470 Gray Falls Drive, TX


3,100



670



1,956



284



670



2,240



2,9102401 Fountainview, TX


12,482



3,500



13,451



332



3,500



13,783



17,2831501 Mockingbird, TX


3,636



1,000



3,583



3



1,000



3,586



4,5866420 Richmond Atrium, TX


6,400



3,384



3,039



85



3,384



3,124



6,5086430 Richmond Atrium, TX


2,948



1,645



2,116



48



1,645



2,164



3,809Office Total

$
147,972


$
44,152


$
134,590


$
15,062


$
44,152


$
149,652


$
193,804Industrial Properties:Southwest Point, TX


2,787



1,800



1,530



490



1,800



2,020



3,820Morenci Professional Park , IN


1,617



790



2,680



141



790



2,821



3,611Technology, TX


7,346



580



9,360



101



580



9,461



10,041Beltway Industrial, TX


17,000



3,829



14,764



266



3,829



15,030



18,859Industrial Total

$
28,750


$
6,999


$
28,334


$
998


$
6,999


$
29,332


$
36,331Retail Properties:Northwest Spectrum Plaza, TX


3,315



1,710



2,297



38



1,710



2,335



4,045Windrose, TX


3,072



1,100



2,440



15



1,100



2,455



3,555Retail Total

$
6,387


$
2,810


$
4,737


$
53


$
2,810


$
4,790


$
7,600Other:American Spectrum Realty










138



180







318



318Other Total

$



$



$
138


$
180


$



$
318


$
318Combined Total

$
183,109


$
53,961


$
167,799


$
16,293


$
53,961


$
184,092


$
238,053Real Estate Held for SaleRetail Property:Columbia NE, SC(2)


2,222



1,050



1,530



511



1,050



1,569



2,619Total

$
2,222


$
1,050


$
1,530


$
511


$
1,050


$
1,569


$
2,619  47




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY, INC.
  SCHEDULE III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
 DECEMBER
    31, 2007
  Column A

Column F


Column G


Column H


Column ILife on WhichDepreciation inLatest IncomeAccumulated


Date of


Date


StatementsDescription

Depreciation


Construction


Acquired


is Computed(Dollars inthousands)Office Properties:San Felipe, TX


1,767



1977



2001



5-40Creekside, CA


2,491



1984



2001



5-40Bristol Bay, CA


3,144



1988



2001



5-407700 Irvine Center, CA


16,555



1989



2001



5-40Northwest Corporate Center, MO


2,602



1983-1987



2001



5-4016350 Park Ten, TX


1,989



1979



2002



5-4016360 Park Ten, TX


1,681



1981



2002



5-40800 Sam Houston Parkway, TX


437



1980



2004



5-40888 Sam Houston Parkway, TX


442



1979



2002



5-405450 Northwest Central, TX


894



1979



2003



5-4012000 Westheimer, TX


927



1981



2003



5-408100 Washington, TX


653



1980



2003



5-408300 Bissonnet, TX


1,075



1981



2003



5-40Pacific Spectrum, AZ


3,343



1986



2001



5-4011500 NW Freeway, TX


849



1983



2004



5-4014741 Yorktown, TX


992



1996



2006



5-402855 Mangum, TX


404



1979



2006



5-402470 Gray Falls Drive, TX


322



1983



2006



5-402401 Fountainview, TX


1603



1980



2006



5-401501 Mockingbird, TX


315



1981



2006



5-406420 Richmond Atrium, TX


293



1979



2006



5-406430 Richmond Atrium, TX


212



1974



2006



5-40Office Total

$
42,990Industrial Properties:Southwest Point, TX


681



1972



2001



5-40Morenci, Professional Park, IN


969



1975-1979



2001



5-40Technology, TX


2,989



1986



2001



5-40Beltway Industrial, TX


588



1999



2007



5-40Industrial Total

$
5,227Retail Properties:Northwest Spectrum Plaza, TX


129



2004



2007



5-25Windrose, TX


130



2005



2007



5-25Retail Total

$
259Other:American Spectrum Realty-FF&E


281











3-5Other Total

$
281Combined Total

$
48,757Real Estate Held for SaleRetail Property:Columbia NE, SC(2)


810



1991



2001



5-25Total

$
810     (1)
    
    Initial cost and date acquired, where applicable.(2)
    
    Valuation allowance of $472 established in 2002 as the estimated
    fair market value declined below book value. Property was
    subsequently sold in February 2008.(3)
    
    Costs capitalized are offset by retirements and write-offs.(4)
    
    The aggregate cost for federal income tax purposes is $134,968. 48




---



##### Table of Contents



AMERICAN
    SPECTRUM REALTY INC.
  SCHEDULE III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
 December 31,
    2007
    2007


2006(Dollars in thousands)Rental Property:Balance at beginning of year

$
208,599


$
152,614Additions during year:Property acquisitions and additions


30,481



56,234Retirements


(1,027
)


(249
)Balance at end of year

$
238,053


$
208,599Accumulated Depreciation:Balance at beginning of year

$
37,592


$
27,538Additions during year:Depreciation


12,192



10,303Retirements


(1,027
)


(249
)Balance at end of year

$
48,757


$
37,592  49




---



##### Table of Contents



SIGNATURES
     AMERICAN SPECTRUM REALTY INC
    Date: March 21, 2008

/s/  William
    J.
    CardenWilliam
    J. Carden
    Chairman of the Board, President and
    Chief Executive Officer
    (Principal Executive Officer)Date: March 21, 2008

/s/  G.
    Anthony EppolitoG.
    Anthony Eppolito
    Vice President, Chief Financial Officer
    (Principal Financial and Accounting Officer),
    Treasurer and SecretaryDate: March 21, 2008

/s/  Timothy
    R. BrownTimothy
    R. Brown 
    DirectorDate: March 21, 2008

/s/  William
    W. Geary, Jr.William
    W. Geary, Jr.
    DirectorDate: March 21, 2008

/s/  Presley
    E. Werlein, IIIPresley
    E. Werlein, III 
    DirectorDate: March 21, 2008

/s/  John
    N. GalardiJohn
    N. Galardi
    Director  50




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Exhibit Title3
.1

Form of Amended and Restated Articles of Incorporation of the
    Company(1)3
.2

Bylaws of the Company(1)3
.3

Amended and Restated Bylaws of the Company are incorporated
    herein by reference to Exhibit 3.01 to the Companys
    Form 10-Q
    for the quarter ended June 30, 2002.3
.4

Articles of Amendment of the Company are incorporated herein by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003.3
.5

Articles of Amendment of the Company are incorporated herein by
    reference to Exhibit 3.3 to the Companys
    Form 10-Q
    for the quarter ended March 31, 2006.4
.1

Form of Stock Certificate(1)10
.1

Form of Agreement and Plan of Merger of Sierra-Pacific
    Development Fund(1)10
.2

Form of Agreement and Plan of Merger of Sierra-Pacific
    Development Fund II(1)10
.3

Form of Agreement and Plan of Merger of Sierra-Pacific
    Development Fund III(1)10
.4

Form of Agreement and Plan of Merger of Sierra Pacific Pension
    Investors 84(1)10
.5

Form of Agreement and Plan of Merger of Sierra Pacific
    Institutional Properties V(1)10
.6

Form of Agreement and Plan of Merger of Nooney Income
    Fund Ltd., L.P.(1)10
.7

Form of Agreement and Plan of Merger of Nooney Income
    Fund Ltd., L.P.(1)10
.8

Form of Agreement and Plan of Merger of Nooney Real Property
    Investors  Two, L.P.(1)10
.9

Omnibus Stock Incentive Plan(1)10
.10

Agreement of Limited Partnership of American Spectrum Realty
    Operating Partnership, L.P.(1)10
.11

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and CGS Properties (Mkt./Col.), L.P.(1)10
.12

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Creekside/Riverside, L.L.C.(1)10
.13

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and McDonnell Associates, L.L.C.(1)10
.14

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Pacific Spectrum, L.L.C.(1)10
.15

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Pasadena Autumn Ridge L.P.(1)10
.16

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Seventy Seven, L.L.C.(1)10
.17

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Villa Redondo L.L.C.(1)10
.18

Agreement and Plan of Merger, dated August 6, 2000, between
    the Company and Third Coast L.L.C.(1)10
.19

Agreement and Plan of Contribution, dated August 6, 2000,
    between the Company and No.-So., Inc.(1)10
.20

Form of Restricted Stock Agreement(1)10
.21

Form of Stock Option Agreement (Incentive Stock Options)(1)10
.22

Form of Stock Option Agreement (Directors)(1)10
.23

Form of Stock Option Agreement (Non-Qualified Options)(1)10
.24

Form of Indenture Relating to Notes(1)10
.25

Contribution Agreement, dated May 31, 2000, between the
    Company and CGS Real Estate Company, Inc.(1)10
.26

Contribution Agreement, dated May 31, 2000, between the
    Company and American Spectrum Real Estate Services, Inc.(1) 51




---



##### Table of Contents



ExhibitNo.

Exhibit Title10
.27

Agreement and Plan of Merger, dated May 31, 2001, between
    the Company and Lindbergh Boulevard Partners (Lindbergh), L.P.(1)10
.28

Agreement and Plan of Merger, dated May 31, 2001, between
    the Company and Nooney Rider Trail L.L.C.(1)10
.29

Agreement and Plan of Merger, dated May 31, 2001, between
    the Company and Back Bay L.L.C.(1)10
.30

Contribution Agreement, dated May 31, 2001, between
    American Spectrum Realty Management, Inc. and CGS Real Estate
    Company, Inc., American Spectrum  Midwest, American
    Spectrum  Arizona, American Spectrum 
    California and American Spectrum  Texas, Inc.(1)10
.31

Amendment of Agreement Plan of Merger between the Company and
    Villa Redondo L.L.C. is incorporated herein by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 200110
.32

Amendment of Agreement Plan of Merger between the Company and
    Pasadena Autumn Ridge, L.P. is incorporated herein by reference
    to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 200110
.33

Amendment of Agreement Plan of Merger between the Company and
    Third Coast L.L.C. is incorporated herein by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 200110
.34

Registration Rights Agreement between the Company, the
    Operating Partnership, and otherparties is incorporated herein by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 200110
.35

Employment Agreement dated October 15, 2001 between the
    Company and Harry A. Mizrahi is incorporated herein by reference
    to Exhibit 10.01 to the Companys
    Form 10-Q
    for the quarter ended March 31, 200210
.36

Employment Agreement dated April 3, 2002 between the
    Company and Paul E. Perkins is incorporated herein by reference
    to Exhibit 10.02 to the Companys
    Form 10-Q
    for the quarter ended March 31, 200210
.37

Employment Agreement dated April 16, 2002 between the
    Company and Patricia A. Nooney is incorporated herein by
    reference to Exhibit 10.03 to the Companys
    Form 10-Q
    for the quarter ended March 31, 200210
.38

Employment Agreement dated September 1, 2002 between the
    Company and Thomas N. Thurber is incorporated herein by
    reference to Exhibit 10.04 to the Companys
    Form 10-Q
    for the quarter ended June 30, 2002 (Exhibits pursuant to
    the Agreement have not been filed by the Company, who hereby
    undertakes to file such exhibits upon the request of the SEC)10
.39

Employment Agreement dated October 15, 2001 between the
    Company and William J. Carden is incorporated herein by
    reference to Exhibit 10.5 to the Companys
    Form 10-Q
    for the quarter ended September 30, 200210
.40

Letter Agreement dated February 25, 2003 between the
    Company and William J. Carden and John N. Galardi is
    incorporated herein by reference to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 200210
.41

Letter Agreement dated February 25, 2003 between the
    Company and CGS Real Estate Company, Inc. is incorporated herein
    by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 200210
.42

Letter Agreement dated February 25, 2003 between the
    Company and William J. Carden and John N. Galardi is
    incorporated herein by reference to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 200210
.43

Amendment No. 1 to Employment Agreement dated
    October 6, 2003 between the Company and Patricia A. Nooney
    incorporated herein by reference to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 200321


Significant Subsidiaries of the Company23
.1

Hein & Associates, LLP Consent 
    Form 10-K 52




---



##### Table of Contents



ExhibitNo.

Exhibit Title31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act31
.2

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350 as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350 as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     (1)
    
    Incorporated herein by reference to the Companys
    Registration Statement on
    Form S-4
    (Registration
    No. 333-43686),
    which became effective August 8, 2001. 53