AAT

Interested in American Assets Trust, Inc.? Here are five stocks we like better. Q2 FFO exceeded expectations at $0.51 per diluted share, while same-store cash NOI rose 0.3% year over year, or 1.3% excluding a one-time office receivable reserve. Office leasing created significant embedded growth: the portfolio was 84.4% leased, with about 200,000 square feet of signed leases yet to commence and an estimated $0.29 per share of potential incremental FFO from stabilizing key properties. American Assets Trust reaffirmed full-year FFO guidance of $1.96–$2.10 per share and said results could reach the upper half of the range if office leasing, multifamily performance and hotel demand improve; liquidity totaled approximately $610 million. American Assets Trust (NYSE:AAT) reported second-quarter funds from operations of $0.51 per diluted share, ahead of its internal expectations, as recently commenced office leases contributed incremental rental income. Net income attributable to common stockholders was $0.09 per diluted share. Portfolio-wide same-store cash net operating income increased 0.3% from the prior-year quarter, or 1.3% excluding a one-time reserve related to an office tenant receivable. President and CEO Adam Wyll said the company’s outlook supports reaching the midpoint of its full-year FFO guidance, with potential to move into the upper half if leasing, multifamily and hotel trends develop favorably. → This Tiny AI Supplier Could Be More Important Than the Chipmakers The office portfolio was 84.4% leased at quarter-end. American Assets Trust signed about 110,000 square feet of office leases during the quarter, generating comparable cash leasing spreads of 9% and straight-line spreads of 10%. The company entered the third quarter with approximately 200,000 square feet of signed office leases that had not yet begun paying cash rent, representing more than $10 million of annualized base rent. It also had 73,000 square feet in lease documentation and proposals outstanding on nearly 150,000 square feet of new and expansion space. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Wyll said leasing conditions vary by market but that the company is seeing demand for higher-quality office properties. He pointed to activity in the UTC and Del Mar Heights submarkets in San Diego, San Francisco’s technology-driven leasing environment, and improving availability trends in Bellevue. Portland remains challenged, although the company said leasing activity there is concentrating in stronger buildings. At La Jolla Commons Tower 3, which was 49% leased, proposals represented another 33% of the building. At One Beach Street in San Francisco, which was 35% leased, the company is converting remaining first- and second-floor availability into spec suites, with completion expected in the coming months. → Innovative ETF Strategies That Are Paying Off This Summer During the question-and-answer session, Wyll said the company’s goal for office occupancy has not changed, though year-end results are “more binary” because several large tenant requirements remain in proposal stages. He said the company would not pursue occupancy at the expense of lease rates, term or tenant credit. Chief Financial Officer Bob Barton said the company sees approximately $0.29 per share of incremental FFO potential from the eventual stabilization of La Jolla Commons Tower 3, One Beach Street and suburban Bellevue properties. About $0.14 of that amount is tied to leases already signed, while $0.15 depends on future speculative leasing. The company has recognized $0.03 of the signed-lease contribution in the first half and expects another $0.02 in the second half, followed by $0.09 next year. The one-time office reserve was related to a tenant that had been on the company’s watch list in 2025. Wyll said American Assets Trust reserved roughly $1.1 million to $1.2 million in cash receivables and straight-line rent during the second quarter, while adding that no recovery is assumed in the 2026 outlook. The space has already been backfilled. Steve Center, senior vice president of office properties, said the replacement tenant has a signed 84-month lease scheduled to commence May 1, with a starting rent of about $63 per square foot, seven months of free rent and 3% annual increases. The retail portfolio ended the quarter 98% leased. The company executed approximately 139,000 square feet of retail leases, with comparable cash spreads of 3% and straight-line spreads of 20%. Retail same-store NOI declined 0.4%, reflecting the absence of a one-time real estate tax refund received in the second quarter of 2025. Multifamily same-store NOI increased 0.9%, or 1.6% excluding the RV park. The multifamily portfolio, excluding the RV park, was more than 94% leased. San Diego communities were 96% leased, where renewal rents increased 5% and new lease rents declined 2%, producing 3% blended growth. Hassalo on Eighth in Portland was 88% leased, with 2% renewal growth and 1% new lease growth. Wyll described 2026 as a stabilization year for multifamily rather than a year of significant rent growth, citing elevated supply in San Diego and Portland. He said development activity has slowed materially in both markets, which could improve the supply-demand balance over the next several years. At Waikiki Beach Walk, stronger retail operations and bad-debt collections offset rate pressure at the Embassy Suites Waikiki hotel. Hotel occupancy increased to 90.5% from 86% a year earlier, while RevPAR rose 0.9% to $308. Average daily rate declined 0.4% to $340, and hotel NOI was approximately $2.5 million, compared with $2.9 million in the prior-year period. Barton said the company ended the quarter with about $610 million of total liquidity, including $110 million of cash and $500 million available under its revolving credit facility. The company’s revolver and $100 million term loan were extended to April 2030. Net debt to EBITDA was 6.7 times on a quarterly annualized basis and 6.9 times on a trailing 12-month basis, compared with its long-term target of 5.5 times or below. American Assets Trust reaffirmed full-year FFO guidance of $1.96 to $2.10 per diluted share, with a midpoint of $2.03. Barton said the company could trend toward the upper half of the range if reserved retail tenants continue meeting rent obligations, office leases begin sooner than expected, multifamily occupancy and rents outperform expectations, and tourism demand improves at Embassy Suites Waikiki. The board also declared a quarterly dividend of $0.34 per share, payable Sept. 17 to shareholders of record on Sept. 3. Wyll said dividend coverage is expected to improve as signed office leases commence and leasing and redevelopment investments contribute more meaningfully to cash flow. American Assets Trust, Inc is a publicly traded real estate investment trust (REIT) that acquires, develops and manages a diversified portfolio of commercial properties across multiple asset classes. The company's holdings include retail centers, office buildings, multifamily communities and select hotel and resort properties. American Assets Trust pursues an integrated strategy combining proactive redevelopment, leasing initiatives and sustainable design to enhance asset value and drive long-term growth. Founded in 1998 and headquartered in San Diego, California, American Assets Trust has built a presence in key markets along the West Coast and select western U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "American Assets Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

SAN DIEGO, July 28, 2026 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its second quarter ended June 30, 2026. Second Quarter Highlights Net income available to common stockholders of $5.2 million and $10.3 million for the three and six months ended June 30, 2026, respectively, or $0.09 and $0.17 per diluted share, respectively. FFO of $0.51 and $1.02 per diluted share for the three and six months ended June 30, 2026, respectively, compared to $0.52 and $1.04 per diluted share for the same periods in 2025. Same-store cash Net Operating Income (“NOI”) increased 0.3% and decreased 0.1% for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. Achieved record average rental rates across our office, retail, and multifamily segments during the second quarter of 2026. Leased 110,000 of office square feet, of which approximately 75,000 is comparable at an average straight-line basis and cash-basis contractual rent increase of 10.2% and 9.1%, respectively, during the second quarter. Leased 139,000 of retail square feet, of which approximately 134,000 is comparable at an average straight-line basis and cash-basis contractual rent increase of 20.2% and 3.0%, respectively, during the second quarter. Amended and Restated Credit Facility On April 1, 2026, the credit facility was amended and restated to, among other things, increase the borrowing capacity to $600 million, consisting of a $500 million revolving line of credit and a $100 million term loan, and extend the maturity date to April 1, 2030. As of June 30, 2026, the only amount outstanding under the credit facility was the $100 million term loan. Financial Results Net income attributable to common stockholders decreased $47.7 million for the six months ended June 30, 2026 compared to the same period in 2025, primarily driven by the gain on sale of Del Monte Center recognized in 2025, higher interest expense as we ceased capitalization of interest related to La Jolla Commons III being placed into service, decrease in occupancy at First & Main and 14Acres and overall increase in rental expenses across all segments. FFO decreased $1.5 million for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to the items described above. Gain on sale of Del Monte Center is excluded from FFO computations. FFO is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release. LeasingThe portfolio leased status as of the end of the indicated quarter was as follows: During the second quarter of 2026, the company signed 34 leases for approximately 248,700 square feet of office and retail space, as well as 575 multifamily apartment leases. Renewals accounted for 67% of the comparable office leases, 100% of the comparable retail leases, and 77% of the residential leases. Office and RetailThe annualized base rent per leased square foot as of the end of the indicated quarter was as follows: On a comparable basis (i.e., leases for which there was a former tenant in the past six-months) our office and retail leasing spreads as of the end of the indicated quarter are shown below: On a comparable basis (i.e., leases for which there was a former tenant in the past six months) during the three and six months ended June 30, 2026 our office and retail leasing spreads are shown below: MultifamilyThe average monthly base rent per occupied unit as of the end of the indicated quarter was as follows: Same-Store Cash Net Operating IncomeFor the three and six months ended June 30, 2026, same-store cash NOI increased 0.3% and decreased 0.1%, respectively, compared to the three and six months ended June 30, 2025. The same-store cash NOI by segment was as follows (in thousands): Same-store cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of same-store cash NOI to net income is attached to this press release. Credit FacilityOn April 1, 2026, our credit facility was amended and restated to, among other things, increase the revolving line of credit from $400 million to $500 million, extend the maturity date of the restated $500 million revolving line of credit to April 1, 2030 (with two, six-month extension options), and extend the maturity of the $100 million term loan included within the credit facility to April 1, 2030 (with one, twelve-month extension option). As of June 30, 2026, the only amount outstanding under the credit facility was the $100 million term loan. Balance Sheet and LiquidityAt June 30, 2026, the company had gross real estate assets of $3.8 billion and liquidity of $609.7 million, comprised of cash and cash equivalents of $109.7 million and $500.0 million of availability on its line of credit. At June 30, 2026, the company had only 1 out of 31 assets encumbered by a mortgage. DividendsThe company declared dividends on its shares of common stock of $0.34 per share for the second quarter of 2026. The dividends were paid on June 18, 2026. In addition, the company has declared a dividend on its common stock of $0.34 per share for the third quarter of 2026. The dividend will be paid in cash on September 17, 2026 to stockholders of record as of September 3, 2026. GuidanceThe company affirms its guidance range for full year 2026 FFO per diluted share of $1.96 to $2.10 per share, with a midpoint of $2.03. The company’s guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financing or repayments. The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company’s actual results may differ materially from these estimates. Conference CallThe company will hold a conference call to discuss the results for the second quarter of 2026 on Wednesday, July 29, 2026 at 8:00 a.m. Pacific Time. To participate in the event by telephone, please dial 1-833-816-1162 and ask to join the American Assets Trust, Inc. conference call. A live on-demand audio webcast of the conference call will be available on the company’s website at www.americanassetstrust.com. A replay of the call will also be available on the company’s website. Supplemental InformationSupplemental financial information regarding the company’s second quarter 2026 results may be found on the “Financial Reporting” tab of the “Investors” page of the company’s website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules. Financial InformationAmerican Assets Trust, Inc.Consolidated Balance Sheets(In Thousands, Except Share Data) American Assets Trust, Inc.Unaudited Consolidated Statements of Operations(In Thousands, Except Shares and Per Share Data) Reconciliation of Net Income to Funds From OperationsThe company’s FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited): Reconciliation of Same-Store Cash NOI to Net IncomeThe company’s reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited): Reported results are preliminary and not final until the filing of the company’s Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment. Use of Non-GAAP InformationFunds from OperationsThe company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company’s operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company’s operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company’s properties, all of which have real economic effects and could materially impact the company’s results from operations, the utility of FFO as a measure of the company’s performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company’s performance. FFO should not be used as a measure of the company’s liquidity, nor is it indicative of funds available to fund the company’s cash needs, including the company’s ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP. Cash Net Operating IncomeThe company uses NOI internally to evaluate and compare the operating performance of the company’s properties. The company believes cash NOI provides useful information to investors regarding the company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company’s properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company’s properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company’s properties but does not measure the company’s performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP. Cash NOI is a non-GAAP financial measure of performance. The company defines cash NOI as operating revenues (rental income, tenant reimbursements (other than tenant improvement reimbursements), ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes lease termination fees, tenant improvement reimbursements, general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company’s cash NOI may not be comparable to the cash NOIs of other REITs. About American Assets Trust, Inc.American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust (“REIT”), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company’s office portfolio comprises approximately 4.3 million rentable square feet, and its retail portfolio comprises approximately 2.4 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,302 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com. Forward Looking StatementsThis press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions, including the impact of tariffs and other trade restrictions; the potential impact of a prolonged government shutdown; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyberattacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company’s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Source: American Assets Trust, Inc. Investor and Media Contact:American Assets TrustRobert F. BartonExecutive Vice President and Chief Financial Officer858-350-2607

SAN DIEGO, July 06, 2026 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE:AAT) (the “Company”) will announce its second quarter 2026 earnings in a press release to be issued after the market closes on Tuesday, July 28, 2026. Senior management will hold a conference call for its second quarter 2026 earnings on Wednesday, July 29, 2026 at 8:00 a.m. Pacific Time (“PT”). To access the conference call, please dial 1 (833) 816-1162 and ask to join the American Assets Trust, Inc. Conference Call. A live on-demand audio webcast of the conference call will be available on the “Investor Relations” section of the Company’s website at www.americanassetstrust.com. A replay webcast will be available on the Company’s website approximately one hour after the conclusion of the conference call. About American Assets Trust, Inc. American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. The Company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The Company's office portfolio comprises approximately 4.3 million square feet, and its retail portfolio comprises approximately 2.4 million rentable square feet. In addition, the Company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,302 multifamily units. In 2011, the Company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com. Forward Looking Statements This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions, including the impact of tariffs and other trade restrictions; the potential impact of a prolonged government shutdown; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyberattacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Source: American Assets Trust, Inc. Investor Contact: American Assets Trust Robert F. BartonExecutive Vice President and Chief Financial Officer858-350-2607

This article first appeared on GuruFocus. Release Date: April 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. American Assets Trust Inc (NYSE:AAT) successfully completed the recast and upsize of its unsecured credit facility, increasing the revolving line of credit from $400 million to $500 million and extending the maturity to 2030, providing enhanced financial flexibility. The office portfolio showed strong leasing activity, with approximately 237,000 square feet of office leases executed, and a proposal pipeline of over 200,000 square feet. Retail assets remained highly leased at 98%, with average base rents reaching a new portfolio record of $30 per square foot. Multifamily portfolio ended the quarter 96% leased, with a 3% year-over-year increase in same-store cash NOI, indicating solid performance despite a competitive supply landscape. The company maintained a quarterly dividend of $0.34 per share, reflecting confidence in the long-term cash flow profile of the portfolio. The office portfolio faced challenges with Genentech vacating approximately 67,000 square feet in Q4, impacting the year-end leasing target. Retail same-store cash NOI was modestly below the prior-year period due to temporary vacancies from former Party City and Discount Tire spaces. Mixed-use NOI declined 2.7% due to lower ADR and higher operating expenses at Embassy Suites Waikiki, despite improved occupancy. The payout ratio remained elevated at approximately 111%, driven by leasing-related capital expenditures, though expected to moderate. Tourism demand at Waikiki Beachwalk was impacted by external factors such as significant rainstorms and a strong Japanese yen, affecting hotel performance. Warning! GuruFocus has detected 7 Warning Signs with AAT. Is AAT fairly valued? Test your thesis with our free DCF calculator. Q: You previously discussed some known move-outs in the office portfolio. Have any tenant decisions shifted or changed since year-end, and could you remind us what's embedded in guidance for the office portfolio's year-end lease rate? A: As Adam mentioned, Genentech will vacate in Q4. On the positive side, we have three known move-outs in lease documentation at City Center Bellevue. We are tracking 173,000 feet with 17 deals, including expansions. We are targeting mid-80% occupancy by year-end, which is achievable if momentum continues. Q: Can you talk about the leasing pipeline at La Jolla and where you might expect it to be by year-end? A: La Jolla Commons Tower 3 is a premier offering with proposals from two full-floor users and two multi-floor users. We expect to secure one or more of these deals. The spec suite program is progressing well, with the fifth floor pre-leased and completion expected by September. Q: Regarding the signed and not occupied pipeline in both office and retail, when do you expect leases to begin cash flowing? A: We have about a quarter million square feet in the office portfolio signed but not commenced, with approximately $0.07 per share expected to impact 2026 guidance. About 100,000 square feet will not hit meaningfully until next year. Retail numbers are not significant in this context. Q: Can you provide insights into the demand for tourism at the hotel in Hawaii, especially from Japanese and American tourists? A: Occupancy improved to 91%, outperforming our competitive set. However, the Japanese yen's strength and recent weather events have impacted demand. Japanese tourists now represent about 20% of visitors, down from 40%. Despite challenges, the hotel remains the top-performing Embassy Suites globally. Q: On One Beach, can you discuss the AI demand and the impact of the large opportunity that didn't materialize? A: The large deal didn't proceed due to complexities, but we quickly pivoted back to the Spec Suite program. We pre-leased the third floor before construction, and we expect similar results for other floors. The AI demand remains strong, and we are optimistic about future leasing. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Management completed an upsized unsecured credit facility, increasing revolver capacity to $500M (total $600M unsecured capacity) and extending maturities to April 1, 2030, leaving roughly $518M of liquidity and no debt maturities until 2027 while net debt/EBITDA stood at 6.9x (target 5.5x). Office leasing showed momentum with about 237,000 sq ft executed and the office portfolio 84.5% leased, but Genentech’s planned 67,000‑sq‑ft vacate in Q4 shifts management to the lower end of its year‑end 85–88% leasing target. The board maintained the quarterly dividend at $0.34 despite a Q1 payout ratio near 111% due to leasing-related capital and Spec Suite spending, and the company reaffirmed 2026 FFO guidance of $1.96–$2.10 per share while expecting the payout ratio to moderate over the year. Interested in American Assets Trust, Inc.? Here are five stocks we like better. American Assets Trust (NYSE:AAT) reported first-quarter 2026 funds from operations (FFO) of $0.51 per diluted share and net income attributable to common stockholders of $0.08 per share, as management pointed to steady performance across its diversified portfolio and increased leasing momentum in office. President and CEO Adam Wyll said the company “started 2026 in line with our expectations,” highlighting encouraging office leasing activity, high retail occupancy, and “steady results” at Waikiki Beach Walk amid what he described as a “still mixed tourism backdrop.” → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Wyll said the company completed a recast and upsize of its unsecured credit facility on April 1, increasing the revolving line of credit from $400 million to $500 million and extending the maturity of both the revolver and a $100 million term loan to April 1, 2030. “Altogether, this facility provides us with $600 million of total unsecured borrowing capacity,” Wyll said, adding that the expanded facility provides “enhanced financial flexibility and runway” with “no debt maturities until 2027.” EVP and CFO Robert Barton said the company ended the quarter with approximately $518 million of liquidity, including $118 million of cash and $400 million available under the revolving credit facility (prior to the April 1 upsizing). Barton reported net debt to EBITDA of 6.9x on a trailing 12-month basis, noting the company’s long-term target remains 5.5x or below. Interest and fixed charge coverage were both 3.0x, he said. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Wyll said demand remains concentrated “at the top of the market” in well-located, amenitized buildings with strong ownership, and argued the company’s coastal office portfolio is aligned with what tenants are seeking today. He also said artificial intelligence is driving investment and business formation across technology and related ecosystems, and that “the net effect in our markets has been constructive,” while emphasizing that office users are placing a higher bar on location and amenities. American Assets Trust ended the quarter 84.5% leased in its office portfolio and 86% leased in its same-store office portfolio. Same-store office cash NOI was “essentially flat” year-over-year, Wyll said, modestly ahead of internal expectations and reflecting previously discussed move-outs. → Did Qualcomm Just Put Apple in Check? During the quarter, the company executed about 237,000 square feet of office leases with comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6%, Wyll said. He added that of 14 non-comparable office leases in the quarter (disclosed separately in the supplemental materials), 12 were new tenants and nine were associated with the company’s Spec Suite program. Looking ahead, Wyll said the company entered the second quarter with roughly: 244,000 square feet of previously signed office leases not yet commenced 122,000 square feet in lease documentation A proposal pipeline of more than 200,000 square feet At La Jolla Commons Tower III, Wyll said the building was 49% leased with proposals out on another 30% of the building. He said the UTC submarket has limited large-block availability outside of Tower III and “no meaningful new supply on the horizon,” which management believes positions the property to capture larger requirements. In response to analyst questions, management provided additional color on Tower III’s pipeline, saying it was in proposals with “two full floor users and two multi-floor users,” and that competition is “very narrow.” Management also said there was only “one suite left” on the fourth-floor Spec Suite program and that a fifth-floor spec suite was “pre-leased” despite not being completed until September. At One Beach Street, Wyll said the building was 36% leased. He noted one larger opportunity referenced previously did not move forward, and said the leasing strategy had shifted toward building a broader pipeline of smaller and mid-sized tenants while advancing Spec Suite build-outs with permits in hand and work underway. Wyll reiterated a prior goal of ending the year at 85% to 88% leased across the office portfolio, but said the company learned that Genentech at Lloyd District (about 67,000 square feet) “reversed course” on a short-term renewal and will vacate in the fourth quarter. As a result, he said the company is now targeting the lower end of that year-end leasing range. Barton added that, beyond Genentech, there are three known move-outs that are already “in lease documentation at City Center Bellevue,” totaling 28,000 square feet. He also said he was tracking 173,000 square feet across 17 deals, including relocations tied to tenant expansions that involve tenants “giving space back.” Wyll said retail remained “a source of consistent, reliable performance,” with the retail portfolio ending the quarter 98% leased. The company executed about 39,000 square feet of retail leasing, and Wyll said average base rents reached a new portfolio record of $30 per square foot. Same-store cash NOI in retail was modestly below the prior-year period, which Wyll attributed primarily to temporary vacancy impacts from two former Party City spaces and a former Discount Tire space. He said the Discount Tire space and one of the two Party City spaces have already been re-leased, with cash rents expected to commence later this year. Wyll also noted that less than 3% of retail square footage expires this year. Barton quantified the retail decline, saying retail NOI fell 0.7% year-over-year due to known vacancies at Gateway Marketplace and Solana Beach Town Center, “both of which have now been addressed through executed leasing.” Wyll said same-store cash NOI in multifamily increased 3% year-over-year, which he described as a solid result given competitive supply in San Diego and Portland. Excluding the RV park, the multifamily portfolio ended the quarter 96% leased. In San Diego, apartment communities ended the quarter 98% leased, and Wyll said net effective rents in San Diego (excluding the newest acquisition, Genesee Park) were up just over 1% compared to the prior-year period. In Portland, Wyll said Hassalo on Eighth ended the quarter 93% leased, up 4% from a year ago, while net effective rents were essentially flat. He characterized 2026 as “more of a stabilization year for multifamily than a recovery year,” with a focus on occupancy, pricing optimization, and controlling expenses. At Waikiki Beach Walk, Wyll said the retail component performed well year-over-year but was partially offset by softness on the hotel side, resulting in mixed-use cash NOI down modestly from the prior-year period. Barton said mixed-use NOI declined 2.7% year-over-year. He attributed the result to a 2% increase in the retail component offset by lower average daily rate (ADR) and higher operating expenses at Embassy Suites Waikiki. He reported first-quarter hotel occupancy improved to 92% from 85% a year earlier, while RevPAR increased 2% to $305 and ADR declined 6% to $332. NOI was approximately $2.4 million compared to $2.6 million last year, he said. On the Q&A, Barton said the hotel continues to outperform its competitive set, citing occupancy of 91% versus 79% for the comp set, while adding that “everybody’s feeling the impact.” He also cited two “Kona” rainstorms in March that brought “significant flooding,” along with the continuing impact of the Japanese yen on travel patterns. Wyll added that Japanese tourism has been slower to recover, saying it used to be closer to 40% of Waikiki tourism and is now about 20%. Wyll said the board approved a quarterly dividend of $0.34 per share, payable June 18 to shareholders of record as of June 4. He acknowledged the payout ratio remained elevated, attributing it largely to leasing-related capital tied to signed leases and the Spec Suite program. Barton said the first-quarter dividend payout ratio was about 111%, driven primarily by the timing of tenant improvements, leasing commissions, Spec Suite spending, and recurring capital needs. As signed leases commence and convert to cash rent, Barton said management expects the payout ratio to moderate, with the remaining three quarters trending in the low-to-mid 90% range and the full year likely in the upper 90% range. He noted that since the company’s IPO in 2011, the payout ratio has generally been about 65% to 85%. The company reaffirmed full-year 2026 FFO guidance of $1.96 to $2.10 per share (midpoint $2.03). Barton said the outlook assumes continued stability across the portfolio supported by leasing activity, contractual rent growth, and cost discipline, and he outlined factors that could support results trending toward the upper end of the range, including continued rent payments from retail tenants currently reserved for bad debt, earlier-than-expected office lease commencements, multifamily outperformance on occupancy and/or rent growth, and improved tourism demand benefiting Embassy Suites Waikiki. American Assets Trust, Inc is a publicly traded real estate investment trust (REIT) that acquires, develops and manages a diversified portfolio of commercial properties across multiple asset classes. The company's holdings include retail centers, office buildings, multifamily communities and select hotel and resort properties. American Assets Trust pursues an integrated strategy combining proactive redevelopment, leasing initiatives and sustainable design to enhance asset value and drive long-term growth. Founded in 1998 and headquartered in San Diego, California, American Assets Trust has built a presence in key markets along the West Coast and select western U.S. The article "American Assets Trust Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Wednesday, April 29, 2026 at 11 a.m. ET President and Chief Executive Officer — Adam Wyll Executive Vice President, Chief Financial Officer, and Treasurer — Robert F. Barton Need a quote from a Motley Fool analyst? Email [email protected] Adam Wyll: Good morning, everyone, and thank you for joining us today. At American Assets Trust, Inc., we continue to approach this market with the same mindset that has guided us across cycles: patient, disciplined, and with a long-term focus. That mindset, combined with the quality of our assets and our platform, guides how we allocate capital, manage risk, and run our business. We started 2026 in line with our expectations, generating $0.51 of FFO per diluted share and continuing to make progress against the priorities we laid out last quarter. Across the portfolio, we saw encouraging activity, most notably in office leasing, while our retail assets remained highly leased and consistent. Our multifamily teams operated well in a competitive supply environment, and Waikiki Beach Walk delivered steady results against a still mixed tourism backdrop. Before turning to the portfolio, I want to highlight a significant balance sheet accomplishment. On April 1, we successfully completed the recast and upsize of our unsecured credit facility. We increased our revolving line of credit from $400 million to $500 million and extended the maturity of the revolver and our $100 million term loan to April 1, 2030. Altogether, this facility provides us with $600 million of total unsecured borrowing capacity. This outcome reflects the quality of our portfolio, the strength of our banking relationships, and the confidence our lender group has in our credit. Importantly, it gives us enhanced financial flexibility and runway as we execute our leasing and operating objectives, now with no debt maturities until 2027. That added capacity is particularly valuable in the current market. While the macro backdrop remains uneven, our tenants are generally well capitalized, and the markets where we operate continue to benefit from diversified economies, strong demographics, and meaningful barriers to new supply. Those structural advantages matter, particularly during periods when the broader landscape is less predictable. One topic that has generated considerable discussion in our office segment is artificial intelligence. AI is driving investment, business formation, and growth across technology, infrastructure, and innovation-oriented companies, along with the professional and advisory ecosystem that supports them. While its impact on office demand will vary by industry, we believe the net effect in our markets has been constructive. At the same time, the bar for office space keeps rising. When companies make office commitments today, they are focused on location, amenities, flexibility, ownership quality, and the ability to attract talent—attributes that define our coastal office portfolio. On our own platform, we are investing in technology to improve how we operate, from work order management and preventative maintenance analytics to tenant communication tools, while also building the data foundation for future AI capabilities. We are early in this effort, but we believe they can become a differentiator as we improve the tenant experience and our operating margins. In office, the momentum we flagged last quarter carried forward. Demand concentrates at the top of the market and in well-located, well-amenitized buildings with strong ownership. That is where we compete. Our office portfolio ended the quarter 84.5% leased, and our same-store office portfolio ended the quarter 86% leased. Same-store office cash NOI came in essentially flat year-over-year, modestly ahead of our internal expectations, reflecting the known move-outs we previously discussed. During the quarter, we executed approximately 237,000 square feet of office leases, with comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6%, which are now separately disclosed in our supplemental. Meanwhile, of our 14 non-comparable leases in Q1, 12 were new tenants, nine of which were in our spec suite program, underscoring the role that program is playing in converting demand into executed leases. We entered the second quarter on solid footing, including approximately 144,000 square feet of previously signed leases not yet commenced, another 122,000 square feet in lease documentation, and a proposal pipeline of over 200,000 square feet. At La Jolla Commons Tower 3, the building is currently 49% leased, with proposals out on another 30% of the building. The UTC submarket has limited large block availabilities outside of Tower 3, and with no meaningful new supply on the horizon, we believe we are in a strong position to capture large tenant requirements in the submarket, including several active requirements we are tracking today. At 1 Beach Street, the building is currently 36% leased. While one larger opportunity we referenced last quarter did not move forward, our leasing focus has shifted toward building a broader pipeline of smaller and mid-sized tenants. We already have permits in hand and work underway to advance our spec suite build-out, positioning us to capture tenants seeking high-quality, move-in ready space. Prospect activity has improved, and the execution across the portfolio has been strong. We remain confident that the trajectory of our office portfolio, including our progress towards stabilizing Tower 3 and 1 Beach, will translate into increased cash flow as these leases convert to revenue. Last quarter, we mentioned our goal of ending the year between 85%–90% leased across our office portfolio. Since then, we learned that Genentech at Lloyd District, approximately 67,000 square feet, reversed course on a short-term renewal and will be vacating in Q4. The space itself is turnkey and modern, and we believe it will show well in the market. However, the vacancy was not in our assumptions last quarter, and as a result, we are now targeting the lower end of that range. We have some work to do, but reaching that level would still represent a meaningful step forward. Retail remains a source of consistent, reliable performance. Our retail portfolio ended the quarter 98% leased, and we executed approximately 39,000 square feet of leasing during the period, with average base rents reaching a new portfolio record of $30 per square foot. Same-store cash NOI was modestly below the prior-year period, primarily due to the temporary impact of vacancies from two former Party City spaces and a former Discount Tire space. The Discount Tire space and one of the two Party City spaces are already re-leased, with cash rents expected to commence later this year. Tenant health across the retail portfolio is strong. Leasing demand is solid, and our centers benefit from affluent, supply-constrained trade areas with limited new competition. Less than 3% of our retail square footage expires this year, and we are actively engaged on upcoming rollover. While we are closely monitoring the consumer in an uncertain economic climate, we believe the demographics surrounding our retail assets support a resilient spending base and a steady cash flow profile. In multifamily, same-store cash NOI increased 3% year-over-year, a solid result given the competitive supply landscape in San Diego and Portland. Excluding the RV park, our multifamily portfolio ended the quarter 96% leased. In San Diego, our apartment communities ended the quarter 98% leased, and excluding our newest acquisition, Genesee Park, net effective rents in San Diego were up just over 1% compared to the prior-year period. In Portland, Hassalo on Eighth ended the quarter at 93% leased, up an additional 4% from a year ago. Net effective rents were essentially flat, which we view as a reasonable outcome in the current Portland market. The recovery remains gradual, and our focus right now is on protecting occupancy while positioning for better growth as supply moderates. As we have noted, 2026 is more of a stabilization year for multifamily than a recovery year. We are focused on optimizing pricing, maintaining occupancy, and tightly managing controllable expenses. At Waikiki Beach Walk, our retail component continued to perform well year-over-year, partially offsetting softness on the hotel side, with overall mixed-use cash NOI down modestly versus the prior-year period. We believe in the long-term value of this irreplaceable fee simple asset and are focused on driving performance across both the hotel and retail components. Finally, I am pleased to share that our Board has approved a quarterly dividend of $0.34 per share, payable on June 18 to shareholders of record as of June 4. While our payout ratio remained elevated in the quarter, much of that reflects leasing-related capital tied to signed leases and our spec suite program, both of which are intended to drive occupancy and future NOI growth. We continue to have conviction in the long-term cash flow profile of the portfolio and are comfortable maintaining the current dividend at this point in time. Robert F. Barton will provide more detail on the payout ratio and its expected moderation in just a moment. In closing, we are pleased with how we have begun 2026. We are converting leasing activity into future revenue, strengthening our balance sheet, and executing against the plan we laid out entering 2026. Our priorities for the year are unchanged: advance office leasing, protect the steady cash flow from our retail and multifamily platforms, and remain disciplined in how we allocate capital. At our core, we own irreplaceable coastal real estate, we operate through a vertically integrated platform, and we manage this business with a long-term perspective. We are in a good position, and our focus is on converting that position into earnings growth. With that, I will turn the call over to Robert F. Barton, who will walk through the financials in more detail. Robert F. Barton: Thanks, Adam, and good morning, everyone. Last night, we reported first quarter 2026 FFO per share of $0.51 and net income attributable to common stockholders of $0.08 per share. FFO increased $0.04 per share compared to 2025, driven primarily by lower G&A expense, incremental rental at Plymouth, Pacific Ridge Apartments, and 14 Acres, as well as lower operating expenses at La Jolla Commons. As we expected, same-store cash NOI across all sectors was flat year-over-year in Q1. Breaking that down by segment as compared to Q1 2025, office same-store NOI was essentially flat, primarily due to the expiration of CLEAResult at First & Main in April 2025. The space has been partially backfilled. Retail NOI declined 0.7%, driven by the known vacancies Adam mentioned at Gateway Marketplace and Solana Beach Town Center, both of which have now been addressed through executed leasing. Multifamily NOI increased 3%, driven by higher rental income and improved occupancy, particularly at Pacific Ridge and Hassalo on Eighth. Mixed-use NOI declined 2.7%, as a year-over-year increase of 2% in the retail component was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki, where in Q1 occupancy improved to 92% from 85%. RevPAR increased 2% to $305, ADR softened by 6% to $332, and NOI was approximately $2.4 million versus $2.6 million last year. Turning to liquidity and leverage. We ended the quarter with approximately $518 million of liquidity, including $118 million of cash and $400 million available on our revolving credit facility. As Adam mentioned, we closed the recast and upsized the credit facility on April 1, extending both the $500 million revolver and $100 million term loan to April 2030. Net debt to EBITDA was 6.9x on a trailing twelve-month basis. Our long-term target remains 5.5x or below. Interest and fixed charge coverage were both 3.0x. Turning to the dividend. Our first quarter dividend payout ratio was approximately 111%, driven primarily by the timing of leasing-related capital expenditures including tenant improvements, leasing commissions, and our spec suite program along with normal recurring capital needs. Importantly, a meaningful portion of this capital is tied to leases that have already been signed or spaces that we are proactively preparing to meet current tenant demand. As those leases commence and convert to cash rent, we expect the payout ratio to moderate. For the remaining three quarters of the year, we currently expect the payout ratio to trend in the low to mid-90% range, with the full-year payout ratio likely landing in the upper-90% range. Since our IPO in 2011, our payout ratio has generally been approximately 65% to 85%. We continue to view that as an appropriate long-term range for the business. In the interim, given our liquidity position, our visibility into signed lease commencements, and our confidence in the long-term cash flow profile of the portfolio, management and the Board are comfortable maintaining the current dividend. As always, we will continue to evaluate the dividend each quarter in the context of operating performance, leasing progress, capital requirements, and broader market conditions. Turning to 2026 guidance. We are reaffirming our full-year FFO guidance range of $1.96 to $2.10 per share with a midpoint of $2.03. This reflects continued stability across our diversified portfolio, supported by leasing activity, contractual rent growth, and disciplined cost management. Based on our current outlook, we believe we are well positioned to achieve our full-year objectives, with potential to trend toward the upper end of the range if several factors align: number one, retail tenants currently reserved for bad debt continue to pay their rent; number two, office lease commencements occur ahead of expectations; number three, multifamily outperforms expectations on occupancy and/or rent growth; and number four, tourism demand improves, supporting performance at Embassy Suites Waikiki. As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancings not yet announced. We remain committed to transparency and will continue to provide clear insight into both the results and assumptions. Additionally, all non-GAAP metrics discussed today are reconciled in our earnings materials. I will now turn the call back over to the operator for Q&A. Operator: Thank you. We will now open the call for questions. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Todd Thomas from KeyBanc. Please go ahead. Analyst: Hi, good morning. This is Sean Glass on for Todd. You previously discussed some known move-outs in the office portfolio. I think there was an expectation that there could be 300 to 400 basis points of occupancy from expected vacates. Have any tenant decisions shifted or changed since year-end, and can you remind us what is embedded in guidance for the office portfolio’s year-end lease rate? Robert F. Barton: Well, as Adam said, the one new one is Genentech, which will occur in Q4 of this year. On the positive side, we have three known move-outs that are in lease documentation at City Center Bellevue specifically. So that is 28,000 feet of move-outs that are already in lease documentation. So that is the latest. Analyst: And one thing of note that I am tracking is 173,000 feet right now. Adam Wyll: Seventeen deals. Eight of those, or about 60,000 feet, are relocations due to expansion. So we are expanding tenants, they are giving space back. Those are good-news givebacks of tenants that have already expanded. Once the TIs are done, we are getting their spaces back. So it is not all bad news. And, Sean, we mentioned in the script that we are targeting mid-80% full portfolio occupancy or lease percentage by the end of the year, which is achievable if momentum continues as it is right now. But we are going to give you a range—we have a little bit of flexibility to figure out how it shakes out. Analyst: Thank you. That is great color. Wanted to ask about La Jolla specifically. Some very good traction there on leasing. Can you talk about the pipeline a little? Were there any additional leases around for signature or anything in documentation? Maybe some color on where you might expect La Jolla to be at year-end? Thank you. Adam Wyll: So it is the premier offering in not only UTC, but Del Mar as well in terms of available spaces, and I am speaking of Tower 3 specifically. We are in proposals with two full-floor users and two multi-floor users, and we do not have that many floors to lease, so it is a good situation. We are in space planning with every one of them. The competition is very narrow, so we expect to make one or more of those, and that would account for the remainder of the full floors. On the spec suite program, we only have one suite left on the 4th floor. We have already pre-leased a 5th floor spec suite, and those are not going to be completed until September. So the traction is good. And the traction is with well-capitalized professional service firms—tenants that you want in this sort of building. So we are pleased with that. Analyst: If I could slip one more in. On 1 Beach, there is some good traction there too. Could you talk a little about the AI demand or otherwise, and where you think that might be at year-end? And maybe you could touch on the one large opportunity I had in pencil, if that changes the equation at all. Adam Wyll: For that large deal, we gave ourselves a 30-day window in which to vet it. There were some complexities to it due to the use, dealing with exiting, dealing with the traffic and such, and it ended up not panning out. We spent 45 days on it. But we pivoted very quickly back to the spec suite program, which is underway, and Jerry and his team will complete that construction around September. We pre-leased that 3rd floor before we had started construction on that floor, so we expect to have similar results. I cannot give you the exact timing, but we are optimistic. Analyst: Thank you. Operator: The next question comes from Haendel St. Juste from Mizuho. Please go ahead. Ravi Vijay Vaidya: Good morning, guys. This is Ravi Vaidya on the line for Haendel. Hope you all are doing well. I wanted to ask a bit about the signed and not occupied pipeline in both office and retail. Can you give some numbers as to how and when you think leases will begin cash flowing for those two verticals, and maybe some detail about the timing over the next couple of years for both office and retail? Thank you. Adam Wyll: Hey, Ravi. It is Adam. As I mentioned in my script, we have about a quarter million square feet on the office portfolio signed, not commenced, and I think about $0.07 is reflected in 2026 guidance. But about 100,000 square feet in that signed-but-not-commenced bucket will not hit meaningfully until next year. So looking at about $0.07 per share or so—call it $5-plus million—that will hit this year. I do not have the retail numbers in front of me. Robert F. Barton: I do not think there is much on that front, though. Ravi Vijay Vaidya: Got it. That is super helpful. I wanted to ask about the hotel in Hawaii. I noticed the occupancy came up quite a bit as you discussed in your script, but mostly offset by rate. What can we see regarding demand for tourism, foot traffic, and how that asset is positioned from both seeing demand from Japanese and American tourists right now? Robert F. Barton: Yeah, Ravi, this is Bob here. It is still slow right now, but what is interesting in terms of the rates—we still outperform our competitive set, which consists of just under 10 hotels, including beachfront properties. For example, our occupancy was 91%, but our comp set was 79%. Our ADR was $300-plus, and theirs was under $300. RevPAR—we are $300-plus, and our comp set is significantly under $300. So everybody is feeling the impact, though from the statistics that I am seeing, we are the number one hotel in Waikiki. Two things happened during March. One is that there were two huge Kona rainstorms, one on March 10 and another on March 24—significant flooding, dumping over [inaudible] gallons of rain—overall, so everybody in town felt that impact. Secondly, the Japanese yen—while the more wealthy clientele from Japan continue to come—has weakened; they have to work through that issue. So there are a lot of little things that are impacting that. Also, you have operating expenses going up. But all in all, it is the number one performing Embassy Suites in the world. It continues to be. Adam Wyll: Hey, Ravi, just to layer on that. As you know, Waikiki is very sensitive to tourism, especially international demand, and as Robert F. Barton was mentioning, the Japanese are not there as much as they used to be. It used to be closer to 40% of tourism in Waikiki; now it is about 20%. So it is slow incremental progress. Recovery has been slower than anticipated, and affordability pressures are really weighing on the results. Still, it remains a high-barrier-to-entry, globally relevant market, and we view the asset as well positioned for the long term. Ravi Vijay Vaidya: Thank you. Appreciate the color, guys. Operator: This concludes our question and answer session. I would like to turn the conference back over to Adam Wyll for closing remarks. Adam Wyll: Yes. Thanks, everybody, for calling and joining us today or listening on recording later. We appreciate your interest, and we will be as transparent as possible going forward. Take care. Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. American Assets (AAT) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Management attributes steady performance to the structural advantages of coastal markets, characterized by high barriers to entry and diversified economies that mitigate macro uncertainty. Office leasing momentum is being driven by a flight-to-quality, with demand concentrating in well-amenitized buildings and the company's spec suite program successfully converting prospects into tenants. The retail portfolio achieved record average base rents of $30 per square foot, supported by affluent demographics and limited new competition in supply-constrained trade areas. Multifamily performance reflects a strategic focus on protecting occupancy over aggressive rent growth during a period described as a stabilization year rather than a recovery year. Operational efficiency is being targeted through new investments in a data foundation for future AI capabilities, aimed at improving tenant experience and operating margins. The Waikiki Beach Walk asset continues to face headwinds from a mixed tourism backdrop, specifically the slow recovery of Japanese tourism and currency-related affordability pressures. Full-year 2026 FFO guidance assumes stability across the diversified portfolio, with potential upside if retail bad debt reserves are not utilized and office commencements accelerate. Office occupancy targets for year-end were revised to the lower end of the 85%–90% range following an unexpected 67,000 square foot vacancy notice from Genentech in Portland. The dividend payout ratio, which peaked at 111% due to front-loaded leasing capital, is expected to moderate to the low-to-mid 90% range for the remainder of the year, with the full-year payout ratio likely landing in the upper-90% range as signed leases convert to cash rent. Management expects approximately $0.07 per share of FFO contribution in 2026 from the portion of the quarter-million square foot office leasing pipeline hitting this year, noting that 100,000 square feet of that pipeline will not hit meaningfully until next year. Strategic focus for the remainder of 2026 remains on stabilizing La Jolla Commons Tower 3 and 1 Beach Street while maintaining high occupancy in the retail and multifamily segments. Successfully upsized and recast the unsecured credit facility to $600 million, extending maturities to 2030 and clearing the debt maturity ladder until 2027. Identified a 67,000 square foot upcoming vacancy at Lloyd District in Q4 2026 due to a tenant reversing a previous renewal decision. Noted that while the Japanese yen weakness has reduced international tourism volume in Waikiki, the Embassy Suites asset continues to outperform its local competitive set in RevPAR and occupancy. Reported that elevated capital expenditures are largely non-recurring and tied specifically to the spec suite program and tenant improvements for already-signed leases. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management confirmed that while Genentech is a new known move-out, several other vacancies are already being backfilled with leases currently in documentation. Approximately 60,000 square feet of 'giveback' space is actually the result of existing tenants relocating into larger footprints within the portfolio. The building is 49% leased with active proposals on another 30%, primarily from well-capitalized professional service firms. Management noted the UTC submarket has very limited large-block availability, positioning the asset to capture remaining large tenant requirements. After a large potential lease did not pan out due to use complexities, management pivoted back to a spec suite strategy to target small and mid-sized tenants. Construction on these suites is expected to be completed around September, with one floor already pre-leased before construction began. The Japanese market, which historically represented 40% of tourism, currently sits at 20%, slowing the recovery of the mixed-use segment. Despite macro headwinds and weather impacts, the property maintains a significant RevPAR premium over its competitive set. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Image source: The Motley Fool. Wednesday, October 29, 2025 at 11 a.m. ET President and Chief Executive Officer — Adam Wyll Chief Financial Officer — Robert Barton Chief Operating Officer — Steve Center Senior Vice President, Residential — Abigail Rex Adam Wyll: Thank you. Good morning, everyone, and thank you for joining us today. At American Assets Trust, we remain focused on executing with discipline and consistency. Our vertically integrated platform, high-quality coastal portfolio and thoughtful approach to capital allocation continue to provide resilience and opportunity. As always, we remain focused on creating long-term value for shareholders across cycles. For the third quarter, funds from operations came in at $0.49 per diluted share, just ahead of our internal projections, supported by continued leasing progress, disciplined expense management and minimal utilization of our bad debt reserve. Portfolio-wide same-store NOI was slightly down for Q3 and is up almost 1% year-to-date, which candidly is tracking with what we've characterized as a transition year. Collections remain strong, and our teams continue to execute to the best of our abilities across all asset classes. The broader economic backdrop remains mixed. Interest rates have shown signs of stabilizing after 2 years of volatility, inflation has moderated but remains above long-term targets and consumer confidence has softened, perhaps less than some had feared. At the same time, capital markets activity remains relatively subdued for commercial real estate. Against this backdrop, our strategy of owning irreplaceable coastal assets, maintaining a strong balance sheet and operating through a fully integrated platform continues to serve us well, underscoring the durability of our long-term approach. Turning to portfolio updates. The office sector remains selective, and we remain very part of that select set. Tenants are focused on well-located, amenitized and institutionally managed assets, and our portfolio is designed to meet those demands. Our office portfolio ended the quarter 82% leased with our same-store office portfolio 87% leased and 5% of the office portfolio includes signed leases that have not commenced paying cash rents. Same-store office NOI increased positively for the quarter, ahead of expectations despite almost 160,000 square feet of known move-outs at First & Main, Torrey Reserve and 14 Acres. We completed approximately 180,000 square feet of office leasing during the quarter with comparable rent spreads increasing 9% on a cash basis and 18% on a straight-line basis, reinforcing that our best-in-class buildings continue to attract tenants even in a competitive environment. Importantly, while the time it takes to finalize office leases has lengthened across our markets, we are not losing deals as a result. Tenants are simply being more deliberate. Along those lines, entering Q4, we have over 25,000 square feet of signed leases and another 56,000 square feet in lease documentation with proposal activity over several hundred thousand square feet. At our new La Jolla Commons Tower 3, following quarter end, we executed leases or have leases in documentation for another 8% of the space with proposals out on another 15%. Momentum is clearly building with increased tours and RFP activity, and we remain optimistic that additional leasing will follow. Meanwhile, the new Travis Swickard restaurant opening later this year will further enhance the already robust amenity package at the campus. Combined with the scarcity of large blocks of Class A space in UTC, we believe this positions us well to capture demand in one of the healthiest office submarkets in the country. At One Beach Street in San Francisco, we saw continued touring activity and are in active negotiations for portions of the building. While San Francisco continues to evolve through its recovery, there are encouraging signs of improved tenant engagement at the highest quality properties such as ours, and we are confident that selective demand will find its way to our assets. It's only a matter of time. Our retail portfolio continues to perform well, thanks to strong consumer spending across our centers. Nationally, retail availability remains near record lows. New construction is virtually non-existent and asking rents have continued to rise. At quarter end, our retail portfolio was 98% leased with 2% signed but not commenced paying cash rents. We executed over 125,000 square feet of new and renewal leases in Q3, with spreads increasing over 4% on a cash basis and 21% on a straight-line basis. Same-store NOI was about $400,000 less than the comparable period, largely reflecting the amount and timing of expense reimbursements as well as lost rents from Party City and reduced rent from at home due to their bankruptcies. Nevertheless, tenant sales and foot traffic remained solid, supported by favorable demographics, resilient employment and limited new supply in our markets. Our focus remains on securing best-in-class retailers, maintaining high occupancy and continuing to drive rent growth over time. In multifamily, performance in San Diego reflected the dynamics of a market working through new supply. Rent growth has decelerated, yet our blended average rents remain positive and occupancy improved as we exited the quarter higher than a year ago, even as we enter the seasonally slower leasing period. At quarter end, our San Diego communities, excluding our RV park, were 94% leased, which is closer to 95% leased today based on recent leasing momentum. Same-store performance was notably impacted by higher concessions, military-related deployments and move-outs impacting almost 30 units in our South Bay assets. A reduction in international student occupancy at Pacific Ridge tied to recent administration policies and the timing of certain property expenditures. We achieved rent increases of 5% on renewals and 2% on new leases for a blended increase of 4%. Excluding our new Genesee Park acquisition, rent increases were a 3% blended increase. In Portland, Hassalo on Eight ended the quarter 91% leased and delivered slightly positive blended rent growth of 1%. Although the market continues to absorb new deliveries and faces affordability challenges, we are encouraged by steady leasing activity and strong retention. Looking ahead, the 4,000-seat live music venue under construction across the street from Hassalo scheduled to open in 2027 will add vibrancy and help drive continued demand. We recognize there is still room for improvement in multifamily lease percentages and rent levels, and our teams remain focused on driving occupancy and capturing long-term rent growth. At Waikiki Beach Walk, our retail component continues to perform in line with expectations, while our Embassy Suites lagged due to softer tourism and heightened rate competition in Oahu. Arrivals have been below prior year levels, reflecting both the stronger dollar and increased competition from other destinations. In addition, the hotel has been further impacted by labor and utility cost pressures and our guest base, which is more cost conscious, has felt the effects of economic uncertainty more acutely. Of note, in the past 3 months, more than $0.5 billion of leased fee interest beneath major Hawaii hotels have changed hands at yields of 4% or lower. This activity underscores the long-term strength and scarcity value of owning the fee simple under all of our Hawaii assets. We remain confident in the long-term appeal of this irreplaceable property and are managing costs and revenue opportunities carefully in the interim. Our priorities are unchanged: to convert leasing momentum across our office portfolio, including La Jolla Commons and One Beach into signed leases, sustain positive leasing spreads in office and retail leasing and support stable occupancy and rent growth in our multifamily portfolio as supply is absorbed. At the same time, we are managing expenses tightly and preserving flexibility to capitalize on future opportunities. All of this reflects our disciplined resilient approach to creating long-term value for our shareholders. Finally, I am pleased to share that the Board approved a quarterly dividend of $0.34 per share for Q4 payable on December 18 to shareholders of record as of December 4. In closing, I want to thank our teams across the company for their dedication and execution. Their hard work continues to position American Assets Trust to execute across cycles. With that, I'll now turn the call over to Bob. Robert Barton: Thanks, Adam, and good morning, everyone. For the third quarter, FFO was $0.49 per diluted share. Net income attributable to common stockholders was $0.07 per diluted share, and total revenue was $110 million for the quarter. Results were generally stable sequentially with modest variability by segment, largely reflecting known office move-outs, expenses, timing and softer tourism trends in Hawaii. Specifically, the $0.03 decline in FFO from Q2 to Q3 reflects 5 things: First, slightly lower office contribution due to a previously disclosed lease expiration at First & Main and the tenant termination at City Center Bellevue, which despite being cash positive with an immediate backfill resulted in a GAAP impact from writing off remaining straight-line rent. Second, retail results reflected timing of property tax refunds recognized in Q2 that did not repeat in Q3. Third, lower family base rent at Pacific Ridge from summer student move-outs and at Hassalo from Portland oversupply, along with higher operating expenses portfolio-wide. Fourth, softer tourism and rate pressure in Oahu; and fifth, partially offset by a $1.1 million lease termination fee recognized in the quarter. Let's talk about same-store cash NOI. For all sectors, same-store cash NOI combined decreased by 0. 8% in the third quarter of 2025 compared to the same period in 2024, which was generally in line with our expectations for a transition year. Breaking Q3 out by segment and each as compared to Q3 2024, our same-store office portfolio's NOI increased by 3.6%, benefiting from rent commencements and higher rents at our City Center Bellevue property and the expiration of rent abatements at Torrey Reserve. Our same-store retail portfolio's NOI declined by 2.6%, driven by credit-related loss of rents mentioned by Adam as well as timing of expense reimbursements. Our same-store multifamily portfolio's NOI declined by 8.3%, reflecting supply headwinds in San Diego and expense pressure at select properties. Our same-store mixed-use portfolio's NOI declined by 10%, primarily driven by lower-than-anticipated occupancy and average daily rate at Embassy Suites Waikiki. Specifically and compared to Q3 2024, paid occupancy for Q3 2025 was lower by 5.5%. RevPAR for Q3 '25 was $298, down 11.7%. ADR for Q3 '25 was $381, down 5.4% and net operating income for Q3 '25 was approximately $2.7 million, down $0.9 million. These results are similar to other hotels in our comp set in Waikiki, Hawaii. We view these macroeconomic pressures as near term and not reflective of long-term fundamentals, and we remain confident in the long-term performance of our Hawaii hotel. In fact, according to preliminary figures from the Japan National Tourism Organization, the number of Japanese nationals traveling overseas in August '25 reached 1.6 million, up 14% year-over-year. This was the highest monthly outbound volume so far this year. Compared to pre-pandemic August 2019 levels of 2.1 million. Outbound traffic has now recovered to nearly 80%. The trajectory of outbound travel is clearly upward. August strong performance reflects pent-up leisure demand during the summer holiday season, following fuel surcharges and increasing seat capacity by Japan's 2 national carriers. Hawaii continues to be one of the most aspirational overseas destinations for Japanese travelers and recovery trends in the outbound market directly benefit our property as well as the other properties in Waikiki and surrounding islands. Forward-looking trends from JAL and ANA Airlines suggest sustained demand for Q4, and we anticipate this momentum to carry into winter and spring 2026. As outbound volume nears pre-pandemic levels, Hawaii is well positioned to capture an outsized share of the recovery given its strong brand equity, culture affinity and increasing promotional activity. Let's talk about liquidity now. Turning to the balance sheet. As of the end of the third quarter, we had total liquidity of approximately $539 million, consisting of roughly $139 million in cash and cash equivalents and $400 million of availability under our revolving line of credit. Our net debt-to-EBITDA ratio was 6.7x on a trailing 12-month basis and 6.9x on a quarter annualized basis. And we remain committed to reducing leverage toward our long-term target of 5.5x or lower. Our interest coverage and fixed charge coverage ratios were both approximately 3.0x on a trailing 12-month basis. Let's talk about 2025 guidance. We are raising our full year 2025 guidance range to $1.93 to $2.01 per FFO share with a midpoint of $0.197 per share. This represents a $0.02 increase from our prior guidance midpoint of $1.95 issued in the second quarter of 2025. The upward revision largely reflects year-to-date performance. Outperformance towards the high end of the range would depend on consistent rent collections from tenants currently reserved for credit exposure, increased demand and continued expense discipline in multifamily, strengthening near-term travel trends at our Embassy Suites Waikiki. Together, these levers represent upside potential, and we will continue to monitor each closely as the year progresses. As a reminder, our guidance in these prepared remarks include the impact of any future acquisitions, dispositions, equity issuances or repurchases and debt refinancings or repayments, except for those already disclosed. We remain committed to transparency, and we'll continue to provide clear insights into our quarterly results and the key assumptions that inform our outlook. Additionally, please note that any non-GAAP financial metrics discussed today such as net operating income or NOI are reconciled to the most directly comparable GAAP measures in our earnings release and supplemental materials. I'll now turn the call back over to the operator for Q&A. Operator: [Operator Instructions] And our first question today comes from Todd Thomas from KeyBanc Capital Markets. Unknown Analyst: This is A.J. on for Todd. Adam, maybe starting with you. I appreciate your comments just in the opening remarks around the leasing pipeline. But just maybe pulling on that thread a little more. Would you just provide an update with regards to the anticipated time line to stabilize the La Jolla Commons 3 and One Beach Street assets? Adam Wyll: Yes, sure. I'll have Steve offer a little bit more insight. But what we are seeing lately, as I mentioned, is a lot more activity. And so though it's really difficult to pin actual stabilization date, we feel the momentum is carrying us to that date a little quicker than it had been in the past quarters. But Steve, maybe you can add a little bit more color on both of those. Steve Center: Sure. As Adam mentioned, we signed a lease with an international bank just last week, and then we have 2 others in lease documentation. One is a technology company in the legal field and the other is a very high-end insurance company. And then we've got 2 other proposals totaling actually 17,000 feet. And we've got 2 other competitors for this one 9,000-foot spec suite. So -- and then along those lines, we're building out more spec suites. We've got another several spec suites under construction and delivering spaces that are ready to go has really borne fruit. The bank that we signed went into a spec suite with minor modifications and the other tenants that are prospects are largely tenants that need the space sooner than later. So building the space out, having it ready to go with minor modifications is really playing out well. And the tenants that are signing leases are paying the rents. They want the best, and they're paying up for it. So we're hitting our numbers on the rent side. So we're very encouraged by that. And as Adam said, the activity is picking up. And with the completion of the restaurant and a major conference center that we're adding to the campus, we think the momentum in '26 is going to be really solid. As it relates to One Beach, we're excited. We just converted our first deal to lease documentation yesterday. We're getting that lease out today, and we hope to sign it gosh, by the end of the quarter, we expect to. We've got another prospect for the same space actually. And so we're playing that out. And we've got robust tour activity. Really, it's turning into an AI hub at the North Waterfront is in Jackson Square. There's one pivotal tenant that signed a lease 2 blocks away that really is creating some gravity in that location. And it's interesting being -- we talk to the CEOs of the 2 firms competing for the same space. They both live in the neighborhood. They can walk to work. So it really is turning out to be this new hub, and it's a great location. They love it. Furthermore, both firms looked at a bunch of space. They looked at competing projects, and they consider that all to be commodity space. And when they got to One Beach, they said, this is different. This is the first one we've been willing to step up and make an offer on. So we're encouraged by that feedback. And so as Adam said, we're more positive about stabilization of both. We can't predict exactly when, but it's sooner than we would have said last time we talked. Unknown Analyst: Understood. I appreciate that color, Steve. Well, I guess sticking with leasing, you guys are speaking about leases in the quarter. Any known move-outs, I guess, as we look to '26 that we should be aware of? Adam Wyll: Sure. There's -- well, they're not known yet. We've got some that we're forecasting. It's about 180,000 feet of those tenants that are up in the area. One case is -- let's see, Genentech. They're in 3 floors currently. They're considering getting back a floor, although we question whether that happens. So that will play out in the next 6 months or so. We've got a full floor health care clinic at Lloyd 700 that we know is coming back. So we've got 108,000 feet that's up in the air. We don't know for certain how that's going to play out. But we've got really strong leasing activity behind it. And so we've been able to really fight really well against those tides where we're swimming upstream, so to speak, but we only went backwards 10 basis points this quarter after losing 70,000 feet of known givebacks this quarter. So our new leasing activity is accelerating and the known givebacks this quarter are down to about 23,000 or 24,000 feet. So we think that's going to flip in our favor from an occupancy standpoint next year. Unknown Analyst: Perfect. I appreciate that. And then maybe, Bob, switching to you just real quick on the balance sheet. Just with leverage ticking up in the quarter, would you just provide some thoughts on the company's current leverage profile and perhaps plans and a time line to get back to under 6x on a Net Debt-to-EBITDA basis, closer to your long-term 5.5x long-term target? Robert Barton: Yes. From our perspective, we have a plan on how to get there. And the plan really is leasing up One Beach and La Jolla Commons 3. And with that, we'll have approximately $0.30 of additional FFO. We'll be back in the game and all the debt ratios will get closer to 6, if not below 6 by then. So we feel pretty confident about it. We've met with all 3 of the rating agencies, and they continue to give us a stable outlook. They understand. And even the rating agencies, all 3 of them have commented in their own information that they share with the public is that it's generally the expectation from their standpoint is it's generally 18 months out on leasing up office, high-quality office. If it's commodity, forget it. But if it's high-quality office like our portfolio, we have a good shot of even beating that. So we'll see. We'll take one step at a time. We feel positive about it. It's just a timing thing that's all it comes down to. Operator: And our next question comes from Rene Pire from Green Street Advisors. Reynolds Pire: So I know you mentioned the multifamily portfolio having been weighed on by higher deliveries in San Diego in addition to higher concessions. Just trying to get a sense of where you think that segment finishes out the year? Are you expecting some relief on the concessions front? I believe you've mentioned some stronger leasing recently in the portfolio. So trying to get a sense of where same-store NOI might finish the year out. Adam Wyll: Yes. I mean, well, just to start, the San Diego multifamily, we think that market remains fundamentally resilient. But as I mentioned, the near-term NOI is impacted by the higher operating expenses and some of the elevated supply. We have had some incremental leasing success. Maybe Abigail can share that with you high level. I'm not sure that we've modeled that in year-end NOI projections yet. So we just want to be careful about what we say on that front. But Abigail, do you have commentary perhaps on the incremental leasing we've seen over the past few weeks in our San Diego multifamily? Abigail Rex: We are currently 95% leased. And at the end of the quarter, specifically over at Pacific Ridge, we have seen a recent uptick with USD students securing tenant fees for their upcoming winter and spring semesters, which is really encouraging for us because going into what's traditionally a slower leasing season, we're finding that people are securing their units earlier sooner rather than later. And then also at our other communities, we're finding that leasing is moving forward strongly, specifically over at Loma Palisades and at Genesee Park, leasing over there has picked up, and we're upwards of 96%, 97% leased, again, in what's usually a historically slow leasing period for us. We really attribute that, as Adam mentioned, to well-maintained communities. Our properties are in the best ZIP codes in San Diego. And then we also have just incredible team members who are operating these communities. So we remain optimistic with our leasing through the end of the year and the end of the quarter. Steve Center: Yes, Rene, we expect stability to improve as supply is absorbed and expenses normalize. So that's the expectation looking out. Robert Barton: Yes. One last question, Rene. You have all 3 of us talking here on this, is that in San Diego, remember that you have the Pacific Ridge, which is right across from USD. So we do take a dip on the move out of tenants from July, August -- June, July, August. So that's our dip every year, and then we generally come back strong after that. But it's -- Abigail is doing a great job keeping the occupancy up. We're as competitive as anybody in San Diego when it comes to rate. But I think overall, I think people are feeling that there is pressure on the operating expenses. It's not just us, it's other multifamily as well. And I think with the competition, especially with -- compared to Mission Valley, there are concessions. So we're doing the best we can, and I don't think we're dissimilar from any other multifamily out there. Reynolds Pire: Great. I appreciate all that color. And then maybe a question for Steve primarily. Good quarter on the office leasing front. I was hoping you could give some detail around which tenant industries you're seeing the most active in market, that would be very helpful. Steve Center: Well, San Francisco, it's AI. And there's an emergence of new co-working operators in AI. So -- but it's really AI-driven for the most part there. We're seeing some of that in Bellevue as well. But we're also seeing a broad base of other types of tenants. So we've got a technology firm that's in the legal industry that's in leases at Tower 3. We've got an insurance company I mentioned earlier in Tower 3, that's ultra-high-end net worth people that they cater to. Let's see. We've got finance. We've got a company that's for a 4.5 and it's -- at First & Main in Portland, and they just did a valuation of a dental practice that we're doing an assignment on. So it's interesting. It's just a broad swath of really good quality tenants... Robert Barton: Law firms. Steve Center: Law firms. Operator: [Operator Instructions] Our next question comes from Ronald Kamdem from Morgan Stanley. Unknown Analyst: This is Matt on for Ron. I was just curious, you guys talked a little bit about the tenant types that are interested in leasing space. Could you talk about the leasing trends between the different submarkets? Would you say there's any markets that are seeing more concentrated interest or if it's just kind of widespread? Adam Wyll: It's a flight to quality. So I wouldn't talk about it market to market. It's really -- every market is mixed. Not all ships are rising. So it's really the activity is gravitating towards to the best properties, but also space that's ready to go. That's the biggest trend I'm seeing is tenants don't want to wait for TIs. Every tenant rep broker we talk to, we tell them our strategy of spec suites and having spaces ready to go, said we're spot on. And the results speak for themselves. We've got about, I think, 38% of the deals we've done year-to-date have been in spec suites. We're doing about 40% of our vacancy in spec suites. And these are smaller spaces. Our average space is 3,000 to 4,000 feet. So it's low risk. We build them out. They're ready to go with minor modifications at most. And that design will last longer than the tenancy. And if you look at our TIs on our renewals, they're very low because we've built out the spaces and they don't require a whole lot of working to relet them. Unknown Analyst: Got it. And then just as a follow-up to that, could you just talk a little bit about how we could think about the office occupancy trajectory over the coming quarters? You guys are seeing momentum in leasing and just kind of wondering how that actually builds into the occupancy as we get into '26. Adam Wyll: New leasing is about 70% of our activity right now. So that bodes well for making up any known givebacks that are coming. Q3 is a light known good back quarter, so we should make good ground up. And we've now recognized -- we're no longer looking at same store. It's really that 82% is the whole portfolio, including Tower 3 and including One Beach. So it is what it is. One Beach alone will really put a big dent in that. Tower 3, as I said, the momentum is building, and I think '26 is going to be a real strong year. So I think we'll go positive. We'll go positive in 2026. I can't tell you how far. We'll see how those known givebacks play out. But the new leasing is strong. If you -- Adam mentioned several hundred thousand feet of proposals, that's the biggest number we've had that I can remember. And our current leasing activity for the year, if we finish out the quarter as expected, it will be our second best quarter -- second best year since I've been here since 2018. Matt, we'll have more visibility into that with our next call in terms of occupancy expectations in the office sector. So we'll have dug in a little deeper on that through year-end. Operator: And ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Adam for any closing remarks. Adam Wyll: Thank you for your continued support. We hope you enjoyed the call as much as we did, and hope you have a great day. Thanks, everybody. Operator: And with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines. Before you buy stock in American Assets Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Assets Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. American Assets (AAT) Q3 2025 Earnings Transcript was originally published by The Motley Fool

SAN DIEGO, April 28, 2026 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its first quarter ended March 31, 2026. First Quarter Highlights Net income available to common stockholders of $5.1 million for the first quarter, or $0.08 per diluted share. FFO of $0.51 per diluted share for the first quarter, compared to $0.52 per diluted share for the same period in 2025. Same-store cash Net Operating Income (“NOI”) remained flat for the first quarter, compared to the same period in 2025. Leased 237,000 of office square feet, of which approximately 108,000 is comparable at an average straight-line basis and cash-basis contractual rent increase of 10.6% and 4.8%, respectively, during the first quarter. Leased 39,000 of retail square feet, of which approximately 38,000 is comparable at an average straight-line basis increase of 1.3% and cash-basis contractual rent decrease of 2.0%, respectively, during the first quarter. Amended and Restated Credit Facility On April 1, 2026, the credit facility was amended and restated to, among other things, increase the borrowing capacity to $600 million, consisting of a $500 million revolving line of credit and a $100 million term loan, and extend the maturity date to April 1, 2030. Financial Results Net income attributable to common stockholders decreased $47.4 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily driven by the gain on sale of Del Monte Center recognized in 2025, higher interest expense as we stopped capitalizing interest related to La Jolla Commons III being placed into service, decrease in occupancy at First & Main and overall increase in rental expenses across all segments. FFO decreased $1.1 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to the items described above. Gain on sale of Del Monte Center is excluded from FFO computations. FFO is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release. Leasing The portfolio leased status as of the end of the indicated quarter was as follows: (1) Percentage leased for our multifamily properties includes total units rented and occupied as of each of the applicable dates. (2) Santa Fe Park RV Resort is excluded from the multifamily presentation above to reflect traditional multifamily performance. Including Santa Fe Park RV Resort, multifamily occupancy would be 92.1%, 91.1% and 90.0% as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively. Including Santa Fe Park RV Resort, multifamily same-store occupancy would be 91.5%, 90.6% and 89.7% as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively. (3) Same-store portfolio excludes: (i) Del Monte Center (retail), which was sold on February 25, 2025, (ii) Genesee Park (multifamily), which was acquired on February 28, 2025, (iii) La Jolla Commons III (office), which was placed into service on April 1, 2025 and (iv) land held for development. During the first quarter of 2026, the company signed 43 leases for approximately 275,300 square feet of office and retail space, as well as 337 multifamily apartment leases. Renewals accounted for 73% of the comparable office leases, 92% of the comparable retail leases, and 52% of the residential leases. Office and Retail The annualized base rent per leased square foot as of the end of the indicated quarter was as follows: On a comparable basis (i.e., leases for which there was a former tenant in the past six-months) our office and retail leasing spreads as of the end of the indicated quarter are shown below: On a comparable basis (i.e., leases for which there was a former tenant in the past six-months) during the first quarter of 2026, our office and retail leasing spreads are shown below: Multifamily The average monthly base rent per occupied unit as of the end of the indicated quarter was as follows: Same-Store Cash Net Operating Income For the three months ended March 31, 2026, same-store cash NOI remained flat, compared to the three months ended March 31, 2025. The same-store cash NOI by segment was as follows (in thousands): (1) Same-store portfolio excludes: (i) Del Monte Center (retail), which was sold on February 25, 2025, (ii) Genesee Park (multifamily), which was acquired on February 28, 2025, (iii) La Jolla Commons III (office), which was placed into service on April 1, 2025 and (iv) land held for development. (2) Lease termination fees and tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance. Same-store cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of same-store cash NOI to net income is attached to this press release. Credit Facility On April 1, 2026, our credit facility was amended and restated to, among other things, increase the revolving line of credit from $400 million to $500 million, extend the maturity date of the restated $500 million revolving line of credit to April 1, 2030 (with two, six-month extension options), and extend the maturity of the $100 million term loan included within the credit facility to April 1, 2030 (with one, twelve-month extension option). Balance Sheet and Liquidity At March 31, 2026, the company had gross real estate assets of $3.8 billion and liquidity of $518.3 million, comprised of cash and cash equivalents of $118.3 million and $400.0 million of availability on its line of credit. At March 31, 2026, the company had only 1 out of 31 assets encumbered by a mortgage. Dividends The company declared dividends on its shares of common stock of $0.340 per share for the first quarter of 2026. The dividends were paid on March 19, 2026. In addition, the company has declared a dividend on its common stock of $0.340 per share for the second quarter of 2026. The dividend will be paid in cash on June 18, 2026 to stockholders of record as of June 4, 2026. Guidance The company affirms its guidance range for full year 2026 FFO per diluted share of $1.96 to $2.10 per share, with a midpoint of $2.03. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financing or repayments. The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates. Conference Call The company will hold a conference call to discuss the results for the first quarter of 2026 on Wednesday, April 29, 2026 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-833-816-1162 and ask to join the American Assets Trust, Inc. conference call. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website. Supplemental Information Supplemental financial information regarding the company's first quarter 2026 results may be found on the "Financial Reporting" tab of the “Investors” page of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules. Financial Information American Assets Trust, Inc. Consolidated Balance Sheets (In Thousands, Except Share Data) American Assets Trust, Inc. Unaudited Consolidated Statements of Operations (In Thousands, Except Shares and Per Share Data) Reconciliation of Net Income to Funds From Operations The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited): Reconciliation of Same-Store Cash NOI to Net Income The company's reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited): (1) Same-store portfolio excludes: (i) Del Monte Center (retail), which was sold on February 25, 2025; (ii) Genesee Park (multifamily), which was acquired on February 28, 2025, (iii) La Jolla Commons III (office), which was placed into service on April 1, 2025 and (iv) land held for development. (2) Lease termination fees and tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance. (3) Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances, the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, and straight-line rent expense for our lease of the Annex at The Landmark at One Market. Reported results are preliminary and not final until the filing of the company's Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment. Use of Non-GAAP Information Funds from Operations The company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company's operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company's properties, all of which have real economic effects and could materially impact the company's results from operations, the utility of FFO as a measure of the company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including the company's ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP. Cash Net Operating Income The company uses NOI internally to evaluate and compare the operating performance of the company's properties. The company believes cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP. Cash NOI is a non-GAAP financial measure of performance. The company defines cash NOI as operating revenues (rental income, tenant reimbursements (other than tenant improvement reimbursements), ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes lease termination fees, tenant improvement reimbursements, general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company's cash NOI may not be comparable to the cash NOIs of other REITs. About American Assets Trust, Inc. American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.3 million rentable square feet, and its retail portfolio comprises approximately 2.4 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,302 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com. Forward Looking Statements This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions, including the impact of tariffs and other trade restrictions; the potential impact of a prolonged government shutdown; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyberattacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Source: American Assets Trust, Inc. Investor and Media Contact: American Assets Trust Robert F. Barton Executive Vice President and Chief Financial Officer 858-350-2607