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American Assets Trust, Inc. (AAT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered steady but mixed results: FFO per diluted share was $0.52, GAAP diluted EPS was $0.09, and total revenue was $107.9M; same-store cash NOI declined 0.3% YoY as retail strength offset office, mixed-use hotel, and multifamily pressure .
  • Management raised FY 2025 FFO guidance to $1.89–$2.01 (midpoint $1.95), ~1% above prior midpoint, citing leasing momentum and disciplined operations; liquidity stood at $543.7M (cash $143.7M, undrawn revolver $400M) .
  • Versus S&P Global consensus: EPS modest miss (actual $0.09 vs $0.10*), revenue slight miss ($107.9M vs $108.2M*), EBITDA modest beat ($58.8M vs $56.5M*). Retail leasing spreads remained robust (+7.4% cash, +21.9% straight-line); office cash spreads were −2.0% with positive +9.6% straight-line .
  • Key catalysts: Guidance raise, growing AI-driven San Francisco office demand at One Beach, and strong retail leasing; offsets include Hawaii hotel softness (ADR and RevPAR down), and lower office occupancy to 82% .

What Went Well and What Went Wrong

What Went Well

  • Retail resilience: Same-store retail cash NOI grew 4.5% YoY; Q2 comparable retail leases (213k sf) signed at +7.4% cash and +21.9% straight-line spreads .
  • Office demand building in key assets: Management highlighted increased touring and spec-suite readiness at One Beach and La Jolla Commons III, with AI tenants driving San Francisco interest (“predicted it could be as big as 25 million sq ft in the next few years”) .
  • Liquidity and dividend stability: $543.7M liquidity and Q3 dividend of $0.340 declared, reinforcing balance sheet strength and cash generation consistency .

What Went Wrong

  • Office softness: Portfolio office leased fell to 82.0% (from 85.5% in Q1), and Q2 comparable office cash rent spread was −2.0% (still +9.6% straight-line); same-store office cash NOI flat YoY with known move-outs (e.g., ClearResult) impacting First & Main .
  • Mixed-use hotel headwinds: Embassy Suites Waikiki NOI down ~$0.5M YoY with ADR $355 (−3%) and RevPAR $305 (−4%); management cited yen (~147) and domestic airfare pressures tilting demand elsewhere .
  • Multifamily pressure: Same-store multifamily cash NOI −3.9% YoY amid San Diego supply and Portland competitive dynamics; net effective rents only modestly up vs last year .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$110.890 $108.607 $107.933
Net Income Attributable to Stockholders ($USD Millions)$11.904 $42.535 $5.456
Diluted EPS ($USD)$0.20 $0.70 $0.09
FFO per Diluted Share/Unit ($USD)$0.60 $0.52 $0.52
FFO per Diluted Share ex Lease Terms/Litigation ($USD)$0.60 $0.52 $0.51
EBITDA ($USD Millions)$61.805 $58.590*$58.760
  • Values with asterisks retrieved from S&P Global.

Actual vs S&P Global consensus – Q2 2025:

MetricS&P Consensus (Q2 2025)Actual (Q2 2025)Beat/Miss
Diluted EPS ($USD)$0.10*$0.09 MISS
Total Revenue ($USD Millions)$108.234*$107.933 MISS
EBITDA ($USD Millions)$56.487*$58.760 BEAT
  • Values with asterisks retrieved from S&P Global.

Segment same-store cash NOI (Q2):

SegmentQ2 2024 ($USD Thousands)Q2 2025 ($USD Thousands)YoY Change
Office$35,730 $35,501 −0.6%
Retail$16,163 $16,891 +4.5%
Multifamily$9,240 $8,881 −3.9%
Mixed-Use$6,000 $5,681 −5.3%
Total$67,133 $66,954 −0.3%

KPIs:

KPIQ2 2024Q1 2025Q2 2025
Office Leased % (Portfolio)86.6% 85.5% 82.0%
Retail Leased % (Portfolio)94.5% 97.4% 97.7%
Multifamily Leased % (Portfolio)90.0% 90.0% 88.1%
Mixed-Use Retail Leased %95.7% 89.3% 95.0%
Hotel Occupancy % (Mixed-Use)88.1% 84.6% 85.3%
Office Comparable Cash Rent Spread7.8% 7.8% −2.0%
Office Comparable Straight-Line Spread16.4% 15.2% 9.6%
Retail Comparable Cash Rent Spread4.4% 13.3% 7.4%
Retail Comparable Straight-Line Spread18.7% 21.0% 21.9%
Avg Monthly Base Rent per Leased Unit ($)$2,739 $2,699 $2,732

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FFO per diluted share rangeFY 2025$1.87–$2.01 $1.89–$2.01 Raised midpoint (+$0.01)
Dividend per share (quarterly)Q2 2025 / Q3 2025$0.340 (Q2 declared) $0.340 (Q3 declared) Maintained
Credit reserves embedded in outlook (FFO/sh)FY 2025Budgeted $0.05 in initial framework ~$0.02 reserved YTD; none utilized Lower utilization YTD

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology leasingTech tenants anchor SF and Bellevue portfolios (e.g., Google, Smartsheet) AI driving SF One Beach demand; brokers touring full building; spec suites underway Improving demand in SF; pipeline building
Office occupancy/utilizationOffice portfolio 85.0% in Q4; 85.5% in Q1 Office 82.0% (portfolio); same-store office NOI flat; −2% cash spreads influenced by specific backfill terms Near-term pressure; selective backfills
Retail demand/collectionsRetail leased 94.5% (Q4) to 97.4% (Q1) Retail 97.7% leased; +7.4% cash spreads; all reserved tenants current; backfill at Gateway ~30% above prior Strong and durable
Multifamily supply/concessionsSame-store multifamily NOI +0.5% (Q1) Same-store multifamily NOI −3.9%; San Diego new supply and elevated costs; Portland stabilization gradual Mixed; San Diego supply impact, Portland stabilizing
Hawaii hotel performanceQ4 occupancy 83.6%, RevPAR $301 ADR $355 (−3%), RevPAR $305 (−4%); yen ~147 pressuring inbound demand; still outperforms comp set Soft near term; medium-term recovery expected

Management Commentary

  • “Our results came in just above our own expectations. FFO per diluted share was $0.52, and same-store cash NOI was approximately flat for Q2 and up 1.4% year-to-date… underscoring the resilience of our portfolio” — Adam Wyll (CEO) .
  • “Q2 FFO remained flat vs Q1; excluding ~$800k lease termination fees, FFO declined ~$0.01 per share, primarily reflecting the Del Monte Center sale” — Robert Barton (CFO) .
  • “AI is the primary driver… It’s going by leaps and bounds” — Steve Center (SVP Office) on One Beach demand .
  • “We outperform our competitive set in Waikiki in RevPAR and ADR” — Robert Barton (CFO) .
  • “We are increasing our full-year 2025 guidance range to $1.89–$2.01 per FFO share” — Robert Barton (CFO) .

Q&A Highlights

  • Guidance mechanics: Management lifted FY FFO midpoint to $1.95; upside levers include rent collections from reserved tenants (~$0.02/sh reserved, none used YTD), stronger multifamily performance, and tourism recovery at Embassy Suites .
  • Office leasing pipeline: One Beach and La Jolla Commons III seeing larger deal sizes (20–60k sf), spec suites and amenities to accelerate leasing; Bellevue assets progressing despite higher market vacancy .
  • Multifamily spreads: Renewals ~7%, new ~4% (San Diego), with competitive dynamics from new supply; Portland steady activity and retention despite elevated supply .
  • Hawaii hotel demand: ADR/RevPAR down; FX headwinds (yen ~147) and airfare costs weigh on domestic travel, but asset outperforms competitive set .
  • Capital allocation: Strong cash balances; preference to deploy into multifamily and selective retail; office focus on internal opportunities .

Estimates Context

  • For Q2 2025: EPS $0.09 vs consensus $0.10* (miss); revenue $107.9M vs consensus $108.2M* (miss); EBITDA $58.8M vs consensus $56.5M* (beat). Retail momentum and credit-reserve conservatism support FY FFO guidance raise despite office and hotel headwinds .

  • Consensus target price remained $20.5* across recent quarters; estimate coverage appears limited (# of estimates: revenue 2; EPS 1 for Q2)*.

  • Near-term revisions: Slight EPS/revenue misses could modestly pressure near-term quarterly estimates; however, raised FY FFO guidance and leasing commentary may support more constructive FY trajectories in FFO/NOI and retail segment estimates .

  • Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Retail is the ballast: high occupancy (97.7%) and strong spreads should underpin cash flows even as office/mixed-use normalize .
  • Office trajectory is asset-specific: negative Q2 cash spreads reflect select backfills; pipeline at One Beach and La Jolla Commons III (AI and spec-suite strategy) could improve occupancy/rents over coming quarters .
  • Hotel softness is likely transitory: Embassy Suites Waikiki under FX/airfare pressure but outperforms peers; watch ADR/RevPAR stabilization trends and FX moves (yen) .
  • FFO guidance up: Midpoint raised to $1.95 with ~$0.02/sh credit reserves reserved but unused YTD; estimate revisions may track improved visibility in retail and office commencements .
  • Balance sheet optionality: $543.7M liquidity and net debt/Adj EBITDA of 6.6x (quarter annualized) provide flexibility; dividend held at $0.340/qtr .
  • Trading implications: Near-term prints may be choppy as office commences stagger, but guidance raise and retail strength offer support; monitoring SF AI leasing, Bellevue progress, and Hawaii hotel demand are key catalysts .

Source Citations

  • Q2 2025 press release and 8-K: financials, NOI, leasing, guidance, liquidity, dividends .
  • Q2 2025 earnings call transcript: segment commentary, guidance, reserves, AI leasing, Hawaii hotel .
  • Q1 2025 press release: prior-quarter benchmarks, leasing status, disposition/acquisition .
  • Q4 2024 8-K: historical trends, leasing status, NOI, tenants .
  • S&P Global consensus data: EPS, revenue, EBITDA, target price, # of estimates (marked with asterisks).