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1. Company Snapshot

1.a. Company Description

American Assets Trust, Inc.is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California.The company has over 50 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington, Texas and Hawaii.


The company's office portfolio comprises approximately 3.4 million rentable square feet, and its retail portfolio comprises approximately 3.1 million square feet.In addition, the company owns one mixed-use property (including approximately 97,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,112 multifamily units.In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

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1.b. Last Insights on AAT

American Assets Trust's recent performance was driven by strong Q1 2025 earnings, beating estimates with FFO of $0.52 per share and revenue exceeding expectations. The company's diversified portfolio in high-demand coastal markets and strategic capital recycling position it for steady FFO/share growth. Additionally, American Assets Trust offers a compelling 7.1% dividend yield with a conservative 69% payout ratio, making it attractive for income investors. The stock's current price presents a significant discount to its historical valuation, indicating strong value.

1.c. Company Highlights

2. Company Delivers Mixed Results, Provides Guidance for 2026

The company reported FFO per share of $2 for the full year 2025, slightly above initial expectations. The office portfolio ended the quarter 83% leased, with same-store office NOI increasing 1% for the quarter and 2.5% for the full year. EPS came in at $0.47, slightly below estimates of $0.48. Revenue growth is expected to be modest at 0.2% next year.

Publication Date: Feb -24

📋 Highlights
  • FFO Performance:: Full-year 2025 FFO per share reached $2, exceeding expectations by 3%, with same-store NOI slightly positive driven by strong collections and disciplined expenses.
  • Office Leasing Progress:: Portfolio ended at 83% leased, with same-store office at 86% (up 150 bps QoQ), achieving 1% Q4 same-store NOI growth and 6.6% cash leasing spreads for 193,000 sq ft in 23 leases.
  • Retail Strength:: 98% leased year-end occupancy, 43,000 sq ft Q4 leasing with positive spreads, supported by high-barrier submarkets and strong tenant demand.
  • 2026 Guidance:: FFO per share projected at $1.96–$2.10 (midpoint $2.03, +1.5% YoY), with same-store NOI growth of 2.2%, including 3.3% in office and 1.7% in retail.
  • Balance Sheet Targets:: Leverage at 7x EBITDA aimed to reduce to 5.5x by 2026 via La Jolla Commons III leasing and potential asset sales, with $500M revolver amendment planned to maintain liquidity.

Segment Performance

The retail portfolio remained strong, ending the year at 98% leased, with positive cash and GAAP leasing spreads. The multifamily segment ended the year 95.5% leased, with net effective rent growth of approximately 1% year-over-year. However, operating conditions remain challenging due to new supply across markets.

Guidance for 2026

The company provided FFO guidance for 2026, with a midpoint of $2.03 per share, representing a 1.5% increase over 2025 actual FFO. Same-store cash NOI is expected to increase by 2.2% in 2026, driven by growth in office, retail, and multifamily segments.

Valuation and Dividend Yield

With a P/E Ratio of 16.48 and a Dividend Yield of 7.01%, the stock appears to be reasonably valued. The company's ROE of 6.07% and ROIC of 5.13% indicate a stable return profile. The Net Debt / EBITDA ratio of 5.68x suggests a moderate level of leverage.

Office Leasing Progress

The company has made significant progress in office leasing, signing 68,000 feet in 11 deals year-to-date, with another 13 deals in lease documentation. The pipeline is substantial, and the company is optimistic about the quality of tenants at La Jolla Commons III.

Balance Sheet and Liquidity

The company's balance sheet has good liquidity, with leverage around 7x EBITDA. The target is to reduce leverage to 5.5x, and the company expects to achieve this by leasing up La Jolla Commons III and One Beach. The company is open to selling assets at a price that reflects long-term value.

3. NewsRoom

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Crossingbridge Advisors LLC Reduces Holdings in American Assets Trust, Inc. $AAT

Mar -09

Source: defenseworld.net

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These 5 Hated Dividend Stocks Are Yielding Up To 15.6%

Feb -21

Source: forbes.com

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American Assets Trust: Dividend Coverage Slips

Feb -06

Source: seekingalpha.com

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American Assets Trust, Inc. (AAT) Q4 2025 Earnings Call Transcript

Feb -04

Source: seekingalpha.com

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American Assets Trust (AAT) Lags Q4 FFO Estimates

Feb -03

Source: zacks.com

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American Assets Trust, Inc. Reports Fourth Quarter and Year End 2025 Financial Results

Feb -03

Source: globenewswire.com

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Head-To-Head Contrast: Urban Edge Properties (NYSE:UE) & American Assets Trust (NYSE:AAT)

Jan -30

Source: defenseworld.net

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Is the Options Market Predicting a Spike in American Assets Trust Stock?

Jan -22

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.79%)

6. Segments

Office

Expected Growth: 1.8%

American Assets Trust's 1.8% office segment growth is driven by strong demand in coastal markets, particularly in California and Washington. The company's focus on high-quality, amenity-rich properties and strategic leasing efforts have contributed to increased occupancy rates and rental growth. Additionally, the ongoing shift towards experiential office spaces and the growth of the tech industry have supported the segment's expansion.

Retail

Expected Growth: 1.5%

American Assets Trust's retail segment growth of 1.5% is driven by increasing demand for experiential retail, strategic leasing efforts, and a strong tenant mix. Additionally, the company's focus on high-quality, grocery-anchored centers and its presence in affluent demographics contribute to its growth. Furthermore, the implementation of omnichannel retailing and investment in technology also support the segment's growth.

Mixed-Use

Expected Growth: 1.9%

American Assets Trust's Mixed-Use segment growth of 1.9% is driven by increasing demand for live-work-play environments, rising urbanization, and growing e-commerce penetration, leading to higher retail and office occupancy rates. Additionally, the segment benefits from a diversified tenant base, strategic property locations, and effective cost management.

Multifamily

Expected Growth: 2.1%

American Assets Trust's multifamily segment growth of 2.1% is driven by increasing demand for rental housing, particularly in coastal markets, coupled with a strong job market and rising wages. Additionally, the company's strategic focus on value-add opportunities, renovations, and operational efficiencies has contributed to the growth.

7. Detailed Products

Office Properties

American Assets Trust, Inc. owns and operates a portfolio of high-quality office properties, providing tenants with modern and amenity-rich workspaces.

Retail Properties

The company's retail properties offer a diverse range of shopping and dining experiences, with a focus on convenience, accessibility, and community engagement.

Multifamily Properties

American Assets Trust, Inc. develops and manages a portfolio of luxury multifamily communities, offering residents upscale amenities and convenient locations.

Mixed-Use Properties

The company's mixed-use properties combine office, retail, and residential spaces, creating vibrant and dynamic communities.

Hotel Properties

American Assets Trust, Inc. owns and operates a select portfolio of high-quality hotels, offering guests exceptional service and amenities.

8. American Assets Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

American Assets Trust, Inc. operates in a competitive industry, but its diversified portfolio and strong brand recognition mitigate the threat of substitutes.

Bargaining Power Of Customers

American Assets Trust, Inc.'s customers have limited bargaining power due to the company's strong market position and diversified tenant base.

Bargaining Power Of Suppliers

American Assets Trust, Inc. has a moderate level of dependence on its suppliers, but its scale and diversified portfolio mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the real estate industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The real estate industry is highly competitive, and American Assets Trust, Inc. faces intense rivalry from other REITs and real estate companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.21%
Debt Cost 3.95%
Equity Weight 39.79%
Equity Cost 10.50%
WACC 6.55%
Leverage 151.34%

11. Quality Control: American Assets Trust, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Gladstone Commercial

A-Score: 6.3/10

Value: 6.0

Growth: 4.7

Quality: 6.6

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

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CTO Realty Growth

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Value: 5.9

Growth: 5.2

Quality: 3.6

Yield: 10.0

Momentum: 3.5

Volatility: 9.3

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One Liberty Properties

A-Score: 6.2/10

Value: 5.3

Growth: 4.1

Quality: 6.5

Yield: 10.0

Momentum: 2.0

Volatility: 9.3

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Urban Edge

A-Score: 6.1/10

Value: 5.0

Growth: 3.2

Quality: 7.4

Yield: 8.0

Momentum: 4.0

Volatility: 9.0

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American Assets Trust

A-Score: 5.7/10

Value: 5.4

Growth: 4.3

Quality: 4.7

Yield: 10.0

Momentum: 2.0

Volatility: 8.0

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Presidio Property Trust

A-Score: 3.3/10

Value: 8.5

Growth: 0.8

Quality: 2.8

Yield: 5.0

Momentum: 3.0

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.78$

Current Price

18.78$

Potential

-0.00%

Expected Cash-Flows