AAT - Earnings call transcript Q3 2019 | American Assets Trust, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2019 American Assets Trust, Inc. Earnings Conference Call. [Operator Instructions].I would now like to hand the conference over to your speaker today, Mr Adam Wyll. Thank you. Please go ahead.

Adam Wyll

you. Thank everyone. morning, Good Assets Quarter American Earnings Trust to XXXX Third Call. Welcome supplemental our the filed Commission. earnings afternoon, information Securities release Exchange with Yesterday X-K and were Form on and a website, the section on available now are of Both our americanassetstrust.com. Investors An audio also for the as by replay Investors week, call section over next website. as be the available phone well of webcast this will on of our

information. our earnings discuss During financial measures, supplemental to we release reconciled our in will non-GAAP GAAP call, results this are financial and which

We forward-looking subject current risks our will making expectations. These and in our also based on be statements discussed statements to SEC are filings. uncertainties

undertake You Actual duty place events to differ to undue statements. our cause these we results to forward-looking forward-looking are no cautioned could these materially update. reliance not from on which statements,

I'll the to results. Ernest? to Ernest that, discussion our with over turn third Rady of call quarter the begin And

Ernest Rady

quarter Trust morning call. Thank American joining you. thank Assets for Good you XXXX earnings all everyone third and

fronts, efforts making as net for are We to our growth shareholders. earnings asset combined on focus in value great with continue we growth, on progress all our

success be last the prior we of are And XXXX. on years. has per of an X% quarterly to its December The stockholders quarterly December financially The on increase XXXX, the dividend ending some common December a share for declared $X.XX XX, and Directors paid enjoyed of all a the period dividend. dividend we've Company's XX, is will which stock XX, share Board increase of $X.XX record on over per XXXX over to share approximately that delighted the

Chief we to function, in Officer. And in been Executive is named of continue responsibility since to manage board Board no Adam Vice has is pleased and breadth well successfully them him. on, our member reporting done as the the of the has and has title been President to our forward important our a what describes also a look team, of IPO, future. valuable confidence very he has team, taken am has in he management there part Adam as and appreciate better Wyll I he that and our with will and as we and working has our Operating change this the management and announce

We are of great fortunate continue management introduce and is work growth together since XXXX all keep a the we whom my to employees to to group of guidance, quality coastal entry going team going West high have Coast comments as estate of real and such a to resilient introductory our of short, a strength trust. best-in-class our I'm on as investment Bob high will focus which portfolios. barrier XX,

of at company, to allowing on your we forward American your Again, to confidence behalf look us all manage thank Trust, your us in for support. continued you of we and

I our and Vice President CFO. will now it over turn Executive to Bob Barton,

Bob, Okay here. take it from

Robert Barton

and stockholders attributable night of Ernest. per share share third the of morning FFO reported XXXX for income $X.XX quarter third Good net and you, per we to thank quarter. $X.XX common Last

approximately comprised primarily $X.XX second primarily FFO compared share XX.X% quarter FFO per five basis per actual following; of are the results in the of third to the the XX% share quarter Third by first, quarter to an XXXX, items. following FFO increased on or from

FFO Commons Jolla First, per added June La on of of acquisition the XX share. approximately $X.XXX

share, added seasonality FFO approximately $X.XXX to and the months. per the due over of Embassy Waikiki Second, Beach Suites the summer

Google was now QX, resulting FFO agreement Landmark per their added approximately The lease XXXX. the in share, $X.XXX under July entered Market the of San lease five of occupied One at in of Xst that commencement floors the from on Francisco remaining by Third, into seven

a in fifth, resulting Commons QX approximately increase raise, La by G&A average increase of connection share, of in shares, share. equal $X.XX the result decrease the in in FFO of of and $X.XXX the approximately interest of expense the FFO this an reduced Jolla acquisition from year. per equity weighted both as And Fourth, per FFO a with

Ernest by $X.XX dividend mentioned, previously approximately per to December and we've quarterly December a prior increase record on increased the on share of as the X.X% Secondly, over XX, quarterly XX beginning stockholders dividend.

over XXXX XXXX revised $X.XX a midpoint our of third, approximately And range midpoint. the guidance is guidance X% increase

The However, XXXX of approximately in XXXX. increase and million believe recorded we would majority be which was approximately excluding fees $X.X year-to-date, non-recurring XX% over guidance FFO the termination XXXX, XXXX the of growth midpoint reflects true non-cash.

detail. highlights discuss Let's more these in

ended with rents base portfolio believe are the peers. combined the Our XX% quarter what among our annualized we leased, at retail highest

feet trailing leased. portfolio. the square four signed representing XX spaces XXX,XXX these retail leases our of of square for or approximately approximately were total quarters, XXX,XXX feet During previously XX Of consisting leases XX% were leases signed, retail

the XX.X% over basis, annual a leases, leases. comparable basis over basis, cash straight-line increased a prior the On X.X% and on the rent increased prior

XX.X% quarter La have Our progress. relates specifically at as we leased, the to office great Commons, portfolio it Jolla made ended

vacancy XX% XX.X% in As it of later dynamic of and market, June X%. of leased. on leased acquired was asset the on as be in a the approximately June path XX, future it it growth September days is where to We date XX.X% XX XX, that leased. continues was the XXth, we and believe it was

overseeing market. Office we XX% rent It's office of submarket. done tremendous our the are office to Properties the in asset's in-place this new below believe Vice rents note, portfolio watermarks setting are a President believe approximately in for also important job our UTC momentum, we Center, for leasing that high Steve what entire has

During approximately were XX of square were these during signed XX% office total representing leases XXX,XXX new our the leases signed, the leased. leases portfolio. or quarters, feet approximately of previously year, Of for office XXX,XXX trailing spaces square consisting XX four feet

line office locked cash in, in leases, growth we in XXXX. basis, On a on the The annual straight rent straight-line that prior see comparable retail cash increased the the expect is the in XX% increased and and rent over to over leases. a NOI beginning XX% the prior basis both basis and increase reflects

X%, deeper with of decreasing a into to the At NOI first same-store it cash in somewhat third from resulting NOI XXXX. approximately two over comprised XXXX retail Brothers one $XXX,XXX, numbers, But dive glance, fees same-store XXXX cash a been was by in from retail simply in of decrease Aaron or in overall stores, the expectations. termination is confusing received quarter has released which

Monte expense store that Forever recorded we Forever QX building a of lease we we store the our bad the natural XXXX the July as XX one And Del is reflect in portfolio. XX, at the expiration Forever debt QX XX have in only in to closing Center have XXXX. acquired the we $X for of XXXX Forever XX of we approximately modelled XX When acquisition million, for

opportunity their rent that It to approximately will make guidance building you the have have fourth factored just the Now which for our We received with marketplace. and in renovate much and $XXX,XXX. is we it a quarter moment. share rent sooner current reserved their XXXX we to into relevant already well, October as

in Bellevue and Same-store to new quarter in third of for third a increased XX.X% leases a Bellevue terminating tenant XXXX. City square Center of from termination cash at tenant fee from City due NOI Center approximately the approximately XX,XXX XXX,XXX feet, the at quarter, received additional signed we primarily revenue

multifamily a Same-store repair San tenant's to has space former basis of on maintenance multifamily at VMware combined the in lease that due for expenses percentage, in primarily NOI primarily our occupancy X.X%, rates. of decrease and decreased X% all NOI a effective approximately a entered expands to higher higher with portfolio, in cash cash properties approximately due since into in into this combined XXXX Loma multifamily Diego at Palisades. a all reduction

X% increased our at on NOI in Eighth multifamily Cash Portland. Hassalo property

consistent percentage Although rental XX% same to NOI. property expenses period in occupancy approximately cash providing the on at compared increase same -- Eighth the the for decreased X%, approximately in Hassalo for remained XXXX,

the previously as Moving designation consisting use mixed Waikiki on our Suites outdoor XXXX, exterior work both balconies Beach same-store the began undergoes of was beginning Beach of Retail, Walk, mixed property our of the moved and of the property renovation, year, to painting a mixed-use out in which significant and announced, spalling Waikiki as use all on QX hotel Embassy including Walk at towers. property; beginning

to work The is working estimated work is on first completed be tower. before second spalling painting complete of to begin for update we now of to the hotel on project May are mid-March the the the renovation, exterior expected end in now both an and and year. and is be completed refresh XX The QX the room tower next end by towers As

third work renovation in increase for properties is our use approximately cash mixed the NOI the quarter of of X%. reported on-going combined a As XXXX,

renovation cash at the NOI remained flat, results Embassy the despite work. Suites' separately, the on-going Looking

room in sales expenses. quarter, in X% Suites increase Embassy was the an an increase of expenses, saw offset and which by increase RevPAR an in and marketing for operating

NOI and income, cash At X%, Waikiki from high estate tenants Retail, benefit increases parking continue in good excellent by taxes. square increase in partially increased months, offset real to a foot per to at an primarily the base remain Tenant Beach sales XX $X,XXX rolling as due our rent Walk and economy. the locations

we at you $XXX availability liquidity, our at third equivalents our $XXX and cash if had of Now on the comprised $XXX sheet in of look million approximately line cash of balance of and million and credit. of the end quarter, million liquidity

X.X is net and debt-to-EBITDA below or times which focus our leverage, times, at terms Our in to of we measure debt-to-EBITDA maintain was net X.X our

July unsecured X.XX% no an for Senior lock agreement contract rate, XX, of of purchase into with X.XX% effective The a XX a of settlement Guaranteed years. million interest On the for placement we maturity. the entered is treasury Notes $XXX private rate XX-year net

by FFO range our with share. we year, $X.XX FFO of midpoint same share $X.XX As XXXX $X.XX to the guidance FFO per of the range of our FFO from $X,XX per are per to per share, guidance $X.XX approach to share the end prior updating we the tightening

guidance. about Now let's XXXX talk

FFO per We September per FFO midpoint $X.XX XXXX approximately or through are range FFO a approximately share, to introducing per increase termination share. million in the share, XXXX our over received of share year-to-date increase X% of $X.X or of per that with of midpoint, $X.XX totaled is $X.XX an XX%, fees revised FFO XXXX $X.XX approximately non-recurring guidance which excluding FFO

up Let's walk through what XXXX makes guidance. the

we received at increase share. This $X.XXX Mountain to Plaza, on continues NOI same-store primarily approximately full leases rent Beach from year's two First, Carmel signed is and Solana Centre. per the at as retail Towne NOI new FFO to at-home or cash increases rent in X% lease recently is expected due cash

is to FFO cash attributable increase expected NOI same-store or Secondly, office per $X.XX is increase cash in mostly to approximately The NOI office same-store XX% following. the share.

from rent tenants per $X.XX expect FFO. share from approximately signed cash Torrey of The to full cash that receive is at of NOI, At a to full is to we estimated year's Point, NOI be newly signed rent estimated a receive share FFO. First, $X.XX newly we expect year's to increase Torrey tenants. in increase Reserve, per

signed year's as specified The the lease District, receive we contractual building, newly is to our a from FFO. At as per Lloyd received to NOI rent full agreements. tenants, be to rents including be newly in expect estimated share of well redeveloped to from cash approximately Oregon Square existing increase increases rent increases from $X.XX

year's Bellevue, is FFO City At be to $X.XX to increases as well contractual share. NOI increase estimated full newly cash rent from signed from per Center expect rent as increases. we The leases, to receive approximately a

include on renewals which negotiating will based one optimistic in cash At occur. current abatements currently are negotiations, decrease that Main, with are giveback A is we lease NOI we floor. which GSA, and anticipated the of First the rent it and

to are per $X.XX a estimating NOI cash of share. decrease approximately We

which What's base Market. from second through approximately at One abatements Landmark, at partial quarter a reason of is rent the is of rent coming in has is The the that XXXX. same-store tenant not NOI cash growth interesting this Google, its Landmark of is that XX% office

at per mostly momentum expected The cash the Center campus share Torrey Reserve to City and Bellevue, XXXX FFO. increase growth multifamily NOI Lloyd X.X% District same-store cash or of is NOI office in Same-store from $X.XX is portfolio. approximately positive

guidance the non-same-store properties. four includes our four, following Number

approximately increase our First, operations Jolla a to NOI La at is year $X.XX XXXX FFO. cash of per Commons share of at full in expected

Francisco. we at major in same-store to Beach will One tenant's expire from at and as adding lease access of building the Beach of North Property Waterfront anticipate Secondly, project rooftop end San Francisco One XXXX, the of with of remove the a the a significant the elevator is a interior Alcatraz metric, we San in redevelopment XXXX. the deck scheduled views off and panoramic undergoing in Street Beginning

and an of in-place excess decrease that is current the justifies are the The be square the tenant is estimated building. $X.XX square of a approximately per XXXX. approximately FFO cash of in to rents foot per per expiring reinvestment share $XX foot, The believe $XX dynamic we in in NOI market, in

continue Third, to from a that a a the building on work a demolition will anticipate construction space lease removed Waikele a with we Center former tenant. building. non-same-store with -- not Kmart prospective as XXXX, We tenants. anticipate retail same in commencing of as signed have same-store lead new We until we Hawaii was do in set Center the with remain building property, Waikele

new share the Authority. $X.XX Center Meanwhile, to formerly the FFO Lease to Safeway store is end Sports XXXX. per before Safeway XXXX in from NOI approximately occupied is open revenue increase at of Waikele expected scheduled in cash by space of the

XXXX, of taken property to the room refresh that maintain in keeps same world. Suites use level Embassy experience Suites our Embassy Beach of Embassy mentioned work customer and metrics previously consisting intended the in high Suites falling paintings, out Fourth, also Retail Waikiki and number due store our Walk the one were the Properties the performing to mixed

We XXXX. hope to by have quarter end the everything of in the completed second

the no change XXXX. cash with expect to flat for results use in our property of mixed will XXXX, We remain NOI

to to the will which approximately primarily Commons is Fifth, the anticipated FFO. FFO interest La approximately by decrease due million, million, of Jolla G&A of development $XX.X to is capitalization share approximately by $X.XX increase the to $X expected costs expected to Interest at related property. decrease per expense

development office getting mentioned construction square ready above. We the of tower are gross A actively currently planning Class XXX,XXX feet the and for

However, time, per nor of approximately reduction that date is developed. capitalization project FFO of respect construction, there by start definitive the no expense this to interest to share is of to be related the there with increase any at costs is assurance the $X.XXX. will our expected The interest

to flat with approximately District and La Lloyd above is million revenue below $XX portfolio. office Seven, at XXXX. of relates straight Landmark, revenue combined remain The Jolla market majority Commons, estimated in adjustments line and to which the

in did the June in X, equity Jolla we with connection offering Number of acquisition Commons, La follow-on a XXXX.

million we shares FFO approximately calculation in result, the estimate common will per share by a for X.X As shares. increase outstanding that average stock of XXXX, weighted of used our

outstanding should revised midpoint We $X.XX for revised $X.XX. weighted have dilutive of that estimated the of XXXX reconcile a $X.XX stock our per share of XXXX. our increased average effect of These FFO shares in result number approximately with adjustments approximately will of common XXXX guidance of guidance

same estimate. CapEx end to occupancy is is to million expected XX%. approximately office store our $XX Retail are to consistent XXXX $XX XXXX again at XXXX at store Operational range, XXXX and end to same be expected expected the million XX.X% in occupancy approximately which with is in

than CapEx year, improvement higher Our increased in leasing the per commission XXXX estimated million million $XX higher our operational expenditures. to resulting tenant historical leasing are XXXX to due in activity $XX and and

refinancing repurchases, in guidance acquisitions, our future always, prepared or already future As debt than issuances what we've equity discussed. any exclude repayments, these or impact dispositions, remarks from other

We analysis, numbers. as and you as share our quarterly interpretations possible of our will our with best transparent be to continue

I'll Operator' questions. over to you the for call now turn

Operator

Thank you.[Operator Instructions].

Mizuho. question first comes Our from with [Indiscernible]

open. line now Your is

Unidentified Analyst

Hey, good morning gentlemen.

Robert Barton

Good morning.

Unidentified Analyst

the you upper guidance if factors about then could wondering lower the some I contemplate color but the was talk maybe that XXXX end bit a of the the a I guidance. end, at the here, bit appreciate of on and you more range?

Robert Barton

generally [Indiscernible], end of I Keep of we're the we range the XX to Well, of out in of all. first in months the in end think a terms range likely XXXX. of hit mind the going the out. put terms range by of not guidance it's But we're lower

-- But seeing next who that there But think is positive us get we're at the we're we're range. my vantage we very opportunity likely give leasing lower in. from positive today months. is of our the hit upper sees our the positive the our the will XX the to going this point momentum future end from don't markets making least the what estimate I think of at that in -- perspective in But point that, did we're I range, time. momentum, knows best of accomplish So we're end the it's to

Unidentified Analyst

falling it, got said thanks. start of drag. the clarity because a now bit Waikiki of a $X.XX more project, Maybe it, you've the Got on, year, the

So a for bit maybe and expectation current in you the what guess little the next the I could in parse about for out guide this year, what's embedded is, year. drag then

this way into XXXX completion? year, year guess and now to I the by And over be the spilling completed previously that contemplated with to the was or it next mid was case always respect is

Robert Barton

have the take next to things really to ship longer you over Hawaii, It's spilling because In to year. island. everything

So say refresh, finished trying it's that -- lot the the there's and end to goal the a for of just room coming initially furniture done. is logistics from was have our I -- by QX timing get would whole that Vietnam of and to

of So the we by we finished. that are have will hopeful this that QX, end

So over question, yes, into XXXX. to it's spilling answer your

Ernest Rady

jobs, you we progress good very think to compare in if But very comparable we're making this time. good

Unidentified Analyst

Okay.

So -- my in guess all, the drive hotel I is, you $X.XX a project a that full basis guidance year of and year start drag within year year first perform how during on of bit the impact to that's it expectations, embedded had quantifying I said that outlook year? for the at that project FFO estimated and did that this your the versus then back next the of guess embedded this then the an question, when the drag maybe --

Robert Barton

increase is to a a of experienced XX%, the hotel, on north spalling. that with what for been $XXX. make to And and occupancy, of of that, we've Embassy up run year rollover. that, XX% the part the about the is happened because that what's to and the at spot the we've has of put We've somewhat had of occupancy beginning at that But may north try Yes. ADR the Suites -- is, RevPAR reduced because sweet significantly reserve $XXX

when of you seeing Keep you say building, spalling, we on when opening the exterior you're curtains vacation to and out. you go in don't have that and mind, scaffolding the and on scaffolding Hawaii, anticipate

You and see water. trees expect palm to

impact to as NOI was It as to it the hasn't thought rate. we but there was, had to the adjustments some been that. hasn't we significant been -- So adjust the

Unidentified Analyst

there? to weakness asset And asset Palisades, multifamily issue Thank fair what color an expectations Southern strong And if otherwise an year. be some sub-market seemed on market enough. Okay, in that you. than maybe specific then it’s the Loma big Curious for then specific, into California? next

Ernest Rady

Lomas Palisades improvement. of the we a has apartments a liked for market is providing Diego. of Bay. we great that. need the of providing would been bit in and softer facelift, in meantime, improvement still In are that Mission And a and tired, right some we the But piece we're than in have San overlooking was it Seaworld, it think needs and property process it's

work property starting landscaping. be it's it the plumbing, beautiful happen, will to sewers It do when that? the doing and in property facelift. we've it a extremely you at the we're to got want facelift. [Indiscernible] time. it, And piece it Well, Abigail, it done a give it's just a maximize add valuable, order to roofs. a We're of will one a from returns on needs the finished. [Indiscernible] to We've to just something great We've the that then done

Unidentified Analyst

next clear, or year be excluded? is to multifamily for that within just your store that the And same

Ernest Rady

I do to... want think you Bob,

Robert Barton

Yes. the We've out taken same-store. same-store. That's not still that of in

Unidentified Analyst

it. Got

you. Thank Okay.

Operator

you. Hill with Stanley. question from Thank Morgan our And Richard comes next

Your is now open. line

Unidentified Analyst

Richard. Ron got you've on Hey, for

looking just question, the… at first The

Robert Barton

morning. Good

Unidentified Analyst

Good morning.

with it had Just like the potential XXXX. you FFO, for investor presentation guys was $X.XX looked looking at out it the

wondering, thinking it's in coming provided. So lot conservative, interest the talk is maybe appreciate -- about ask I possible than bit can you're well. that range benefit low? be And La -- going too and a way, of Maybe, that that like feels that year to maybe next the guess just But a just little the guidance it it have may from high-end of another color sort of for expected. you if about you I'm a better even Jolla expense as

Robert Barton

of in but Ron. Well good morning, there all, always possibility, that -- first There's mind. keep

So, several from we had question along that investors way. the

in or we through bridge, with during comfortable on were been time, realistic road we've August, midpoint was reflected a meeting So presentations we what and with the we $X.XX. which investors, our thought at at had that the XXXX, that

months $X.XX. of we eight showed through year, So the

the and up, midpoint In it presentation, the end -- we next and that range out like our increased when our it, process do to September guidance not we -- a next possibilities, we around increased midpoint, to that's just prudent ranges that we we you're take $X.XX the to the always year. at the when but through look a and and XX of at put months from budgeting our rolled

the saying while that we achieve and the $X.XX. a So range more it $X.XX; we the put above. we $X.XX, the think not to bottom up the at important was reflected are have midpoint rock between I that weigh can't And midway potential upper

the potential -- think I there positive very on this we're portfolio. in is

And not which to we had think But we year. say right do at the $X.XX. put midpoint $X.XX the to was, most the so achieve of shown thing can to that it's throughout what is we the

Ernest Rady

over it's don't hope our to our it best deliver. to promise choice guess, If of case, disappoint. would But deliver. and strategy, be under we this promises over had we make In certainly want we to a and

and them exceed Sooner promise. meet the perhaps that make least and promises at of results

Unidentified Analyst

on like, environment acquisition what the rate helpful. you're that's right assets update What you interesting types an now? give the to most at? Thanks. can look cap Maybe you looking that maybe property Great, is

Ernest Rady

had we much money mostly is run that acquire, there Ron, to office been the look we properties. high, around, has of several, a at properties value so and that

acquire very intense, have, that competition come is the profitable. value as realize in own is conclusion, we the can is what we for the to good significantly path properties But if be so what expensive. growth, quality it if office have what that you ours to the would We that of such lead

pleased to of the very beat and more and continue find what with this as are -- with bushes try have, to quality the well. upside we with we we same So,

Unidentified Analyst

Great. end. my from all That's Thanks guys.

Ernest Rady

Thanks.

Robert Barton

and to Thank you, say Richard. Ron hello

Unidentified Analyst

sure. Yes,

Ernest Rady

Thanks Ron.

Operator

our comes And Carroll RBC from Thank next you. Michael Capital question with Markets.

line now open. is Your

Jason Idoine

guys, Mike. Jason it's Hey on for

Ernest Rady

on? is Who

Jason Idoine

Jason on Mike. for

Ernest Rady

Okay, Jason, Michael. say hello to

Jason Idoine

do. Will

you fill space given wondering, around to X.XX rework, how all the noise lease guys are up about the continuing feeling at just that sales [ph]? So and are

Ernest Rady

we're watching at continue it. not concerned for They Yes, for have upgrading we the to path it. we do a the I'm seems Rework about to work building midpoint. that We least have lease have. security provide them.

And that so that interest if, losing and forbid something any excellent we any sleep an property we a God believe have improved frankly, sleep? not reworks also in in And it. that over has Steve, product. happens you're to I'm market losing this

Steve Center

No, I feet that that, for foot marketing to XX,XXX they it's building a lease. and XX,XXX now are can add

they've all So six -- it spaces. XX,XXX in for owned foot small the

to in So very to the are it. of or we're about appears asked process also well, they And not the were to beginning be it building, doing present should that some other even completing And reason you other. that we prior upgrade TIs. for

Ernest Rady

will manage ourselves. We'll that

Jason Idoine

a ton? That's seven

Steve Center

where demand we to for Its producing. there spent, a be money market seems in the well are project the

Jason Idoine

update of you're Got guys just leasing could kind the there? on also provide it. I you if and asset Point then Torrey wondering was And what an activity seeing

Ernest Rady

some to progress, for. we'd We're to going it wished slower been certainly you. making leave that has I'm but than Steve,

Steve Center

they feet up proposals company. science in got XX,XXX We recently signed an feet customer is were and we've and X,XXX to for existing foot with They out a life another XX,XXX grew a XX,XXXfeet. which lease Neurelis,

and the coming is our away, the UTC QX. chipping virtually Class are Torrey is and we're end of in So, direction. Direct UTC A, full. X.X% markets Vacancy at Pines

at only we're Torrey prospects, as So science at Reserve of a but also life lot well. not seeing Point, Torrey

market improving feel and is the we about future. the So good

Ernest Rady

to not seems in of we're optimistic. the hopeful, and path be It growth the if

Jason Idoine

it. Got

guys. thank Okay, you

Ernest Rady

Thank you, Jason.

Operator

you. And Germain question comes from JMP Mitch with our next Thank Securities.

now is line open. Your

Ernest Rady

Hi Mitch.

Mitch Germain

Hey, you? good how morning, are

Ernest Rady

Good.

Mitch Germain

commence then that curious how guys does you guess to planning planning/entitlement I stands you for from a number number and So two, it, fund then And to UTC the it perspective, development, I'm one? three, it? number where are take what

Ernest Rady

of who Okay. answer, is that I'm that ask him Gammieri, the almost to question because he going and knows charge ask Jerry I in daily. entitlement

Jerry Gammieri

morning, Good Mitch.

with of coming process our -- entitlements code protect in now under the right is XXXX. submit are the City and a Diego code We change there the San in to

the next this the We year basically four expect to be to protect city into years. ourselves for

allowing before is of we pre-lease but first building us go of hope the to we runway quarter opportunity So to some have an XXXX. permit to our be ready in us, construction, the front by

Robert Barton

in you get me to to those to is people upgrade it's be the is just do and that, talking XXXX. Let is that, the is Jerry about the the number, of Diego code what permit vested. build entitlement then clear don't protected, But listening if get the -- can into the city we from San have XXXX to the

Ernest Rady

or Jerry? just upgrade a it an change, Is

Jerry Gammieri

in code. change a It's

Ernest Rady

upgrade. change. It's necessary a an not It's

Jerry Gammieri

Yes.

Ernest Rady

delays. leaves code more time in change The

Robert Barton

is But the vested. entitlement

Jerry Gammieri

presentation, of more the we're time going out sheet, will as the to X% a as on into not and we vacancy. million other pointed goes, we And build with build, consider is Bob And financing. we likely cash it whether as balance the then would financing methods $XXX it, his have much approaches, than market in

Robert Barton

don't somewhere $XXX $XXX But our sheet. million my it's that like range. back in balance the to cost yet. I probably X% a the from we Mitch, Yes. bid math, -- of mean the under napkin, of million But expansion probably building, than $XXX it's a -- only it that haven't -- been out it's less just of we million of back napkin it's

right in of the right growth. in market, market the very forefront it's the in thing, UTC, low a So vacancy on and that's

Ernest Rady

like it. one buy another to We'd like just

Mitch Germain

sounds that wonderful. sounds That

So you, to XQ XQ. I from Bob, me about while have to talk

that a have you like looks the it So numbers. fee term comes quarter out this of

Forever from out. bridge to terms of do XQ XQ obviously, comes XX the I to your range? hit So guidance in How get

Robert Barton

forward going to bridge the XXXX? for looking you're So

Mitch Germain

no, No, about talking I'm Yes. I'm just just about XQ. to -- from XQ talking

just Just XX? the you the in I for how a guess couple of that of There's charge took couple much negatives a -- number Forever was right.

Robert Barton

just I actually about we for We morning. heard took this -- approximately and $XXX,XXX, we did November. got paid that

a So that little maybe stiff. bit

Ernest Rady

lightly [Indiscernible] think I it's

Mitch Germain

you Got you term then a received then a office then in and -- -- that took fee and you sector, right? you and have the

Robert Barton

received office QX. sector $XXX,XXX in we fee, Term in about the

Mitch Germain

it's So about $XXX,XXX positive, right? two, Is netting off? those that comes

Robert Barton

Approximately, yes.

Mitch Germain

Yes. XQ is in should we anything of of in be wasn't -- that XQ? And that then, kind cognizant the there that

Robert Barton

nothing out our on that that. midpoint. track really We're hit sticks to nothing, on No,

Mitch Germain

you. thank Great,

Ernest Rady

Thank you, Mitch.

Operator

Craig you our next Bank Thank from and comes of America. question with Schmidt

is line open. now Your

Ernest Rady

Good morning Craig.

Elvis Rodriguez

is you guys How for doing? guys, Elvis this Hey Craig. are

Ernest Rady

Say, for Good, hi Okay. us. thanks. to Craig

Elvis Rodriguez

congratulations to Adam. And will. We

Ernest Rady

Yes. He it. deserves

Elvis Rodriguez

of there's because should Just a the think question, in XXXX in you as for portfolio? the same-store a call of it, think report the it pool. NOI, same-store and will cash of quick that entire as we it lot or end you about How moving you out report pieces

Robert Barton

in we're Well, look that about I for years, XX% of couple in sector -- a I and in X.X%. strong it X% it same-store. the be next growth is of office. should was growth we in frankly, excess multifamily remarks, And the is when in said at office mean, retail expecting I XX% think the on office Elvis, into And sector then us. the

Elvis Rodriguez

X% the redevelopment? or redevelopment includes excludes Bob, So

Robert Barton

excludes It redevelopment.

Elvis Rodriguez

Okay.

it, trending So think including through you redevelopment, where would call XXXX? that be

Robert Barton

mean, I Yes. impacted be It's be impacted. isn't not -- slightly. Retail to would multifamily going

it what that excluding break it's that it it there. at including -- of look in -- and it, not redevelopment on it's supplemental, we the not is you out If today big and

call. impact. that glad after of So think, don't you But big it's an that the give be more color I'll I to on

Elvis Rodriguez

potentially you stock with you the more be project, you or office have diversified about longer probably the Jolla think so another trend That'd multifamily do to going going And future rebalance you'll as retail you're will think you just commenced than your La forward, helpful. right. sort the be of or commence All or term? portfolio more How that and XX% office. is to question; in

Ernest Rady

we're What that. me try the categories going we pay tell don't or in to office, a emphasize too. to you work guys investors, if come to build the wealth to other REIT, if me time, in shopping the center office, wealth. And a REIT to we're build At you REIT, build wealth to is residential build opportunity a to an going and same pay

ourselves that opportunities. of we one to Right as take in fortunate the to and those of in is are have be We to character advantage as able think don't So that ourselves only. wealth we builders. been office, opportunity of now, think

Robert Barton

Elvis, just to that. add to

wealth. I Ernest retail, not right a we multifamily we're lesser think looking Where office, and stated a that's about to to are great now, add add has that we're way looking creating extent. to

Ernest Rady

are as And if and good the what statistics REIT. since apologizing increased hope apologize for than better that a our the in track continue vast been was and last -- be We industry return over the majority, the anybody went year. years, you XX% strategy, because being eight has our dividend -- multi-strategy XX% year able compound we and look record. we've I've stopped to at to this or still every public we

Elvis Rodriguez

guys. Thanks Great.

Ernest Rady

Thank you, sir.

Operator

question KeyBanc comes our And Thomas Capital from you. next Thank with Todd Markets.

Your line is open. now

Ernest Rady

morning Good Todd.

Todd Thomas

Good Hi. morning.

So I circle wanted to just to back acquisitions.

But environment. that of a it's your You and portfolio had now, the what's over doubling improved. talked has commented size capital I also a year you of competitive about previously guess four time-frame, cost the

if XXXX capital raising? investments So just for is the guidance if then curious there appetite has I'm Bob or I'm changed anything and curious in your

Ernest Rady

hasn't changed. and have the appetite to of It's we'd number Our question the consume. a of calories meal

achieve to But going those to achieve we're have superior continue objectives. to do you us and them through... results. to we produce try to And Bob, So want don't take

Robert Barton

We're In acquisitions any not in Todd factored all. Yeah. we've the actively looking. guidance at XXXX Hey

of out be job going good big looking something to to attention, sake and it for shareholders, We're our to and get Our looking. it's find value we the do if shareholder. your why every getting accretive, to its is then going be accretively looking create bring it and to to not We're for that's big. we're for

Ernest Rady

put. well That's

Todd Thomas

then? couple coming had that quarters When a into plan you of targeting? What's ago, couple last markets that the since changed there's of it what's some discussed you're that cap more changed capital over Is rate compression and Okay. specifically? just the quarters, been

Ernest Rady

make is nothing got acquisitions something up Look and groceries. makes basket and to your store going to significant not like that We've significant. with in To we sense. that changed, filling to make except has that find we look grocery Bob? the are continue acquisitions

Robert Barton

acquisition accretive. shareholder been could at you get or we've do history, and could Ye, make than IRRs look what underwrite. greater to and destroy We focus not financial for consistent That's we at mean an we look and it. you our I economy, I important look value on you sure still on where it's we underwriting. want make we regardless growth. in We're think earnings NAV you big -- pretty is engineering, unlevered on six. our really we We And and growth focused we destroy earnings. the are good very of Earnings if do.

capital We're our is you continue thing vantage cost too cost which at mentioned. of a The that I other to not point. to capital, in our enhance that, is -- we think and everybody

to job those looking. opportunities actively and our we it's look think I So are for

Todd Thomas

to light going you the decrease meaningfully not well, are saw could in projecting solid the that what Diego, confidence portfolio, I'm occupancy And pretty what on shed And gives XXXX. the you as you'll more see recovery Okay. back wondering multifamily broadly the portfolio in you're Portland in that materialize quarter, quarter you a bit just then, more some little in across growth just forecasting? if but the and same-store San we in happened

Ernest Rady

become has have over. any competitive. are control Portland Those more don't we circumstances Well,

have Palisades product. excellent Diego, said excellent doing changing working facelift a and product Loma opportunity a as on San It's earlier, In needs Ridge have for upside. Pacific [Indiscernible]. I we We has and that. as is well, we're well,

anything You Abigail? have

Abigail Rex

Yes.

to that. little a add to bit Just

star Diego softening and I San in think a terms we've across we with Diego. the X% vacancy think and seen healthy the live occupancy what Board San rates, Diego a and of being and in comparative the nice while to to five in is place in here San the X% pretty healthy about pretty star and vacancy average communities, that's rate county about to we're portfolio between that's comparative to three seeing X% in

the said, these and communities. to continue greater leasing target to We're communities, Ernest capital investing continue occupancy more hopes value. in we're will like building in trying a that it in So

Todd Thomas

little Okay. Are you come increasing across But see it held they've down? your use well of XXXX? concessions? to Should multifamily we begin expect pretty in more bit up to we to to portfolio. see occupancy a should expect build rent far, So the start

Ernest Rady

maximize year. coming We'll to the can do in what we

Robert Barton

this think product that a and in spot. is recent quality product the studio, I that, at what is that the is product new when very that, of our for $X,XXX you about I is a pricing which paper, think sweet expensive. about I've And like the of and in seen Todd, And think studio I comes our the think online. going for

thee for want rent say its bedroom, it its that start tough let's $X,XXX But which when to that $XXXX; to you expensive, achievable. mixing sustainable a up, at continue is person, it's a higher rate. If $X,XXX you more to becomes

that positive and portfolio think will that that product to multifamily continue it about our growth, in I So think -- I San see I here see right, we our priced Diego. is it. feel

of steady terms is two there In the product about hopefully we've in in away. when that's slowly product, XX%. next the within you being absorbed. in on is tell going in years goes -- we're District, I'm Portland, away. staying at Lloyd other the that an But And I can't meantime, that Portland, that but multifamily mentioned not of and oversupply calls Lloyd the

Todd Thomas

in remarks right just you And President Okay. And been I I on last Bob you comprised to COO. prepared question. for missed as you're management I team at then for you Chairman, I wondering the -- heard finishing entirely and years call. time several now. Ernest Ernest, been appointment the very came your and quite were Adam about, if the of seat just the some was beginning the commenting of though, has of and CEO and executive you've

this Adam here, this what anything into we new on his focus with if So And should announcement? I about responsibilities and announcement read I'm could there's What means find will interesting. if curious talk that just you for AAT?

Ernest Rady

it's contribution, Board, operations has No. and a made that acknowledge Adam has a well of has just role really This his I he and made Counsel. Legal Other significant Bob of capable a wanted Chief me. great a title. than the team that the just contribution in to room, is lot all good Board he than been including more and it's the handled that Bob the been extremely recognition by younger has and He been very has Adam, being who I, never with has and than fortune and this the the

don't having On to the love so fun me, if and know I hand, what do, I the I'd what and I fun. fired other I'm have do Board much

a dedicated It's all build We're with stockholders. together. us work Stick team. wealth to our continue great to going the to for Todd. we're So

Todd Thomas

All you. Great. right. Thank

Ernest Rady

Thank you.

Robert Barton

Todd. Thanks

Operator

the Would seeing do like to turn I Thank in see to call you. further And -- it? you in back questions queue. take I'm like question I'd correction; currently to the further no the queue. one

Ernest Rady

Sure.

Operator

right. All

question Fargo Tammi Next from comes Securities. with Wells Fique

Your line is open. now

Ernest Rady

Hi.

Tammi Fique

Hi.

to Just does includes wondering, the CapEx out XXXX, the do? spending that redevelopment you laid for that planning that you're

Robert Barton

not The Commons Jolla at include property? redevelopment That which La does at all.

Tammi Fique

you to in projects redevelopment I looking Kmart expect really summary capital total Okay. Waikele, spending like what development, the XXXX? guess, for just curious -- I'm just I'm the know But that space for still I -- of like just at to a do in

Robert Barton

Yes.

Kmart leasing commissions that. lot signed. a we're think $XX probably then expect about TIs the I $XX gets that where of redevelopment and new toward the to leases. have lease million And in there we hopeful And for about of We some million Chris on put

Tammi Fique

Okay, developments what so in the you expecting XXXX? just redevelopments I and total, guess in to are spend for

Robert Barton

don't be answer out that to Tammi, I front that in me. But I'd have broken offline. of glad

Tammi Fique

you little just then is you about is tenant apparel expansion you tenant, And bit? better with another a that great. in will talk a little XX replace there a the opportunity or Okay, potential, there if if renovating use, I'm Forever the just there elaborate wondering wondering you bit space. could if that mentioned could more space, wondering

Ernest Rady

would that you correct stirring, which Sully, to is the who question? answer question. means like Chris, that am that handles I he that wants answer to

ChrisSullivan

Tammi. Hi,

XX Mervyns building Center. is second floor former feet Forever XX,XXX feet the of of a Monte on that Del ground know in you So and XX,XXX

be probably of as break of space, So combination and more tenants it a there. and also mall entertainment that to say we box up a what look typical a I some pieces combination would will

Ernest Rady

of... the And we are in process

ChrisSullivan

probably for working now. been a this year we've on about Yes,

Tammi Fique

to rents Forever that will Yes, think you spending? go was do -- there up the XX then rent XX And sorry Forever it. Got Okay. I'm what there? relative

ChrisSullivan

so, hope certainly XX, gross I say. Forever lease. on to a going I'm is

I do it it. the and got nets get So better. of hope my to I've compute to back But triple to rest

Tammi Fique

XXXX last And then I in just eliminated, question, investor curious just presentation, the I'm to why estimates looks FFO you most for recent XXXX and mean were that take like out? and it the decided

Robert Barton

earnings call. are doing for getting ready report this on guidance just we is What our

is, fully we'll just on do that. on as not put do know, you is focusing point doing knew we we're that information out in what there What at was XXXX, what hope more put, into XXXX what we we time. because we only we and that baked, So The give get growth. we that XXXX information in and to is

And so as as past. you share we will we in get with a it we have consistently the clearer picture,

Tammi Fique

great. you. Okay, Thank

Ernest Rady

Thanks, Tammi.

Operator

showing questions I'd to no Rady the And this Ernest like any to further remarks. I'm you. back at time. call Thank queue turn closing in for the

Ernest Rady

we so are last for fruitful. the years have you thank as stockholders much hope, able over create for the confidence. next us for representatives stockholders wealth and our for create fun the our eight years, us your really It's of And all to Thanks to Okay. allowing been fun. to we've the and

Operator

this call. concludes today's gentlemen, and for Thank you conference participating. Ladies

You may disconnect. now

Adam Wyll	Senior Vice President, General Counsel, Secretary
Ernest Rady	Chairman, President, Chief Executive Officer
Robert Barton	Executive Vice President, Chief Financial Officer
Steve Center	Vice President of Office Properties
Jerry Gammieri	Vice President of Construction and Development
Abigail Rex	Director, Multifamily, San Diego
Chris Sullivan	Vice President of Retail Properties
Jason Idoine	RBC Capital Markets
Mitch Germain	JMP Securities
Todd Thomas	KeyBanc Capital Markets
Tammi Fique	Wells Fargo Securities

American Assets Trust (AAT) 3 Nov 192019 Q3 Earnings call transcript