American Assets Trust, Inc. Reports Third Quarter 2022

Net revenue out there to widespread stockholders of $12.8 million and $33.9 million for the three and 9 months ended September 30, 2022, respectively, or $0.21 and $0.56 per diluted share, respectively.

Funds From Operations per diluted share elevated 11% and 23% year-over-year for the three and 9 months ended September 30, 2022, respectively, or $0.63 and $1.79 per diluted share, respectively.

Increased 2022 FFO per diluted share steerage to a variety of $2.30 to $2.34, an roughly 16% improve on the midpoint over our full 12 months 2021 FFO per diluted share.

SAN DIEGO, Oct. 25, 2022 (GLOBE NEWSWIRE) — American Assets Trust, Inc. (NYSE: AAT) (the “company”) right now reported monetary outcomes for its third quarter ended September 30, 2022.

Third Quarter Highlights

• Net revenue out there to widespread stockholders of $12.8 million and $33.9 million for the three and 9 months ended September 30, 2022, respectively, or $0.21 and $0.56 per diluted share, respectively.
• Funds From Operations (“FFO”) elevated 11% and 23% year-over 12 months to $0.63 and $1.79 per diluted share for the three and 9 months ended September 30, 2022, respectively, in comparison with the identical intervals in 2021.
• Same-store money Net Operating Income (“NOI”) elevated 11.3% and 10.7% year-over-year for the three and 9 months ended September 30, 2022, respectively, in comparison with the identical intervals in 2021.
• Increased 2022 FFO per diluted share steerage to a variety of $2.30 to $2.34 with a midpoint of $2.32, an roughly 4% improve over the prior 2022 steerage midpoint of $2.24.
• Leased roughly 43,000 comparable workplace sq. ft at a mean straight-line foundation and cash-basis contractual hire improve of 35% and 24%, respectively, through the three months ended September 30, 2022.
• Leased roughly 71,000 comparable retail sq. ft at a mean straight-line foundation and cash-basis contractual hire improve of 28% and 7%, respectively, through the three months ended September 30, 2022.

Financial Results
Net revenue attributable to widespread stockholders was $12.8 million, or $0.21 per fundamental and diluted share for the three months ended September 30, 2022 in comparison with $10.0 million, or $0.17 per fundamental and diluted share for the three months ended September 30, 2021. For the 9 months ended September 30, 2022, web revenue attributed to widespread stockholders was $33.9 million, or $0.56 per fundamental and diluted share in comparison with $20.2 million, or 0.34 per fundamental and diluted share for the 9 months ended September 30, 2021. The year-over-year improve in web revenue attributable to widespread stockholders is primarily attributable to (i) a $4.3 million debt extinguishment cost associated to the compensation of the corporate’s Senior Guaranteed Notes, Series A on January 26, 2021, not incurred in 2022, (ii) a $3.1 million web improve in retail revenue, attributable to COVID-related lease modifications that modified some tenants to alternate hire or money foundation of income recognition (with a few of these tenants later reverting again to contractual fundamental month-to-month hire), (iii) a $2.5 million web improve in multifamily revenue primarily attributable to an total improve in occupancy and common month-to-month base hire, (iv) a $1.7 million web improve at our Waikiki Beach Walk – Embassy Suites attributable to elevated tourism into Hawaii, and (v) and improve of $1.4 million in workplace web revenue associated to our latest acquisitions of Eastgate Office Park and Corporate Campus East III in July 2021 and September 2021, respectively, and Bel-Spring 520 in March 2022.

During the third quarter of 2022, the corporate generated FFO for widespread inventory and customary items of $47.9 million, or $0.63 per diluted share and unit, in comparison with $43.4 million, or $0.57 per diluted share and unit, for the third quarter of 2021. The improve in FFO from the corresponding interval in 2021 was primarily attributable to a rise in income at our Waikiki Beach Walk – Embassy Suites™, a rise in our workplace section associated to accelerated income recognition of tenant enchancment overage as a tenant turned over a part of their leased sq. footage early and recognition of accelerated deferred hire funds, and a rise in income and common month-to-month base hire for our multifamily section. Additionally, there was a rise in FFO in 2022 from our latest acquisitions of Corporate Campus East III in September 2021 and Bel-Spring 520 in March 2022.

FFO is a non-GAAP supplemental earnings measure which the corporate considers significant in measuring its working efficiency. A reconciliation of FFO to web revenue is hooked up to this press launch.

Leasing
The portfolio leased standing as of the top of the indicated quarter was as follows:

(1) Same-store workplace leased percentages excludes (i) One Beach Street attributable to important redevelopment exercise; (ii) Eastgate Office Park which was acquired on July 7, 2021; (iii) Corporate Campus East III which was acquired on September 10, 2021; (iv) Bel-Spring 520 which was acquired on March 8, 2022 and (v) land held for improvement.

During the third quarter of 2022, the corporate signed 34 leases for about 138,500 sq. ft of workplace and retail house, in addition to 713 multifamily condo leases. Renewals accounted for 89% of the comparable workplace leases, 82% of the comparable retail leases, and 53% of the residential leases.

Office and Retail
On a comparable house foundation (i.e. leases for which there was a former tenant) through the third quarter of 2022 and trailing 4 quarters ended September 30, 2022, our retail and workplace leasing spreads are proven under:

Multifamily
The common month-to-month base hire per leased unit for our multifamily properties for the third quarter of 2022 was $2,372 in comparison with a mean month-to-month base hire per leased unit of $2,090 for the third quarter of 2021, which is a rise of roughly 13.5%.

Same-Store Cash Net Operating Income
For the three and 9 months ended September 30, 2022, same-store money NOI elevated 11.3% and 10.7%, respectively, in comparison with the three and 9 months ended September 30, 2021. The same-store money NOI by section was as follows (in 1000’s):

(1)   Same-store portfolio excludes (i) One Beach Street, attributable to important redevelopment exercise; (ii) Eastgate Office Park which was acquired on July 7, 2021; (iii) Corporate Campus East III which was acquired on September 10, 2021; (iv) Bel-Spring 520 which was acquired on March 8, 2022 and (v) land held for improvement.

Same-store money NOI is a non-GAAP supplemental earnings measure which the corporate considers significant in measuring its working efficiency. A reconciliation of same-store money NOI to web revenue is hooked up to this press launch.

Balance Sheet and Liquidity
At September 30, 2022, the corporate had gross actual property property of $3.6 billion and liquidity of $427.4 million, comprised of money and money equivalents of $63.4 million and $364.0 million of availability on its line of credit score. At September 30, 2022, the corporate has only one out of 31 property encumbered by a mortgage.

Dividends
The firm declared dividends on its shares of widespread inventory of $0.32 per share for the third quarter of 2022. The dividends have been paid on September 22, 2022.

In addition, the corporate has declared a dividend on its widespread inventory of $0.32 per share for the fourth quarter of 2022. The dividend shall be paid in money on December 22, 2022 to stockholders of file on December 8, 2022.

Guidance
The firm elevated its 2022 FFO per diluted share steerage to a variety of $2.30 to $2.34 per share, a rise of roughly 4% at midpoint from the prior 2022 FFO per diluted share steerage vary of $2.21 to $2.27 per share.

The firm’s steerage excludes any influence from future acquisitions, tendencies, fairness issuances or repurchases, debt financings or repayments. Management will focus on the corporate’s steerage in additional element on tomorrow’s earnings name. The foregoing estimates are forward-looking and mirror administration’s view of present and future market situations, together with sure assumptions with respect to leasing exercise, rental charges, occupancy ranges, rates of interest, credit score spreads and the quantity and timing of acquisition and improvement actions. The firm’s precise outcomes could differ materially from these estimates.

Conference Call
The firm will maintain a convention name to debate the outcomes for the third quarter of 2022 on Wednesday, October 26, 2022 at 8:00 a.m. Pacific Time (“PT”). To take part within the occasion by phone, please dial 1-866-652-5200 and ask to hitch the American Assets Trust, Inc. Conference Call. A dwell on-demand audio webcast of the convention name shall be out there on the corporate’s web site at www.americanassetstrust.com. A replay of the decision will even be out there on the corporate’s web site.

Supplemental Information
Supplemental monetary info concerning the corporate’s third quarter 2022 outcomes could also be discovered on the “Financial Reporting” tab of the “Investors” web page of the corporate’s web site at www.americanassetstrust.com. This supplemental info supplies extra element on gadgets comparable to property occupancy, monetary efficiency by property and debt maturity schedules.

Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)

American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)

Reconciliation of Net Income to Funds From Operations
The firm’s FFO attributable to widespread stockholders and working partnership unitholders and reconciliation to web revenue is as follows (in 1000’s besides shares and per share knowledge, unaudited):

Reconciliation of Same-Store Cash NOI to Net Income
The firm’s reconciliation of Same-Store Cash NOI to Net Income is as follows (in 1000’s, unaudited):

(1)   Same-store portfolio excludes (i) One Beach Street, attributable to important redevelopment exercise; (ii) Eastgate Office Park which was acquired on July 7, 2021; (iii) Corporate Campus East III which was acquired on September 10, 2021; (iv) Bel-Spring 520 which was acquired on March 8, 2022 and (v) land held for improvement.
(2)   Tenant enchancment reimbursements are excluded from same-store money NOI to supply a extra correct measure of working efficiency.
(3)   Represents changes associated to the straight-line hire revenue acknowledged through the interval offset by money obtained through the interval and the supply for dangerous money owed recorded for deferred hire receivable balances; web change in lease receivables (solely with respect to Q2 2020 by way of This autumn 2021), the amortization of above (under) market rents, the amortization of lease incentives paid to tenants, the amortization of different lease intangibles, and straight-line hire expense for our lease of the Annex at The Landmark at One Market.

Reported outcomes are preliminary and never closing till the submitting of the corporate’s Form 10-Q with the Securities and Exchange Commission and, due to this fact, stay topic to adjustment.

Use of Non-GAAP Information
Funds from Operations
The firm calculates FFO in accordance with the requirements established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents web revenue (computed in accordance with GAAP), excluding good points (or losses) from gross sales of depreciable working property, impairment losses, actual property associated depreciation and amortization (excluding amortization of deferred financing prices) and after changes for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP monetary measure. Management makes use of FFO as a supplemental efficiency measure as a result of it believes that FFO is useful to traders as a place to begin in measuring the corporate’s operational efficiency. Specifically, in excluding actual property associated depreciation and amortization and good points and losses from property tendencies, which don’t relate to or will not be indicative of working efficiency, FFO supplies a efficiency measure that, in comparison year-over-year, captures developments in occupancy charges, rental charges and working prices. The firm additionally believes that, as a widely known measure of the efficiency of REITs, FFO shall be utilized by traders as a foundation to check the corporate’s working efficiency with that of different REITs. However, as a result of FFO excludes depreciation and amortization and captures neither the adjustments within the worth of the corporate’s properties that end result from use or market situations nor the extent of capital expenditures and leasing commissions crucial to keep up the working efficiency of the corporate’s properties, all of which have actual financial results and will materially influence the corporate’s outcomes from operations, the utility of FFO as a measure of the corporate’s efficiency is proscribed. In addition, different fairness REITs could not calculate FFO in accordance with the NAREIT definition as the corporate does, and, accordingly, the corporate’s FFO is probably not similar to such different REITs’ FFO. Accordingly, FFO needs to be thought-about solely as a complement to web revenue as a measure of the corporate’s efficiency. FFO shouldn’t be used as a measure of the corporate’s liquidity, neither is it indicative of funds out there to fund the corporate’s money wants, together with the corporate’s capability to pay dividends or service indebtedness. FFO additionally shouldn’t be used as a complement to or substitute for money circulation from working actions computed in accordance with GAAP.

Cash Net Operating Income
The firm makes use of NOI internally to judge and evaluate the working efficiency of the corporate’s properties. The firm believes money NOI supplies helpful info to traders concerning the corporate’s monetary situation and outcomes of operations as a result of it displays solely these revenue and expense gadgets which can be incurred on the property stage, and in comparison throughout intervals, can be utilized to find out developments in earnings of the corporate’s properties as this measure isn’t affected by (1) the non-cash income and expense recognition gadgets, (2) the price of funds of the property proprietor, (3) the influence of depreciation and amortization bills in addition to good points or losses from the sale of working actual property property which can be included in web revenue computed in accordance with GAAP or (4) common and administrative bills and different good points and losses which can be particular to the property proprietor. The firm believes the exclusion of this stuff from web revenue is beneficial as a result of the ensuing measure captures the precise income generated and precise bills incurred in working the corporate’s properties in addition to developments in occupancy charges, rental charges and working prices. Cash NOI is a measure of the working efficiency of the corporate’s properties however doesn’t measure the corporate’s efficiency as an entire. Cash NOI is due to this fact not an alternative to web revenue as computed in accordance with GAAP.

Cash NOI is a non-GAAP monetary measure of efficiency. The firm defines money NOI as working revenues (rental revenue, tenant reimbursements, lease termination charges, floor lease rental revenue and different property revenue) much less property and associated bills (property bills, floor lease expense, property advertising prices, actual property taxes and insurance), adjusted for non-cash income and working expense gadgets comparable to straight-line hire, web change in lease receivables (solely with respect to Q2 2020 by way of This autumn 2021), amortization of lease intangibles, amortization of lease incentives and different changes. Cash NOI additionally excludes common and administrative bills, depreciation and amortization, curiosity expense, different nonproperty revenue and losses, acquisition-related expense, good points and losses from property tendencies, extraordinary gadgets, tenant enhancements, and leasing commissions. Other REITs could use completely different methodologies for calculating money NOI, and accordingly, the corporate’s money NOI is probably not similar to the money NOIs of different REITs.

About American Assets Trust, Inc.
American Assets Trust, Inc. is a full service, vertically built-in and self-administered actual property funding belief (“REIT”), headquartered in San Diego, California. The firm has over 50 years of expertise in buying, enhancing, growing and managing premier workplace, retail, and residential properties all through the United States in among the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii.  The firm’s workplace portfolio contains roughly 4.0 million rentable sq. ft, and its retail portfolio contains roughly 3.1 million rentable sq. ft. In addition, the corporate owns one mixed-use property (together with roughly 94,000 rentable sq. ft of retail house and a 369-room all-suite resort) and a pair of,112 multifamily items. In 2011, the corporate was fashioned to succeed to the true property business of American Assets, Inc., a privately held company based in 1967 and, as such, has important expertise, long-standing relationships and in depth information of its core markets, submarkets and asset lessons. For extra info, please go to www.americanassetstrust.com.

Forward Looking Statements
This press launch could comprise forward-looking statements throughout the which means of the federal securities legal guidelines, that are based mostly on present expectations, forecasts and assumptions that contain dangers and uncertainties that might trigger precise outcomes and outcomes to vary materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and techniques, anticipated occasions or developments and comparable expressions regarding issues that aren’t historic info. In some circumstances, you possibly can establish forward-looking statements by means of forward-looking terminology comparable to “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the destructive of those phrases and phrases or comparable phrases or phrases that are predictions of or point out future occasions or developments and which don’t relate solely to historic issues. The following components, amongst others, may trigger precise outcomes and future occasions to vary materially from these set forth or contemplated within the forward-looking statements: the influence of epidemics, pandemics, or different outbreaks of sickness, illness or virus (such because the outbreak of COVID-19 and its variants) and the actions taken by authorities authorities and others associated thereto, together with the flexibility of our firm, our properties and our tenants to function; adversarial financial or actual property developments in our markets; our failure to generate enough money flows to service our excellent indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, together with important tenants; difficulties in figuring out properties to amass and finishing acquisitions; difficulties in finishing tendencies; our failure to efficiently function acquired properties and operations; our incapability to develop or redevelop our properties attributable to market situations; fluctuations in rates of interest and elevated working prices; dangers associated to three way partnership preparations; our failure to acquire crucial exterior financing; on-going litigation; common financial situations; monetary market fluctuations; dangers that have an effect on the overall retail, workplace, multifamily and mixed-use surroundings; the aggressive surroundings wherein we function; decreased rental charges or elevated emptiness charges; conflicts of pursuits with our officers or administrators; lack or inadequate quantities of insurance; environmental uncertainties and dangers associated to adversarial climate situations and pure disasters; different components affecting the true property business usually; limitations imposed on our business and our capability to fulfill complicated guidelines to ensure that us to proceed to qualify as a REIT for U.S. federal revenue tax functions; and adjustments in governmental rules or interpretations thereof, comparable to actual property and zoning legal guidelines and will increase in actual property tax charges and taxation of REITs. While forward-looking statements mirror the corporate’s good religion beliefs, assumptions and expectations, they aren’t ensures of future efficiency. For an additional dialogue of those and different components that might trigger the corporate’s future outcomes to vary materially from any forward-looking statements, see the part entitled “Risk Factors” within the firm’s most up-to-date annual report on Form 10-Ok, and different dangers described in paperwork subsequently filed by the corporate now and again with the Securities and Exchange Commission. The firm disclaims any obligation to publicly replace or revise any forward-looking assertion to mirror adjustments in underlying assumptions or components, of recent info, knowledge or strategies, future occasions or different adjustments.

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