Group 1 - The article emphasizes that now is an opportune time for income investors due to many stocks being available at bargain valuations, suggesting a focus on acquiring quality assets at lower prices [2] - The investment strategy highlighted involves targeting income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The author has a long position in American Assets Trust (AAT), indicating a positive outlook on the company's stock performance [3] Group 2 - The article is positioned as an informational resource rather than financial advice, encouraging readers to conduct their own due diligence before making investment decisions [4] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not represent the platform as a whole [5]

Financial Performance - Total revenue for Q1 2025 was $108.607 million, a decrease of 1.96% from $110.695 million in Q1 2024[23] - Operating income increased significantly to $71.972 million, compared to $30.549 million in the same period last year, reflecting a growth of 135.5%[23] - Net income attributable to American Assets Trust, Inc. stockholders was $42.535 million, up from $19.260 million in Q1 2024, representing a year-over-year increase of 109.5%[23] - Earnings per common share (basic and diluted) for Q1 2025 was $0.70, compared to $0.32 in Q1 2024, marking a 118.75% increase[23] - Net income for Q1 2025 was $54,107,000, a significant increase of 119% compared to $24,623,000 in Q1 2024[31] - Total revenue decreased to $108,607,000 in Q1 2025, down 1.9% from $110,695,000 in Q1 2024, primarily due to a decline in rental income[31] - Operating income rose to $71,972,000 in Q1 2025, compared to $30,549,000 in Q1 2024, reflecting a substantial increase of 135%[31] - Net income for the three months ended March 31, 2025, was $54.1 million, a significant increase from $24.6 million in the same period of 2024, representing a growth of 119%[38] - The company declared a dividend of $0.340 per common share, slightly up from $0.335 in the previous year[23] - Distributions per unit increased slightly to $0.340 in Q1 2025 from $0.335 in Q1 2024[31] Assets and Liabilities - Total assets decreased to $2.968 billion as of March 31, 2025, down from $3.273 billion at the end of 2024, a decline of 9.3%[21] - Total liabilities decreased to $1.815 billion from $2.149 billion, a reduction of 15.5%[21] - Cash and cash equivalents significantly decreased to $143.915 million from $425.659 million, a decline of 66.1%[21] - Total assets decreased to $2,967,788,000 as of March 31, 2025, from $3,273,365,000 at the end of 2024[29] - Total liabilities decreased to $1,815,428,000 as of March 31, 2025, down from $2,149,044,000 at the end of 2024[29] - Cash and cash equivalents at the end of the period were $143.9 million, up from $98.6 million at the end of Q1 2024, marking a 46% increase[38] Cash Flow and Financing Activities - Net cash provided by operating activities was $36,869,000 in Q1 2025, down from $54,778,000 in Q1 2024[37] - The company reported a net cash used in financing activities of $351.3 million in Q1 2025, compared to $25.8 million in Q1 2024, indicating a substantial increase in financing outflows[38] - Cash paid for interest, net of amounts capitalized, rose to $34.0 million in Q1 2025 compared to $21.2 million in Q1 2024, an increase of 60%[50] - The company recorded an income tax expense of $0.4 million for the three months ended March 31, 2025, compared to $0.3 million for the same period in 2024[134] Real Estate and Property Management - Gain on sale of real estate was $44.476 million in Q1 2025, compared to no gain in Q1 2024, indicating successful asset management strategies[23] - The company owned or had a controlling interest in 31 properties as of March 31, 2025, maintaining a diversified portfolio across office, retail, multifamily, and mixed-use segments[42] - The company reported a gain on the sale of real estate amounting to $44,476 million in Q1 2025, with no comparable gain in Q1 2024[166] - The company has a proactive leasing and capital improvement program to enhance property attractiveness[145] - The company operates in four reportable segments: retail real estate, office real estate, multifamily real estate, and mixed-use real estate[160] Rental Income and Expenses - Total rental income was $102.951 million, a decrease of 2.0% from $105.021 million in the same period of 2024[153] - Total rental expenses increased to $30.300 million for the three months ended March 31, 2025, compared to $29.841 million in 2024, reflecting a rise of 1.5%[154] - Rental expenses for total property in Q1 2025 were $10,874 million, an increase of 7.3% from $10,135 million in Q1 2024[166] - Office tenants accounted for 46.8% of total revenues, while retail tenants accounted for 22.7%, indicating a significant concentration in these sectors[141] - Minimum future rentals from noncancelable operating leases total $1.155 billion, with $184.004 million expected in 2025[146] Debt and Interest Rates - Total interest costs incurred increased to $20.2 million in Q1 2025 from $18.3 million in Q1 2024, reflecting a rise of 10%[50] - The company had $1.6 billion of fixed-rate debt outstanding as of March 31, 2025, with an estimated fair value of $1.5 billion[260] - Variable rate debt outstanding as of March 31, 2025, was $100 million, all subject to interest rate swaps, effectively hedging against interest rate fluctuations[261] - The company estimates that cash flow hedges in place will reduce interest expense by approximately $1.0 million over the next twelve months[79] - The effective interest rate on the 6.150% Senior Notes is approximately 6.209% per annum after accounting for treasury lock contracts and debt discounts[94] Capital Expenditures and Investments - Capital expenditures for Q1 2025 totaled $17,230 million, an increase of 29.3% from $13,292 million in Q1 2024[169] - The company acquired Genesee Park, a 192-unit apartment community, for $67.9 million on February 28, 2025[64] - For the period of acquisition through March 31, 2025, Genesee Park generated revenues of $359,000 and incurred operating expenses of $518,000, resulting in an operating loss of $159,000[65] Compliance and Agreements - The Operating Partnership was in compliance with all financial covenants related to the 3.375% and 6.150% Senior Notes as of March 31, 2025[95] - The Operating Partnership entered into an interest rate swap agreement to fix the interest rate on Term Loan A at approximately 2.70% through January 5, 2027[109] - As of March 31, 2025, the Operating Partnership was in compliance with all covenants of the Third Amended and Restated Credit Facility[111]

Financial Data and Key Metrics Changes - The company reported FFO per diluted share of $0.52 for Q1 2025, a decrease of approximately $0.03 compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition [16] - Same store cash NOI increased by 3.1% year over year in Q1 2025, with all sectors reporting positive growth except for the mixed-use sector [16][17] - The company ended Q1 with liquidity of approximately $544 million, including $144 million in cash and cash equivalents [20] Business Line Data and Key Metrics Changes - The office portfolio's same store NOI increased by 5.4% in Q1 2025, driven by the expiration of a rent abatement [17] - The retail portfolio's same store NOI also increased by 5.4%, supported by new leases and contractual rent escalations [17] - The multifamily portfolio's NOI was flat year over year, primarily due to lower rental income in Portland, while San Diego properties showed growth [17][12] - The mixed-use portfolio's NOI declined by approximately 11.6%, mainly due to lower occupancy at the Embassy Suites Waikiki [18] Market Data and Key Metrics Changes - The office portfolio ended Q1 at 85.5% leased, with an increase in average base rents and an 8% increase in cash basis spreads [8] - The retail portfolio ended the quarter 97% leased, with strong collections and an all-time high average base rent [10] - The San Diego multifamily properties ended the quarter approximately 95% leased, with a blended rent increase of 2% [12] Company Strategy and Development Direction - The company focuses on thoughtful capital allocation, operational discipline, and enhancing asset quality to ensure long-term stability [5][6] - The strategy includes pursuing organic growth through leasing and value-add improvements while maintaining strong liquidity [6][14] - Recent capital recycling includes the sale of Del Monte Center and the acquisition of Genesee Parks Apartments, aligning with the strategy to concentrate on core markets [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the complex operating environment, including inflation, interest rate volatility, and geopolitical uncertainty, but sees opportunities for growth [4][5] - The company remains cautiously optimistic about the office sector's recovery, particularly in high barrier coastal markets [9] - Management reaffirms full-year 2025 guidance of $1.87 to $2.10 per FFO share, reflecting confidence in the portfolio's strength [21][22] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q2, reflecting confidence in the company's outlook [14][15] - The company is closely monitoring economic conditions and tenant performance, particularly in the multifamily and retail segments [23] Q&A Session Summary Question: Update on Bellevue assets and occupancy outlook - Management highlighted recent leasing activity, including a 29,000 square foot lease at Timber Ridge, bringing it to 97% leased, and ongoing negotiations for additional leases [27][28] Question: Impact of Proposition 1A on tenant interest in Downtown Seattle - Management noted increased inbound tenant inquiries in Bellevue, partly due to the proposition, indicating a positive trend [30] Question: Plans for redeploying proceeds from Del Monte Center sale - Management confirmed they are actively looking for additional acquisitions but are also comfortable holding cash for liquidity during economic uncertainty [32][33] Question: Update on leasing pipeline and market conditions in La Jolla - Management reported a tight submarket with a direct vacancy of 7.4%, and ongoing efforts to enhance leasing activity through new amenities and spec suites [34][38]

Financial Data and Key Metrics Changes - The company reported FFO per diluted share of $0.52 for Q1 2025, a decrease of approximately $0.03 compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition [16] - Same store cash NOI increased by 3.1% year over year in Q1 2025, with all sectors reporting positive growth except for the mixed-use sector [16][17] - The company ended Q1 with liquidity of approximately $544 million, including $144 million in cash and cash equivalents [20] Business Line Data and Key Metrics Changes - The office portfolio's same store NOI increased by 5.4% in Q1 2025, driven by the expiration of a rent abatement [17] - The retail portfolio's same store NOI also increased by 5.4%, supported by new leases and contractual rent escalations [17] - The multifamily portfolio's NOI was flat year over year, primarily due to lower rental income in Portland, while San Diego properties showed growth [17][12] - The mixed-use portfolio's NOI declined by approximately 11.6%, mainly due to lower occupancy at the Embassy Suites Waikiki [17] Market Data and Key Metrics Changes - The office portfolio ended Q1 at 85.5% leased, with an increase in average base rents [8] - The retail portfolio ended the quarter 97% leased, with strong collections and an all-time high average base rent [10] - The San Diego multifamily properties ended the quarter approximately 95% leased, with a blended rent increase of 2% [12] Company Strategy and Development Direction - The company focuses on thoughtful capital allocation, operational discipline, and enhancing asset quality to ensure long-term stability [4][5] - The strategy includes pursuing organic growth through leasing and value-add improvements while maintaining strong liquidity [6] - Recent capital recycling includes the sale of Del Monte Center and the acquisition of Genesee Parks Apartments, aligning with the strategy to concentrate on core markets [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the complex operating environment, including inflation, interest rate volatility, and geopolitical uncertainty, but sees opportunities for growth [5] - The company remains cautiously optimistic about the office sector's recovery, particularly in high barrier coastal markets [9] - Management reaffirms full-year 2025 guidance of $1.87 to $2.10 per FFO share, reflecting confidence in the portfolio's strength [21][22] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q2, reflecting confidence in the company's outlook [14][15] - The company aims to maintain a long-term net debt to EBITDA ratio of 5.5 times or below [20] Q&A Session Summary Question: Update on Bellevue assets and occupancy - Management noted significant leasing activity in Bellevue, with recent leases bringing properties closer to market vacancy rates [26][28] Question: Impact of Proposition 1A on tenant interest in Downtown Seattle - Increased inbound tenant inquiries were noted, with Bellevue outperforming in the current market [30] Question: Plans for redeploying proceeds from Del Monte Center sale - The company is actively looking for additional acquisitions but is also comfortable holding cash for liquidity during economic uncertainty [32][33] Question: Update on leasing pipeline at La Jolla - The UTC submarket remains tight, with ongoing leasing efforts and new amenities expected to drive activity [34][38]

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

Company Performance - American Assets Trust (AAT) reported quarterly funds from operations (FFO) of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, but down from $0.71 per share a year ago, indicating a 26.76% year-over-year decline [1] - The company achieved an FFO surprise of 15.56% for the quarter, having previously reported an FFO of $0.55 per share against an expectation of $0.50 per share, resulting in a 10% surprise [1][2] - Revenues for the quarter were $108.61 million, surpassing the Zacks Consensus Estimate by 2.37%, although this represents a decrease from $110.7 million in the same quarter last year [2] Market Outlook - American Assets Trust shares have declined approximately 27.6% since the beginning of the year, contrasting with a 6% decline in the S&P 500 [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the outlook for FFO [3][4] - Current consensus FFO estimate for the upcoming quarter is $0.49 on revenues of $109.83 million, and for the current fiscal year, it is $1.94 on revenues of $437.04 million [7] Industry Context - The REIT and Equity Trust - Retail industry, to which American Assets Trust belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in estimate revisions, which can impact investor sentiment [5][6]

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

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

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

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