American Assets Trust(US:AAT)2026-02-06 21:56Portfolio Composition - As of December 31, 2025, the portfolio includes 12 office properties, 11 retail shopping centers, 1 mixed-use property, and 7 multifamily properties[34]. - As of December 31, 2025, the operating portfolio consists of 31 properties with approximately 6.8 million rentable square feet of office and retail space, 2,302 residential units, and a 369-room hotel[183]. - The office portfolio included approximately 4.3 million rentable square feet, with an occupancy rate of 83.1% as of December 31, 2025, contributing 47.2% of total revenue[231]. - The multifamily portfolio has a total of 2,302 units, with an overall occupancy rate of 92.8% and an average monthly base rent of $2,684[186]. - The retail properties have a weighted average leased percentage of 97.7% and an annualized base rent totaling $70,277,527[184]. Financial Performance - The company aims to increase operating cash flows and maximize stockholder value through strategic acquisitions and property redevelopment[38]. - The company reported that LPL Holdings, Inc. accounted for approximately 13.1%, 12.3%, and 13.2% of total office segment revenues for the years ended December 31, 2025, 2024, and 2023, respectively[50]. - Google LLC accounted for approximately 13.3%, 12.3%, and 10.4% of total office segment revenues for the years ended December 31, 2025, 2024, and 2023, respectively[50]. - The total weighted average annualized base rent for the retail and office portfolio is $271,612,776, with an average rent per square foot of $45.90[184]. - The annualized base rent per leased square foot for the total portfolio is $47.23, indicating a strong rental performance[187]. Growth Strategy - The company intends to pursue growth through acquisitions in high-barrier-to-entry markets, focusing on properties with strong supply and demand characteristics[42]. - The company aims to grow earnings and cash flows through same-store portfolio growth, property development, and acquisitions in high-barrier-to-entry markets[223]. - The company evaluates properties continuously to identify redevelopment opportunities that enhance operating performance[223]. - The company plans to pursue redevelopment opportunities at Waikele Center and multifamily developments at various existing properties, contingent on market conditions[224]. Tenant and Lease Information - As of December 31, 2025, the three largest tenants in the office portfolio represented approximately 31% of the total annualized base rent, with Google LLC at 13.7%, LPL Holdings, Inc. at 10.5%, and Autodesk, Inc. at 6.8%[60]. - The largest anchor tenants in the retail portfolio as of December 31, 2025, were Lowe's, Sprouts Farmers Market, and Marshalls, collectively representing about 11.7% of total annualized base rent[64]. - The company operates 24 properties with a total net rentable square footage of 6,787,569, with Southern California accounting for 46.0% of the total[196]. - The operating portfolio includes approximately 735 leases with office and retail tenants, with only one tenant accounting for more than 9.8% of the annualized base rent[192]. Risks and Challenges - The company faces competition from other developers and operators, which may impact its ability to lease properties and achieve desired financial outcomes[47]. - The company faces risks related to economic conditions in California, Washington, Oregon, Texas, and Hawaii, which could adversely affect financial performance[56]. - The company may encounter challenges in identifying and completing property acquisitions that meet its growth criteria, potentially impeding growth[66]. - The company is susceptible to trends in office real estate, including the shift towards remote work, which may reduce demand for office space[57]. - The company faces risks associated with joint ventures, including lack of decision-making authority and potential disputes with co-venturers[114]. Capital and Financing - Total debt outstanding as of February 6, 2026, was $1.70 billion, excluding debt issuance costs, with a credit facility capacity of $500 million[58]. - The company may face challenges in obtaining additional capital due to unfavorable economic conditions, which could hinder growth strategies and refinancing efforts[70]. - High mortgage rates may limit the company's ability to finance or refinance properties, potentially reducing net income and cash distributions[71]. - The company may need to borrow funds during unfavorable market conditions to meet distribution requirements, potentially affecting its financial condition[164]. Regulatory and Compliance - The company is committed to maintaining its REIT status by distributing at least 90% of its net taxable income to stockholders annually[41]. - The company is subject to various data privacy and security regulations, and any failure to comply could result in significant penalties and reputational damage[121]. - Legislative changes affecting REITs could negatively impact the company's ability to maintain its REIT status and the tax consequences for investors[169]. - The company may incur significant costs complying with various federal, state, and local laws, which could adversely impact its financial condition and results of operations[135]. Cybersecurity and Technology - The company has not identified any material cybersecurity incidents affecting operations or financial condition as of December 31, 2025[174]. - The cybersecurity risk management program includes a response team responsible for managing cybersecurity risks and incidents[180]. - The company utilizes AI technologies, which involve risks related to implementation, data quality, and potential legal liabilities[122]. - The company faces risks related to the evolving regulatory framework for AI Technologies, which may impact its ability to use and commercialize these technologies in the future[123]. Shareholder and Governance - The company has a substantial beneficial interest held by Ernest S. Rady and his affiliates, who own approximately 16.5% of the outstanding common stock, potentially influencing corporate decisions[137]. - Conflicts of interest may arise between the interests of stockholders and the interests of holders of units in the Operating Partnership, which could impede beneficial business decisions[138]. - The company's charter restricts ownership of common stock to a maximum of 7.275% for any individual, with exceptions granted to specific entities allowing ownership up to 19.9% and 10%[141]. - The board of directors can increase the number of authorized shares without stockholder approval, potentially leading to changes in control that may not favor existing shareholders[142].