Executive Summary

Q4 2024 printed Revenue $113.5M, Net income $9.0M ($0.15/share), and FFO $0.55/share; revenue was roughly flat year over year, EPS fell vs Q4’23 ($0.17), and FFO fell vs Q3’24 due to absence of Q3’s $0.15/share termination fee and normal seasonality at the Waikiki hotel .
Same-store cash NOI rose 2.6% YoY in Q4, with Retail +11.4%, Multifamily +5.5%, Mixed-use +3.7% offsetting Office -2.8%; office leased rate declined to 85% (from 87%) on remeasurement and tenant move-outs .
2025 FFO guidance of $1.87–$2.01 (midpoint $1.94) reflects a “reset” from one-time 2024 items (lease terminations, litigation), higher interest expense, loss of capitalized interest, credit reserves, and the Del Monte disposition (-$0.11) partially offset by a planned multifamily acquisition (+$0.02) .
Liquidity remained strong at $825.7M (cash $425.7M + $400M revolver); post-year-end, AAT repaid $325M (Term Loans B/C and Series C notes). Dividend was raised 1.5% to $0.34 for Q1’25, signaling confidence despite lower 2025 FFO guide .
Key near-term catalysts: leasing progress at La Jolla Commons III and Bellevue offices (management sees ~$0.30/share FFO run-rate upside at ~93% leased over time) and completion of Del Monte sale plus reinvestment into San Diego multifamily .

What Went Well and What Went Wrong

What Went Well
- Retail momentum: Q4 comparable cash leasing spreads +6.5% (SL +30.8%); retail same-store cash NOI +11.4% YoY; portfolio 94.5% leased .
- Multifamily resilience: same-store cash NOI +5.5% YoY in Q4; San Diego multifamily ~97% leased exiting Q4; net effective rents in San Diego +2% YoY and in Portland +3.5% YoY vs Q4’23 .
- Balance sheet/liquidity: year-end liquidity $825.7M; subsequent repayment of $325M short-dated debt; no maturities until 2027, supporting flexibility through leasing cycles .
What Went Wrong
- Office softness: Q4 office same-store cash NOI -2.8% YoY; office leased declined to 85% (from 87% QoQ), impacted by remeasurement and move-outs (incl. space tied to Q3 termination fee) .
- FFO step-down sequentially: $0.55 in Q4 vs $0.71 in Q3, largely due to lack of Q3’s $0.15/share termination fee and lower Waikiki hotel revenue quarter-to-quarter seasonality .
- Higher interest headwinds into 2025: 6.15% notes and cessation of capitalized interest expected to reduce 2025 FFO by ~$0.06/share; credit reserves of $0.05/share (office $0.02, retail $0.03) reflect conservative posture amid tenant risk (e.g., Petco, Michaels, Angelika) .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$112.5	$122.8	$113.5
Net Income Attributable to AAT Stockholders ($USD Millions)	$10.5	$16.7	$9.0
Diluted EPS ($)	$0.17	$0.28	$0.15
Funds From Operations per diluted share ($)	$0.57	$0.71	$0.55
Operating Income ($USD Millions)	$29.4	$37.8	$30.0
Operating Margin (%)	26.1% (calc from 29.4/112.5)	30.8% (37.8/122.8)	26.5% (30.0/113.5)

Note: Operating margin is calculated from company-reported revenue and operating income cited above.

Segment same-store cash NOI (Q4)

Segment	Q4 2023 ($000)	Q4 2024 ($000)	YoY Change
Office	35,488	34,483	(2.8%)
Retail	18,255	20,327	11.4%
Multifamily	8,543	9,016	5.5%
Mixed-Use	5,285	5,481	3.7%
Total	67,571	69,307	2.6%

Key KPIs

KPI	Q3 2024	Q4 2024
Office leased % (Total portfolio)	87.0%	85.0%
Retail leased % (Total portfolio)	94.5%	94.5%
Mixed-use Retail leased %	96.3%	90.5%
Multifamily leased %	90.3%	91.8%
Avg monthly base rent per leased unit ($)	$2,739	$2,683
Liquidity ($USD Millions)	$933.0	$825.7
Net debt / Adjusted EBITDA (TTM)	6.0x	6.0x

Leasing spreads (comparable)

Segment	Q3 2024 Cash Spread	Q4 2024 Cash Spread
Office	+7.8%	+1.6%
Retail	+4.4%	+6.5%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
FFO per diluted share	FY 2025	NA	$1.87–$2.01 (midpoint $1.94)	New
Same-store cash NOI (Office/Retail/Multifamily/Mixed-Use)	FY 2025 vs 2024	NA	Office ~-1%; Retail ~+1.6%; Multifamily ~+2.7%; Mixed-Use ~flat	New
Embassy Suites Waikiki KPIs	2025 vs 2024	NA	Occ +~2%; ADR +~4% to ~$384; RevPAR +~6% to ~$337	New
Credit reserves	FY 2025	NA	~$0.05/share (Office $0.02; Retail $0.03)	New
Interest expense impact	FY 2025	NA	(~$0.06)/share from 6.15% notes and end of capitalized interest	New
Disposition: Del Monte Center	FY 2025	NA	(~$0.11)/share impact to 2025 FFO	New
Acquisition: San Diego multifamily (~200 units)	FY 2025	NA	+$0.02/share impact to 2025 FFO (expected close late Feb)	New
Dividend per share	Q1 2025	$0.335 (Q4’24)	$0.340 (declared)	Raised

Bridge detail: Management’s supplemental bridges 2024 actual $2.58 to 2025 midpoint $1.94 via nonrecurring items (-$0.28), interest/taxes/other (-$0.22), credit reserves (-$0.05), disposition (-$0.11), partially offset by multifamily acquisition (+$0.02) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Office utilization & leasing	New leasing outpaced renewals for first time since 2019; positive momentum in San Diego/Bellevue; La Jolla Commons III amenity build-out; One Beach tours improving but SF still small-tenant market .	Office leased 85%; Q4 cash spreads +1.6%; robust Q1 pipeline (~20k sf executed, ~105k sf in docs); spec suite program to accelerate commencements; ~8% office roll in 2025; expected bottoming mid/late 2025 as commencements ramp .	Gradual improvement; near-term softness; focus on spec suites and small tenants.
Retail performance & tenant health	Cash spreads +5.8% (Q2), +4.4% (Q3); strong base rents; resilient consumer demand; low 2025 expirations .	Cash spreads +6.5% (Q4); same-store cash NOI +11.4%; monitoring Petco/Michaels/Angelika; Party City closures constrain 2025 retail NOI, but backfill interest present .	Solid trends with isolated watchlist risk.
Multifamily rents/occupancy	Highest avg base rents post-IPO; San Diego blended +4% (Q2), Portland stabilizing; strong collections .	Same-store cash NOI +6.1% FY; San Diego ~97% leased Q4; USD master lease extended with 5%/3.5% rent bumps; Portland net effective +3.5% YoY .	Stable to improving; seasonal Q4 concessions; positive 2025 momentum.
Capital allocation	Issued $525M 6.15% notes (upsized; >4x demand); indicated pivot toward multifamily & retail; de-emphasize office buys .	In escrow: sell Del Monte Center (late Feb close expected); buy ~200-unit San Diego multifamily (~half proceeds), highlighting long-term value over near-term yield .	Recycling into multifamily; streamline markets for scale.
Balance sheet & liquidity	Liquidity $515M (Q2) rising to $933M (Q3); aim net debt/EBITDA ≤5.5x .	YE liquidity $825.7M; subsequent $325M repayments; net debt/Adj EBITDA 6.0x TTM; no maturities until 2027 .	De-risked near-term maturities; leverage still a focus.
Dividend policy	Quarterly $0.335 maintained in 2024 .	Dividend raised to $0.340 (Q1’25) to signal confidence despite FFO reset; payout expected high 80s–low 90s% on management view .	Modest increase; conservative stance on coverage.

Management Commentary

“2024 marked yet another milestone as we achieved our highest FFO per share since our IPO... complemented by record total revenue, NOI, aggregate dividends... and record average monthly base rents across our office, retail and multifamily portfolios.” — CEO Adam Wyll .
“2025 represents a reset... primarily due to certain one-time opportunistic revenue-generating items in prior periods... increased interest expense... and the discontinuation of capitalized interest... [with] no debt maturities until 2027.” — CEO Adam Wyll .
“At a 93% leased occupancy, we should be able to add over $0.30 of FFO per share [from La Jolla Commons III, One Beach and suburban Bellevue]... Our focus is getting each of these properties leased as quickly as possible.” — CFO Robert Barton .
“We have entered into an agreement to pla sell Del Monte Center... and are in escrow on a multifamily community in San Diego... [prioritizing] long-term value creation rather than short-term yield metrics.” — CEO Adam Wyll .

Q&A Highlights

Timing of ~$0.30/share FFO upside: Contributions depend on lease signings and commencements; management expects little in H1’25, with an inflection potential in mid/late 2025 as spec suites deliver and tenants commence; several Bellevue and La Jolla deals are in documentation (e.g., 29k sf at Timber Ridge; top floor ~16k sf at La Jolla Commons III) .
Del Monte sale and reinvestment: Management declined to give pricing while in escrow, but indicated proceeds roughly exceed the multifamily purchase (apartments “a little over half” of proceeds); surplus cash may earn interest while sourcing additional opportunities; focus on market scale and operating synergies .
Credit reserves: ~$0.05/share in 2025 (office $0.02, retail $0.03). Watchlist includes two office tenants and retailers (Petco, Michaels, Angelika). Party City closures already reflected in guidance .
Same-store cash NOI assumptions: Office ~-1% (impacted by known move-outs), retail ~+1.6%, multifamily ~+2.7%, mixed-use flat; leverage expected to remain ~6x net debt/EBITDA while leasing progresses .
Leasing color: Flight-to-quality persists; tenants prefer turnkey/spec spaces and longer terms when landlord funds build-outs; spec suite program expanded to accelerate absorption; weighted average lease terms on in-negotiation deals >10 years noted .

Estimates Context

Wall Street consensus (S&P Global) EPS/revenue estimates for Q4 2024 and near-term periods were unavailable due to access limits at the time of this analysis. As a result, we have not included vs-consensus comparisons here and will update once S&P Global data access is restored.

Key Takeaways for Investors

2024 finished solid on underlying operations (retail/multifamily), but Q4 FFO stepped down vs Q3 given the absence of one-time fees and hotel seasonality; office softness remains the main drag .
2025 guidance embeds a prudent reset (midpoint $1.94) driven by normalization of one-offs, higher interest expense, credit reserves, and the Del Monte sale; the bar is set conservatively with upside from faster leasing/commencements and lower bad debt .
The medium-term equity story hinges on leasing La Jolla Commons III, Bellevue assets, and One Beach; management quantifies ~$0.30/share FFO run-rate upside at ~93% leased—a material lever for deleveraging and NAV accretion .
Retail remains a bright spot with positive spreads and high occupancy; curated tenant management and backfilling of isolated closures should sustain modest growth .
Multifamily fundamentals are stable-to-improving; targeted San Diego acquisition and USD master-lease extension strengthen the segment’s role in the mix .
Balance sheet flexibility is decent (post-year-end debt paydowns, no maturities until 2027), but leverage near ~6x keeps execution risk in focus; progress on office leasing is the key swing factor for both FFO and leverage trajectories .
Trading implication: Expect shares to key off leasing headlines (LJC III/Bellevue), asset recycling updates (Del Monte/SD multifamily), and any changes to credit reserve needs; modest dividend raise signals confidence but not a primary driver near term .

Additional Data (from 8-K and Supplemental)

Q4 2024 unaudited revenue $113.46M; operating income $30.05M; net income $11.58M (AAT stockholders $8.98M; diluted EPS $0.15); FFO/share $0.55; FAD $26.8M; dividends paid $25.9M ($0.335/share) .
YE 2024 cash $425.7M; revolver availability $400M; gross real estate assets $3.6B; net real estate $2.59B; total debt $2.025B (weighted average fixed ~4.6%); TTM net debt/Adj EBITDA 6.0x; interest coverage 3.4x .

All figures and statements above are sourced from the company’s Q4 2024 8‑K (press release + supplemental) and earnings call transcript, with citations in-line.

American Assets Trust, Inc. (AAT)·Q4 2024 Earnings Summary