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Date

Wednesday, April 29, 2026 at 11 a.m. ET

Call participants

  • President and Chief Executive Officer — Adam Wyll
  • Executive Vice President, Chief Financial Officer, and Treasurer — Robert F. Barton

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Takeaways

  • FFO per Diluted Share -- $0.51, up $0.04 versus the prior year, attributed primarily to lower general and administrative expense, incremental rental contributions from Plymouth, Pacific Ridge Apartments, and 14 Acres, and reduced operating expenses at La Jolla Commons.
  • Net Income per Share -- $0.08 attributable to common stockholders for the quarter.
  • Office Portfolio Leased Rate -- 84.5% leased at period end, with same-store office leased rate at 86% and executed 237,000 square feet of new office leases.
  • Office Leasing Spreads -- Comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6% on executed leases.
  • Same-Store Office Cash NOI -- Flat year over year, meeting internal expectations and reflecting previously disclosed move-outs including CLEAResult at First & Main.
  • Office Signed-but-Not-Commenced Leases -- Approximately 144,000 square feet signed not yet commenced, with an additional 122,000 square feet in lease documentation, and a pipeline of over 200,000 square feet in proposals.
  • Retail Portfolio Leased Rate -- 98% leased, with 39,000 square feet of leasing completed and average base rents reaching $30 per square foot, a company record.
  • Same-Store Retail Cash NOI -- Declined 0.7% due to temporary vacancies at Gateway Marketplace and Solana Beach Town Center, now addressed via new leases.
  • Multifamily Portfolio Performance -- Same-store cash NOI grew 3%, driven by higher rents and improved occupancy, notably 98% leased in San Diego and 93% leased at Hassalo on Eighth in Portland, up 4% from last year.
  • Mixed-Use Portfolio NOI -- Down 2.7% year over year; retail increased 2% but was offset by lower average daily rate (ADR) and increased expenses at Embassy Suites Waikiki, where occupancy improved to 92% and RevPAR rose 2% to $305, but ADR fell 6% to $332 (NOI $2.4 million versus $2.6 million last year).
  • Dividend -- Quarterly dividend of $0.34 per share approved; payout ratio was 111% due mainly to leasing-related capital deployment linked to signed leases and the spec suite program, with moderation expected as leases commence.
  • Balance Sheet and Liquidity -- $518 million total liquidity, including $118 million in cash and $400 million on revolving credit; credit facility upsized and extended to April 2030 with unsecured borrowing capacity at $600 million and no debt maturities until 2027.
  • Leverage and Coverage -- Net debt to EBITDA at 6.9x (trailing twelve months); interest and fixed charge coverage at 3.0x; long-term net debt/EBITDA target remains 5.5x or below.
  • FFO Guidance Reaffirmed -- Full-year 2026 FFO guidance range of $1.96 to $2.10 per share with a $2.03 midpoint, predicated on stable portfolio performance; management noted guidance excludes unannounced future transactions.
  • Dividend Payout Ratio Outlook -- Management expects payout ratio to trend in the low- to mid-90% range for the remaining quarters, finishing the year in the upper-90% range, versus a post-IPO range of 65%-85%.
  • Significant Office Vacancy -- Genentech to vacate approximately 67,000 square feet at Lloyd District in Q4, impacting office leasing targets and shifting year-end goal to the lower end of the 85%-90% occupancy range.
  • Spec Suite Leasing Activity -- Of 14 non-comparable office leases, 12 signed with new tenants and 9 completed through the spec suite program, highlighting its role in absorption.
  • Waikiki Tourism Mix Change -- Japanese visitors now represent about 20% of tourism, down from a typical 40%, contributing to a slower than anticipated recovery at Embassy Suites Waikiki.
  • La Jolla Commons Tower 3 Leasing -- Currently 49% leased, with proposals for an additional 30% of space; management cites "good traction" with full-floor and multi-floor users and limited direct competition.

Summary

American Assets Trust (AAT 5.19%) delivered financial performance in line with prior expectations, highlighted by stable same-store NOI, a modest increase in FFO, and record retail rents. Portfolio-wide leasing progress was evidenced by significant signed-but-not-commenced office leases and continued strength in both multifamily occupancy and tenant retention. Management underscored enhancements to balance sheet flexibility via a larger, longer-maturity credit facility and no debt maturities until 2027. Strategic focus remains on capturing demand in supply-constrained submarkets and advancing capital deployment in leasing and amenities that bolster future NOI. Elevated near-term dividend payout ratios reflect upfront capital tied to executed lease signings, with normalization anticipated as leases convert to cash rent.

  • Management reaffirmed full-year 2026 FFO guidance and positioned results as on track for objectives, contingent upon timely lease commencements and stable tenant payments.
  • Retail portfolio experienced minimal lease expiration exposure in the short term, with less than 3% of square footage expiring this year.
  • After-party lease-up at Gateway Marketplace and Solana Beach Town Center is expected to drive future retail cash rent commencement, partially offsetting the recent NOI dip.
  • La Jolla Commons Tower 3's prospective full-floor user activity, paired with robust spec suite leasing, points to accelerated momentum in high-quality coastal office assets.
  • Embassy Suites Waikiki’s performance exceeded its comp set for both occupancy and room rates, despite headwinds from weather events and reduced Japanese tourism share.

Industry glossary

  • FFO (Funds From Operations): Non-GAAP measure of REIT performance, adding back depreciation and amortization to net income, adjusted for gains/losses from property sales.
  • NOI (Net Operating Income): Property-level net income from operations, excluding depreciation and interest expense.
  • RevPAR (Revenue Per Available Room): Hotel metric calculated as average daily room revenue multiplied by occupancy rate.
  • Spec Suite Program: Initiative in which office suites are built out and pre-finished to attract tenants seeking immediate occupancy.
  • ADR (Average Daily Rate): Average price paid per hotel room occupied per day.

Full Conference Call Transcript

Adam Wyll: Good morning, everyone, and thank you for joining us today. At American Assets Trust, Inc., we continue to approach this market with the same mindset that has guided us across cycles: patient, disciplined, and with a long-term focus. That mindset, combined with the quality of our assets and our platform, guides how we allocate capital, manage risk, and run our business. We started 2026 in line with our expectations, generating $0.51 of FFO per diluted share and continuing to make progress against the priorities we laid out last quarter. Across the portfolio, we saw encouraging activity, most notably in office leasing, while our retail assets remained highly leased and consistent.

Our multifamily teams operated well in a competitive supply environment, and Waikiki Beach Walk delivered steady results against a still mixed tourism backdrop. Before turning to the portfolio, I want to highlight a significant balance sheet accomplishment. On April 1, we successfully completed the recast and upsize of our unsecured credit facility. We increased our revolving line of credit from $400 million to $500 million and extended the maturity of the revolver and our $100 million term loan to April 1, 2030. Altogether, this facility provides us with $600 million of total unsecured borrowing capacity. This outcome reflects the quality of our portfolio, the strength of our banking relationships, and the confidence our lender group has in our credit.

Importantly, it gives us enhanced financial flexibility and runway as we execute our leasing and operating objectives, now with no debt maturities until 2027. That added capacity is particularly valuable in the current market. While the macro backdrop remains uneven, our tenants are generally well capitalized, and the markets where we operate continue to benefit from diversified economies, strong demographics, and meaningful barriers to new supply. Those structural advantages matter, particularly during periods when the broader landscape is less predictable. One topic that has generated considerable discussion in our office segment is artificial intelligence. AI is driving investment, business formation, and growth across technology, infrastructure, and innovation-oriented companies, along with the professional and advisory ecosystem that supports them.

While its impact on office demand will vary by industry, we believe the net effect in our markets has been constructive. At the same time, the bar for office space keeps rising. When companies make office commitments today, they are focused on location, amenities, flexibility, ownership quality, and the ability to attract talent—attributes that define our coastal office portfolio. On our own platform, we are investing in technology to improve how we operate, from work order management and preventative maintenance analytics to tenant communication tools, while also building the data foundation for future AI capabilities. We are early in this effort, but we believe they can become a differentiator as we improve the tenant experience and our operating margins.

In office, the momentum we flagged last quarter carried forward. Demand concentrates at the top of the market and in well-located, well-amenitized buildings with strong ownership. That is where we compete. Our office portfolio ended the quarter 84.5% leased, and our same-store office portfolio ended the quarter 86% leased. Same-store office cash NOI came in essentially flat year-over-year, modestly ahead of our internal expectations, reflecting the known move-outs we previously discussed. During the quarter, we executed approximately 237,000 square feet of office leases, with comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6%, which are now separately disclosed in our supplemental.

Meanwhile, of our 14 non-comparable leases in Q1, 12 were new tenants, nine of which were in our spec suite program, underscoring the role that program is playing in converting demand into executed leases. We entered the second quarter on solid footing, including approximately 144,000 square feet of previously signed leases not yet commenced, another 122,000 square feet in lease documentation, and a proposal pipeline of over 200,000 square feet. At La Jolla Commons Tower 3, the building is currently 49% leased, with proposals out on another 30% of the building.

The UTC submarket has limited large block availabilities outside of Tower 3, and with no meaningful new supply on the horizon, we believe we are in a strong position to capture large tenant requirements in the submarket, including several active requirements we are tracking today. At 1 Beach Street, the building is currently 36% leased. While one larger opportunity we referenced last quarter did not move forward, our leasing focus has shifted toward building a broader pipeline of smaller and mid-sized tenants. We already have permits in hand and work underway to advance our spec suite build-out, positioning us to capture tenants seeking high-quality, move-in ready space. Prospect activity has improved, and the execution across the portfolio has been strong.

We remain confident that the trajectory of our office portfolio, including our progress towards stabilizing Tower 3 and 1 Beach, will translate into increased cash flow as these leases convert to revenue. Last quarter, we mentioned our goal of ending the year between 85%–90% leased across our office portfolio. Since then, we learned that Genentech at Lloyd District, approximately 67,000 square feet, reversed course on a short-term renewal and will be vacating in Q4. The space itself is turnkey and modern, and we believe it will show well in the market. However, the vacancy was not in our assumptions last quarter, and as a result, we are now targeting the lower end of that range.

We have some work to do, but reaching that level would still represent a meaningful step forward. Retail remains a source of consistent, reliable performance. Our retail portfolio ended the quarter 98% leased, and we executed approximately 39,000 square feet of leasing during the period, with average base rents reaching a new portfolio record of $30 per square foot. Same-store cash NOI was modestly below the prior-year period, primarily due to the temporary impact of vacancies from two former Party City spaces and a former Discount Tire space. The Discount Tire space and one of the two Party City spaces are already re-leased, with cash rents expected to commence later this year. Tenant health across the retail portfolio is strong.

Leasing demand is solid, and our centers benefit from affluent, supply-constrained trade areas with limited new competition. Less than 3% of our retail square footage expires this year, and we are actively engaged on upcoming rollover. While we are closely monitoring the consumer in an uncertain economic climate, we believe the demographics surrounding our retail assets support a resilient spending base and a steady cash flow profile. In multifamily, same-store cash NOI increased 3% year-over-year, a solid result given the competitive supply landscape in San Diego and Portland. Excluding the RV park, our multifamily portfolio ended the quarter 96% leased.

In San Diego, our apartment communities ended the quarter 98% leased, and excluding our newest acquisition, Genesee Park, net effective rents in San Diego were up just over 1% compared to the prior-year period. In Portland, Hassalo on Eighth ended the quarter at 93% leased, up an additional 4% from a year ago. Net effective rents were essentially flat, which we view as a reasonable outcome in the current Portland market. The recovery remains gradual, and our focus right now is on protecting occupancy while positioning for better growth as supply moderates. As we have noted, 2026 is more of a stabilization year for multifamily than a recovery year.

We are focused on optimizing pricing, maintaining occupancy, and tightly managing controllable expenses. At Waikiki Beach Walk, our retail component continued to perform well year-over-year, partially offsetting softness on the hotel side, with overall mixed-use cash NOI down modestly versus the prior-year period. We believe in the long-term value of this irreplaceable fee simple asset and are focused on driving performance across both the hotel and retail components. Finally, I am pleased to share that our Board has approved a quarterly dividend of $0.34 per share, payable on June 18 to shareholders of record as of June 4.

While our payout ratio remained elevated in the quarter, much of that reflects leasing-related capital tied to signed leases and our spec suite program, both of which are intended to drive occupancy and future NOI growth. We continue to have conviction in the long-term cash flow profile of the portfolio and are comfortable maintaining the current dividend at this point in time. Robert F. Barton will provide more detail on the payout ratio and its expected moderation in just a moment. In closing, we are pleased with how we have begun 2026. We are converting leasing activity into future revenue, strengthening our balance sheet, and executing against the plan we laid out entering 2026.

Our priorities for the year are unchanged: advance office leasing, protect the steady cash flow from our retail and multifamily platforms, and remain disciplined in how we allocate capital. At our core, we own irreplaceable coastal real estate, we operate through a vertically integrated platform, and we manage this business with a long-term perspective. We are in a good position, and our focus is on converting that position into earnings growth. With that, I will turn the call over to Robert F. Barton, who will walk through the financials in more detail.

Robert F. Barton: Thanks, Adam, and good morning, everyone. Last night, we reported first quarter 2026 FFO per share of $0.51 and net income attributable to common stockholders of $0.08 per share. FFO increased $0.04 per share compared to 2025, driven primarily by lower G&A expense, incremental rental at Plymouth, Pacific Ridge Apartments, and 14 Acres, as well as lower operating expenses at La Jolla Commons. As we expected, same-store cash NOI across all sectors was flat year-over-year in Q1. Breaking that down by segment as compared to Q1 2025, office same-store NOI was essentially flat, primarily due to the expiration of CLEAResult at First & Main in April 2025. The space has been partially backfilled.

Retail NOI declined 0.7%, driven by the known vacancies Adam mentioned at Gateway Marketplace and Solana Beach Town Center, both of which have now been addressed through executed leasing. Multifamily NOI increased 3%, driven by higher rental income and improved occupancy, particularly at Pacific Ridge and Hassalo on Eighth. Mixed-use NOI declined 2.7%, as a year-over-year increase of 2% in the retail component was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki, where in Q1 occupancy improved to 92% from 85%. RevPAR increased 2% to $305, ADR softened by 6% to $332, and NOI was approximately $2.4 million versus $2.6 million last year. Turning to liquidity and leverage.

We ended the quarter with approximately $518 million of liquidity, including $118 million of cash and $400 million available on our revolving credit facility. As Adam mentioned, we closed the recast and upsized the credit facility on April 1, extending both the $500 million revolver and $100 million term loan to April 2030. Net debt to EBITDA was 6.9x on a trailing twelve-month basis. Our long-term target remains 5.5x or below. Interest and fixed charge coverage were both 3.0x. Turning to the dividend. Our first quarter dividend payout ratio was approximately 111%, driven primarily by the timing of leasing-related capital expenditures including tenant improvements, leasing commissions, and our spec suite program along with normal recurring capital needs.

Importantly, a meaningful portion of this capital is tied to leases that have already been signed or spaces that we are proactively preparing to meet current tenant demand. As those leases commence and convert to cash rent, we expect the payout ratio to moderate. For the remaining three quarters of the year, we currently expect the payout ratio to trend in the low to mid-90% range, with the full-year payout ratio likely landing in the upper-90% range. Since our IPO in 2011, our payout ratio has generally been approximately 65% to 85%. We continue to view that as an appropriate long-term range for the business.

In the interim, given our liquidity position, our visibility into signed lease commencements, and our confidence in the long-term cash flow profile of the portfolio, management and the Board are comfortable maintaining the current dividend. As always, we will continue to evaluate the dividend each quarter in the context of operating performance, leasing progress, capital requirements, and broader market conditions. Turning to 2026 guidance. We are reaffirming our full-year FFO guidance range of $1.96 to $2.10 per share with a midpoint of $2.03. This reflects continued stability across our diversified portfolio, supported by leasing activity, contractual rent growth, and disciplined cost management.

Based on our current outlook, we believe we are well positioned to achieve our full-year objectives, with potential to trend toward the upper end of the range if several factors align: number one, retail tenants currently reserved for bad debt continue to pay their rent; number two, office lease commencements occur ahead of expectations; number three, multifamily outperforms expectations on occupancy and/or rent growth; and number four, tourism demand improves, supporting performance at Embassy Suites Waikiki. As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancings not yet announced. We remain committed to transparency and will continue to provide clear insight into both the results and assumptions.

Additionally, all non-GAAP metrics discussed today are reconciled in our earnings materials. I will now turn the call back over to the operator for Q&A.

Operator: Thank you. We will now open the call for questions. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Todd Thomas from KeyBanc. Please go ahead.

Analyst: Hi, good morning. This is Sean Glass on for Todd. You previously discussed some known move-outs in the office portfolio. I think there was an expectation that there could be 300 to 400 basis points of occupancy from expected vacates. Have any tenant decisions shifted or changed since year-end, and can you remind us what is embedded in guidance for the office portfolio’s year-end lease rate?

Robert F. Barton: Well, as Adam said, the one new one is Genentech, which will occur in Q4 of this year. On the positive side, we have three known move-outs that are in lease documentation at City Center Bellevue specifically. So that is 28,000 feet of move-outs that are already in lease documentation. So that is the latest.

Analyst: And one thing of note that I am tracking is 173,000 feet right now.

Adam Wyll: Seventeen deals. Eight of those, or about 60,000 feet, are relocations due to expansion. So we are expanding tenants, they are giving space back. Those are good-news givebacks of tenants that have already expanded. Once the TIs are done, we are getting their spaces back. So it is not all bad news. And, Sean, we mentioned in the script that we are targeting mid-80% full portfolio occupancy or lease percentage by the end of the year, which is achievable if momentum continues as it is right now. But we are going to give you a range—we have a little bit of flexibility to figure out how it shakes out.

Analyst: Thank you. That is great color. Wanted to ask about La Jolla specifically. Some very good traction there on leasing. Can you talk about the pipeline a little? Were there any additional leases around for signature or anything in documentation? Maybe some color on where you might expect La Jolla to be at year-end? Thank you.

Adam Wyll: So it is the premier offering in not only UTC, but Del Mar as well in terms of available spaces, and I am speaking of Tower 3 specifically. We are in proposals with two full-floor users and two multi-floor users, and we do not have that many floors to lease, so it is a good situation. We are in space planning with every one of them. The competition is very narrow, so we expect to make one or more of those, and that would account for the remainder of the full floors. On the spec suite program, we only have one suite left on the 4th floor.

We have already pre-leased a 5th floor spec suite, and those are not going to be completed until September. So the traction is good. And the traction is with well-capitalized professional service firms—tenants that you want in this sort of building. So we are pleased with that.

Analyst: If I could slip one more in. On 1 Beach, there is some good traction there too. Could you talk a little about the AI demand or otherwise, and where you think that might be at year-end? And maybe you could touch on the one large opportunity I had in pencil, if that changes the equation at all.

Adam Wyll: For that large deal, we gave ourselves a 30-day window in which to vet it. There were some complexities to it due to the use, dealing with exiting, dealing with the traffic and such, and it ended up not panning out. We spent 45 days on it. But we pivoted very quickly back to the spec suite program, which is underway, and Jerry and his team will complete that construction around September. We pre-leased that 3rd floor before we had started construction on that floor, so we expect to have similar results. I cannot give you the exact timing, but we are optimistic.

Analyst: Thank you.

Operator: The next question comes from Haendel St. Juste from Mizuho. Please go ahead.

Ravi Vijay Vaidya: Good morning, guys. This is Ravi Vaidya on the line for Haendel. Hope you all are doing well. I wanted to ask a bit about the signed and not occupied pipeline in both office and retail. Can you give some numbers as to how and when you think leases will begin cash flowing for those two verticals, and maybe some detail about the timing over the next couple of years for both office and retail? Thank you.

Adam Wyll: Hey, Ravi. It is Adam. As I mentioned in my script, we have about a quarter million square feet on the office portfolio signed, not commenced, and I think about $0.07 is reflected in 2026 guidance. But about 100,000 square feet in that signed-but-not-commenced bucket will not hit meaningfully until next year. So looking at about $0.07 per share or so—call it $5-plus million—that will hit this year. I do not have the retail numbers in front of me.

Robert F. Barton: I do not think there is much on that front, though.

Ravi Vijay Vaidya: Got it. That is super helpful. I wanted to ask about the hotel in Hawaii. I noticed the occupancy came up quite a bit as you discussed in your script, but mostly offset by rate. What can we see regarding demand for tourism, foot traffic, and how that asset is positioned from both seeing demand from Japanese and American tourists right now?

Robert F. Barton: Yeah, Ravi, this is Bob here. It is still slow right now, but what is interesting in terms of the rates—we still outperform our competitive set, which consists of just under 10 hotels, including beachfront properties. For example, our occupancy was 91%, but our comp set was 79%. Our ADR was $300-plus, and theirs was under $300. RevPAR—we are $300-plus, and our comp set is significantly under $300. So everybody is feeling the impact, though from the statistics that I am seeing, we are the number one hotel in Waikiki. Two things happened during March.

One is that there were two huge Kona rainstorms, one on March 10 and another on March 24—significant flooding, dumping over [inaudible] gallons of rain—overall, so everybody in town felt that impact. Secondly, the Japanese yen—while the more wealthy clientele from Japan continue to come—has weakened; they have to work through that issue. So there are a lot of little things that are impacting that. Also, you have operating expenses going up. But all in all, it is the number one performing Embassy Suites in the world. It continues to be.

Adam Wyll: Hey, Ravi, just to layer on that. As you know, Waikiki is very sensitive to tourism, especially international demand, and as Robert F. Barton was mentioning, the Japanese are not there as much as they used to be. It used to be closer to 40% of tourism in Waikiki; now it is about 20%. So it is slow incremental progress. Recovery has been slower than anticipated, and affordability pressures are really weighing on the results. Still, it remains a high-barrier-to-entry, globally relevant market, and we view the asset as well positioned for the long term.

Ravi Vijay Vaidya: Thank you. Appreciate the color, guys.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Adam Wyll for closing remarks.

Adam Wyll: Yes. Thanks, everybody, for calling and joining us today or listening on recording later. We appreciate your interest, and we will be as transparent as possible going forward. Take care.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.