American Assets Trust (AAT) Q3 2024 earnings summary

Executive summary

• Issued a 10-year, $525 million investment-grade bond at a 6.15% coupon, upsized due to strong demand, with proceeds used to repay debt and for general corporate purposes, extending maturities into 2027.

• Net income attributable to common stockholders was $16.7 million for Q3 2024, up 41% year-over-year, or $0.28 per diluted share.

• Portfolio occupancy remained strong: office at 87%, retail at 94.5%, multifamily at 90.3%, and mixed-use at 96.3% as of September 30, 2024.

• Significant lease termination fees, especially at Torrey Reserve Campus, contributed to higher other property income and boosted Q3 FFO.

• Declared a quarterly dividend of $0.335 per share for Q3 and Q4 2024.

Financial highlights

• Q3 2024 FFO was $54.7 million ($0.71 per diluted share), up 20% year-over-year, driven by an $11 million lease termination fee.

• Same-store cash NOI for Q3 2024 increased 15.8% year-over-year; for the nine months, up 6.6%.

• Q3 2024 rental income was $105.5 million, flat year-over-year; other property income surged to $17.3 million from $5.7 million.

• Liquidity at quarter-end was $933 million, including $533 million in cash and $400 million in revolver availability.

• Net operating income for Q3 2024 was $80.4 million, up from $69.9 million in Q3 2023.

Outlook and guidance

• Raised 2024 FFO per share guidance to $2.51–$2.55 (midpoint $2.53), up 1% from prior guidance, mainly due to retail outperformance.

• Excluding one-time items, adjusted 2024 FFO midpoint would be $2.24 per share.

• Guidance reflects current assumptions on leasing, rental rates, occupancy, and excludes future acquisitions or major capital events.

• 2025 FFO expected to be impacted by higher net interest expense from the new bond and lower interest income as cash is deployed.

• Development pipeline includes future phases at La Jolla Commons, Lloyd Portfolio, and multifamily units at Lomas Santa Fe Plaza, with timing dependent on market conditions.