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]