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Net income available to common stockholders of $42.5 million for the first quarter, or $0.70 per diluted share.
Funds from Operations ("FFO") per diluted share excluding lease termination fees and litigation income decreased 10% year-over-year for the first quarter to $0.52 per diluted share.
SAN DIEGO, April 29, 2025 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE: AAT) (the "company”) today reported financial results for its first quarter ended March 31, 2025.
First Quarter Highlights
- Net income available to common stockholders of $42.5 million for the first quarter, or $0.70 per diluted share.
- FFO decreased 10% year-over-year to $0.52 per diluted share excluding lease termination fees and litigation income for the first quarter, compared to the same period in 2024.
- Same-store cash Net Operating Income ("NOI") increased 3.1% year-over-year for the first quarter, compared to the same period in 2024.
- Leased approximately 44,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 8%, respectively, during the first quarter.
- Leased approximately 156,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 21% and 13%, respectively, during the first quarter.
Disposition and Acquisition Activity
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- Completed the sale of Del Monte Center on February 25, 2025, for $123.5 million.
- Acquired Genesee Park on February 28, 2025, a 192-unit apartment community located in San Diego, California for $67.9 million.
Financial Results
| (Unaudited, amounts in thousands, except per share data) | Three Months Ended March 31, | ||||
| 2025 | 2024 | ||||
| Net income attributable to American Assets Trust, Inc. stockholders | $ | 42,535 | $ | 19,260 | |
| Basic and diluted income attributable to common stockholders per share | $ | 0.70 | $ | 0.32 | |
| FFO attributable to common stock and common units | $ | 39,945 | $ | 54,648 | |
| FFO per diluted share and unit | $ | 0.52 | $ | 0.71 | |
| FFO per diluted share and unit, excluding lease termination fees and litigation income(1) | $ | 0.52 | $ | 0.58 | |
| (1) | Excludes $10.0 million in litigation income recognized during the three months ended March 31, 2024. |
Net income attributable to common stockholders increased $23.3 million for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a $44.5 million gain on sale recognized for Del Monte Center, a $0.7 million increase in interest and investment income attributable to a higher yield on our average cash balance, and a $0.7 million net increase in our same-store retail segment due to new tenant leases signed, scheduled rent increases and an increase in cost recoveries. These increases were offset by $10 million in litigation income received during the first quarter of 2024 relating to building specifications for one of the existing buildings at our office project in University Town Center (San Diego), higher net interest expense of approximately $2.5 million primarily due to the $525 million in principal amount of 6.15% senior notes due 2034, $2.5 million net decrease in our office segment due to tenant move-outs within our Lloyd Portfolio and Torrey Reserve Campus and $0.5 million decrease related to the hotel portion of our mixed-use property due to a decrease in tourism.
FFO decreased $14.7 million for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to the litigation income received during the first quarter of 2024, an increase in our interest expense and a decrease in our office segment due to lower occupancy. These decreases were offset by an increase in our same-store retail segment due to higher occupancy and average monthly base rent and an increase in other income due to interest and investment income attributed to higher yield on our average cash balance during the period.
FFO is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release.
Leasing
The portfolio leased status as of the end of the indicated quarter was as follows:
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||
| Total Portfolio | ||||||
| Office | 85.5% | 85.0% | 86.4% | |||
| Retail | 97.4% | 94.5% | 94.4% | |||
| Multifamily | 90.0% | 91.8% | 92.8% | |||
| Mixed-Use: | ||||||
| Retail | 89.3% | 90.5% | 95.4% | |||
| Hotel | 84.6% | 85.9% | 89.8% | |||
| Same-Store Portfolio(1) | ||||||
| Office | 87.6% | 87.1% | 88.6% | |||
| Retail | 97.4% | 97.7% | 97.8% | |||
| Multifamily | 89.7% | 91.8% | 92.8% | |||
| Mixed-Use: | ||||||
| Retail | 89.3% | 90.5% | 95.4% | |||
| Hotel | 84.6% | 85.9% | 89.8% | |||
| (1) | Same-store leased percentages excludes: (i) One Beach Street (office) due to significant redevelopment activity; (ii) Del Monte Center (retail), which was sold on February 25, 2025, (iii) Genesee Park (multifamily), which was acquired on February 28, 2025 and (iv) land held for development (office). |
During the first quarter of 2025, the company signed 35 leases for approximately 297,200 square feet of office and retail space, as well as 280 multifamily apartment leases. Renewals accounted for 89% of the comparable office leases, 100% of the comparable retail leases, and 61% of the residential leases.
Office and Retail
The annualized base rent per leased square foot as of the end of the indicated quarter was as follows:
| 2nd Quarter 2024 | 3rd Quarter
2024 | 4th Quarter 2024 | 1st Quarter 2025 | ||||||
| Office | Weighted Average Portfolio | $ | 55.48 | $ | 56.39 | $ | 55.92 | $ | 56.49 |
| Retail | Weighted Average Portfolio | $ | 26.85 | $ | 27.29 | $ | 27.35 | $ | 29.64 |
On a comparable basis (i.e., leases for which there was a former tenant) our office and retail leasing spreads as of the end of the indicated quarter are shown below:
| 2nd Quarter
2024 | 3rd Quarter 2024 | 4th Quarter 2024 | 1st Quarter 2025 | ||||||
| Office | Cash Basis % Change Over Prior Rent | 5.2 | % | 7.8 | % | 1.6 | % | 7.8 | % |
| Straight-Line Basis % Change Over Prior Rent | 14.5 | % | 16.4 | % | 11.0 | % | 15.2 | % | |
| Retail | Cash Basis % Change Over Prior Rent | 5.8 | % | 4.4 | % | 6.5 | % | 13.3 | % |
| Straight-Line Basis % Change Over Prior Rent | 34.4 | % | 18.7 | % | 30.8 | % | 21.0 | % | |
On a comparable basis (i.e., leases for which there was a former tenant) during the first quarter of 2025 and trailing four quarters ended March 31, 2025, our office and retail leasing spreads are shown below:
| Number of Leases Signed | Comparable Leased Sq. Ft. | Average Cash Basis % Change Over Prior Rent | Average Cash Contractual Rent Per Sq. Ft. | Prior Average Cash Contractual Rent Per Sq. Ft. | Straight-Line Basis % Change Over Prior Rent | ||||||
| Office | Q1 2025 | 9 | 44,000 | 7.8 | % | $ | 36.83 | $ | 34.16 | 15.2 | % |
| Last 4 Quarters | 42 | 212,000 | 5.4 | % | $ | 50.35 | $ | 47.75 | 14.2 | % | |
| Retail | Q1 2025 | 15 | 156,000 | 13.3 | % | $ | 22.89 | $ | 20.21 | 21.0 | % |
| Last 4 Quarters | 69 | 445,000 | 7.3 | % | $ | 32.41 | $ | 30.20 | 25.2 | % | |
The average monthly base rent per leased unit as of the end of the indicated quarter was as follows:
| 2nd Quarter 2024 | 3rd Quarter 2024 | 4th Quarter 2024 | 1st Quarter 2025 | |||||
| Average Monthly Base Rent per Leased Unit | $ | 2,711 | $ | 2,739 | $ | 2,683 | $ | 2,699 |
Same-Store Cash Net Operating Income
For the three months ended March 31, 2025, same-store cash NOI increased 3.1%, compared to the three months ended March 31, 2024. The same-store cash NOI by segment was as follows (in thousands):
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2025 | 2024 | Change | |||||||
| Cash Basis: | |||||||||
| Office | $ | 35,318 | $ | 33,515 | 5.4 | % | |||
| Retail | 16,383 | 15,551 | 5.4 | ||||||
| Multifamily | 9,562 | 9,513 | 0.5 | ||||||
| Mixed-Use | 5,363 | 6,066 | (11.6 | ) | |||||
| Same-store Cash NOI(1)(2) | $ | 66,626 | $ | 64,645 | 3.1 | % | |||
| (1) | Same-store excludes: (i) One Beach Street (office) due to significant redevelopment activity; (ii) Del Monte Center (retail), which was sold on February 25, 2025, (iii) Genesee Park (multifamily), which was acquired on February 28, 2025 and (iv) land held for development (office). |
| (2) | Lease termination fees and tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance. |
Same-store cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of same-store cash NOI to net income is attached to this press release.
Balance Sheet and Liquidity
At March 31, 2025, the company had gross real estate assets of $3.7 billion and liquidity of $543.9 million, comprised of cash and cash equivalents of $143.9 million and $400.0 million of availability on its line of credit. At March 31, 2025, the company had only 1 out of 31 assets encumbered by a mortgage.
On January 2, 2025, we repaid in full the $225 million outstanding balance on our Term Loan B and Term Loan C under the Amended and Restated Term Loan Agreement. Additionally, on February 3, 2025, we repaid in full the $100 million outstanding balance on our Series C Notes under the Note Purchase Agreement.
Dividends
The company declared dividends on its shares of common stock of $0.340 per share for the first quarter of 2025. The dividends were paid on March 20, 2025.
In addition, the company has declared a dividend on its common stock of $0.340 per share for the second quarter of 2025. The dividend will be paid in cash on June 19, 2025 to stockholders of record on June 5, 2025.
Guidance
The company affirms its guidance range for full year 2025 FFO per diluted share of $1.87 to $2.01 per share, with a midpoint of $1.94. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments.
The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates.
Conference Call
The company will hold a conference call to discuss the results for the first quarter of 2025 on Wednesday, April 30, 2025 at 8:00 a.m. Pacific Time ("PT”). To participate in the event by telephone, please dial 1-833-816-1162 and ask to join the American Assets Trust, Inc. conference call. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.
Supplemental Information
Supplemental financial information regarding the company's first quarter 2025 results may be found on the "Financial Reporting" tab of the "Investors” page of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.
Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
| March 31, 2025 | December 31, 2024 | ||||||
| Assets | (unaudited) | ||||||
| Real estate, at cost | |||||||
| Operating real estate | $ | 3,521,083 | $ | 3,449,009 | |||
| Construction in progress | 185,202 | 176,868 | |||||
| Held for development | 487 | 487 | |||||
| 3,706,772 | 3,626,364 | ||||||
| Accumulated depreciation | (1,064,424 | ) | (1,038,878 | ) | |||
| Net real estate | 2,642,348 | 2,587,486 | |||||
| Cash and cash equivalents | 143,915 | 425,659 | |||||
| Accounts receivable, net | 7,104 | 6,905 | |||||
| Deferred rent receivables, net | 87,170 | 88,059 | |||||
| Other assets, net | 87,251 | 87,737 | |||||
| Real estate assets held for sale | - |
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