American Assets Trust, Inc.

Second quarter 2026 FFO was $0.51 per diluted share, and net income attributable to common stockholders was $0.09 per diluted share. Portfolio-wide same-store cash NOI increased 0.3%, or 1.3% excluding a one-time reserve for an office tenant receivable. By segment versus Q2 2025, office same-store NOI increased 0.4% (2.4% excluding the reserve), retail same-store NOI declined 0.4%, multifamily same-store NOI increased 0.9% (1.6% excluding the RV park), and mixed-use same-store NOI increased 0.6%. The office portfolio ended the quarter 84.4% leased, retail was 98% leased, and multifamily was over 94% leased excluding the RV park. In the hotel business, occupancy rose to 90.5% from 86% last year, RevPAR increased 0.9% to $308, ADR declined 0.4% to $340, and hotel NOI was approximately $2.5 million versus $2.9 million last year. The company ended the quarter with about $610 million of total liquidity, including $110 million of cash and $500 million available on its revolver. Net debt-to-EBITDA was 6.7x on a quarterly annualized basis and 6.9x on a trailing 12-month basis, with a long-term target of 5.5x or below. Full-year FFO guidance was reaffirmed at $1.96 to $2.10 per diluted share, midpoint $2.03.

Adam Wyll framed the quarter as consistent execution in an uneven macro backdrop, emphasizing patience, discipline, and a long-term focus. He said the company is letting its high-quality coastal assets and platform do the work, and highlighted that office leasing progress is expected to convert into commenced rent and better cash flow over time. His tone was constructive but measured, repeatedly noting that timing on larger office deals is uncertain and that the company will not chase occupancy at the expense of pricing or credit.

Robert Barton said Q2 FFO rose modestly from Q1, helped by incremental rental income from recently commenced office leases at City Center Bellevue and One Beach. He detailed the one-time office receivable reserve and said it did not factor into 2026 guidance, while also noting that same-store cash NOI should improve in the back half as signed leases start paying rent. He emphasized balance sheet strength, citing about $610 million of liquidity, the April 2030 maturity extension of the $500 million revolver and $100 million term loan, and leverage at 6.7x quarterly annualized net debt-to-EBITDA versus a 5.5x target. He also quantified embedded upside from office lease-up: about $0.29 per share of incremental FFO when stabilized, with roughly $0.14 from signed leases and the rest from speculative leasing.

Analysts focused heavily on office occupancy, especially year-end occupancy guidance, the Torrey Reserve receivable reserve, and the timing of lease commencements at La Jolla Commons and One Beach. Management said office occupancy is more binary now because several large proposals could close in 2026 or slip into next year, and reiterated that they will not force leases just to hit a percentage target. They also clarified that the Torrey Reserve issue was an accounting write-off of about $1.2 million of cash receivables and straight-line rent, with no recovery assumed in guidance, and said the space has already been backfilled. On pipeline, management said La Jolla and One Beach both have multiple proposals in flight, but timing remains uncertain until leases are signed.