American Assets Trust (AAT) Q2 2024 earnings summary

Executive summary

• CEO transition announced: Adam Wyll to become CEO on January 1, 2025, with Ernest Rady moving to executive chairman; management team remains intact.

• Q2 2024 results exceeded expectations, with strong leasing and rent growth across office, retail, multifamily, and mixed-use segments.

• Portfolio occupancy as of June 30, 2024: office 86.6%, retail 94.5%, multifamily 90.0%, mixed-use 95.7%.

• Company owns 78.8% of its Operating Partnership, with a diversified portfolio in high-barrier markets across CA, WA, OR, TX, and HI.

• Board approved a quarterly dividend of $0.335 per share for Q2 and Q3 2024.

Financial highlights

• Q2 2024 total revenue was $110.9M, up 1% year-over-year; rental income was $105.1M.

• Net income attributable to common stockholders was $11.9M ($0.20 per share) for Q2 2024; FFO was $46.1M ($0.60 per share).

• For the first half of 2024, total revenue was $221.6M, net income $31.2M, and FFO $100.8M ($1.32 per share).

• Same-store cash NOI grew 2.1% year-over-year in Q2; multifamily same-store NOI up 9.5% in Q2.

• Retail and multifamily portfolios achieved their highest average base rents since IPO.

Outlook and guidance

• 2024 FFO per share guidance raised to $2.48–$2.54 (midpoint $2.51), a 9.6% increase from prior guidance.

• Guidance increase driven by outperformance in retail, office, and multifamily, lower G&A, higher interest income, and a lease termination fee.

• Guidance excludes impacts from future acquisitions, dispositions, equity issuances, or major debt changes.

• Management seeks growth through same-store performance, development/redevelopment, and selective acquisitions in core markets.

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