Financial Data and Key Metrics Changes - The company reported FFO per diluted share of $0.52 for Q1 2025, a decrease of approximately $0.03 compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition [18][6] - Same store cash NOI increased by 3.1% year over year across all sectors, with positive growth reported in all sectors except mixed-use [18][19] - The company ended Q1 with liquidity of approximately $544 million, including $144 million in cash and $400 million available on a revolving line of credit [22] Business Line Data and Key Metrics Changes - The office portfolio's same store NOI increased by 5.4% in Q1 2025, driven by the expiration of a rent abatement [18][19] - The retail portfolio's same store NOI also increased by 5.4%, supported by new leases and contractual rent escalations [19] - The multifamily portfolio's NOI was flat year over year, primarily due to lower rental income in Portland, while San Diego properties showed growth [19][12] - The mixed-use portfolio's NOI declined by approximately 11.6%, mainly due to lower occupancy at the Embassy Suites Waikiki [19][20] Market Data and Key Metrics Changes - The office portfolio ended Q1 at 85.5% leased, with an increase in leasing activity and average base rents reaching an all-time high [9][11] - The retail portfolio ended the quarter 97% leased, with strong collections and an all-time high average base rent [11][12] - The multifamily properties in San Diego ended the quarter approximately 95% leased, with a blended rent increase of 2% [12][13] Company Strategy and Development Direction - The company is focused on thoughtful capital allocation, operational discipline, and enhancing asset quality to ensure long-term stability [5][6] - Recent strategic initiatives include the sale of Del Monte Center and the acquisition of Genesee Parks Apartments, aimed at concentrating capital in core markets [14][15] - The company aims to maintain a balance sheet that allows for flexibility in both offensive and defensive strategies [6][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the ongoing shift in office dynamics, despite economic uncertainty [7][10] - The company remains focused on reducing leverage and maintaining strong liquidity, which is deemed essential in the current environment [6][22] - Management acknowledged potential challenges in leasing activity due to economic uncertainty but remains committed to monitoring market conditions closely [14][26] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q2, reflecting confidence in the company's outlook [16][17] - The company aims to achieve and maintain a long-term net debt to EBITDA ratio of 5.5 times or below [22] Q&A Session Summary Question: Update on Bellevue assets and occupancy - Management noted significant leasing momentum in Bellevue, with recent leases bringing occupancy to 97% at Timber Ridge and ongoing interest in other properties [30][32] Question: Impact of Proposition 1A on tenant interest - Management observed increased inbound tenant inquiries in Bellevue, indicating a positive response to the proposition [34] Question: Plans for redeploying proceeds from Del Monte Center sale - The company is actively looking for additional acquisitions but is also comfortable holding cash on the balance sheet amid economic uncertainty [36][37] Question: Update on leasing pipeline at La Jolla - The UTC submarket remains tight, with ongoing proposals and construction of amenities expected to boost leasing activity [38][41]

Financial Performance - Total revenue for Q1 2025 was $108.607 million, a decrease of 1% from $110.695 million in Q1 2024[13] - Net income attributable to American Assets Trust, Inc. stockholders was $42.535 million, up 109% from $19.260 million in the same period last year[13] - Funds from Operations (FFO) for Q1 2025 were $40.125 million, down 27% from $54.840 million in Q1 2024[14] - FFO per diluted share was $0.52, a decrease from $0.71 in Q1 2024[14] - EBITDA for Q1 2025 was $57,990, down from $70,766 in Q1 2024, reflecting a decrease of approximately 18%[120] - Total Net Operating Income (NOI) for Q1 2025 was $67,302, slightly down from $69,608 in Q1 2024, a decrease of about 3.7%[124] - Cash NOI for Q1 2025 was $66,962, compared to $66,479 in Q1 2024, indicating a modest increase of 0.7%[126] Assets and Liabilities - Cash and cash equivalents decreased to $143.915 million from $425.659 million at the end of Q4 2024[12] - Total assets as of March 31, 2025, were $2.968 billion, down from $3.273 billion at the end of 2024[12] - Total liabilities decreased to $1.815 billion from $2.149 billion at the end of 2024[12] - The company reported total outstanding debt of $1,700,000,000 as of March 31, 2025, with a total debt to total capitalization ratio of 52.2%[58] - The company’s total unencumbered assets grossed $3,741,620,000, providing a cushion against debt obligations[58] Real Estate Performance - The portfolio consists of 4.1 million square feet of office space, contributing 63% to Net Operating Income (NOI), and 2.4 million square feet of retail space, contributing 37% to NOI[5] - Total real estate rental revenue for the three months ended March 31, 2025, was $108,607,000, an increase from the previous period[20] - Same-store cash NOI for the same period was $66,626,000, reflecting a 3.1% increase compared to $64,645,000 in the prior year[26] - The office segment reported a same-store cash NOI of $35,318,000, up 5.4% from $33,515,000 in the previous year[26] - Retail same-store cash NOI increased by 5.4% to $16,383,000 from $15,551,000[26] - Mixed-use segment experienced a decline in same-store cash NOI by 11.6%, down to $5,363,000 from $6,066,000[26] - The total real estate expenses for the same period amounted to $41,305,000, with same-store expenses at $39,582,000[20] - The net operating income (NOI) for the total portfolio was $67,302,000, with same-store NOI at $66,930,000[20] Dividends and Capital Expenditures - Dividends declared and paid in Q1 2025 were $26.288 million, compared to $25.821 million in Q1 2024[14] - Total capital expenditures for the first quarter of 2025 amounted to $17,230,000, with the office portfolio accounting for $14,311,000 of this total[49] Tenant and Lease Information - The company has 4,077,376 square feet of office space expiring, representing 61.9% of total base rent at an average of $44.53 per square foot[103] - The company has signed leases not commenced totaling 86,998 square feet, which is 2.1% of total space[104] - The total number of leases signed in the first quarter of 2025 was 19, covering 139,616 square feet, with a weighted average lease term of 8.2 months[86] - The total annualized base rent for signed but not commenced leases as of March 31, 2025, is projected to be $4,639,340[84] - The average contractual rent per square foot for new leases in Q4 2024 was $129.08, with a significant annual change of 10.6%[90] Development Projects - The La Jolla Commons project in San Diego has an estimated stabilized yield of 6.5% - 7.5% with a total estimated investment of $175 million and 213,000 square feet[67] - The company is developing multiple retail and multifamily projects, including the Waikele Center in Honolulu with 120,000 square feet[68] - The company has incurred $130.1 million in costs to date for the La Jolla Commons project, with stabilization expected by 2026/2027[67] Market Conditions and Future Outlook - The company anticipates continued market expansion with a focus on increasing occupancy rates and optimizing rental income from expiring leases[102] - The company is exploring various development opportunities that may be subject to market conditions and approvals[66]

Financial Results - Net income available to common stockholders for the first quarter of 2025 was $42.5 million, or $0.70 per diluted share, an increase from $19.3 million, or $0.32 per diluted share, in the same period of 2024 [5][24] - Funds from Operations (FFO) per diluted share, excluding lease termination fees and litigation income, decreased 10% year-over-year to $0.52 for the first quarter of 2025, compared to $0.58 in the first quarter of 2024 [5][6] - Same-store cash Net Operating Income (NOI) increased by 3.1% year-over-year for the first quarter of 2025 [5][13] Disposition and Acquisition Activity - The company completed the sale of Del Monte Center for $123.5 million on February 25, 2025 [5] - The acquisition of Genesee Park, a 192-unit apartment community in San Diego, was completed for $67.9 million on February 28, 2025 [5] Leasing Activity - Approximately 44,000 square feet of office space were leased with average contractual rent increases of 15% on a straight-line basis and 8% on a cash basis during the first quarter [5] - Approximately 156,000 square feet of retail space were leased with average contractual rent increases of 21% on a straight-line basis and 13% on a cash basis during the first quarter [5] - The portfolio leased status as of March 31, 2025, showed office occupancy at 85.5%, retail at 97.4%, and multifamily at 90.0% [8] Balance Sheet and Liquidity - As of March 31, 2025, the company had gross real estate assets of $3.7 billion and liquidity of $543.9 million, which includes $143.9 million in cash and cash equivalents [15] - The company had only 1 out of 31 assets encumbered by a mortgage as of March 31, 2025 [15] Dividends - The company declared dividends of $0.340 per share for the first quarter of 2025, which were paid on March 20, 2025 [17] - A similar dividend of $0.340 per share has been declared for the second quarter of 2025, payable on June 19, 2025 [17] Guidance - The company affirms its guidance for full year 2025 FFO per diluted share in the range of $1.87 to $2.01, with a midpoint of $1.94 [18]

Group 1 - The trade war between the U.S. and China is intensifying, with China now imposing 125% tariffs on U.S. goods, an increase from the previous 84% [1] Group 2 - The ongoing tariffs have caused significant disruption in the overall market in recent weeks [1]

Company Overview - American Assets Trust, Inc. is a full-service, vertically integrated, and self-administered real estate investment trust (REIT) headquartered in San Diego, California with over 55 years of experience in acquiring, improving, developing, and managing premier office, retail, and residential properties throughout the United States [3] - The company's office portfolio comprises approximately 4.1 million rentable square feet, while its retail portfolio includes approximately 2.4 million rentable square feet [3] - Additionally, the company owns one mixed-use property with approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel, along with 2,302 multifamily units [3] Upcoming Earnings Announcement - The company will announce its first quarter 2025 earnings in a press release after the market closes on Tuesday, April 29, 2025 [1] - A conference call for the first quarter 2025 earnings will be held on Wednesday, April 30, 2025, at 8:00 a.m. Pacific Time [1] - Access to the conference call can be obtained by dialing 1 (833) 816-1162 and requesting to join the American Assets Trust, Inc. Conference Call [1]

Core Insights - American Assets Trust, Inc. has successfully acquired Genesee Park, a 192-unit apartment community in San Diego, California for $67.9 million [1][4] - The property is currently approximately 93% leased, with rental rates believed to be significantly below market levels, presenting an opportunity for value enhancement through strategic asset management [2][3] Company Overview - American Assets Trust, Inc. is a vertically integrated and self-administered real estate investment trust (REIT) with over 55 years of experience in acquiring, improving, developing, and managing premier properties across the United States [5] - The company's portfolio includes approximately 4.1 million rentable square feet of office space, 2.4 million rentable square feet of retail space, and 2,302 multifamily units [5] Strategic Plans - The company plans to optimize rental rates and explore opportunities to enhance density at Genesee Park, aiming to unlock the property's full value while improving the living experience for residents [3] - This acquisition aligns with the company's long-term strategy of acquiring and enhancing high-quality assets in key markets [3]

Core Viewpoint - American Assets Trust, Inc. has announced the sale of Del Monte Shopping Center for approximately $123.5 million, which is a strategic move to focus on markets that offer greater economies of scale and operational efficiencies [1][2]. Company Overview - American Assets Trust, Inc. is a vertically integrated and self-administered real estate investment trust (REIT) based in San Diego, California, with over 55 years of experience in acquiring, improving, developing, and managing premier properties across the United States [3]. - The company's office portfolio includes approximately 4.1 million rentable square feet, while its retail portfolio comprises around 2.4 million rentable square feet [3]. - The company also owns a mixed-use property with approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel, in addition to 2,110 multifamily units [3].

Portfolio Composition - As of December 31, 2024, the portfolio includes twelve office properties, twelve retail shopping centers, one mixed-use property with a 369-room hotel, and six multifamily properties[35]. - The operating portfolio as of December 31, 2024, includes 31 properties with approximately 7.3 million rentable square feet of office and retail space, 2,110 residential units, and a 369-room hotel[179]. - The total net rentable square feet across all properties is 7,264,703, with Southern California contributing 40.2% of this total[196]. - The office portfolio includes 12 properties with approximately 4.1 million rentable square feet, 85.0% of which were leased as of December 31, 2024[233]. Financial Performance - In 2024, approximately 53% of the company's net operating income was derived from office properties, indicating a significant reliance on this segment[58]. - The total annualized base rent for the retail and office portfolio is $273,746,176, with an average rent per leased square foot of $42.85 and an overall leased percentage of 89.1%[180]. - The total property operating income for the office segment was $153,544,000, representing 52.9% of the total property operating income[198]. - The retail segment generated property operating income of $76,532,000, accounting for 26.4% of the total[198]. Growth Strategy - The company aims to pursue growth through strategic acquisitions of high-quality properties in high-barrier-to-entry markets[42]. - The company plans to selectively reposition and redevelop existing properties and pursue ground-up development opportunities[42]. - The company aims for growth in earnings and cash flows through property development, acquisitions, and redevelopment opportunities[223]. - The company evaluates properties continuously to identify redevelopment opportunities that enhance operating performance[224]. Debt and Financial Risks - The company had total debt outstanding of $1.70 billion as of February 11, 2025, which may expose it to risks of default under its debt obligations[60]. - High mortgage rates may hinder the company's ability to finance or refinance properties, potentially reducing net income and cash distributions[74]. - The company is exposed to foreclosure risks due to mortgage debt obligations, which could adversely affect its property portfolio value[75]. - The company’s ability to grow is limited if it cannot obtain additional capital, especially in unfavorable economic conditions[72]. Tenant and Lease Information - As of December 31, 2024, the three largest tenants in the office portfolio accounted for approximately 31.5% of the total annualized base rent, with Google LLC, LPL Holdings, Inc., and Autodesk, Inc. contributing 14.0%, 10.6%, and 6.9% respectively[62]. - The largest anchor tenants in the retail portfolio, including Lowe's, Sprouts Farmers Market, and Marshalls, represented approximately 10.1% of total annualized base rent as of December 31, 2024[66]. - The total annualized base rent for signed but not commenced leases in the office portfolio is $3,381,430, with a rent per leased square foot of $45.94[187]. - The total annualized base rent for signed but not commenced leases in the retail portfolio is $767,399, with a rent per leased square foot of $68.29[187]. Market and Competitive Environment - The company operates in a highly competitive environment, which may limit suitable acquisition opportunities and increase acquisition costs[50]. - The company faces competition from other developers and operators in its markets, which may affect its ability to lease properties and maintain rental rates[49]. - The company faces significant risks in the retail real estate market, including competition from discount and internet retailers, which could adversely affect market rents and tenant demand[88]. - The company competes with numerous developers and operators, which may lead to decreased occupancy and rental rates if competitors offer lower rates[90]. Environmental and Regulatory Risks - The company is exposed to potential environmental liabilities, including contamination issues at certain properties, which could impact financial performance[47]. - The company may face liabilities related to environmental issues, including mold and air quality problems, which could lead to costly remediation efforts[133]. - The company is subject to laws and regulations related to climate change, which could result in substantial compliance costs[112]. - The company’s properties are vulnerable to climate change impacts, which may lead to additional compliance obligations and costs[113]. Operational and Management Risks - The company is focused on proactive asset and property management to increase occupancy rates and enhance property cash flows[42]. - The company relies on third-party management for its hospitality properties, which may limit operational control and increase financial risks[99]. - The company has implemented various security measures to mitigate risks associated with information technology and data security[121]. - The Audit Committee receives quarterly reports on cybersecurity risks and oversees the cybersecurity risk management program, ensuring governance and risk oversight[175]. Shareholder and Governance Issues - The company is committed to maintaining its REIT status by distributing at least 90% of its net taxable income to stockholders[44]. - The company’s ability to generate revenues in excess of expenses is crucial for making expected distributions to stockholders and unitholders[124]. - The board of directors can increase the number of authorized shares without stockholder approval, potentially diluting existing shares[141]. - The partnership agreement includes provisions that may delay or prevent unsolicited acquisitions, potentially affecting stockholder interests[145].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported FFO per share of $0.55, a decrease of approximately $0.16 compared to Q3 2024, primarily due to nonrecurring termination fees received in Q3 that were not present in Q4 [31][32] - Total revenue, NOI, and aggregate dividends exceeded $103 million, marking record levels for the company [8][9] - The company ended Q4 with liquidity of approximately $826 million, comprised of $426 million in cash and cash equivalents and $400 million available on a revolving line of credit [33] Business Line Data and Key Metrics Changes - The office segment experienced a negative 2.8% same-store cash NOI growth in Q4, primarily due to known move-outs [32] - The retail segment achieved a 5% same-store NOI growth in 2024, with properties at 95% leased [20] - The multifamily segment reported over 6% same-store cash NOI growth in 2024 compared to 2023 [21] Market Data and Key Metrics Changes - The office portfolio closed the year at 85% leased, reflecting a decrease of 200 basis points compared to the prior quarter [14] - National office demand is approaching pre-pandemic levels, with quarterly net absorption turning positive for the first time in three years [14] - The retail segment is supported by resilient consumer spending in affluent, supply-constrained markets [20] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, ample liquidity, and increasing dividends through long-term cash flow growth [11] - A strategic decision was made to sell Del Monte Center to focus on markets with greater operational efficiencies and economies of scale [25][26] - The company is actively pursuing multifamily acquisitions that offer value-add opportunities, particularly in markets where they already have a presence [78] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the return-to-office mandates from tenants, which are expected to drive increased occupancy and leasing momentum [12][13] - The Class A office market is anticipated to improve significantly over the next 12 to 24 months, assuming economic stability [14] - Management acknowledged the challenges posed by increased interest expenses and the need for prudent financial management [11][12] Other Important Information - The board approved a 1.5% increase in the quarterly dividend to $0.34 per share, reflecting confidence in the company's long-term performance [29] - The company expects 2025 FFO per share guidance to range from $1.87 to $2.01, representing a 24% decrease from 2024 [35] Q&A Session Summary Question: Can you discuss the expected contribution from La Jolla One Beach and the Bellevue assets in 2025? - Management indicated that while the future looks bright, cash flow improvements from these assets are expected to be realized later in 2025 and into 2026 [52][60] Question: What is the expected FFO dilution from the Del Monte Center sale? - Management stated that the sale is expected to result in an 11-cent dilution, with proceeds earmarked for multifamily acquisitions [64][67] Question: Why raise the dividend now despite reduced earnings expectations? - The board aimed to assure investors of their confidence in the portfolio's quality, maintaining a payout ratio below 100% [85][88] Question: What are the assumptions for same-store cash NOI for office and retail? - Same-store office cash NOI is expected to decrease by 1%, while retail is projected to increase by approximately 1.5% [130][132]

Core Viewpoint - American Assets Trust (AAT) reported quarterly funds from operations (FFO) of $0.55 per share, exceeding the Zacks Consensus Estimate of $0.50 per share, but down from $0.57 per share a year ago [1][2] Financial Performance - The company achieved revenues of $113.46 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.66% and showing an increase from $112.49 million year-over-year [2] - Over the last four quarters, AAT has consistently exceeded consensus FFO estimates [2] Stock Performance - AAT shares have declined approximately 8.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.53 on revenues of $111.51 million, and for the current fiscal year, it is $2.29 on revenues of $456.86 million [7] - The outlook for the REIT and Equity Trust - Retail industry is positive, ranking in the top 36% of over 250 Zacks industries, suggesting potential for outperformance [8]