American Assets Trust, Inc. Reports First Quarter 2025 Financial Results
American Assets Trust reported mixed Q1 2025 financial results, with net income of $42.5 million ($0.70 per diluted share), despite a 10% year-over-year decrease in FFO to $0.52 per diluted share.
Key highlights include:
- Same-store cash NOI increased 3.1% year-over-year
- Leased 44,000 office square feet with 15% rent increase
- Leased 156,000 retail square feet with 21% rent increase
- Sold Del Monte Center for $123.5 million
- Acquired Genesee Park apartments for $67.9 million
Portfolio performance shows strong retail occupancy at 97.4% while office occupancy remained at 85.5%. The company maintains a solid balance sheet with $543.9 million in liquidity and affirmed its 2025 FFO guidance of $1.87 to $2.01 per share. Quarterly dividend remains steady at $0.340 per share.
American Assets Trust ha comunicato risultati finanziari contrastanti per il primo trimestre 2025, con un utile netto di 42,5 milioni di dollari (0,70 dollari per azione diluita), nonostante una diminuzione del 10% su base annua del FFO, che si è attestato a 0,52 dollari per azione diluita.
I punti salienti includono:
- Incremento del 3,1% anno su anno del NOI in contanti degli immobili a parità di negozio
- Affittati 44.000 piedi quadrati di uffici con un aumento del canone del 15%
- Affittati 156.000 piedi quadrati di spazi commerciali con un aumento del canone del 21%
- Venduto il Del Monte Center per 123,5 milioni di dollari
- Acquistati gli appartamenti Genesee Park per 67,9 milioni di dollari
La performance del portafoglio mostra una forte occupazione nel settore retail al 97,4%, mentre l'occupazione degli uffici si mantiene all'85,5%. L'azienda conserva un bilancio solido con una liquidità di 543,9 milioni di dollari e ha confermato le previsioni di FFO per il 2025 tra 1,87 e 2,01 dollari per azione. Il dividendo trimestrale rimane stabile a 0,340 dollari per azione.
American Assets Trust reportó resultados financieros mixtos para el primer trimestre de 2025, con un ingreso neto de 42,5 millones de dólares (0,70 dólares por acción diluida), a pesar de una disminución interanual del 10% en el FFO, que fue de 0,52 dólares por acción diluida.
Los aspectos destacados incluyen:
- El NOI en efectivo de tiendas comparables aumentó un 3,1% interanual
- Se arrendaron 44,000 pies cuadrados de oficinas con un aumento del 15% en la renta
- Se arrendaron 156,000 pies cuadrados comerciales con un incremento del 21% en la renta
- Se vendió Del Monte Center por 123,5 millones de dólares
- Se adquirieron los apartamentos Genesee Park por 67,9 millones de dólares
El desempeño de la cartera muestra una fuerte ocupación en el sector minorista del 97,4%, mientras que la ocupación de oficinas se mantuvo en 85,5%. La compañía mantiene un balance sólido con 543,9 millones de dólares en liquidez y confirmó su guía de FFO para 2025 entre 1,87 y 2,01 dólares por acción. El dividendo trimestral se mantiene estable en 0,340 dólares por acción.
American Assets Trust는 2025년 1분기 재무 실적에서 순이익 4,250만 달러(희석 주당 0.70달러)를 기록했으나, FFO는 전년 대비 10% 감소한 희석 주당 0.52달러를 보고했습니다.
주요 내용은 다음과 같습니다:
- 동일 점포 현금 NOI가 전년 대비 3.1% 증가
- 사무실 44,000평방피트 임대, 임대료 15% 인상
- 소매 공간 156,000평방피트 임대, 임대료 21% 인상
- Del Monte Center를 1억 2,350만 달러에 매각
- Genesee Park 아파트를 6,790만 달러에 인수
포트폴리오 성과는 소매 부문 강한 점유율 97.4%를 보였으며, 사무실 점유율은 85.5%로 유지되었습니다. 회사는 5억 4,390만 달러의 유동성을 보유하며 견고한 재무 상태를 유지하고 있으며, 2025년 FFO 가이던스를 주당 1.87달러에서 2.01달러로 확인했습니다. 분기 배당금은 주당 0.340달러로 유지됩니다.
American Assets Trust a publié des résultats financiers mitigés pour le premier trimestre 2025, avec un bénéfice net de 42,5 millions de dollars (0,70 dollar par action diluée), malgré une baisse de 10 % en glissement annuel du FFO à 0,52 dollar par action diluée.
Les points clés incluent :
- Augmentation de 3,1 % du NOI en espèces des magasins comparables
- Location de 44 000 pieds carrés de bureaux avec une augmentation de loyer de 15 %
- Location de 156 000 pieds carrés de commerces de détail avec une hausse de loyer de 21 %
- Vente du Del Monte Center pour 123,5 millions de dollars
- Acquisition des appartements Genesee Park pour 67,9 millions de dollars
La performance du portefeuille montre une forte occupation dans le secteur du commerce de détail à 97,4 %, tandis que l’occupation des bureaux est restée à 85,5 %. La société maintient un bilan solide avec 543,9 millions de dollars de liquidités et a confirmé ses prévisions de FFO pour 2025 entre 1,87 et 2,01 dollars par action. Le dividende trimestriel reste stable à 0,340 dollar par action.
American Assets Trust meldete gemischte Finanzergebnisse für das erste Quartal 2025 mit einem Nettogewinn von 42,5 Millionen US-Dollar (0,70 US-Dollar pro verwässerter Aktie), trotz eines 10%igen Rückgangs des FFO im Jahresvergleich auf 0,52 US-Dollar pro verwässerter Aktie.
Wichtige Highlights umfassen:
- Steigerung des Same-Store-Cash-NOI um 3,1% im Jahresvergleich
- Vermietung von 44.000 Quadratfuß Bürofläche mit 15% Mieterhöhung
- Vermietung von 156.000 Quadratfuß Einzelhandelsfläche mit 21% Mieterhöhung
- Verkauf des Del Monte Centers für 123,5 Millionen US-Dollar
- Erwerb der Genesee Park Apartments für 67,9 Millionen US-Dollar
Die Portfolioleistung zeigt eine starke Einzelhandelsauslastung von 97,4%, während die Büroauslastung bei 85,5% blieb. Das Unternehmen verfügt über eine solide Bilanz mit 543,9 Millionen US-Dollar Liquidität und bestätigte seine FFO-Prognose für 2025 von 1,87 bis 2,01 US-Dollar pro Aktie. Die Quartalsdividende bleibt stabil bei 0,340 US-Dollar pro Aktie.
- Net income increased to $42.5M ($0.70/share) from $19.2M ($0.32/share) YoY
- Same-store cash NOI increased 3.1% YoY
- Strong leasing activity with 156,000 retail sq ft at 21% rent increase
- Office leasing achieved 15% rent increase on 44,000 sq ft
- Retail occupancy improved to 97.4% from 94.4% YoY
- Strategic sale of Del Monte Center for $123.5M
- Only 1 out of 31 assets encumbered by mortgage, showing strong balance sheet
- Solid liquidity position of $543.9M including $143.9M cash
- FFO decreased 10% YoY to $0.52 per diluted share
- Office occupancy declined to 85.5% from 86.4% YoY
- Multifamily occupancy dropped to 90.0% from 92.8% YoY
- Mixed-use retail occupancy decreased to 89.3% from 95.4% YoY
- Hotel occupancy declined to 84.6% from 89.8% YoY
- Higher net interest expense of $2.5M due to 6.15% senior notes
- $2.5M net decrease in office segment due to tenant move-outs
Insights
AAT's Q1 shows mixed performance: higher net income from property sale offset by 10% FFO decline and varying segment results.
American Assets Trust's Q1 2025 results reveal a financial picture requiring deeper scrutiny beyond headline figures. Net income jumped to
The more critical metric for REITs is Funds From Operations (FFO), which decreased 10% year-over-year to
Despite FFO challenges, same-store cash NOI grew 3.1%, indicating healthy performance in the core property portfolio. This growth was supported by strong retail and office segment performance, both posting
Portfolio metrics reveal divergent sector trends:
- Retail occupancy improved significantly to
97.4% from94.5% at year-end - Office occupancy increased slightly to
85.5% from85.0% quarter-over-quarter - Multifamily occupancy declined to
90.0% from91.8%
Leasing activity demonstrates solid pricing power with office leases signed at
The balance sheet remains strong with
Management affirmed its 2025 FFO guidance range of
Net income available to common stockholders of
Funds from Operations ("FFO") per diluted share excluding lease termination fees and litigation income decreased
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% and8% , 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% and13% , respectively, during the first quarter.
Disposition and Acquisition Activity
- 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 |
Net income attributable to common stockholders increased
FFO decreased
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 | ||||||
| Retail | ||||||
| Multifamily | ||||||
| Mixed-Use: | ||||||
| Retail | ||||||
| Hotel | ||||||
| Same-Store Portfolio(1) | ||||||
| Office | ||||||
| Retail | ||||||
| Multifamily | ||||||
| Mixed-Use: | ||||||
| Retail | ||||||
| Hotel | ||||||
| (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
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 | % | |
Multifamily
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
| 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
On January 2, 2025, we repaid in full the
Dividends
The company declared dividends on its shares of common stock of
In addition, the company has declared a dividend on its common stock of
Guidance
The company affirms its guidance range for full year 2025 FFO per diluted share of
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 | — | 77,519 | |||||
| Total assets | $ | 2,967,788 | $ | 3,273,365 | |||
| Liabilities and equity | |||||||
| Liabilities: | |||||||
| Secured notes payable, net | $ | 74,782 | $ | 74,759 | |||
| Unsecured notes payable, net | 1,611,299 | 1,935,756 | |||||
| Accounts payable and accrued expenses | 57,763 | 63,693 | |||||
| Security deposits payable | 8,913 | 8,896 | |||||
| Other liabilities and deferred credits, net | 62,671 | 62,588 | |||||
| Liabilities related to real estate assets held for sale | — | 3,352 | |||||
| Total liabilities | 1,815,428 | 2,149,044 | |||||
| Commitments and contingencies | |||||||
| Equity: | |||||||
| American Assets Trust, Inc. stockholders' equity | |||||||
| Common stock, | 611 | 611 | |||||
| Additional paid-in capital | 1,476,539 | 1,474,869 | |||||
| Accumulated dividends in excess of net income | (282,387 | ) | (304,339 | ) | |||
| Accumulated other comprehensive income | 3,617 | 4,760 | |||||
| Total American Assets Trust, Inc. stockholders' equity | 1,198,380 | 1,175,901 | |||||
| Noncontrolling interests | (46,020 | ) | (51,580 | ) | |||
| Total equity | 1,152,360 | 1,124,321 | |||||
| Total liabilities and equity | $ | 2,967,788 | $ | 3,273,365 | |||
American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Revenue: | |||||||
| Rental income | $ | 102,951 | $ | 105,021 | |||
| Other property income | 5,656 | 5,674 | |||||
| Total revenue | 108,607 | 110,695 | |||||
| Expenses: | |||||||
| Rental expenses | 30,300 | 29,841 | |||||
| Real estate taxes | 11,005 | 11,246 | |||||
| General and administrative | 9,312 | 8,842 | |||||
| Depreciation and amortization | 30,494 | 30,217 | |||||
| Total operating expenses | 81,111 | 80,146 | |||||
| Gain on sale of real estate | 44,476 | — | |||||
| Operating income | 71,972 | 30,549 | |||||
| Interest expense, net | (18,780 | ) | (16,255 | ) | |||
| Other income, net | 915 | 10,329 | |||||
| Net income | 54,107 | 24,623 | |||||
| Net income attributable to restricted shares | (203 | ) | (196 | ) | |||
| Net income attributable to unitholders in the Operating Partnership | (11,369 | ) | (5,167 | ) | |||
| Net income attributable to American Assets Trust, Inc. stockholders | $ | 42,535 | $ | 19,260 | |||
| Net income per share | |||||||
| Basic income attributable to common stockholders per share | $ | 0.70 | $ | 0.32 | |||
| Weighted average shares of common stock outstanding - basic | 60,537,300 | 60,309,921 | |||||
| Diluted income attributable to common stockholders per share | $ | 0.70 | $ | 0.32 | |||
| Weighted average shares of common stock outstanding - diluted | 76,718,837 | 76,491,458 | |||||
| Dividends declared per common share | $ | 0.340 | $ | 0.335 | |||
Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
| Three Months Ended | |||
| March 31, 2025 | |||
| Funds From Operations (FFO) | |||
| Net income | $ | 54,107 | |
| Depreciation and amortization of real estate assets | 30,494 | ||
| Gain on sale of real estate | (44,476 | ) | |
| FFO, as defined by NAREIT | $ | 40,125 | |
| Less: Nonforfeitable dividends on restricted stock awards | (180 | ) | |
| FFO attributable to common stock and units | $ | 39,945 | |
| FFO per diluted share/unit | $ | 0.52 | |
| Weighted average number of common shares and units, diluted | 76,719,191 | ||
Reconciliation of Same-Store Cash NOI to Net Income
The company's reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited):
| Three Months Ended | |||||||
| March 31, | |||||||
| 2025 | 2024 | ||||||
| Same-store cash NOI(1) | $ | 66,626 | $ | 64,645 | |||
| Non-same-store cash NOI | 336 | 1,834 | |||||
| Cash NOI | $ | 66,962 | $ | 66,479 | |||
| Lease termination fees and tenant improvement reimbursements(2) | 174 | 135 | |||||
| Non-cash revenue and other operating expenses(3) | 166 | 2,994 | |||||
| General and administrative | (9,312 | ) | (8,842 | ) | |||
| Depreciation and amortization | (30,494 | ) | (30,217 | ) | |||
| Interest expense, net | (18,780 | ) | (16,255 | ) | |||
| Gain on sale of real estate | 44,476 | — | |||||
| Other income, net | 915 | 10,329 | |||||
| Net income | $ | 54,107 | $ | 24,623 | |||
| Number of properties included in same-store analysis | 29 | 30 | |||||
| (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. |
| (3) | Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances, the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, and straight-line rent expense for our lease of the Annex at The Landmark at One Market. |
Reported results are preliminary and not final until the filing of the company's Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.
Use of Non-GAAP Information
Funds from Operations
The company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company's operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company's properties, all of which have real economic effects and could materially impact the company's results from operations, the utility of FFO as a measure of the company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including the company's ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
Cash Net Operating Income
The company uses NOI internally to evaluate and compare the operating performance of the company's properties. The company believes cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP.
Cash NOI is a non-GAAP financial measure of performance. The company defines cash NOI as operating revenues (rental income, tenant reimbursements (other than tenant improvement reimbursements), ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes lease termination fees, tenant improvement reimbursements, general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company's cash NOI may not be comparable to the cash NOIs of other REITs.
About American Assets Trust, Inc.
American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 2.4 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,302 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions, including the impact of tariffs and other trade restrictions; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyberattacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
Source: American Assets Trust, Inc.
Investor and Media Contact:
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607
FAQ
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