Financial Data and Key Metrics Changes - For Q3 2025, funds from operations (FFO) were $0.49 per diluted share, slightly above internal projections, with total revenue at $110 million [3][14] - Same-store cash NOI decreased by 0.8% compared to Q3 2024, with specific declines in retail and multifamily sectors [16][20] - Net income attributable to common stockholders was $0.07 per diluted share, reflecting stable results with modest variability by segment [14][15] Business Line Data and Key Metrics Changes - The office portfolio ended the quarter 82% leased, with same-store office NOI increasing by 3.6% compared to Q3 2024 [4][16] - Retail portfolio was 98% leased, with same-store retail NOI declining by 2.6% due to credit-related rent losses [8][16] - Multifamily performance showed an 8.3% decline in same-store NOI, impacted by supply headwinds and higher concessions [10][16] Market Data and Key Metrics Changes - The broader economic backdrop remains mixed, with interest rates stabilizing and inflation moderating but still above long-term targets [4] - Retail availability is near record lows nationally, with asking rents continuing to rise [8] - In Hawaii, tourism has been affected by economic uncertainty, with arrivals below prior year levels, impacting hotel performance [11][12] Company Strategy and Development Direction - The company focuses on owning irreplaceable coastal assets and maintaining a strong balance sheet, emphasizing a disciplined approach to capital allocation [3][4] - There is a commitment to converting leasing momentum into signed leases and sustaining positive leasing spreads across office and retail sectors [12][20] - The company aims to reduce leverage towards a long-term target of 5.5 times net debt to EBITDA [19][30] Management's Comments on Operating Environment and Future Outlook - Management views current macroeconomic pressures as near-term and not reflective of long-term fundamentals, particularly in the hotel sector [17][19] - There is optimism regarding leasing activity, with expectations for improved stability in the multifamily segment as supply is absorbed [38][39] - The company anticipates sustained demand for Q4, particularly in the hospitality sector, as outbound travel from Japan is recovering [18][19] Other Important Information - The board approved a quarterly dividend of $0.34 per share for Q4, payable on December 18 [13] - Total liquidity at the end of Q3 was approximately $539 million, with a net debt to EBITDA ratio of 6.7 times [19] Q&A Session Summary Question: Update on leasing pipeline for La Jolla Commons Tower 3 and One Beach Street - Management noted increased activity and momentum in leasing, with specific leases signed and in documentation [24][25] Question: Known move-outs for 2026 - Approximately 180,000 square feet of potential move-outs are anticipated, but strong leasing activity is expected to offset this [28][29] Question: Current leverage profile and plans to reduce it - The company has a plan to reduce leverage through leasing up key properties, aiming to return to below 6 times net debt to EBITDA [30] Question: Multifamily segment outlook - Management expressed optimism about the San Diego multifamily market, noting recent leasing successes and expectations for improved stability [34][38] Question: Active tenant industries in the market - The office leasing activity is primarily driven by AI and technology firms, with a broad base of quality tenants across various sectors [40][41]

Core Insights - American Assets Trust (AAT) reported quarterly funds from operations (FFO) of $0.49 per share, matching the Zacks Consensus Estimate, but down from $0.71 per share a year ago [1] - The company posted revenues of $109.58 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.14% and down from $122.81 million year-over-year [2] - AAT shares have declined approximately 23.5% year-to-date, contrasting with the S&P 500's gain of 16.9% [3] Financial Performance - AAT has surpassed consensus FFO estimates three times over the last four quarters [2] - The current consensus FFO estimate for the upcoming quarter is $0.49 on revenues of $109.13 million, and for the current fiscal year, it is $1.99 on revenues of $435.29 million [7] Market Outlook - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] - The Zacks Industry Rank places the REIT and Equity Trust - Retail sector in the top 38% of over 250 Zacks industries, indicating a favorable outlook [8] - The estimate revisions trend for AAT was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it will perform in line with the market [6]

Financial Performance - Total revenue for Q3 2025 was $109.578 million, a decrease of 10.7% from $122.810 million in Q3 2024[14] - Net income attributable to American Assets Trust, Inc. stockholders was $4.509 million, down 72.9% from $16.657 million in the same quarter last year[14] - Funds from Operations (FFO) for Q3 2025 were $37.754 million, a decline of 30.9% compared to $54.655 million in Q3 2024[15] - FFO per diluted share for Q3 2025 was $0.49, down from $0.71 in Q3 2024, representing a decrease of 30.4%[15] - The company reported a net income of $70,977,000 for the nine months ended September 30, 2025, compared to $80,186,000 for the same period in 2024, a decrease of 13.5%[23] - Net income for Q3 2025 was $5,921 million, a decrease of 72.2% compared to $21,318 million in Q3 2024[130] - EBITDA for Q3 2025 was $56,781 million, down 20.5% from $71,339 million in Q3 2024[130] - Total NOI for Q3 2025 was $66,281 million, a decline of 17.5% from $80,405 million in Q3 2024[134] - Cash NOI for Q3 2025 was $64,319 million, a decrease of 4.1% compared to $67,423 million in Q3 2024[135] - Operating income for Q3 2025 was $24,767 million, down 34.5% from $37,808 million in Q3 2024[134] Assets and Liabilities - Total assets as of September 30, 2025, were $2.942 billion, a decrease from $3.273 billion at the end of 2024[13] - Cash and cash equivalents decreased to $138.714 million from $425.659 million at the end of 2024, a decline of 67.4%[13] - Total liabilities decreased to $1.828 billion from $2.149 billion at the end of 2024, a reduction of 14.9%[13] - As of September 30, 2025, total outstanding debt was $1,700,000,000, with a weighted average interest rate of 4.46%[60] - The company’s equity market capitalization was $1,571,447,000, leading to a total market capitalization of $3,271,447,000[68] - The total debt to total capitalization ratio stood at 52.0%, while the total debt to total enterprise value ratio was 54.3%[68] - The total unencumbered assets grossed $3,652,649,000, providing a strong asset base relative to unsecured debt[68] Cash Flow and Dividends - The company declared dividends of $26.294 million in Q3 2025, compared to $25.822 million in Q3 2024, an increase of 1.8%[15] - Funds Available for Distribution (FAD) for Q3 2025 was $25,960,000, down from $34,576,000 in Q3 2024, a decrease of 25.1%[17] - Total Cash NOI for the nine months ended September 30, 2025, was $197,452, a decrease of 2.83% compared to $203,129 for the same period in 2024[138] - Interest expense for Q3 2025 was $19,773 million, an increase of 8.5% from $18,229 million in Q3 2024[134] - General and administrative expenses for Q3 2025 were $9,500 million, an increase of 4.8% from $9,068 million in Q3 2024[134] Portfolio and Leasing - The portfolio consists of 4.3 million square feet of office space, contributing 64% to Net Operating Income (NOI)[6] - Same-store Net Operating Income (NOI) for Q3 2025 totaled $66,797,000, compared to $67,510,000 in Q3 2024, reflecting a slight decline of 1.1%[28] - Same-store Cash NOI for Q3 2025 was $64,959, a decrease of 0.84% from $65,510 in Q3 2024[138] - The company reported a total base rent of $91,607,000 for Q3 2025, with additional property-related income of $11,643,000[54] - The company signed 20 leases totaling 181,455 square feet with a contractual rent of $56.01 per square foot[93] - The total number of leases signed over the last 12 months for the retail portfolio was 86, with a total net rentable area of 580,524 square feet[96] - The total annualized base rent for Loma Palisades in Q3 2025 was $17,579,544, with a leasing percentage of 91.2%[101] - The average monthly base rent per leased unit for Pacific Ridge Apartments in Q3 2025 was $4,199, with an annualized base rent of $24,734,688[101] Market and Development - The company operates in high-barrier-to-entry markets, which are expected to maintain favorable supply/demand characteristics[5] - The company has a development pipeline that includes the Waikele Center in Honolulu, HI, with an estimated rentable area of 120,000 square feet[75] - The company anticipates continued market expansion with new leases expected to commence in the upcoming quarters, enhancing overall portfolio performance[92] Tenant Information - Top 10 office tenants occupy a total of 1,338,154 square feet, representing 31.2% of total office space[117] - Annualized base rent from top 10 office tenants amounts to $92,270,859, accounting for 46.5% of total office rent[117] - Google LLC is the largest tenant with 253,198 square feet leased, contributing $27,659,898 in annualized base rent[117] - Top 10 retail tenants occupy 679,727 square feet, which is 28.3% of total retail space[122] - Annualized base rent from top 10 retail tenants totals $17,744,330, representing 25.3% of total retail rent[122]

Core Insights - American Assets Trust, Inc. reported a net income of $4.5 million for Q3 2025, down from $16.7 million in Q3 2024, and a net income of $52.5 million for the nine months ended September 30, 2025, compared to $47.8 million for the same period in 2024 [4][5][26] - Funds from Operations (FFO) per diluted share were $0.49 for Q3 2025 and $1.53 for the nine months ended September 30, 2025, compared to $0.71 and $2.03 for the same periods in 2024 [5][27] - The company increased its 2025 FFO per diluted share guidance to a range of $1.93 to $2.01, reflecting a $0.02 increase over prior guidance [5][18] Financial Results - Total revenue for Q3 2025 was $109.6 million, down from $122.8 million in Q3 2024, while total revenue for the nine months ended September 30, 2025, was $326.1 million, compared to $344.4 million in the same period in 2024 [26] - The company recognized a $44.5 million gain on the sale of Del Monte Center, contributing to the increase in net income for the nine months ended September 30, 2025 [4][6] - Same-store cash Net Operating Income (NOI) decreased by 0.8% for Q3 2025 but increased by 0.6% for the nine months ended September 30, 2025, compared to the same periods in 2024 [5][13] Leasing Activity - The company leased 181,000 square feet of office space and 125,000 square feet of retail space during Q3 2025, with average straight-line and cash-basis contractual rent increases of 19% and 9% for office, and 21% and 4% for retail, respectively [5][9] - The total portfolio leased status as of September 30, 2025, was 81.9% for office, 97.9% for retail, and 89.7% for multifamily properties [9][10] Balance Sheet and Liquidity - As of September 30, 2025, the company had gross real estate assets of $3.7 billion and liquidity of $538.7 million, consisting of $138.7 million in cash and cash equivalents and $400 million available on its line of credit [16] - The company had only 1 out of 31 assets encumbered by a mortgage as of the reporting date [16] Dividends - The company declared dividends of $0.340 per share for both Q3 and Q4 2025, with the Q4 dividend scheduled to be paid on December 18, 2025 [17]

Core Insights - The article discusses the investment landscape in the real estate sector, particularly focusing on the performance and outlook of various real estate investment trusts (REITs) and housing-related companies [2][3]. Group 1: Company Insights - Hoya Capital Research & Index Innovations is affiliated with Hoya Capital Real Estate, which provides investment advisory services and focuses on publicly traded securities in the real estate industry [2]. - The commentary emphasizes that the information provided is for educational purposes and does not constitute investment advice or recommendations for specific securities [2][3]. Group 2: Industry Insights - The real estate sector is highlighted as having unique risks associated with investments in real estate companies and housing industry companies, which may not be suitable for all investors [2]. - The article notes that past performance of market data does not guarantee future results, indicating the inherent volatility and unpredictability of the real estate market [3].

Core Insights - The article promotes a platform called "The Dividend Dogcatcher," which focuses on small-cap dividend stocks, particularly those in the S&P 600 index [1] - It highlights a live video series called "Underdog Daily Dividend Show," where potential investment candidates are discussed [1] - The article encourages audience engagement by inviting comments on favorite or curious stock tickers for future reports [1] Summary by Categories - **Investment Focus** - The emphasis is on small-cap dividend stocks, specifically within the S&P 600 index [1] - The platform aims to identify and highlight potential investment opportunities in this segment [1] - **Engagement and Community** - The article encourages interaction through social media, specifically Facebook, to discuss stock tickers [1] - It invites users to participate in the selection of stocks for future analysis by commenting on their interests [1]

Core Points - American Assets Trust, Inc. will announce its third quarter 2025 earnings on October 28, 2025, after market close [1] - A conference call for the earnings will be held on October 29, 2025, at 8:00 a.m. PT [1] - The conference call can be accessed by dialing 1 (833) 816-1162 [1] Company Overview - American Assets Trust, Inc. is a vertically integrated and self-administered real estate investment trust (REIT) based in San Diego, California [3] - The company has over 55 years of experience in acquiring, improving, developing, and managing office, retail, and residential properties across the United States [3] - The office portfolio comprises approximately 4.3 million rentable square feet, while the retail portfolio includes about 2.4 million rentable square feet [3] - The company also owns one mixed-use property with approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel, along with 2,302 multifamily units [3] - American Assets Trust was formed in 2011, succeeding the real estate business of American Assets, Inc., which was founded in 1967 [3]

Group 1 - The REIT sector is expected to benefit from lower base rates in the coming months, providing relief as REITs typically rely on debt for growth [1] Group 2 - The article emphasizes the importance of conducting due diligence and encourages investors to build portfolios of high-quality, dividend-paying companies [2] - The author expresses a personal investment philosophy focused on buy-and-hold strategies, particularly in blue-chip stocks, BDCs, and REITs [2]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - Publicly traded REITs can experience significant volatility, with price swings of 20% in a single year being common, unlike the private market [2] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment horizons [2]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201%2E%20Financial%20Statements) The company presents unaudited consolidated financial statements for the REIT and its operating partnership for the period ended June 30, 2025 [Consolidated Financial Statements of American Assets Trust, Inc.](index=6&type=section&id=Consolidated%20Financial%20Statements%20of%20American%20Assets%20Trust%2C%20Inc%2E) Net income rose 53% due to a real estate sale, while total assets decreased to $2.96 billion following the sale and debt repayment Consolidated Balance Sheet Highlights (AAT, Inc.) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Real estate, net | $2,634,394 | $2,587,486 | +$46,908 | | Cash and cash equivalents | $143,736 | $425,659 | -$281,923 | | Total Assets | $2,955,676 | $3,273,365 | -$317,689 | | Total Liabilities | $1,821,831 | $2,149,044 | -$327,213 | | Total Equity | $1,133,845 | $1,124,321 | +$9,524 | Consolidated Income Statement Highlights (AAT, Inc.) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $107,933 | $110,890 | $216,540 | $221,585 | | Gain on sale of real estate | $0 | $0 | $44,476 | $0 | | Net Income | $7,121 | $15,294 | $61,228 | $39,917 | | Net Income Attributable to AAT, Inc. | $5,456 | $11,904 | $47,991 | $31,164 | | EPS, diluted | $0.09 | $0.20 | $0.79 | $0.52 | Consolidated Cash Flow Highlights - Six Months Ended June 30 (AAT, Inc.) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $86,040 | $114,060 | | Net cash provided by (used in) investing activities | $9,619 | ($30,424) | | Net cash used in financing activities | ($377,582) | ($51,644) | [Consolidated Financial Statements of American Assets Trust, L.P.](index=11&type=section&id=Consolidated%20Financial%20Statements%20of%20American%20Assets%20Trust%2C%20L%2EP%2E) The Operating Partnership's financials mirror the parent REIT, with the key distinction being the presentation of Partners' Capital - The L.P.'s balance sheet, income statement, and cash flow statement are **identical to AAT, Inc.'s on a consolidated basis**, as the L.P. holds substantially all the assets and debt of the company[32](index=32&type=chunk)[35](index=35&type=chunk)[42](index=42&type=chunk) Partners' Capital as of June 30, 2025 (AAT, L.P.) | Capital Component | Amount (in thousands) | | :--- | :--- | | Limited partners' capital | ($51,560) | | General partner's capital | $1,181,316 | | Accumulated other comprehensive income | $4,089 | | **Total capital** | **$1,133,845** | [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key events include a $67.9 million acquisition, a $123.5 million property sale, and significant debt repayments of over $325 million - On February 28, 2025, the company acquired Genesee Park, a 192-unit apartment community in San Diego, for **$67.9 million**[70](index=70&type=chunk) - On February 25, 2025, the company sold Del Monte Center for **$123.5 million**, recognizing a gain of approximately **$44.5 million**[72](index=72&type=chunk) - During the first half of 2025, the company repaid the **$225 million** aggregate balance on Term Loan B and Term Loan C, and the **$100 million** balance on its Series C Senior Guaranteed Notes[95](index=95&type=chunk)[105](index=105&type=chunk)[117](index=117&type=chunk) - The company declared and paid dividends of **$0.340 per share/unit** in both Q1 and Q2 2025[126](index=126&type=chunk) Segment Profit (Six Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Office | $70,386 | $73,055 | -3.6% | | Retail | $34,317 | $36,380 | -5.7% | | Multifamily | $19,275 | $18,884 | +2.1% | | Mixed-Use | $10,934 | $11,831 | -7.6% | | **Total** | **$134,912** | **$140,150** | **-3.7%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202%2E%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses decreased property revenue due to a property sale, solid liquidity despite debt repayments, and non-GAAP performance [Results of Operations](index=42&type=section&id=Results%20of%20Operations) H1 2025 net income rose 53% on a property sale gain, though total property revenue declined 2% due to the same sale and office weakness Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Property Revenues | $107,933 | $110,890 | -2.7% | | Total Property Operating Income | $67,610 | $70,542 | -4.2% | | Net Income | $7,121 | $15,294 | -53.5% | H1 2025 vs H1 2024 Performance | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Property Revenues | $216,540 | $221,585 | -2.3% | | Gain on sale of real estate | $44,476 | $0 | N/A | | Total Property Operating Income | $134,912 | $140,150 | -3.7% | | Net Income | $61,228 | $39,917 | +53.4% | - Same-store retail operating income **increased 5.5%** for the six months ended June 30, 2025, compared to 2024, while same-store office operating income **decreased 2.1%** over the same period[185](index=185&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - The decrease in H1 2025 other income was primarily due to a one-time **$10.0 million net settlement payment** received in H1 2024[159](index=159&type=chunk)[253](index=253&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity through operations and its credit facility, holding $143.7 million in cash as of June 30, 2025 - The company's (AAT, Inc.) primary source of funding for dividends is **distributions received from the Operating Partnership**[256](index=256&type=chunk) - The Operating Partnership held **$143.7 million in cash and cash equivalents** as of June 30, 2025[267](index=267&type=chunk) - Short-term liquidity requirements are expected to be met through **net cash from operations and borrowings under the credit facility**[268](index=268&type=chunk) - **No shares of common stock were sold** through the company's $250 million ATM equity program during the six months ended June 30, 2025[123](index=123&type=chunk)[265](index=265&type=chunk) [Non-GAAP Financial Measures](index=56&type=section&id=Non-GAAP%20Financial%20Measures) The company reports Q2 2025 FFO of $39.9 million, or $0.52 per diluted share, and provides reconciliations for NOI and FFO NOI to Net Income Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net operating income (NOI) | $67,610 | $134,912 | | General and administrative | ($8,850) | ($18,162) | | Depreciation and amortization | ($32,782) | ($63,276) | | Interest expense, net | ($19,784) | ($38,564) | | Gain on sale of real estate | $0 | $44,476 | | Other income, net | $927 | $1,842 | | **Net income** | **$7,121** | **$61,228** | Funds from Operations (FFO) Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net income | $7,121 | $61,228 | | Plus: Real estate depreciation and amortization | $32,782 | $63,276 | | Less: Gain on sale of real estate | $0 | ($44,476) | | **Funds from operations (FFO)** | **$39,903** | **$80,028** | | FFO per diluted share/unit | $0.52 | $1.04 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=58&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rates, with $1.6 billion in fixed-rate debt and $100 million in fully hedged variable-rate debt - As of June 30, 2025, the company had **$1.6 billion of fixed-rate debt** outstanding with an estimated fair value of $1.5 billion[288](index=288&type=chunk) - A **1.0% increase in interest rates** would decrease the fair value of the fixed-rate debt by approximately **$47.7 million**[288](index=288&type=chunk) - The company's **$100.0 million of variable-rate debt is effectively fixed** through interest rate swap agreements, mitigating risk from interest rate fluctuations[289](index=289&type=chunk)[290](index=290&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures for both the REIT and its L.P. were effective as of June 30, 2025 - The CEO and CFO concluded that as of June 30, 2025, the disclosure controls and procedures for both American Assets Trust, Inc. and American Assets Trust, L.P. were **effective**[292](index=292&type=chunk)[296](index=296&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter for either entity[293](index=293&type=chunk)[297](index=297&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=60&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is not party to any material legal proceedings - The company reports **no material legal proceedings** as of the filing date[298](index=298&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A%2E%20Risk%20Factors) A new risk factor was added concerning the potential adverse effects of international trade policies and tariffs - A new risk factor was added regarding the potential negative impact of **changes in trade policies, including tariffs**, on tenants' ability to pay rent, leasing demand, and property development costs[299](index=299&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None[300](index=300&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[301](index=301&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205%2E%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - No officers or directors adopted or terminated any **Rule 10b5-1 trading plans** during the three months ended June 30, 2025[303](index=303&type=chunk)