The following is a summary of the American Assets Trust, Inc. (AAT) Q4 2023 Earnings Call Transcript:

Financial Performance:

• American Assets Trust reported Q4 and year-end 2023 FFO per share of $0.57 and $2.40 respectively and net income attributable to common shareholders was $0.17 and $0.84.

• Same-store cash NOI for all sectors had a YoY growth of 2.6% in Q4 and 4.5% for year-end 2023 compared to 2022.

• Liquidity at the end of Q4 was approx $483 million with a net debt to EBITDA of 6.5x on a trailing 12-month basis.

• The company predicts a 5.8% decrease from 2023's $2.40 per FFO share in the 2024 FFO per share guidance which ranges from $2.19 to $2.33.

• The expected operating capital expenditure for 2024 is approx $59 million.

• Despite rising competition and increasing operating expenses, the company expects its properties to remain profitable due to their location and amenities.

• Negative revenue changes are expected at the Embassy Suites Waikiki Hotel due to seasonality and the office segment due to delayed leasing decisions.

Business Progress:

• American Assets Trust achieved its highest-ever FFO per share in 2023, a 3% increase from 2022, as well as the highest ever total revenue and net operating income.

• The company executed 11 leases in Q4 2023 and has already signed 6 leases in 2024, totalling approximately 50,000 rentable sq ft, with rent increases of 10.7% on a cash basis and 26.6% on a straight-line basis.

• The company's office portfolio was 86% leased at the end of Q4 2023.

• The company has an objective to achieve a net debt to EBITDA of 5.5x or below and is focusing on leasing up La Jolla Commons III to achieve this.

• A new fitness center designed by Gensler is in the permitting process with the San Diego city administration, and construction is set to start next month.

• American Assets Trust is experiencing increased leasing activity and expects it to contribute to NOI and occupancy growth in the long term.

• The company aims to improve its resident experience to maintain appeal in a competitive rental market condition in San Diego.

More details: American Assets Trust Inc IR

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