American Assets Trust (AAT) 12 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Adam Wyll	EVP and COO
Ernest Rady	Chairman, President, and CEO
Robert Barton	EVP and CFO
Steve Center	VP, Office Properties
Jerry Gammieri	VP, Construction and Development
Chris Sullivan	VP, Retail Properties
Craig Schmidt	Bank of America
Haendel St. Juste	Mizuho
Michael Carroll	RBC Capital Markets
Rich Hill	Morgan Stanley
Daniel Ismail	Green Street Advisors
Todd Thomas	KeyBanc Capital Markets

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Year End 2019 American Assets Trust, Inc. Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Wyll, conference ahead. EVP, now speaker to hand Adam today, COO. to would over the your I Please go

Adam Wyll

call you, and XXXX everyone. fourth morning, supplemental information our operator. American to and Thank Trust the furnished and Assets Securities Investors over available earnings Welcome release quarter website, americanassetstrust.com. our Commission X-K. are Both of be call. week. on earnings to year-end next also now were telephonic Yesterday Exchange the section on-demand replay Form for will this afternoon, available on and the Good webcast A

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

We be will statements based also forward-looking making expectations. on current our

subject SEC risks in to discussed uncertainties filings. are our and These statements

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

Ernest call Ernest? our And fourth results. year XXXX with of that, end and to quarter discussion the I'll and over to Rady, the Chairman turn begin CEO, our

Ernest Rady

good and for joining everybody Adam Thanks and morning thanks us.

shareholder look and ranked I knowing particular, operational on and our performance back wealth. successes our disciplined I maintaining and that in past best-in-class at creating financial years instrumental As several has in the our us reflect comfort amongst our REITs, in the take was strategy

that Adam, this our our Bob has the done drivers provide been execution to Chief of elements, job disciplined them, Wyll, well-qualified the us top-notch crucial great been Adam I years have and our who's a asked I've and primary with that is believe with four And to appointed to strategy. together strategy. our been management and Officer, Operating and team recently XX have

I'll I'll remarks. call Adam of the at over please. end turn and Adam, be our now, prepared back for certainly available question-and-answer to the

Adam Wyll

Thanks Ernest.

key mentioning, been As driven have four Ernest we was by believe elements. results our

assets growth. coast and to infill coastal portfolio of primarily entry demographics, irreplaceable of an and having markets high with premier west path First, innovation the strong barrier in

financial maturity schedule, ample balance Second, X.X strength or ratio a target and of with sensible times sheet having strategy less. liquidity a debt-to-EBITDA net and a well-laddered

Third, having platform in investment, vertically of expertise real all management facets and are best-in-class integrated with operational and estate we where development. a

and fourth, single of perhaps our is element the people. success And important most our

to industry has XX We real the XX in almost various estate tenure average cohesive, years together are asset team has working an fortunate experience team executive been have executive a of sector across Each capabilities with almost a average and classes. member on and significant seasoned for years.

pleased growth XXXX, With dividends and public we've in to FFO XXXX. calendar EBITDA per year eighth and year that, approximately we each are impressively ended FFO since we report in a earned have per X% the over prior XX, share our share consecutive for for our per year, the share, year, increased we December went

look forward We and is much for continued behalf company to and opportunity of to allowing of to there you your at us manage come. we believe us Assets your thank and American all Trust, we confidence more your success support. On

Executive Center, Steve Bob the then and Properties, momentum to our now VP Bob? it year-end Office and Vice Barton, discuss to our over quarter CFO, results, our in I'll fourth discuss to leasing. and office turn of to President positive

Robert Barton

FFO X% of end the the our FFO a share, XXXX common for share night, low growth of $X.XX attributable net Last still FFO Adam. you thank stockholders and we per quarter, $X.XX bringing income fourth XXXX. and per over range morning to at $X.XX of share guidance to reported our FFO Good quarter fourth in XXXX healthy year-end per

which quarter. of first, up we the highlights. midpoint in our a required primarily approximately reserve to related multi-family expense approximately $X.XXX FFO a to project, by share $X.XX of approximately quarter were fourth And FFO two household rules. short the retail new things; per tenant accounting $X.XXX bad into secondly, we right of had debt due of to of to FFO, was guidance jump We Let's for ended our down multifamily

We bit were Let through little Late me on more XXXX. give color in XXXX, internal you up Diego on a track the performing to San and on were both projections. that saw QX Portland we multifamily. of QX our and budget multifamily our not

lower expenses. of and and approximately Diego, rent percentage FFO and than higher approximately rent $X.XXX resulting revenues, related a $X.XXX another cents to to higher San For lower operating average expected from incentives occupancy related

corporate conservatively we rents even operating guidance approximately multifamily and Portland, FFO to results believe midpoint. $X.XXX we Hassalo a at still Oregon, base on published are more lease $X.XX that within our took for tightened comfortably range $X.XX the We FFO in per XX% departments a our close growth incentives model XXXX, a consistent at in quarter the XXXX of lower our related and higher share, depth occupancy. to Eighth and fourth For in look maintain to

Turning $X.XX fourth third to activity. The to quarter fourth results, our FFO approximately quarter. $X.XX share include FFO results per decreased compared the per quarter following to the

received Jolla fourth FFO quarter La per payments in First, increased FFO. $X.XX approximately share the rental of by Commons

expenses base tax and FFO. real approximately by Secondly, operating and FFO multifamily San of estate share Portland in increase a properties, combination Diego decreased per of rent $X.XXX decrease in

tenant by FFO operations quarter. share. FFO mentioned, expense, renovation income excess share ongoing And per per approximately $X.XXX. income write-off, $X.XX cash on share fourth approximately the on earned reduction per per decreased work a finally, hand FFO Suites, $X.XX and as with decreased tax in Embassy by retail the approximately interest increased at Thirdly, the by share seasonality FFO Hassalo the coupled Fourth, previously of of

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

was EBITDA net Our X.X to measure in times. we debt leverage, which of terms

or maintain EBITDA debt Our focus net to is to X.X our at times below.

our maintaining with are we share, $X.XX FFO to mentioned, guidance of share. per range midpoint $X.XX previously XXXX a $X.XX per of as Lastly,

FFO We per XXXX QX $X.XX are be share. per to estimating our FFO share

appears the estimate $X.XX per corporate multifamily based current This still a be XXXX. is XXXX within XXXX, of for than share. due to consensus are our but of in operating to our QX in FFO model QX on lower view multifamily well guidance $X.XX the more range we conservative Bloomberg results, Our operating

further successes In Beach and Corporate XXXX Lloyd fact, Oregon comment leasing our into range. guidance QX District, as on Center have good in the Steve which Portland, in San our portfolio we office shortly, XXXX. Solana Reserve will QX Including and Campus New had Torrey and in strengthens Diego,

the now to Steve? Center, over Steve Vice our of Office will call turn Properties. I President

Steve Center

Good morning net stabilizations rent growth, absorption and coupled thank you, Bob. We've significant key experienced renewals. with through strong and

approximately quarter the the portfolio XX% XX% expiring leased, with ended office portfolio only the end through of office Our of at XXXX.

but On by extend year-over-year. XX% a Bellevue leased, expand occupancy higher existing points our and we Center basis XXX City customers continue comparative is basis, rates. we to increased much at

rents climb the seen XX% years. have two over in last by We

also us. has been for very Portland strong

square-foot currently building Lloyd early delivered are in the And at District rents buildings similar Oregon a XXX% the XX,XXX the increase XXX two be XXXX. we office building, in Our now to building nearly are redeveloping last leased. XXX seen XX% Square, years. will that We've

Square. to square & we two buildings are remaining lease we existing First Oregon on approximately renewing demand tenants a with XX%. evaluating from in market, have increase due In the addition, the our rent for other additional at blocks At that succeeded the customers in XX,XXX office and IRS Main, increased of are feet

month. XX,XXX lease to with also of for this Veterans feet, the renew by Administration increase rent expect Benefits We XX% of approximately the end a

Landmark of making to market space. In San for The significant in is Google and Francisco, blocks Both remains customers Autodesk. their XXX% leased larger especially strong, investments spaces. very are

Alcatraz with foot let of are to Gate square Bridge. we elevator-served in Beach, The Golden intentionally expire, delivered process of lower One early square-foot building in the the be leases redeveloping space X,XXX we and panoramic fully includes the rooftop of approximately have deck a XXX,XXX an XX,XXX will renovated contiguous block addition views provide building, XXXX. foot the rent At of which and square

approximately XXXX, rent period. this being reminds that in empty completed. increases growth renovation We And the during once expect are we XX% approximately despite net XX% our building of in FFO still expecting me Bob overall

great portfolio, and stands the now which approximately versus XX% we've XX% at at in made climbing leased Diego leased. progress market our San overall Finally, Class A

was Jolla has a than XX% two as year-end, La rates Commons And It initial leased tremendous on an been of of tenant. acquisition XX% leased it newest underwriting. XX% at over above our leased success. internally with sourced was weeks Our less acquisition, XX% later

market. life buildings Direct break about street RFPs to in demand bodes Del building we in just significant on La our quarter both not is A with X.X%, buildings Point and well in Mar just block This UTC Class Additionally, science sooner, users. and fourth new in Reserve ground this optimistic if to by the for of for not or currently in UTC third Heights. technology but north only the large driven our Commons, expect Torrey Jolla as respond we year, are buildings vacancy street at

a the occupies. We that signed lease company with space most recently floor square-foot at a traded XX,XXX publicly Plaza AAT of for Torrey life science

That approximately So, we take later will tenant XX% Torrey relocating move, expansions the with leased. coupled this year. to Torrey be Point Point pending will

pending leased stands success. spec signed. are leases Solana been XX% a our At two great Crossing, and approach suit now has if should program The XX% property at

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

Operator

Thank you. [Operator Instructions]

Our Bank Schmidt America. of of the first with from question comes Craig line

open. line is now Your

Craig Schmidt

Thank Good you. morning,

Robert Barton

Good morning Craig.

Craig Schmidt

think rate wanted do is? year Torrey the to occupancy Yes, see little think you more hear And do By Point. lease a is? the -- the what about end what you XXXX, I

Steve Center

comments. foot. we're just XX%, of We'll said are I deals be as doing $X And the right north a now our in at

So, we're hitting targets. our

Craig Schmidt

mean, But will space? the Okay. I be occupying they

Steve Center

Yes.

Craig Schmidt

just great. leased? will be Or been has They occupying? Okay, that

Steve Center

be They'll yes. occupying,

Craig Schmidt

estimate you Okay. the you for redevelopment the And on or Thank yields do secondly, a retail indication pipeline? rough much. very have development, then

Steve Center

numbers our publish But back-of-the-napkin we've preliminary waiting I for the those. not -- -- and capital. we're our cost Jerry of to We're tell some And we're heads construction -- done average Gammieri, we're -- we've the with. buyout that exceed we pleasantly going we're thus now. far that throughout he's you seen can ready they just don't who numbers. the weighted impressed Craig,

to we So firm before numbers hard get some any we numbers. publish want

Craig Schmidt

Thank you. Okay.

Steve Center

Thanks Craig.

Operator

you. Thank

of Our Haendel next question line comes the St. from

Juste with Mizuho.

now open. Your is line

Haendel St. Juste

out Hey there. good morning

Steve Center

Haendel. morning Good

Robert Barton

morning. Good

Haendel St. Juste

here curious your I'm you. the on for maybe portfolio thoughts term. Ernest, for near So.

previously to inclined a year, to And multifamily. growth as initiative. more You key early add you last mentioned larger getting be seem

office. it's More in a lot been enthusiasm recently, more

excited I the So, perhaps I'm the expanding most guess, you're what in more portfolio? of opportunities today, what What's you're terms about? likely you, in seeing, curious given front of

strong a you at inclined to some sorry story even be potentially but you IRR? -- dilution would then if there assets and then was for incur And acquire would yields, how growth fund question, multipart the lower of strong a upfront

Ernest Rady

whole Are you've out you Haendel? got question sure the there,

Haendel St. Juste

not will I debate.

Ernest Rady

a Okay, an that's have great question. attorney. should you been Also,

glow doesn't are but happy that First the we the as retail goes, and in retail same doing range the of come we that We're we're the that all, have, years. retail would have of like far had prior it's to a that extremely very well as have in entices retail, retail prices the quality with of not us.

and earlier goes as As issues, by for goes, residential and recounted some Bob, -- as as also our far in perfection, residential priced own is portfolio. we as have far office

results, these will Steve and/or eventually path and is position some has thanks than which we our in good we've his office the our not of We've fortune, and on be satisfactory. Portland Diego are And that in working got to in as very portfolio, we'd to been is undermanaged think acquiring do strong San team is the if but which Number not like. affecting had satisfactory, results growth. as either in we one, repositioning more

to made And bids regard, opportunities, outbid. and that look at we've so we've we several those in been and continue

whom tell we will wellbeing. we their won't get how we I'll hurt existing are I'll when be love thing it. existing we some then We not stockholders, And And the or consider stockholders. backs be there, in to but one family. it, tell you accretive, It would it want of you will wouldn't and that our finance our of

a questions. God, was It thank really great that's your all So, interest. question. I could comprehensive. And Thank remember you, the for Haendel,

Haendel St. Juste

more, bit one I maybe specifically. Portland, Obviously, a the on portfolio there And been Ernest. Thanks could, has challenged. if multifamily

you. we considering of lighten I'm development And to starting maybe to continues the be Thank curious you're about? you're the you type you pre-leasing require supply part of what more then if two challenge. should on of thinking that inclined up mentioned, maybe office start? yields there. think be levels you And would type the what that before I

Ernest Rady

Portland, the as Hassalo, it. far we would As not selling consider

cost XX% of the than probably cost. to our First is all, replacement XX% more

created apartments that that all, for has a presence in community resulted of office -- that us being successful. our those very in have Second

the continue office successful, will to apartments our more As likely that become be it's successful.

train So, to be get off a now mistake. the major would

pre-leasing If lease I signed a with some I difficult other asked tenant the as would the about, lease another we start and two be with Commons, would Diego that was La market. a and projects us, or far had that San pre-leasing a on to is As goes, say, ground, I be and reason we in, you've be building, not didn't construction, something to broken explain. for Jolla hadn't going and

space. San the Diego of market break not So, we'll a ground, is It's pre-leasing for we've to got is then knowledge, pre-leasing. be blocks to tight San market. common and Francisco how hope

rendering position be up. And think we'll pre-lease have pre-leasing, of won't up is what we we rate. coming We are a have in offer to have we to but going even What at work rental or not we adequate of expense yet the coming on elegant.

Haendel St. Juste

it. Or a should XXXX? can and that. appreciated I Are clarify one even those be guide to thinking as it. Torrey XXXX? comments earlier And the you. on XXXX in we Got thing. current of Point, for maybe I Thank The embedded that potential upside Got

Robert Barton

Steve our talking and guidance better sees the was it Torrey than Point. results going that where for No, he about is

Ernest Rady

here space as we're space to curiosity, less here there. matter we're got of moving over Just leased Point Torrey because occupying a our and

in an for company. move the and us cost space. at more be for economic move economic efficient will lower It an less it's net So,

So, it's a win-win.

Haendel St. Juste

you. Thank Okay. yield. I'll

Ernest Rady

be Very reference. become And need Haendel. you, to reference your questions. an good a Thank if you I'm to attorney, willing

Haendel St. Juste

Thank you.

Operator

Thank you.

comes of Michael the Carroll question Markets. next from Our RBC with line Capital

Your line is now open.

Ernest Rady

Mike. Hi

Robert Barton

Mike. Hello

Michael Carroll

expectations you I the the Portland something Hey. Diego? little and multifamily talk weakness in Bob, else? drove about portfolio? was a it your bit Was it what your And specifically can guess, Or San -- versus supply?

Ernest Rady

that. take Maybe I'll

Robert Barton

want You to take that?

Ernest Rady

Diego. and This particular, in location, it. is project, but San building we've repositioning. major And San for X we in the a is fourth are of is quarter And a the update weak got market. a leasing Diego, old, It's process repositioning. In usually the it's great in to

Second of my in all was mistake all, management the overloaded mix with that required.

you'll we are least In the separated can think we've And those year pleased from now be the best So, the going very at two. a I and doing with that on think results. pleased. you'll now, I we focused forward, meantime, be

Robert Barton

on quarter the Mike, to X% let same-store me add that down due from expenses two in were that basis, year-over-year in real rental taxes. increase in increase fourth And and One, a primarily estate to -- perspectives. quarter. we was

well, comes that So, XX, doesn't limit up the that is, question about what that. Prop

quarter. got Well, this there late is measure bond earlier was a we with passed that the year to in fourth that build

X%. taxes And real year so that's which estate Prop generally why XX, is this in XX% the we had increase versus cap under like a

the San at softening was again, fell in compared but in rent our $X.XXX short we Diego, had the of fourth in of approximately the operating versus multifamily look also actual, when you expenses, then was the budget expectation quarter. a we the And where to

And then a in we the had less trying incentives, lease lease coming Portland. in to more which incentives and in occupancy revenue maintain -- had Portland, we reduced consistent more those

to So your that's answer the question. really

Ernest Rady

do are I will on pleased, And are and they focused you'll be it properties. and better hope. can These great and we sincerely

Michael Carroll

the taxes, bonds expect Should that increased reoccurring in then that And we to XXXX? occur Okay. is thing? a that's

Robert Barton

for differences within think, passed leeway Yes. a we late we late forward. that we're in any and issued There that. expecting in to allows mid our But that -- range. -- going is was like guidance in Yes, that that's that -- there -- XXXX I XXXX, yes,

with we're the So, very comfortable current guidance.

Ernest Rady

in and safe that that have it in no to Is consistent going statement? resulted over-deliver which results, we Is if there's try to to we're going under-promise years, and anything, say last growth? the way Bob and eight overestimate a we're the fair as have

Robert Barton

an be attorney. must You

Ernest Rady

I. and Haendel

Robert Barton

is thing true. do to No, -- want last Yes. that's so our The we important. credibility

thing the do to so And overpromise. we is want last

that, miss is bothers And really we like that going when impact something to what us. why we so forward. want the and understand And

the is. So, we're with very XXXX comfortable where it guidance

Michael Carroll

to is provided mean, I quarter. I should know changes last there than growth. make that the X.X% to that? guide multifamily need same-store was And a to is Okay. right it guide we expect the lower be now

Robert Barton

expectation our that. I we than No, for And now was okay I think even we're internally, the it our multifamily in to down -- that. guidance, brought higher on mean, X.X%.

think up. fine to year, today. right little I'm drop it sitting expect pick should a X.X% bit then at we're is and QX, for we see I see we in So, from now. the up We'll end of where And where that

Ernest Rady

work do. which the it to And hard roofs that but going run, San the and major repositioning that's we value one over We're Diego, in something pleasant, run, will long the as there's ought -- winner. with other and of painting project In be the And to short not started a on not sewer hand, the may landscaping. outcome in the major may in to and property, a the that deliver. it's on, going the the and improve giant the

Michael Carroll

Can budget One until commence maybe you And I tenant Okay. about, there Steve, the in of tenant last that And talk you is the for Beach And can construction one building? about that then expected at out? that guess, moves the renovation? that another me. project? of what's

Steve Center

and on a construction we're the tenant them. floor, around is the third do There going to

up that. do to set we're So,

the around-- think of budget is scope, terms the In I

Ernest Rady

think we'll not-- probably I

Steve Center

Yes.

enough. Fair Okay.

Ernest Rady

--until know. we

Ernest Rady

I we -- don't About haven't got--

Steve Center

out, yes. bought Fully

Ernest Rady

a have building permit. even out It and don't isn't bought we

Jerry Gammieri

yet got costs, a costs. We're out not the fully yet street Yes, We've tendering And in this some preliminary on even for but city permitting. we we're point. do not. permit not we're at the building have

Ernest Rady

That may puts is And all Gammieri, absorb in end, the was difficulties in is construction. the responsible the municipality Francisco it as worthwhile. Jerry the a just permit. building know, take San to its our And fortunately, enough that for But strong who be delivering time all you will market way.

Robert Barton

we actually Well, included numbers CapEx have XXXX. operating of in our

top mean, leasing that's the So you And we some building. CapEx in But in for I the $XX for that, approximately guidance that XXXX. on TI's all provided in have million commissions. factored we operating QX of

Ernest Rady

out So, so-- that yet, is not bought

Robert Barton

not. that's No,

Ernest Rady

or estimate best conservative. your are Those hopefully

Robert Barton

right. right. That's That's

Michael Carroll

you. Thank great. Okay,

Robert Barton

Mike. Thanks

Operator

Thank you.

Our next of Stanley. Hill with question comes Morgan from the line Rich

open. line Your now is

Rich Hill

Hey, good guys. morning

to sure did a understand XXXX. for expectations about little in same-store believe quarter, maintaining want your NOI that down bit? views you coming call the I Are some multifamily make Just you we I your think or should last on guidance. provide

Robert Barton

we provided sectors will views QX in changes, with you If we other No, guidance. maintaining our currently well, we let multifamily along that that know. are as the all our

Ernest Rady

multifamily And whole, the is rather has perform, hope I'd downside. to advantage there also there's will and like I than as believe, and add downside. and portfolio a too The that over-deliver projected, being of upside retail some we to some the and downside and diversified is Bob There's in upside upside in as that or office whatever. under-promise

Rich Hill

it. Got

on or market? So, us you ideas any on is bad below above the debt rent that retail give space, could the if

Robert Barton

Chris, you to-- want if

Chris Sullivan

Chris Sullivan. there. That's All right. It's grocer our

some about is market. just So, going their struggles. rent They're through

there. the Center, they'll through so comes it's of it's get weather mean, I I in an struggle bit kind body it. of grocery the business, a Lloyd down counts a to It think of patterns. issue

to it. question, market. But their get is at rent about that they'll think answer I through

Ernest Rady

It's that project. an important amenity for

Lloyd we'll business. we're, there as becomes you as it's District the have have meantime, have rent. that in them amenity will they And for the a the and to we business, along. them In an as have important area. the area that keep folks mature, -- a And more that They for people so nursing say, would

Rich Hill

few maybe Got you think But volatility where to investors sort community. have and to it. a not of with it's and as And your about you Ernest, particularly high-quality on, the going you've XX just is But think from but next alluded different there portfolio, have speaking going, months? look, to velocity this about this the you to sell-side times. over quarter-to-quarter. Is a analyst is leasing right XX the that it about but quarter-to-quarter, company, small,

Ernest Rady

existing that, again? and we're we'll more small and question, have XX that we went the as and the What Jolla diversified fortunate, results next we growing public. La to it. able And was if we in we grow another hopefully, pursuing, built a portfolio eight successful the the months, the we're to portfolio, hope that wealth that's be strategy continue portfolio. we're years will for last are at and Commons be Over over have our not If since stockholders the we'll have will not, today, produce

Rich Hill

me. Got it. it you guys. That's for Thank

Robert Barton

Thank you.

Ernest Rady

Thank you, Rich.

Operator

Thank you.

Our Ismail from Daniel next line question Advisors. Green the comes of with Street

now is open. line Your

Robert Barton

Danny. morning Good

Daniel Ismail

you Good Across in your trends your markets portfolio, everyone. leasing expectations in Hi morning. concessions for and economics discuss across office maybe the XXXX? can

Steve Center

and San raise have Portland has improve. and strong. very It's rent the expand we're to expand growth. continue Francisco rents. well, and We're economics of to pleasant right -- And customers behind our surprise. really is continue leased, find a and The performing been space, we bullish of out we're terms is we opportunities raise customers. growing to in XX% existing rents it Bellevue even there. though

bullish we're So, there.

in forced is of turned and really life San Pines benefit then Vacancy out UTC users as we're well. tech Del and Heights. coming quarter science Mar the Torrey Diego of to and the has And seeing being

And so really our Torrey Reserve really, and doing properties well. Solana are Beach

getting it's So better. just

Daniel Ismail

meant big accretive and mentioned or the was Ernest, questions. word. or to backs picture lawyery, there? NAV But not of if just a financing I two just too on guess, via to whether of just maybe you I be that's bit then, do hoping can wanting FFO a point And or not not shareholders any if clarify you clarification you of

Ernest Rady

building wealth. is Our focus on always

would by of that what that we would an that's accretive. period. possible, to it for going And diluting chomping accretive. other the we're is the larger. on do, like existing what sake acquisition like next we're by the mean not be get is also if the our We'd just taking big the like something be value make backs that's We and being And words, over larger. what for shareholders. So, have acquire Bob to to at of bit. to be would the I to not stockholders In shooting

Robert Barton

NAV both No. perspective, important to growth the us is and and earnings hey Danny, to from growth a financial shareholders.

when an we standpoint, growth we it So balance -- a from acquisition at earnings from perspective, metrics, an sure from sheet we'll debt make leverage. maintain look low

an then We at against. And from average at that higher NAV we look a the we perspective, each look bar internally also measure of we -- that our NAV. publish research analyst have also year we

rate And so and of that from in we to X% FFO sure an delivering cap perspective, want is growing. on earnings a excess make basis

been, say, weighted a to an Class properties as to but looking we the can, cost your XXXX IRR development, XXX you we from you that and for it's least want plus between been, make and over has at let's basis, A And much the ours at add somewhere obviously, at we're a look when historically has unlevered get X%. financial to rule And that. want you X.X% sure take we're of as look thumb in From which average of X% capital, at. basis points now, perspective,

So, about over you're X%.

on X.X% X% hopeful cost We to range between would return of on to development. a be that get somewhere

growth. to want growth the and earnings we by we the -- which wealth -- is NAV the So, creation, represented

and we recoup short-term wealth sure the to dilution we that, growing on then growth we in our short NAV that dip that start NAV make within term, the shareholders. for the creating and want extent three-year the To period

Ernest Rady

stockholders Bob acquire path, be we valuable that you, the whatever convinced forward. we our all in with that have sure overcome I'm will places metrics the that to that to going

Daniel Ismail

last just but roll and Thanks. any Proposition one updated you to ballot we potential office your XX impacts thoughts before, initiative can on give one. this California about That's I split the know helpful. And chatted any portfolio?

Ernest Rady

of XX. acquisitions. that say we leases some maybe think, is make short-term answer opportunity from Proposition to were that, extent a the the the I And give us protect great if values, us to aberration may Proposition and extent, additional to always pass, to and an certain it a Well, decrease would XX

job it is the I to So, the our catch store and on the way air, down. put is go in a way chips few if

Robert Barton

gone majority, leases actually retail at don't if think our to the our tenant. year, portfolio not that again, all, pass an on the in the first in the impact we've our looked And and in there's increase through and of our Danny, office. because we

the think is NAV. your is, terms I real in issue long-term what of

to And it's for passes, over doing years, seven we're acquisition, we XX what that because chance points we an end. like front adding our not reason, something when or or is the whether we're issue that we're XX/XX rate that another on a next basis underwrite, cap terminal that reversionary that when look address to at NAV or adding valuation on the

Ernest Rady

well. astonishing. very see are, is properties trading somewhat The prices the marketplace we frankly, are what in course, of the And

would the our me what in levels. of certainly, market. the price if in that it's stock on current So, my they be the leads opinion, not to wonder were reflected properties at worth And

Daniel Ismail

Great, that's helpful. Thanks everyone.

Robert Barton

Thank you, Danny.

Operator

you. Thank

question of Thomas Capital Markets. from comes the Todd next Our KeyBanc with line

open. now Your is line

Robert Barton

Todd. Hi

Todd Thomas

Good morning. Thanks. Hi.

leasing in the And help incremental question, office was office FFO. the guidance, the Can previously in it sounds that the a you leasing share It you slots strong. previously anticipated. leasing beyond growth of you First us is driving had that XXXX was where the of into like provided? quarter bridge understand almost terms $X.XX what

XXXX XXXX? Can you Point. that And you Torrey the in move and little the upside at quantify lease a bit Bob, and about talked

Robert Barton

I me. about talk quantify can't that? any right don't of now. numbers to I more want have that But in the Yes, front you Steve, do

Steve Center

ours. we've higher for Torrey ourselves. I'd deal. the leases and that Point, rent of expanding performance on the projected leases the expanding of The focus terms the than that got market tenants doing actually we've In We're aside are a that we're two got from

there, outcome good customers got at it's a a We've good growing really customers, great obviously, and it's So, point. Tory outcome.

Ernest Rady

going a to we have fact. us and worthwhile, got glad worthwhile, be a was once and the took matter there living we It while to as construction waiting there. of what we're have. we're the get to there, And was But

So, forward it. to with we're living looking

Robert Barton

terms we in our same-store Todd, office guidance in for Yes, that issued QX. of

had we think I XX% NOI. office same-store increase cash in

factored we're all But out the leasing I successes we recent So of comfortable that. the mean, there. into don't I have -- have range we're that confident

Todd Thomas

though, was it leasing office Got of bit you're sounds Is a that it. push of assets. Again, here to some FFO of fair? that little some or growth, to the higher. materialize $X.XX the specific that expecting attributable X like could leasing There

Robert Barton

hopeful. I'm fair. That's

Todd Thomas

Okay.

Ernest Rady

the want that we make had please don't it. count to mistake But and experience not again. don't We've on of delivering $X.XX,

in So, please numbers. don't put your that

pleasant a surprise. have Let's

Robert Barton

Don't push number. Yes. the up Bloomberg

Ernest Rady

Yes.

Todd Thomas

it. Got to years. trying you're talked of La number of over back I'm there? but seeing could size a you broadly step of and the out doubling investments, acquisition some talking another And more portfolio you're back curious about Jolla maybe talk about opportunities just the if previously Ernest, about find Commons, had you to that the then

Ernest Rady

opportunities the We've Sure. least metrics that significant and investment out, at looked laid at, couldn't two them. Bob meet we

outbid. So, we got

And meets Bob to acquire find the we the that so fortune have has good outlined. that to something metrics we have

and there's out And lots money there. there are opportunities of out there,

like more to think if Eventually, So, than more returns, produce find will we'll bit be not; adequate. I which we'd we'll to adequate. will just quite have to some, What a the than continue be keep looking. portfolio

Todd Thomas

of look most attractive on, see do to some you of that think opportunity that sort you're terms you the When you're in in potentially then sets where opportunities markets of the surface? you're focused And the likely geographic today. at

Ernest Rady

we're of at And we've markets we've that a in all bids made two of in. Well, markets. couple the looked the

opportunities factor to for because tell And continue that what's can't we're I and look makes to we'll than at marketplaces. of each so those future see other we happen you fortunate the we opportunities, get up, that existing to do a one the the in going come in our stockholders. are hopefully, And sense

Todd Thomas

Okay. changing travel? any and And question me. just Suites for tourism just anything Embassy last those if Is Beach from was Waikiki or along bans could on all at you or the Have bookings Hotel. Walk at anything you impact at there lines? curious reduced travel at comment I all seen there

Robert Barton

seen Embassy outstanding or heard talked does We Simeon, that. the coronavirus, job the haven't who's relates an As General and it Manager, for China any impact Suites from at us. just that we or to with of our

we So, not really like of And our really that's less and one-off, from And Asia. the wholesale. that XX% say than customers have the X% China, would from come Japan. it's of I that's majority comes

one China But have them that this we've it's that -- temperature, had visitors that have customers week the or airports device me to is that of in this has not your with not or U.S. from only -- Honolulu XX earlier in and infrared interesting there scanning any been Airport. note, Simeon sharing see recently. was can they're And

so that. and they'll you what they'll if quarantine, do you is stop And go through

But we seen haven't any that. from impact

the by the we on all and wasn't are as refresh going We And Embassy May, That's the impact our with and Suite and Suites believe. on up year goal. at in -- the Embassy refresh have to do as painting. April be severe project I of this We thought the wrapped the spalling, end we last June. from spalling hope painting and

the to done on is about the -- we've ocean, way completed. tower Tower, closest the the the there, mountains of to back of Hula towers that So, is front the completely spalling three-fourths and one are which The painting. the called is two closest

to impact so until very our and won't hopeful April way we're to May, that. but think we're see what And on that. We and I get is close on the we

Ernest Rady

or done, is the and number when continuing to have world is shipped approaching Suites to being done, refurbishing safe the in performing finish all the basis. the shipped, going say, on Embassy and spalling a one the and is your and in over? the completed, is we're the and it painting that opinion, the And that this Is either furniture worst we're line Bob, is

Robert Barton

through grow retail wealth. I our it podium is the And these door, such Hilton where very main. that and enhance walk, is Yes, are continue will the the that's lawyers. Anybody an hotel, right asset Tower mean, is true. which main and such only this A in hotels and is in and on two think one -- that people fee, to may of to Hawaiian Trump for it I that. continue got you Walk, Beach Waikiki the come it's This through next that. is sweet love -- is Waikiki Village walks you There's a at spot. that's them. about

Ernest Rady

Todd. Thanks

Todd Thomas

you. great. Okay, Thank

Operator

Rady Thank you. over would remarks. Ernest closing for This concludes session. the today's call to I turn question-and-answer to now like

Ernest Rady

and we had that this to $X.XX to we performance look the our we hope that multibillion-dollar continue I our to of XX% stockholders. the value doesn't at run quarter, a last for Again, to of the the the hope over we've it stockholders earned where of continue but apologize hope And confidence and the trend last this short XX%, all years, affect return we've our differential, investors overall property. and not in earn eight happened but what over

we again, interest for chatting with And you forward quarter. and next to thank your look you

Operator

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

disconnect. may You now

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