American Assets Trust, Inc. Reports Fourth Quarter and Year End 2024 Financial Results
American Assets Trust (NYSE: AAT) reported its Q4 and full-year 2024 financial results. Net income available to common stockholders was $9.0 million ($0.15 per diluted share) for Q4 and $56.8 million ($0.94 per diluted share) for the full year. FFO per diluted share decreased 4% to $0.55 in Q4 but increased 8% to $2.58 for the full year 2024.
The company's same-store cash NOI increased 2.6% and 1.4% year-over-year for Q4 and full-year 2024, respectively. During Q4, AAT leased approximately 57,000 comparable office square feet and 100,000 comparable retail square feet, with significant rent increases on a straight-line basis.
For 2025, AAT introduced annual FFO guidance with a midpoint of $1.94 per diluted share (range: $1.87-$2.01). The company maintains strong liquidity of $825.7 million, including $425.7 million in cash and $400.0 million available on its credit line.
American Assets Trust (NYSE: AAT) ha riportato i risultati finanziari del quarto trimestre e dell'intero anno 2024. Il reddito netto disponibile per gli azionisti ordinari è stato di 9,0 milioni di dollari (0,15 dollari per azione diluita) per il quarto trimestre e di 56,8 milioni di dollari (0,94 dollari per azione diluita) per l'intero anno. FFO per azione diluita è diminuito del 4% a 0,55 dollari nel quarto trimestre, ma è aumentato dell'8% a 2,58 dollari per l'intero anno 2024.
Il fatturato NOI da negozi comparabili dell'azienda è aumentato del 2,6% e dell'1,4% rispetto all'anno precedente per il quarto trimestre e l'intero anno 2024, rispettivamente. Durante il quarto trimestre, AAT ha affittato circa 57.000 piedi quadrati di uffici comparabili e 100.000 piedi quadrati di spazi commerciali comparabili, con significativi aumenti degli affitti su base lineare.
Per il 2025, AAT ha introdotto una guida annuale per l'FFO con un punto medio di 1,94 dollari per azione diluita (intervallo: 1,87-2,01 dollari). L'azienda mantiene una forte liquidità di 825,7 milioni di dollari, inclusi 425,7 milioni di dollari in contanti e 400,0 milioni di dollari disponibili sulla propria linea di credito.
American Assets Trust (NYSE: AAT) informó sobre sus resultados financieros del cuarto trimestre y del año completo 2024. El ingreso neto disponible para los accionistas comunes fue de 9,0 millones de dólares (0,15 dólares por acción diluida) para el cuarto trimestre y de 56,8 millones de dólares (0,94 dólares por acción diluida) para el año completo. FFO por acción diluida disminuyó un 4% a 0,55 dólares en el cuarto trimestre, pero aumentó un 8% a 2,58 dólares para el año completo 2024.
El NOI en efectivo de las mismas tiendas de la compañía aumentó un 2,6% y un 1,4% interanual para el cuarto trimestre y el año completo 2024, respectivamente. Durante el cuarto trimestre, AAT arrendó aproximadamente 57,000 pies cuadrados de oficinas comparables y 100,000 pies cuadrados de comercios comparables, con aumentos significativos en el alquiler en base al método lineal.
Para 2025, AAT introdujo una guía anual para el FFO con un punto medio de 1,94 dólares por acción diluida (rango: 1,87-2,01 dólares). La compañía mantiene una fuerte liquidez de 825,7 millones de dólares, incluidos 425,7 millones de dólares en efectivo y 400,0 millones de dólares disponibles en su línea de crédito.
American Assets Trust (NYSE: AAT)는 2024년 4분기 및 전체 연도 재무 결과를 발표했습니다. 보통주 주주에게 배분 가능한 순이익은 4분기에 900만 달러(희석 주당 0.15달러), 전체 연도에 5680만 달러(희석 주당 0.94달러)였습니다. 희석 주당 FFO는 4분기에 4% 감소하여 0.55달러였으나, 2024년 전체 연도에는 8% 증가하여 2.58달러로 나타났습니다.
회사의 동일 매장 현금 NOI는 4분기 및 2024년 전체 연도에 각각 2.6%와 1.4% 증가했습니다. 4분기 동안 AAT는 약 57,000평방피트의 비교 가능한 오피스 공간과 100,000평방피트의 비교 가능한 소매 공간을 임대하였으며, 직선 기준으로 상당한 임대료 인상이 있었습니다.
2025년을 위해 AAT는 희석 주당 1.94달러(범위: 1.87-2.01달러)의 중간값으로 연간 FFO 가이드를 도입했습니다. 이 회사는 4억2570만 달러의 현금을 포함하여 8억2570만 달러의 강력한 유동성을 유지하고 있습니다.
American Assets Trust (NYSE: AAT) a annoncé ses résultats financiers pour le quatrième trimestre et l'année entière 2024. Le revenu net disponible pour les actionnaires ordinaires était de 9,0 millions de dollars (0,15 dollar par action diluée) pour le quatrième trimestre et de 56,8 millions de dollars (0,94 dollar par action diluée) pour l'année complète. FFO par action diluée a diminué de 4 % à 0,55 dollar au quatrième trimestre, mais a augmenté de 8 % à 2,58 dollars pour l'année complète 2024.
Le NOI en espèces des magasins comparables de l'entreprise a augmenté de 2,6 % et de 1,4 % d'une année sur l'autre pour le quatrième trimestre et l'année entière 2024, respectivement. Au cours du quatrième trimestre, AAT a loué environ 57 000 pieds carrés d'espace de bureau comparable et 100 000 pieds carrés d'espace commercial comparable, avec des augmentations significatives des loyers sur une base linéaire.
Pour 2025, AAT a introduit des prévisions annuelles pour le FFO avec un point médian de 1,94 dollar par action diluée (plage : 1,87-2,01 dollars). L'entreprise maintient une forte liquidité de 825,7 millions de dollars, y compris 425,7 millions de dollars en liquidités et 400,0 millions de dollars disponibles sur sa ligne de crédit.
American Assets Trust (NYSE: AAT) berichtete über seine Finanzergebnisse für das vierte Quartal und das gesamte Jahr 2024. Der den Stammaktionären zur Verfügung stehende Nettogewinn betrug 9,0 Millionen Dollar (0,15 Dollar pro verwässerter Aktie) für das vierte Quartal und 56,8 Millionen Dollar (0,94 Dollar pro verwässerter Aktie) für das gesamte Jahr. FFO pro verwässerter Aktie sank im vierten Quartal um 4 % auf 0,55 Dollar, stieg aber im gesamten Jahr 2024 um 8 % auf 2,58 Dollar.
Das Cash NOI aus vergleichbaren Geschäften des Unternehmens stieg im vierten Quartal und im Gesamtjahr 2024 um 2,6 % bzw. 1,4 % im Jahresvergleich. Im vierten Quartal mietete AAT etwa 57.000 Quadratfuß vergleichbare Bürofläche und 100.000 Quadratfuß vergleichbare Einzelhandelsfläche mit erheblichen Mietsteigerungen auf Basis der linearen Betrachtung an.
Für 2025 gab AAT eine Jahresprognose für das FFO mit einem Mittelpunkt von 1,94 Dollar pro verwässerter Aktie (Spanne: 1,87-2,01 Dollar) heraus. Das Unternehmen hält eine starke Liquidität von 825,7 Millionen Dollar, einschließlich 425,7 Millionen Dollar in bar und 400,0 Millionen Dollar, die auf seiner Kreditlinie verfügbar sind.
- Same-store cash NOI increased 2.6% in Q4 and 1.4% for full-year 2024
- Retail leasing showed strong performance with 31% straight-line rent increases in Q4
- Strong liquidity position of $825.7 million
- Full-year 2024 FFO per share increased 8% to $2.58
- Quarterly dividend increased to $0.340 per share for Q1 2025
- Q4 FFO per share decreased 4% year-over-year to $0.55
- Office portfolio occupancy declined to 85.0% from 86.0% year-over-year
- 2025 FFO guidance midpoint of $1.94 represents a decrease from 2024's $2.58
- Mixed-use retail occupancy declined to 90.5% from 95.1% year-over-year
Insights
The Q4 and FY2024 results reveal several critical insights for investors. While headline numbers show year-over-year improvement, there are significant concerns beneath the surface:
Key Performance Metrics:
- FY2024 net income increased to
$56.8M (12.7% YoY growth) - FFO per share grew to
$2.58 in 2024, but Q4 showed concerning4% decline - Same-store NOI growth of just
1.4% for 2024 suggests underlying operational challenges
Strategic Concerns:
- 2025 FFO guidance midpoint of
$1.94 implies a dramatic25% decline from 2024, indicating potential structural issues or conservative management expectations - Office portfolio showing weakness with occupancy declining to
85% , reflecting broader market challenges - Mixed-use retail occupancy declined significantly from
96.3% to90.5% QoQ
Positive Developments:
- Strong retail leasing spreads (
30.8% on straight-line basis) demonstrate pricing power - Proactive debt management with
$325M in debt repayment in early 2025 - Robust liquidity position of
$825.7M provides financial flexibility
The
Net income available to common stockholders of
Funds from Operations ("FFO") per diluted share decreased
Introducing 2025 annual guidance midpoint of
SAN DIEGO, Feb. 04, 2025 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its fourth quarter and year ended December 31, 2024.
Fourth Quarter Highlights
- Net income available to common stockholders of
$9.0 million and$56.8 million for the three months and year ended December 31, 2024, respectively, or$0.15 and$0.94 per diluted share, respectively. - FFO decreased
4% and increased8% year-over-year to$0.55 and$2.58 per diluted share for the three months and year ended December 31, 2024, respectively, compared to the same periods in 2023. - Same-store cash Net Operating Income ("NOI") increased 2.6% and 1.4% year-over-year for the three months and year ended December 31, 2024, respectively, compared to the same periods in 2023.
- Introducing 2025 annual guidance midpoint of
$1.94 with a range of$1.87 t o$2.01 of FFO per diluted share. - Leased approximately 57,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of
11% and2% , respectively, during the fourth quarter. - Leased approximately 100,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of
31% and7% , respectively, during the fourth quarter.
Financial Results
| (Unaudited, amounts in thousands, except per share data) | Three Months Ended December 31, | Year Ended December 31, | |||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Net income attributable to American Assets Trust, Inc. stockholders | $ | 8,977 | $ | 10,481 | $ | 56,798 | $ | 50,378 | |||
| Basic and diluted income attributable to common stockholders per share | $ | 0.15 | $ | 0.17 | $ | 0.94 | $ | 0.84 | |||
| FFO attributable to common stock and common units | $ | 42,110 | $ | 43,210 | $ | 197,526 | $ | 183,441 | |||
| FFO per diluted share and unit | $ | 0.55 | $ | 0.57 | $ | 2.58 | $ | 2.40 | |||
| FFO per diluted share and unit, excluding lease termination fees and litigation income (1) | $ | 0.55 | $ | 0.57 | $ | 2.30 | $ | 2.31 | |||
| (1) | Excludes lease termination fees and litigation income consisting of |
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:
| December 31, 2024 | September 30, 2024 | December 31, 2023 | |
| Total Portfolio | |||
| Office | |||
| Retail | |||
| Multifamily | |||
| Mixed-Use: | |||
| Retail | |||
| Hotel | |||
| Same-Store Portfolio | |||
| Office (1) | |||
| Retail | |||
| Multifamily | |||
| Mixed-Use: | |||
| Retail | |||
| Hotel | |||
| (1) Same-store office leased percentages exclude One Beach Street due to significant redevelopment activity and land held for development. | |||
During the fourth quarter of 2024, the company signed 40 leases for approximately 189,400 square feet of office and retail space, as well as 508 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:
| 1st Quarter 2024 | 2nd Quarter 2024 | 3rd Quarter 2024 | 4th Quarter 2024 | ||
| Office | Weighted Average Portfolio | ||||
| Retail | Weighted Average Portfolio | ||||
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:
| 1st Quarter 2024 | 2nd Quarter 2024 | 3rd Quarter 2024 | 4th Quarter 2024 | ||
| Office | Cash Basis % Change Over Prior Rent | ||||
| Straight-Line Basis % Change Over Prior Rent | |||||
| Retail | Cash Basis % Change Over Prior Rent | ||||
| Straight-Line Basis % Change Over Prior Rent | |||||
On a comparable basis (i.e., leases for which there was a former tenant) during the fourth quarter of 2024 and year ended December 31, 2024, 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 | Q4 2024 | 11 | 57,000 | ||||||
| FY 2024 | 45 | 248,000 | |||||||
| Retail | Q4 2024 | 18 | 100,000 | ||||||
| FY 2024 | 80 | 392,000 | |||||||
Multifamily
The average monthly base rent per leased unit as of the end of the indicated quarter was as follows:
| 1st Quarter 2024 | 2nd Quarter 2024 | 3rd Quarter 2024 | 4th Quarter 2024 | |||||
| Average Monthly Base Rent per Leased Unit | $ | 2,685 | $ | 2,711 | $ | 2,739 | $ | 2,683 |
Same-Store Cash Net Operating Income
For the three months and year ended December 31, 2024, same-store cash NOI increased
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||
| Cash Basis: | |||||||||||||||||||
| Office (1) | $ | 34,483 | $ | 35,488 | (2.8 | ) | % | $ | 137,833 | $ | 140,162 | (1.7 | ) | % | |||||
| Retail | 20,327 | 18,255 | 11.4 | 75,973 | 72,334 | 5.0 | |||||||||||||
| Multifamily | 9,016 | 8,543 | 5.5 | 36,061 | 33,994 | 6.1 | |||||||||||||
| Mixed-Use | 5,481 | 5,285 | 3.7 | 23,856 | 23,458 | 1.7 | |||||||||||||
| Same-store Cash NOI (2) | $ | 69,307 | $ | 67,571 | 2.6 | % | $ | 273,723 | $ | 269,948 | 1.4 | % | |||||||
| (1) | Same-store office portfolio excludes One Beach Street due to significant redevelopment activity and land held for development. |
| (2) | Lease termination fees (including, without limitation, the |
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 December 31, 2024, 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 is introducing 2025 guidance for full year 2025 FFO per diluted share of
A high-level reconciliation of 2024 actual FFO to our 2025 budgeted FFO is available on the “Corporate Guidance” page of our Supplemental Information. See below for more details regarding Supplemental Information.
Management will discuss the company's guidance in more detail during tomorrow's earnings call. Except as discussed during the call, the company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financing 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 three months and year ended December 31, 2024 on Wednesday, February 5, 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 three months and year ended December 31, 2024 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) | |||||||
| December 31, 2024 | December 31, 2023 | ||||||
| Assets | (unaudited) | ||||||
| Real estate, at cost | |||||||
| Operating real estate | $ | 3,449,009 | $ | 3,353,735 | |||
| Construction in progress | 176,868 | 238,482 | |||||
| Held for development | 487 | 487 | |||||
| 3,626,364 | 3,592,704 | ||||||
| Accumulated depreciation | (1,038,878 | ) | (958,645 | ) | |||
| Net real estate | 2,587,486 | 2,634,059 | |||||
| Cash and cash equivalents | 425,659 | 82,888 | |||||
| Accounts receivable, net | 6,905 | 6,486 | |||||
| Deferred rent receivables, net | 88,059 | 87,995 | |||||
| Other assets, net | 87,737 | 99,030 | |||||
| Real estate assets held for sale | 77,519 | 74,223 | |||||
| Total assets | $ | 3,273,365 | $ | 2,984,681 | |||
| Liabilities and equity | |||||||
| Liabilities: | |||||||
| Secured notes payable, net | $ | 74,759 | $ | 74,669 | |||
| Unsecured notes payable, net | 1,935,756 | 1,614,958 | |||||
| Accounts payable and accrued expenses | 63,693 | 60,958 | |||||
| Security deposits payable | 8,896 | 8,778 | |||||
| Other liabilities and deferred credits, net | 62,588 | 69,739 | |||||
| Liabilities related to real estate assets held for sale | 3,352 | 1,904 | |||||
| Total liabilities | 2,149,044 | 1,831,006 | |||||
| Commitments and contingencies | |||||||
| Equity: | |||||||
| American Assets Trust, Inc. stockholders' equity | |||||||
| Common stock, | 611 | 609 | |||||
| Additional paid-in capital | 1,474,869 | 1,469,206 | |||||
| Accumulated dividends in excess of net income | (304,339 | ) | (280,239 | ) | |||
| Accumulated other comprehensive income | 4,760 | 8,282 | |||||
| Total American Assets Trust, Inc. stockholders' equity | 1,175,901 | 1,197,858 | |||||
| Noncontrolling interests | (51,580 | ) | (44,183 | ) | |||
| Total equity | 1,124,321 | 1,153,675 | |||||
| Total liabilities and equity | $ | 3,273,365 | $ | 2,984,681 | |||
| American Assets Trust, Inc. Unaudited Consolidated Statements of Operations (In Thousands, Except Shares and Per Share Data) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue: | |||||||||||||||
| Rental income | $ | 107,947 | $ | 107,268 | $ | 423,611 | $ | 419,373 | |||||||
| Other property income | 5,513 | 5,223 | 34,244 | 21,791 | |||||||||||
| Total revenue | 113,460 | 112,491 | 457,855 | 441,164 | |||||||||||
| Expenses: | |||||||||||||||
| Rental expenses | 32,796 | 32,673 | 123,503 | 118,801 | |||||||||||
| Real estate taxes | 11,091 | 11,039 | 44,224 | 45,156 | |||||||||||
| General and administrative | 8,821 | 9,472 | 35,468 | 35,960 | |||||||||||
| Depreciation and amortization | 30,704 | 29,908 | 125,461 | 119,500 | |||||||||||
| Total operating expenses | 83,412 | 83,092 | 328,656 | 319,417 | |||||||||||
| Operating income | 30,048 | 29,399 | 129,199 | 121,747 | |||||||||||
| Interest expense, net | (23,754 | ) | (16,284 | ) | (74,527 | ) | (64,706 | ) | |||||||
| Other income, net | 5,290 | 377 | 18,147 | 7,649 | |||||||||||
| Net income | 11,584 | 13,492 | 72,819 | 64,690 | |||||||||||
| Net income attributable to restricted shares | (202 | ) | (193 | ) | (787 | ) | (761 | ) | |||||||
| Net income attributable to unitholders in the Operating Partnership | (2,405 | ) | (2,818 | ) | (15,234 | ) | (13,551 | ) | |||||||
| Net income attributable to American Assets Trust, Inc. stockholders | $ | 8,977 | $ | 10,481 | $ | 56,798 | $ | 50,378 | |||||||
| Net income per share | |||||||||||||||
| Basic income attributable to common stockholders per share | $ | 0.15 | $ | 0.17 | $ | 0.94 | $ | 0.84 | |||||||
| Weighted average shares of common stock outstanding - basic | 60,388,681 | 60,193,953 | 60,333,055 | 60,158,976 | |||||||||||
| Diluted income attributable to common stockholders per share | $ | 0.15 | $ | 0.17 | $ | 0.94 | $ | 0.84 | |||||||
| Weighted average shares of common stock outstanding - diluted | 76,570,218 | 76,375,490 | 76,514,592 | 76,340,513 | |||||||||||
| Dividends declared per common share | $ | 0.335 | $ | 0.330 | $ | 1.340 | $ | 1.320 | |||||||
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 | Year Ended | ||||||
| December 31, 2024 | December 31, 2024 | ||||||
| Funds From Operations (FFO) | |||||||
| Net income | $ | 11,584 | $ | 72,819 | |||
| Depreciation and amortization of real estate assets | 30,704 | 125,461 | |||||
| FFO, as defined by NAREIT | $ | 42,288 | $ | 198,280 | |||
| Less: Nonforfeitable dividends on restricted stock awards | (178 | ) | (754 | ) | |||
| FFO attributable to common stock and units | $ | 42,110 | $ | 197,526 | |||
| FFO per diluted share/unit | $ | 0.55 | $ | 2.58 | |||
| Weighted average number of common shares and units, diluted | 76,575,348 | 76,514,433 | |||||
| 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Same-store cash NOI (1) | $ | 69,307 | $ | 67,571 | $ | 273,723 | $ | 269,948 | |||||||
| Non-same-store cash NOI | (638 | ) | (380 | ) | (1,926 | ) | (1,214 | ) | |||||||
| Cash NOI | $ | 68,669 | $ | 67,191 | $ | 271,797 | $ | 268,734 | |||||||
| Lease termination fees and tenant improvement reimbursements (2) | 172 | 505 | 12,445 | 1,450 | |||||||||||
| Non-cash revenue and other operating expenses (3) | 732 | 1,083 | 5,886 | 7,023 | |||||||||||
| General and administrative | (8,821 | ) | (9,472 | ) | (35,468 | ) | (35,960 | ) | |||||||
| Depreciation and amortization | (30,704 | ) | (29,908 | ) | (125,461 | ) | (119,500 | ) | |||||||
| Interest expense, net | (23,754 | ) | (16,284 | ) | (74,527 | ) | (64,706 | ) | |||||||
| Other income, net | 5,290 | 377 | 18,147 | 7,649 | |||||||||||
| Net income | $ | 11,584 | $ | 13,492 | $ | 72,819 | $ | 64,690 | |||||||
| Number of properties included in same-store analysis | 30 | 30 | 30 | 29 | |||||||||||
| (1) | Same-store office portfolio excludes One Beach Street due to significant redevelopment activity and land held for development. |
| (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-K 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 3.1 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 2,110 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; 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 cyber attacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus (such as the outbreak of COVID-19 and its variants) 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; on-going and/or 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
What was AAT's FFO per share for Q4 2024?
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