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SAN DIEGO, Oct. 01, 2024 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE:AAT) (the “company”) will announce its third quarter 2024 earnings in a press release to be issued after the market closes on Tuesday, October 29, 2024. Senior management will hold a conference call for its third quarter 2024 earnings on Wednesday, October 30, 2024, at 8:00 a.m. Pacific Time. 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-dema ...

Investors in American Assets Trust, Inc. (AAT) need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2024 $17.5 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It co ...

Matteo Colombo leReal Estate Weekly Outlook Following their worst week since mid-2023, U.S. equity markets rebounded this week while benchmark interest rates dipped to two-year lows as a critical slate of inflation data provided further evidence that price pressures are contained following a historic pandemic-era surge, setting the stage for the Federal Reserve to officially end its aggressive rate hiking cycle. Hoya Capital Erasing the majority of last week's declines, the S&P 500 rallied 4.0% on the w ...

SAN DIEGO, Sept. 10, 2024 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE: AAT) (the “company”) today announced that its operating partnership, American Assets Trust, L.P. (the “operating partnership”), has priced a public offering of $525 million aggregate principal amount of 6.150% senior notes due 2034 (the “Notes”). The Notes were priced at 99.671% of the principal amount and will mature on October 1, 2034. The offering is expected to settle on September 17, 2024, subject to the satisfaction of cu ...

Matteo Colombo Real Estate Weekly Outlook Hoya Capital U.S. equity markets posted their worst week since March 2023, while benchmark interest rates tumbled to their lows of the year after a critical slate of employment data showed further signs of softening in U.S. labor markets. Snapping a four-week winning streak that lifted the major benchmark to the cusp of record highs, the S&P 500 tumbled 4.1% this week. Technology stocks dragged on the downside this week amid continued pressure on once-high-flyin ...

Core Viewpoint - The article emphasizes the potential of high-quality office REITs, particularly Cousins Properties (CUZ) and American Assets Trust (AAT), as interest rates are expected to decline, which may lead to increased leasing activity and growth in the sector [2][3]. Group 1: Office REITs Performance - Cousins Properties and American Assets Trust have seen stock price increases of approximately 16% and 15% respectively since July 11th, outperforming peers Douglas Emmett, Inc. and SL Green Realty Corp. [5] - The performance of CUZ and AAT is attributed to their strategic property locations in the growing Sun Belt region and affluent areas in San Diego, California [5][8]. Group 2: Market Trends and Leasing Activity - The office sector has experienced a pickup in leasing activity over the last three quarters, which is expected to continue as interest rates decline [3]. - The article notes that the population decline in states like New York, where SL Green Realty Corp. operates, contrasts with the growth in areas where CUZ and AAT have properties [5][7]. Group 3: Financial Metrics and Outlook - Cousins Properties has a forward price-to-FFO ratio of 10.53x, which is below the sector median of 13.88x, indicating potential for upside [9]. - The occupancy rate for CUZ increased from 87.6% to 88.5% from the beginning of the year to the end of Q2, reflecting positive demand trends [9]. - American Assets Trust has a forward price-to-FFO ratio of 10.61x and a solid occupancy rate of 86.6%, which has improved from 86.4% at the beginning of the year [11][13]. Group 4: Growth Potential - Cousins Properties is projected to have a 21.4% upside over the next two years if it returns to its normal multiple, supported by strong fundamentals and property locations [17]. - American Assets Trust offers a more significant upside of 41.44% if it returns to its historical multiple, with potential growth driven by its property locations and the anticipated return of employees to offices [18].

Core Viewpoint - American Assets Trust (AAT) is positioned as a high-quality REIT that offers attractive income opportunities despite challenges in the office sector, with a focus on its strong financial performance and prime property locations [2][4][15]. Financial Performance - AAT reported Q2 earnings with FFO of $0.60, exceeding estimates by $0.06, and revenue of $110.89 million, surpassing estimates by nearly $2 million [5]. - Year-over-year FFO increased slightly by $0.01, while revenue rose by approximately $1 million from $109.72 million [5]. - The company raised its full-year guidance by nearly 10%, now expected to be in the range of $2.48 - $2.54, indicating a solid growth rate of 4.6% from 2023 [11]. Occupancy and Leasing Activity - AAT's office portfolio was 86.6% leased at the end of the quarter, showing a 20 basis points increase from the previous quarter [8]. - The REIT executed 18 leases totaling 96,000 square feet in Q2, with more than half of the new leasing activity occurring for the first time in five years [8][10]. Property Locations - AAT's properties are primarily located in affluent areas such as San Diego, San Francisco, Honolulu, and others, which are considered Class A properties [6]. - The strategic locations contribute to the REIT's resilience and potential for future growth as businesses may require more office space [10][14]. Dividend and Balance Sheet - AAT is expected to provide a dividend of $1.34 for 2024, translating to a forward yield of 5.2%, supported by growing FFO [11]. - The REIT maintains a manageable debt profile with a net debt to EBITDA ratio of 6.4x, targeting a range of 5.5x or below [13]. Valuation - AAT's current trading price is $26 per share, with a forward P/FFO ratio of 10.36x, below the sector median of 13.96x, suggesting potential undervaluation [14]. - The stock was previously trading near $50 before the pandemic, indicating significant upside potential as occupancy rates improve [14].

Financial Performance - Rental income for the three months ended June 30, 2024, was $105,094,000, up from $103,901,000 for the same period in 2023, representing an increase of 1.1%[16] - Total revenue for the six months ended June 30, 2024, reached $210,115,000, compared to $206,611,000 in the prior year, marking a growth of 1.2%[16] - Net income for the six months ended June 30, 2024, was $39,917,000, compared to $36,063,000 for the same period in 2023, representing an increase of 5.1%[23] - Total revenue for the three months ended June 30, 2024, was $110,890,000, a 1.1% increase from $109,721,000 in the same period of 2023[28] - Net income attributable to American Assets Trust, Inc. stockholders for the three months ended June 30, 2024, was $11,904,000, compared to $11,983,000 in the prior year, a decrease of 0.7%[16] - Net income attributable to common stockholders for the three months ended June 30, 2024, was $11.904 million, a slight decrease from $11.983 million in the same period of 2023[113] - For the six months ended June 30, 2024, net income attributable to common stockholders increased to $31.164 million, compared to $28.119 million for the same period in 2023, representing a growth of 10.9%[113] Assets and Liabilities - Total assets increased to $2,992,932,000 as of June 30, 2024, compared to $2,984,681,000 at December 31, 2023, reflecting a growth of 0.3%[15] - Total liabilities rose to $1,847,276,000 as of June 30, 2024, compared to $1,831,006,000 at the end of 2023, an increase of 0.9%[15] - Cash and cash equivalents increased to $114,880,000 as of June 30, 2024, from $82,888,000 at December 31, 2023, a significant increase of 38.6%[15] - Total stockholders' equity as of June 30, 2024, was $1,145,656,000, reflecting a decrease from $1,176,116,000 as of June 30, 2023[21] - Total assets as of March 31, 2024, amounted to $1,470,823,000, with stockholders' equity at $1,155,388,000[19] Cash Flow and Expenditures - Net cash provided by operating activities for the six months ended June 30, 2024, was $114,060,000, an increase from $98,118,000 in 2023[23] - Capital expenditures for the six months ended June 30, 2024, were $26,616,000, down from $44,411,000 in the same period of 2023[23] - The company reported a net increase in cash and cash equivalents of $31,992,000 for the six months ended June 30, 2024, compared to $35,138,000 in 2023[23] - Cash and cash equivalents at the end of the period were $114,880, up from $84,709 at the end of June 30, 2023, representing a growth of 35.5%[36] Dividends and Distributions - Dividends declared per common share increased to $0.335 for the three months ended June 30, 2024, compared to $0.330 in the same period of 2023[16] - Dividends declared and paid for the six months ended June 30, 2024, totaled $51,644,000, slightly higher than $50,756,000 in the same period of 2023[23] - The company declared dividends of $0.335 per share for both the first and second quarters of 2024, with payment dates on March 21, 2024, and June 20, 2024, respectively[104] Operating Performance - Operating income for the three months ended June 30, 2024, was $30,794,000, slightly down from $31,492,000 in the same quarter of 2023, a decrease of 2.2%[16] - Total property revenues for the three months ended June 30, 2024, were $110.89 million, a 1% increase from $109.72 million in the same period of 2023[188] - Total property expenses increased by $2.5 million, or 3%, for the six months ended June 30, 2024, totaling $81.4 million[211] - Total segments' profit for the three months ended June 30, 2024, was $70,542 thousand, an increase from $69,924 thousand in the same period of 2023, representing a growth of 0.9%[153] Leasing and Rental Income - The company signed 18 office leases totaling 96,042 square feet, with average rental rate increases of 5.2% on a cash basis and 14.5% on a GAAP basis[177] - For retail leases, 19 leases were signed for 68,735 square feet, with average rental rate increases of 5.8% on a cash basis and 34.4% on a GAAP basis[178] - The percentage leased for multifamily properties increased to 90.0% as of June 30, 2024, compared to 85.9% in 2023[189] - Office rental income for the three months ended June 30, 2024, was $49.337 million, a decrease of 1.9% from $50.269 million in the same period of 2023[137] - Multifamily rental income for the three months ended June 30, 2024, increased to $15.306 million from $14.146 million in the same period of 2023, representing an 8.2% growth[137] Debt and Financing - The Operating Partnership has a total principal balance of $1.625 billion in unsecured notes, with various interest rates ranging from 3.375% to 4.50%[76] - The company borrowed $100 million on its Revolver Loan on July 18, 2024, to repay the entirety of its Series F Notes upon their maturity on July 19, 2024[158] - The weighted average interest rate on the Revolver Loan for the six months ended June 30, 2024, was 6.53%[88] - As of June 30, 2024, the Operating Partnership had outstanding borrowings of $150 million under Term Loan B and $75 million under Term Loan C, both maturing on January 5, 2025[93] Other Financial Metrics - The company recognized $3.4 million in stock-based compensation expense for the six months ended June 30, 2024[108] - The provision for doubtful accounts was approximately $1.4 million as of both June 30, 2024, and December 31, 2023, indicating stable expectations regarding collectability[52] - Total other assets decreased from $99,644,000 on December 31, 2023, to $97,924,000 on June 30, 2024, a decline of about 1.8%[68] - Other income, net, for the six months ended June 30, 2024, totaled $11.118 million, significantly higher than $6.951 million in the same period of 2023, marking a 59.5% increase[141]

Financial Data and Key Metrics Changes - In Q2 2024, the company reported FFO of $0.60 per share, a decrease of approximately $0.11 compared to Q1 2024, primarily due to a one-time $10 million litigation settlement in Q1 2024 [16][17] - The company increased its 2024 FFO per share guidance range to $2.48 to $2.54, representing a 9.6% increase from the previous guidance [20][23] Business Line Data and Key Metrics Changes - The same-store cash NOI for all sectors combined grew by 2.1% year-over-year in Q2 2024 [18] - The office portfolio's NOI was flat in Q2 2024, primarily due to contractual rent abatements [18] - The retail portfolio's NOI increased by 3.2% in Q2 2024, driven by higher base rents [18] - The multifamily portfolio's NOI saw a positive increase of 9.5% in Q2 2024, mainly due to higher-than-expected revenue [18] Market Data and Key Metrics Changes - Office utilization rates in San Diego and San Francisco remained stable between 70% and 80%, while Bellevue and Portland were at 60% to 75% [10] - The retail sector is currently about 95% leased, with strong foot traffic supporting demand [12] - The multifamily portfolio in San Diego ended Q2 with an occupancy rate of 89% and a leased percentage of 95% [13] Company Strategy and Development Direction - The company is focused on maintaining a robust balance sheet and enhancing its properties to drive long-term growth [3][9] - The transition of leadership to Adam Wyll as CEO in January 2025 is expected to be seamless, with a continued focus on the same strategic direction [5][8] - The company is not currently looking for acquisitions but is investing in improving existing properties [60][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite pessimistic market sentiment surrounding commercial real estate [3] - The company anticipates that office utilization rates may increase with the implementation of return-to-office mandates [10] - Management believes that the quality and location of their properties are key differentiators in maintaining higher utilization rates [10] Other Important Information - The company announced a quarterly dividend of $0.335 per share for Q3 2024, reflecting strong financial performance [7] - The company released its 2023 sustainability report, highlighting its initiatives in environmental sustainability and corporate governance [15] Q&A Session Summary Question: Any G&A impact expected from the announcement in this year's guide? - Management does not anticipate any G&A impact this year, with changes effective from January next year [33] Question: Details on the lease termination fee and tenant situation? - The tenant was a life science company facing FDA approval issues, leading to a mutually acceptable termination deal [34][35] Question: Prospects for new leasing in the office segment? - New leasing has outpaced renewals for the first time in years, with increased activity and interest in the market [37][39] Question: Thoughts on balance sheet and upcoming debt maturities? - The company is monitoring the market for the right time to refinance upcoming maturities, with a focus on maintaining a strong balance sheet [44][45] Question: Known move-outs in the office segment? - No known move-outs for 2024, but there are plans for backfilling space from a tenant vacating in 2025 [46][48] Question: Progress on leasing at One Beach and La Jolla? - Leasing activity at La Jolla Commons III is strong, while One Beach is facing challenges due to the San Francisco market [50][52]