##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    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.
  State of Maryland
    
    52-2258674(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)2401 Fountain View, Suite 510
Houston, Texas 77057
    
    77057(Address of principal executive offices)
    
    (Zip Code)
 
  
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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##### 



TABLE OF CONTENTS
 Page No.PART I
    
    FINANCIAL INFORMATIONItem 1
    
    Financial Statements
    
    
    3Consolidated Condensed Balance Sheets at March 31,
2009 (unaudited) and December 31, 2008
    
    
    3Consolidated Condensed Statements of Operations for
the three months ended March 31, 2009 and 2008
(unaudited)
    
    
    4Consolidated Condensed Statements of Cash Flows for
the three months ended March 31, 2009 and 2008
(unaudited)
    
    
    5Notes to Consolidated Condensed Financial Statements
    
    
    6Item 2
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    15Item 4T
    
    Controls and Procedures
    
    
    20PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    20Item 6
    
    Exhibits and Reports on Form 8-K
    
    
    20EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 AMERICAN SPECTRUM REALTY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
 March 31, 2009
    
    
    December 31, 2008(Unaudited)ASSETSReal estate held for investment
    
    $
    258,664
    
    
    $
    257,786Accumulated depreciation
    
    
    (64,662
    )
    
    
    (61,283
    )Real estate held for investment, net
    
    
    194,002
    
    
    
    196,503Cash and cash equivalents
    
    
    775
    
    
    
    2,092Tenant and other receivables, net of allowance for doubtful accounts of
$371 and $371, respectively
    
    
    1,119
    
    
    
    805Deferred rents receivable
    
    
    1,931
    
    
    
    1,869Deferred tax asset
    
    
    4,260
    
    
    
    3,123Insurance claims receivable
    
    
    1,350
    
    
    
    2,700Investment in management company
    
    
    4,000
    
    
    
    4,000Prepaid and other assets, net
    
    
    11,860
    
    
    
    13,899Total Assets
    
    $
    219,297
    
    
    $
    224,991LIABILITIESLiabilities:Notes payable, including premium of $8 and $19, respectively
    
    $
    201,584
    
    
    $
    202,194Accounts payable
    
    
    3,753
    
    
    
    3,970Liabilities related to insurance claims
    
    
    2,458
    
    
    
    3,200Accrued and other liabilities
    
    
    8,936
    
    
    
    10,970Total Liabilities
    
    
    216,731
    
    
    
    220,334Commitments and Contingencies (Notes 9 and 10):Equity:American Spectrum Realty, Inc. stockholders equity:Preferred stock, $.01 par value; authorized, 25,000,000 shares;
issued and outstanding, 55,172 and 55,172 shares, respectively
    
    
    1
    
    
    
    1Common stock, $.01 par value; authorized, 100,000,000 shares;
issued, 1,639,905 and 1,620,304 shares, respectively; outstanding,
1,404,199 and 1,384,598 shares, respectively
    
    
    16
    
    
    
    16Additional paid-in capital
    
    
    48,727
    
    
    
    48,393Accumulated deficit
    
    
    (46,061
    )
    
    
    (44,200
    )Treasury stock, at cost, 235,706 and 235,706 shares, respectively
    
    
    (3,095
    )
    
    
    (3,095
    )Total American Spectrum Realty, Inc. stockholders (deficit) equity
    
    
    (412
    )
    
    
    1,115Noncontrolling interest
    
    
    2,978
    
    
    
    3,542Total Equity
    
    
    2,566
    
    
    
    4,657Total Liabilities and Equity
    
    $
    219,297
    
    
    $
    224,991
  3




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##### Table of Contents



AMERICAN SPECTRUM REALTY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 Three Months Ended March 31,2009
    
    
    2008REVENUES:Rental revenue
    
    $
    8,891
    
    
    $
    8,264Third party management and leasing revenue
    
    
    17
    
    
    
    13Interest and other income
    
    
    8
    
    
    
    77Total revenues
    
    
    8,916
    
    
    
    8,354EXPENSES:Property operating expense
    
    
    4,108
    
    
    
    3,528General and administrative
    
    
    870
    
    
    
    856Depreciation and amortization
    
    
    3,712
    
    
    
    3,238Interest expense
    
    
    3,371
    
    
    
    3,105Total expenses
    
    
    12,061
    
    
    
    10,727Loss from continuing operations before deferred income tax benefit
    
    
    (3,145
    )
    
    
    (2,373
    )Deferred income tax benefit
    
    
    1,094
    
    
    
    848Loss from continuing operations
    
    
    (2,051
    )
    
    
    (1,525
    )Discontinued operations:Gain from discontinued operations
    
    
    
    
    
    
    5Gain on sale of discontinued operations
    
    
    
    
    
    
    1,141Deferred income tax expense
    
    
    
    
    
    
    (421
    )Income from discontinued operations
    
    
    
    
    
    
    725Net loss, including noncontrolling interest
    
    
    (2,051
    )
    
    
    (800
    )Plus: Net loss attributable to noncontrolling interest
    
    
    250
    
    
    
    103Net loss attributable to American Spectrum Realty, Inc.
    
    
    (1,801
    )
    
    
    (697
    )Preferred stock dividend
    
    
    (60
    )
    
    
    Net loss attributable to American Spectrum Realty, Inc.
common stockholders
    
    $
    (1,861
    )
    
    $
    (697
    )Basic and diluted per share data:Loss from continuing operations attributable to American
Spectrum Realty, Inc. common stockholders
    
    $
    (1.33
    )
    
    $
    (.97
    )Income from discontinued operations attributable to American
Spectrum Realty, Inc. common stockholders
    
    
    
    
    
    
    .46Net loss attributable to American Spectrum Realty, Inc.
common stockholders
    
    $
    (1.33
    )
    
    $
    (0.51
    )Basic weighted average shares used
    
    
    1,397,665
    
    
    
    1,379,381Amounts attributable to American Spectrum Realty, Inc. common
stockholders:Loss from continuing operations
    
    $
    (1,861
    )
    
    $
    (1,328
    )Income from discontinuing operations
    
    $
    
    
    
    $
    631Net loss
    
    $
    (1,861
    )
    
    $
    (697
    )
  4




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AMERICAN SPECTRUM REALTY, INC
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Three Months Ended March 31,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (1,801
    )
    
    $
    (697
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    3,712
    
    
    
    3,260Deferred rental income
    
    
    (62
    )
    
    
    (212
    )Noncontrolling interest
    
    
    (250
    )
    
    
    (103
    )Net gain on sale of real estate asset
    
    
    
    
    
    
    (1,141
    )Stock-based compensation expense
    
    
    20
    
    
    
    13Income tax benefit
    
    
    (1,094
    )
    
    
    (427
    )Amortization of note payable premium, included in interest expense
    
    
    (11
    )
    
    
    (11
    )Changes in operating assets and liabilities:Increase in tenant and other receivables
    
    
    (314
    )
    
    
    (7
    )Decrease in prepaid and other assets
    
    
    1,706
    
    
    
    1,733(Decrease) increase in accounts payable
    
    
    (217
    )
    
    
    153Decrease in accrued and other liabilities
    
    
    (2,137
    )
    
    
    (2,078
    )Net cash (used in) provided by operating activities
    
    
    (448
    )
    
    
    483CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds received from sale of real estate asset
    
    
    
    
    
    
    3,014Deposit held in escrow for future acquisitions
    
    
    
    
    
    
    (300
    )Capital improvements to real estate assets
    
    
    (878
    )
    
    
    (1,225
    )Proceeds received related to insurance claims
    
    
    1,350
    
    
    
    Payments for damages related to insurance claims
    
    
    (742
    )
    
    
    Net cash (used in) provided by investing activities:
    
    
    (270
    )
    
    
    1,489CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    300Repayment of borrowings  property sales
    
    
    
    
    
    
    (2,218
    )Repayment of borrowings  scheduled payments
    
    
    (599
    )
    
    
    (409
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    31Net cash used in financing activities:
    
    
    (599
    )
    
    
    (2,296
    )Decrease in cash and cash equivalents
    
    
    (1,317
    )
    
    
    (324
    )Cash and cash equivalents, beginning of period
    
    
    2,092
    
    
    
    847Cash and cash equivalents, end of period
    
    $
    775
    
    
    $
    523SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:Conversion of operating partnership units to common stock
    
    $
    314
    
    
    
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    3,401
    
    
    $
    3,056Cash paid for income taxes
    
    
    19
    
    
    
    13
  5




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AMERICAN SPECTRUM REALTY, INC.
Notes to Consolidated Condensed Financial Statements
 NOTE 1. DESCRIPTION OF BUSINESS
       6




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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 BASIS OF PRESENTATION
    RECLASSIFICATIONS
 Accounting for the Impairment or Disposal of Long-Lived Assets Noncontrolling Interests in Consolidated Financial Statementsan amendment of Accounting Research
Bulletin No. 51.
 SEGMENT REPORTING
  NEW ACCOUNTING PRONOUNCEMENTS
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities Earnings Per Share
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 7




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Business Combinations Business Combinations
 Fair Value Measurement
 STOCK-BASED COMPENSATION
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees
 NONCONTROLLING INTEREST
  8




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NET LOSS PER SHARE
 Earnings Per Share,
 INCOME TAXES
    NOTE 3. REAL ESTATE
 ACQUISITIONS
 2009
  2008
  9




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##### Table of Contents



DISPOSITIONS
 2009
  2008
  NOTE 4. DISCONTINUED OPERATIONS
  Three Months Ended March 31,Consolidated Condensed Statements of Operations
    
    2009
    
    2008Rental revenue
    
    $
    
    
    
    $
    73Total expenses
    
    
    
    
    
    
    68Income from discontinued operations before gain on
sale and income tax expense
    
    
    
    
    
    
    5Gain on sale of discontinued operations
    
    
    
    
    
    
    1,141Income tax expense
    
    
    
    
    
    
    (421
    )Income from discontinued operations
    
    $
    
    
    
    $
    725
 NOTE 5. NOTES PAYABLE, NET OF PREMIUM
  March 31, 2009
    
    
    December 31, 2008Collateral (property
    
    Maturity
    
    
    Principal
    
    
    Interest
    
    
    Principal
    
    
    Interestunless otherwise noted)
    
    Date
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateFixed RateFixed Rate
Pacific Spectrum
    
    
    6/10/2009
    
    
    
    5,316
    
    
    
    8.02
    %
    
    
    5,341
    
    
    
    8.02
    %1501 Mockingbird
    
    
    6/30/2009
    
    
    
    299
    
    
    
    6.00
    %
    
    
    300
    
    
    
    6.00
    %6430 Richmond Atrium
    
    
    6/30/2009
    
    
    
    712
    
    
    
    5.50
    %
    
    
    715
    
    
    
    5.50
    %Fountain View Place (1)
    
    
    10/29/2009
    
    
    
    2,425
    
    
    
    18.00
    %
    
    
    2,500
    
    
    
    18.00
    %Morenci
    
    
    12/1/2009
    
    
    
    1,500
    
    
    
    6.60
    %
    
    
    1,524
    
    
    
    6.60
    %Corporate  Secured
    
    
    2/7/2010
    
    
    
    1,950
    
    
    
    7.50
    %
    
    
    1,950
    
    
    
    7.50
    %Fountain View Place (2)
    
    
    4/29/2010
    
    
    
    1,700
    
    
    
    10.00
    %
    
    
    1,700
    
    
    
    10.00
    %Bristol Bay
    
    
    8/1/2011
    
    
    
    6,977
    
    
    
    7.58
    %
    
    
    7,005
    
    
    
    7.58
    %Technology
    
    
    8/1/2011
    
    
    
    7,215
    
    
    
    7.44
    %
    
    
    7,243
    
    
    
    7.44
    %Creekside
    
    
    12/1/2011
    
    
    
    5,883
    
    
    
    7.17
    %
    
    
    5,907
    
    
    
    7.17
    %16350 Park Ten Place
    
    
    5/11/2012
    
    
    
    4,509
    
    
    
    7.45
    %
    
    
    4,526
    
    
    
    7.45
    %16360 Park Ten Place
    
    
    5/11/2012
    
    
    
    3,533
    
    
    
    7.45
    %
    
    
    3,546
    
    
    
    7.45
    %2855 Mangum
    
    
    5/11/2012
    
    
    
    2,603
    
    
    
    7.45
    %
    
    
    2,613
    
    
    
    7.45
    %2855 Mangum
    
    
    5/11/2012
    
    
    
    1,457
    
    
    
    6.00
    %
    
    
    1,472
    
    
    
    6.00
    %6430 Richmond Atrium
    
    
    5/11/2012
    
    
    
    2,185
    
    
    
    7.45
    %
    
    
    2,193
    
    
    
    7.45
    %Southwest Pointe
    
    
    6/1/2012
    
    
    
    2,740
    
    
    
    7.33
    %
    
    
    2,751
    
    
    
    7.33
    %16350 Park Ten Place
    
    
    8/11/2012
    
    
    
    498
    
    
    
    7.45
    %
    
    
    500
    
    
    
    7.45
    %16360 Park Ten Place
    
    
    8/11/2012
    
    
    
    390
    
    
    
    7.45
    %
    
    
    391
    
    
    
    7.45
    %11500 Northwest Freeway
    
    
    6/1/2014
    
    
    
    4,128
    
    
    
    5.93
    %
    
    
    4,145
    
    
    
    5.93
    %11500 Northwest Freeway
    
    
    6/1/2014
    
    
    
    298
    
    
    
    5.93
    %
    
    
    300
    
    
    
    5.93
    %5850 San Felipe
    
    
    8/1/2014
    
    
    
    5,155
    
    
    
    5.65
    %
    
    
    5,177
    
    
    
    5.65
    %Northwest Corporate Center
    
    
    8/1/2014
    
    
    
    5,430
    
    
    
    6.26
    %
    
    
    5,451
    
    
    
    6.26
    %14741 Yorktown
    
    
    9/1/2014
    
    
    
    8,600
    
    
    
    5.32
    %
    
    
    8,600
    
    
    
    5.32
    %8100 Washington
    
    
    2/22/2015
    
    
    
    2,223
    
    
    
    5.59
    %
    
    
    2,232
    
    
    
    5.59
    %8300 Bissonnet
    
    
    5/1/2015
    
    
    
    4,579
    
    
    
    5.51
    %
    
    
    4,597
    
    
    
    5.51
    %1501 Mockingbird
    
    
    7/1/2015
    
    
    
    3,275
    
    
    
    5.28
    %
    
    
    3,287
    
    
    
    5.28
    %5450 Northwest Central
    
    
    9/1/2015
    
    
    
    2,663
    
    
    
    5.38
    %
    
    
    2,674
    
    
    
    5.38
    %
 10




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March 31, 2009
    
    
    December 31, 2008Collateral (property
    
    Maturity
    
    
    Principal
    
    
    Interest
    
    
    Principal
    
    
    Interestunless otherwise noted)
    
    Date
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate800 Sam Houston Parkway
    
    
    12/29/2015
    
    
    
    2,358
    
    
    
    6.25
    %
    
    
    2,372
    
    
    
    6.25
    %888 Sam Houston Parkway
    
    
    12/29/2015
    
    
    
    2,358
    
    
    
    6.25
    %
    
    
    2,372
    
    
    
    6.25
    %2401 Fountain View
    
    
    3/1/2016
    
    
    
    12,270
    
    
    
    5.82
    %
    
    
    12,316
    
    
    
    5.82
    %12000 Westheimer
    
    
    1/1/2017
    
    
    
    4,250
    
    
    
    5.70
    %
    
    
    4,250
    
    
    
    5.70
    %2470 Gray Falls
    
    
    1/1/2017
    
    
    
    3,100
    
    
    
    5.70
    %
    
    
    3,100
    
    
    
    5.70
    %6420 Richmond Atrium
    
    
    6/5/2017
    
    
    
    6,400
    
    
    
    5.87
    %
    
    
    6,400
    
    
    
    5.87
    %7700 Irvine Center
    
    
    8/1/2017
    
    
    
    45,000
    
    
    
    5.99
    %
    
    
    45,000
    
    
    
    5.99
    %Fountain View Place
    
    
    4/29/2018
    
    
    
    12,631
    
    
    
    6.50
    %
    
    
    12,670
    
    
    
    6.50
    %Subtotal
    
    $
    176,610
    
    
    
    
    
    
    $
    177,120Variable RateCorporate  Unsecured
    
    
    1/12/2010
    
    
    
    1,200
    
    
    
    6.00
    %
    
    
    1,200
    
    
    
    6.00
    %Beltway Industrial
    
    
    5/9/2010
    
    
    
    17,170
    
    
    
    7.00
    %
    
    
    17,170
    
    
    
    7.00
    %Corporate  Unsecured
    
    
    5/31/2010
    
    
    
    500
    
    
    
    6.00
    %
    
    
    500
    
    
    
    6.00
    %Northwest Spectrum
    
    
    4/19/2012
    
    
    
    3,164
    
    
    
    2.90
    %
    
    
    3,210
    
    
    
    4.30
    %Windrose Plaza
    
    
    4/19/2012
    
    
    
    2,932
    
    
    
    2.90
    %
    
    
    2,975
    
    
    
    4.30
    %Subtotal
    
    $
    24,966
    
    
    
    
    
    
    $
    25,055Loan Premium
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    19Total
    
    $
    201,584
    
    
    
    
    
    
    $
    202,194
 
 (1)
    
    In April 2009, the Company made a principal payment of $250,000 on the note and exercised an
option to extend the maturity to October 29, 2009. The payment reduced the balance on the note to
$2,175,000. The note contains a second option to extend maturity to April 29, 2010.(2)
    
    In April 2009, the Company made a principal payment of $170,000 on the note, which reduced the
balance to $1,530,000 and the lender extended the maturity date of the note to April 29, 2010  NOTE 6. NONCONTROLLING INTEREST
     Three Months Ended March 31,2009
    
    2008Net loss attributable to the Company
    
    $
    (1,801
    )
    
    $
    (697
    )Increase in the Companys paid-in
capital on exchange of OP Units for
shares of Common Stock
    
    $
    314
    
    
    $
    Change from net loss attributable to
the Company and exchange of OP Units
for shares of Common Stock
    
    $
    (1,487
    )
    
    $
    (697
    )
 NOTE 7. REPURCHASE OF COMMON STOCK
  11




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NOTE 8. STOCK-BASED COMPENSATION
    Stock Options
   Shares
    
    Weighted Average
    
    AggregateUnder Option
    
    Exercise Price
    
    Intrinsic ValueOutstanding on January 1, 2009
    
    
    29,375
    
    
    $
    23.93Granted
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Outstanding on March 31, 2009
    
    
    29,375
    
    
    $
    23.93
    
    
    $
    143,775Exercisable as of March 31, 2009
    
    
    27,813
    
    
    $
    24.25
    
    
    $
    139,838
  Weighted Average
    
    WeightedRemaining
    
    AverageNumber
    
    Contractual
    
    ExerciseRange of Exercise Price
    
    Outstanding
    
    Life
    
    Price$8.10 - $12.20
    
    
    12,500
    
    
    5.0 years
    
    $
    10.66$18.25 - $27.16
    
    
    11,250
    
    
    5.4 years
    
    $
    20.65$60.00 - $60.00
    
    
    5,625
    
    
    2.5 years
    
    $
    60.00
  Weighted Average
    
    WeightedRemaining
    
    AverageNumber
    
    Contractual
    
    ExerciseRange of Exercise Price
    
    Exercisable
    
    Life
    
    Price$8.10 - $12.20
    
    
    12,500
    
    
    5.0 years
    
    $
    10.66$18.25 - $27.16
    
    
    9,688
    
    
    5.2 years
    
    $
    21.03$60.00 - $60.00
    
    
    5,625
    
    
    2.5 years
    
    $
    60.00
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##### Table of Contents



Weighted AverageGrant DateNonvested Stock Options
    
    Number
    
    Fair ValueNonvested at January 1, 2009
    
    
    1,562
    
    
    $
    10.00Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2009
    
    
    1,562
    
    
    $
    10.00
  Restricted Stock
    Weighted AverageNumber of
    
    Grant DateRestricted Stock Awards
    
    Shares
    
    Fair ValueNonvested at January 1, 2009
    
    
    7,087
    
    
    $
    24.10Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2009
    
    
    7,087
    
    
    $
    24.10
  NOTE 9. RELATED PARTY TRANSACTIONS
   13




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##### Table of Contents



NOTE 10. COMMITMENTS AND CONTINGENCIES
    NOTE 11. PREFERRED STOCK
    14




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
       CRITICAL ACCOUNTING POLICIES
  15




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##### Table of Contents



Investment in Real Estate Assets
   Building and Improvements
    
    5 to 40 yearsTenant Improvements
    
    Term of the related leaseFurniture and Equipment
    
    3 to 5 years
 Allocation of Purchase Price of Acquired Assets
 Business Combinations
  Sales of Real Estate Assets
 Accounting for Sales of Real Estate
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##### Table of Contents



RESULTS OF OPERATIONS
 Discussion of the three months ended March 31, 2009 and 2008.
  March 31,
    
    March 31,
    
    Variance2009
    
    2008
    
    $
    
    %Rental revenue
    
    $
    8,891,000
    
    
    $
    8,264,000
    
    
    $
    627,000
    
    
    
    7.6
    %Operating expenses:Property operating expenses
    
    
    4,108,000
    
    
    
    3,528,000
    
    
    
    580,000
    
    
    
    15.8
    %General and administrative
    
    
    870,000
    
    
    
    856,000
    
    
    
    14,000
    
    
    
    1.6
    %Depreciation and amortization
    
    
    3,712,000
    
    
    
    3,238,000
    
    
    
    474,000
    
    
    
    14.6
    %Interest expense
    
    
    3,371,000
    
    
    
    3,105,000
    
    
    
    266,000
    
    
    
    8.6
    %
 Rental revenue
 Property operating expenses
 General and administrative
 Depreciation and amortization
 Interest expense
 Income taxes.
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##### Table of Contents



Noncontrolling interest.
 Discontinued operations
 LIQUIDITY AND CAPITAL RESOURCES
   Three Months EndedMarch 31,2009
    
    2008Non-Cash Items:Depreciation and amortization expense
    
    $
    3,712
    
    
    $
    3,260Income tax benefit
    
    
    (1,094
    )
    
    
    (427
    )Deferred rental income
    
    
    (62
    )
    
    
    (212
    )Noncontrolling interest
    
    
    (250
    )
    
    
    (103
    )Stock-based compensation expense
    
    
    20
    
    
    
    13Amortization of loan premium
    
    
    (11
    )
    
    
    (11
    )
    18




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##### Table of Contents



INFLATION
  FORWARD-LOOKING STATEMENTS
  19




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##### Table of Contents



ITEM 4T. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
      20




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##### Table of Contents



SIGNATURES
  AMERICAN SPECTRUM REALTY, INC.Date: May 11, 2009
    By:
    /s/ William J. CardenWilliam J. CardenChairman of the Board, President and,
Chief Executive Officer
(Principal Executive Officer)Date: May 11, 2009
    By:
    /s/ G. Anthony EppolitoG. Anthony EppolitoVice President, Chief Financial Officer,
(Principal Financial Officer and Accounting Officer),
Treasurer and Secretary EXHIBIT INDEX
 Exhibit No.
    
    Exhibit Title31.1
    
    Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 200232.2
    
    Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 21