American Assets Trust, Inc. Reports Second Quarter 2025 Financial Results
Net income available to common stockholders of $5.5 million and $48.0 million for the three and six months ended June 30, 2025, respectively, or $0.09 and $0.79 per diluted share, respectively.
Funds from Operations ("FFO") excluding lease termination fees and litigation income of $0.51 and $1.03 per diluted share for the three and six months ended June 30, 2025, respectively, compared to $0.60 and $1.19 per diluted share for the same periods in 2024.
Increased 2025 FFO per diluted share guidance to a range of $1.89 to $2.01 with a midpoint of $1.95, an approximately 1% increase over prior guidance.
SAN DIEGO, July 29, 2025 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE:AAT) (the "company") today reported financial results for its second quarter ended June 30, 2025.
Second Quarter Highlights
Net income available to common stockholders of $5.5 million and $48.0 million for the three and six months ended June 30, 2025, respectively, or $0.09 and $0.79 per diluted share, respectively.
FFO excluding lease termination fees and litigation income of $0.51 and $1.03 per diluted share for the three and six months ended June 30, 2025, respectively, compared to $0.60 and $1.19 per diluted share for the same periods in 2024.
Same-store cash Net Operating Income ("NOI") decreased 0.3% and increased 1.4% year-over-year for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.
Increased 2025 FFO per diluted share guidance to a range of $1.89 to $2.01 with a midpoint of $1.95, an approximately 1% increase over prior guidance.
Leased approximately 69,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 10% and decrease of 2%, respectively, during the second quarter.
Leased approximately 213,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 22% and 7%, respectively, during the second quarter.
Financial Results
(Unaudited, amounts in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net income attributable to American Assets Trust, Inc. stockholders
$
5,456
$
11,904
$
47,991
$
31,164
Basic and diluted income attributable to common stockholders per share
$
0.09
$
0.20
$
0.79
$
0.52
FFO attributable to common stock and common units
$
39,723
$
46,113
$
79,668
$
100,761
FFO per diluted share and unit
$
0.52
$
0.60
$
1.04
$
1.32
FFO per diluted share and unit, excluding lease termination fees and litigation income (1)
$
0.51
$
0.60
$
1.03
$
1.19
(1)
Excludes $0.8 million in lease termination fees recognized during the three and six months ended June 30, 2025 and $10.0 million in litigation income recognized during the six months ended June 30, 2024.
Net income attributable to common stockholders increased $21.3 million for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to a $44.5 million gain on sale recognized for Del Monte Center and a $1.6 million net increase in our same-store retail segment due to new tenant leases signed and scheduled rent increases. 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 $6.0 million primarily due to the $525 million in principal amount of 6.15% senior notes due 2034 and the decrease in capitalized interest from the completion of La Jolla Commons III and One Beach, $4.5 million net decrease in our office segment due to lower occupancy and annualized base rents at Torrey Reserve Campus, First & Main and Lloyd Portfolio and increased $2.0 million in depreciation and amortization expense with new assets placed in operations at La Jolla Commons III and the acquisition of Genesee Park, and $1.3 million decrease related to the hotel portion of our mixed-use property due to a decrease in tourism.
FFO decreased $21.1 million for the six months ended June 30, 2025 compared to the same period in 2024, primarily due the litigation income received during the first quarter of 2024, an increase in our interest expense, a decrease in our retail segment due to the sale of Del Monte Center, and a decrease in our office segment due to lower occupancy and annualized base rent. These decreases were partially offset by an increase in our same-store retail segment due to higher occupancy and average monthly base rent.
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:
June 30, 2025
March 31, 2025
June 30, 2024
Total Portfolio
Office
82.0%
85.5%
86.6%
Retail
97.7%
97.4%
94.5%
Multifamily
88.1%
90.0%
90.0%
Mixed-Use:
Retail
95.0%
89.3%
95.7%
Hotel
85.3%
84.6%
88.1%
Same-Store Portfolio (1)
Office
86.9%
87.6%
88.8%
Retail
97.7%
97.4%
97.8%
Multifamily
87.4%
89.7%
90.0%
Mixed-Use:
Retail
95.0%
89.3%
95.7%
Hotel
85.3%
84.6%
88.1%
(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, (iv) La Jolla Commons III (office) which was placed into operations on April 1, 2025 and (v) land held for development (office).
During the second quarter of 2025, the company signed 52 leases for approximately 322,500 square feet of office and retail space, as well as 577 multifamily apartment leases. Renewals accounted for 69% of the comparable office leases, 90% of the comparable retail leases, and 68% 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:
3rd Quarter 2024
4th Quarter 2024
1st Quarter 2025
2nd Quarter 2025
Office
Weighted Average Portfolio
$56.39
$55.92
$56.49
$56.36
Retail
Weighted Average Portfolio
$27.29
$27.35
$29.64
$29.57
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:
3rd Quarter 2024
4th Quarter 2024
1st Quarter 2025
2nd Quarter 2025
Office
Cash Basis % Change Over Prior Rent
7.8%
1.6%
7.8%
(2.0)%
Straight-Line Basis % Change Over Prior Rent
16.4%
11.0%
15.2%
9.6%
Retail
Cash Basis % Change Over Prior Rent
4.4%
6.5%
13.3%
7.4%
Straight-Line Basis % Change Over Prior Rent
18.7%
30.8%
21.0%
21.9%
On a comparable basis (i.e., leases for which there was a former tenant) during the second quarter of 2025 and trailing four quarters ended June 30, 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
Q2 2025
13
69,000
(2.0)%
$40.93
$41.74
9.6%
Last 4 Quarters
43
228,000
3.5%
$48.31
$46.69
12.9%
Retail
Q2 2025
30
213,000
7.4%
$31.59
$29.41
21.9%
Last 4 Quarters
83
594,000
7.6%
$30.56
$28.40
22.9%
Multifamily
The average monthly base rent per leased unit as of the end of the indicated quarter was as follows:
3rd Quarter 2024
4th Quarter 2024
1st Quarter 2025
2nd Quarter 2025
Average Monthly Base Rent per Leased Unit
$
2,739
$
2,683
$
2,699
$
2,732
Same-Store Cash Net Operating Income
For the three and six months ended June 30, 2025, same-store cash NOI decreased 0.3% and increased 1.4%, respectively, compared to the three and six months ended June 30, 2024. The same-store cash NOI by segment was as follows (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
Change
2025
2024
Change
Cash Basis:
Office
$
35,501
$
35,730
(0.6
)
%
$
70,819
$
69,244
2.3
%
Retail
16,891
16,163
4.5
33,274
31,714
4.9
Multifamily
8,881
9,240
(3.9
)
18,444
18,753
(1.6
)
Mixed-Use
5,681
6,000
(5.3
)
11,045
12,066
(8.5
)
Same-store Cash NOI (1)(2)
$
66,954
$
67,133
(0.3
)
%
$
133,582
$
131,777
1.4
%
(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, (iv) La Jolla Commons III (office) which was placed into operations on April 1, 2025 and (v) 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 June 30, 2025, the company had gross real estate assets of $3.7 billion and liquidity of $543.7 million, comprised of cash and cash equivalents of $143.7 million and $400.0 million of availability on its line of credit. At June 30, 2025, the company had only 1 out of 31 assets encumbered by a mortgage.
Dividends
The company declared dividends on its shares of common stock of $0.340 per share for the second quarter of 2025. The dividends were paid on June 18, 2025.
In addition, the company has declared a dividend on its common stock of $0.340 per share for the third quarter of 2025. The dividend will be paid in cash on September 18, 2025 to stockholders of record as of September 4, 2025.
Guidance
The company increased its 2025 FFO per diluted share guidance to a range of $1.89 to $2.01 per share, an increase of approximately 1% at midpoint from the prior 2025 FFO per diluted share guidance range of $1.87 to $2.01 per share.
Management will discuss the ...
