American Assets Trust, Inc. Q3 FY2025 earnings call

• FFO and Performance: Funds from operations (FFO) were $0.49 per diluted share for Q3, ahead of internal projections, supported by leasing progress, disciplined expenses, and minimal bad debt reserve use. Same-store NOI down in Q3 but up ~1% YTD. - Portfolio Updates: Office sector 82% leased, same-store office NOI up despite move-outs, strong leasing activity; Retail 98% leased, strong leasing; Multifamily facing challenges in San Diego and Portland but some leasing uptick; Waikiki Beach Walk retail okay, Embassy Suites impacted by tourism. - Liquidity and Balance Sheet: Total liquidity ~$539M as of end of Q3, net debt-to-EBITDA 6.7x trailing 12-month, interest coverage ~3.0x. - Dividend: Board approved $0.34 per share dividend for Q4, payable December 18.

Office: Ended Q3 at 82% leased, same-store office 87% leased with 5% of office portfolio having signed leases not commenced. Same-store office NOI increased for the quarter despite move-outs, with ~180k sq ft of office leasing completed, comparable rent spreads up 9% cash and 18% straight-line. Retail: 98% leased, executed over 125,000 sq ft of new and renewal leases in Q3, spreads up over 4% cash and 21% straight-line, same-store NOI down due to expense reimbursements and bankruptcies. Multifamily: San Diego communities (excluding RV park) 94% leased (now ~95% due to recent leasing), impacted by higher concessions, military deployments, move-outs, and international student occupancy; Portland's Hassalo on Eight 91% leased with slight blended rent growth; Waikiki Beach Walk retail performing in line, Embassy Suites lagged due to softer tourism and rate competition. Mixed-use (Embassy Suites Waikiki): Paid occupancy for Q3 2025 lower by 5.5%, RevPAR $298, ADR $381, net operating income down $0.9M compared to Q3 2024.

• Raised full-year 2025 FFO guidance range to $1.93 to $2.01 per share with midpoint $2.01, a $0.02 increase from prior guidance. Upward revision due to year-to-date performance, with upside potential from consistent rent collections, multifamily demand/expense discipline, and Hawaii travel trends.

• Mixed economic backdrop with interest rate volatility, inflation above targets, and softened consumer confidence. - Capital markets subdued for commercial real estate. - Office lease finalization taking longer, but not losing deals. - Multifamily supply headwinds in San Diego and expense pressure. - Hawaii tourism challenges including softer tourism and rate competition.

Q: Provide an update on the anticipated timeline to stabilize La Jolla Commons 3 and One Beach Street assets?

A: Adam Wyll noted momentum is building, with Steve Center adding details like recent leases, lease documentation, and spec suites playing out well. For La Jolla Commons 3, signed leases and proposals, and for One Beach, recent lease conversion and robust tour activity.

Q: Thoughts on the company's current leverage profile and plans to get back to under 6x Net Debt-to-EBITDA?

A: Robert Barton stated the plan is to lease up One Beach and La Jolla Commons 3, which would add ~$0.30 of additional FFO, bringing debt ratios closer to 6x or below. Met with rating agencies with stable outlook.

Q: Sense of where the multifamily segment finishes out the year and relief on concessions?

A: Adam Wyll mentioned San Diego multifamily market is resilient, Abigail Rex noted recent leasing uptick at Pacific Ridge and other communities, with expectation of stability improving as supply is absorbed.

Q: Tenant industries active in office leasing?

A: Steve Center mentioned AI in San Francisco, law firms, technology, insurance, and a broad base of quality tenants in various industries.

Q: Office occupancy trajectory over coming quarters?

A: Adam Wyll stated new leasing is strong, with ~70% of activity being new leasing, and momentum building, expecting positive trajectory in 2026 with better visibility in future calls.