AAT - Earnings call 4 2023 | American Assets Trust, Inc.

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Operator

Good day, and welcome to the American Assets Trust Fourth Quarter and Year-End 2023 Earnings Conference Call. [Operator Instructions] Please note that statements made on this conference call include forward-looking statements based on current expectations, which are subject to risks and uncertainties discussed in the company's filings with the SEC.

You are cautioned not to place undue reliance on these forward-looking statements as actual events could cause the company's results to differ materially from these forward-looking statements.

As a reminder, today's conference call is being recorded.

It is now my pleasure to introduce your host, Mr. COO Assets and President Wyll, for Trust. American Adam you, Mr. Thank begin. Wyll, may you

Adam Wyll

afternoon, and you, Welcome the available Quarter and Yesterday everyone. Good SEC XXXX earnings American Call. Thank Both morning, Year-end on to Form Gary. are furnished information supplemental were Assets X-K. Trust Earnings year-end our to release Chairman I'll call now over our to the of website, fourth our discussion the on and to americanassetstrust.com. With the Rady, results. turn our and XXXX Investors section that CEO, begin quick Ernest? intro, quarter Ernest of Fourth

Ernest Rady

thank and Thanks, high-quality, I Adam, the long and our us properties our prudently our and irreplaceable could you continuing platform business meet good by an of well all quickly believe on top reiterate and the We of as to well term. will for morning, focus support. earnings long-term demands nimble everybody, adapt our growth continued that strength wealth our making focus continue our to to positioned and guided our remain to accretive earnings and outperformance disciplined allow will very and contribute sheet, over and the long decisions evolving the shareholder term. your over our that portfolio on as shareholders basis balance diverse wanted support ability management efficient to to notch growing team, operating of

premium today's like like as over high-quality prices soaring XXXX. to record estate encouraged decline for we future. the our FFO Particularly, year likely see solid we the property ours, ours by come, growth real bargain costs In as property our will that replacement in we upon for a years our fundamentals over operating built meantime, are we in the and think be continued

unpredictable volatility the our since way, me IPO, notwithstanding associates. we years world likely proud cycles, and have of which in that FFO economic that's makes to events ago, growth that team highest so of our our and over face. management and and and has fact, the focusing per our And company, been to by and facing all exceeded continue will XXXX achieve been share XX In that generally the difficult we've

To about American see our of times, developments, capitalize managing we expenses over our opportunity the maintaining balance volumes eventual a me, tourism But pushing is and lease-up that will that our Trust, #X an the [indiscernible] the speaks to yet of organic ample best with including during Assets absolute Asian resilience prudently Oahu, rents rebound for and through will to of years, strong sheet volatile and growth on. dividend. do priority uncertain we these increasing new liquidity

will guidance. Steve segments, our go more various into results and Bob asset detail Adam, and financial on

quarterly X. that March an the increase to a be of an expected believe approved want from First, of by Board's say of March I and Directors dividend X.X% is will results our which of dividend, the $X.XXX our in confidence on to for XX Board dividend per we share previous is expression has performance. paid quarter, the supported of financial The our shareholders

company. to On Adam. confidence the for in continue you. at you support we allowing behalf all turn continued manage us to over back Trust, of call us American and thank our to going of Thank I'm to

Adam Wyll

among including fundamentals few. history, in operating and the results healthy the our name Thanks, financial Ernest. In and best achievements a to following were quite XXXX, our

an from mentioned, since compounded XXXX growth our a rate our share, our approximately and X% XXXX. IPO Ernest increase highest per in ever share As FFO X% annual FFO per in

net from XXXX. XXXX, increase operating over our highest NOI, and revenue or total from a ever highest income, increase ever Our X% X%

rent highest monthly for and portfolio total office per average Suites for our for base highest RevPAR Embassy ever highest and $XXX WBW and monthly square foot our average portfolio both and our our ever unit highest retail per paid ADR ever dividends multifamily our rent million. over Our portfolio, of

rents. these retain improvements properties forces path industry. our and to and entry, continue been those ours it and to in we've amenitized by our in to new capital are high the push ability attract that We with We received therefore, believe significant to the education modern the that enhance, innovation tenants, access of know improve cycles reflect are meaningful and made with part and our inevitable a more properties have tenants, remain estate achievements certainly well in real amenitize to challenging convenient of the tenants market like best-in-class. difference makes barrier how growth, Particularly and to existing transportation in resilient

of the was from to XXXX development productivity lowest most from corresponding home U.S. showed report of Labor worker front, lack and a to working which decline engagement. attributed On that its the Bureau XX Statistics in and the office of level employees [indiscernible] years,

that cultural What to and policies, at amenities, keeps pivot technology, and eventually tenants showed Xx that our companies have the gone industry help have from us hybrid another that the workplace. and objectives that is like office tenants turnover to full-time policies. fact, job that impactful almost work to to need support with away our at remote remote annual office attract our experiences is and In well-being by our report to create office the financial proving projects the operational, to companies fully will employees enhancing employers

Bellevue Meanwhile, with on QX office now week note their than employees UPS, XX X that the since at past be Market data And percentage that remote and San property to as the in seen Landmark a of our in access X/X And control week, office they points. [indiscernible] the estimates, hybrid of work insisting we tenants as days properties the evolves, to and at progress by in utilization office in at office X strong least seen end are Boeing Diego further uptick a records on work. received with manager lose their employees have in we Francisco more days have based X Portland our others from and San sure. another increasing and We've we One maintain utilization. the understandably our patience

front, retail XX% of comprises retail with just expiring NOI, X% this year. of GLA our leased are which portfolio XX% our the we about On

from We excess fundamentals home continue markets, to see spending an leasing markets improved prices. and post-COVID and for remained consumer strong steady wealth assisted as U.S. by most environment and relatively part, retail labor have creation equity savings the

we retail In significant activity. QX, had renewal

retail XX% year testament Our X.X% have deals spreads demographics. for and on on straight-line a a basis in supply-constrained and past X% to trajectory the with favorable over for densely increase cash doubt, QX on a leasing on plus comparable a straight-line a XX% with increase basis their maintained increase and properties basis dominant our a of and best-in-class retail increase favorable are basis this well-managed and markets in the which absolutely is populated XXXX. a that No trade reside all areas cash

we to albeit blended With to respect communities, rent positive, slightly Diego growth San decelerating see continue our multifamily QX. in

San blended units while in rates renewed to increase. in period, Diego, average lease reduction a approximately units saw an X% in XX% X% QX of percentage due of slow is what X% rents. at over an of leasing average our average largely increased for on otherwise prior an in from prior rate approximately seasonally pushing rent a rents Specifically vacant QX from XX.X% on to This we leases

blended concessions Additionally, multifamily to to a Portland our for lease X% [indiscernible], XXXX. multifamily on in flat Net multifamily of under saw San compared just X% decrease to Northwest we new our leases to our has leases remained rents down compared move-ins market Diego, offered in Pacific sluggish leases of as In the renewals we for being XXXX the our at of over percentage QX the longer-term fourth in at net with are in fourth Hassalo rents. push as worked higher between end effective with slightly approximately effective at rents year-over-year from now and XX% quarter quarter year-over-year the to QX. softening XX% QX are of the

on demographics low multifamily note notwithstanding with NOI we rates, as in same-store growth and fairly communities the cash X.X% As of you ownership strong unemployment our term some income among wanted costs, we to market, know, XXXX and growth that long realized our multifamily in reside softening compared XXXX. high bullish so remain fundamentals favorable to

towards coming Center, at on bankruptcy rents approvals, briefly tenants quarters. bankruptcy that terms have Touching XXXX, terms with the filed in which with of extended which remained those the our court Square end to to Del are have a our at anticipated and [indiscernible] remain Oregon on current both of to come subject we few WeWork properties at Monte

to In Oregon in fact, Portland, locations Square. our redirecting WeWork business has at all closed all location competing

at entered received we for January, payment and in guidance settlement finally, a of of building financial Diego, that, million. pleased Bob in in net office results which our one $XX to over turn settlement detail. call discuss existing the in that announce more agreement I'll And the updated a in UTC buildings regarding to to Bob? we With San specifications we're project into

Robert Barton

expected good Last to QX. at $X.XX, of approximately XXXX the per share Fourth share fourth net Suites third reported $X.XX, $X.XX and Thanks, year-ended and QX everyone. revenue $X.XX to Hotel, and quarter per Fourth quarter quarter normal stockholders income of as to FFO Embassy Adam, compared XXXX the between morning, respectively. common was to due the seasonality high decreased and per by attributable and $X.XX and share Waikiki we FFO of to due year-ended quarter night, respectively. the FFO primarily XXXX $X.XX lower season

and X.X% compared cash have cash ended the all fourth for real quarter, Meanwhile, for tax at the negative of due year the was in expenses XXXX. quarter [indiscernible]. year full X.X%, in received the QX large 'XX except combined onetime primarily full refund which sector, X.X% all a in for as XXXX Same-store ended growth fourth same-store QX and the was positive a to certain NOI NOI XXXX year-over-year write-off sectors sectors retail to growth development for estate

fourth in our the approximately $XXX approximately revolving million at million comprised and quarter, $XXX line liquidity, of credit. cash cash million and of liquidity availability of our to As equivalents had of on we of end $XX

was the XX-month in debt to basis. as leverage, fourth trailing our which a Additionally, end the quarter, measure on of X.Xx of terms of EBITDA, we net

or Our achieve net to objective EBITDA below. X.Xx maintain is of debt and to

quarter the basis. charge XX-month interest at ended ratio X.Xx coverage coverage fixed trailing and a on Our

Let's talk XXXX about guidance.

are share to there decrease a share $X.XX midpoint which all share, ending with negative taking a reserves, of time excluding longer and per out combined, that approximately our we to expected per of XXXX in They NOI X% or over in is range is decrease had more sector guidance $X.XX each Starting which existing 'XX. time our make one, it on decrease I per space. cash FFO same-store office in X.X% a XXXX $X.XX per approximately the time or We same-store share. FFO by unique Broken office excluding sectors decisions of of in share. FFO guidance X.X% discuss combined cash NOI that which view, period same-store case, FFO $X.XX $X.XX is this of in per first to FFO for introducing of is FFO detail XXXX in less make with office are reserves things FFO up and number are and expected few $X.XX prospective per will approximately are, the per share in have decrease. to share, than This point $X.XX leasing minutes, due office X to cash a each NOI actual is tenants

XXXX, Excluded we NOI, more that leasing feet is of square XXX,XXX cash our a which decided issue share to per or from approximately speculative of our from push is FFO to guidance out office perspective. same-store timing $X.XX

likely create leased likely was will to early decision Our it XXXX of revenue is first not if based quarter second to construction our quarter due it in in in the the of timing on: XXXX, or markets. be and permitting not

and hopefully the to numbers quarter uncertainty took on in decision-making we past. a will as longer under-promise each as the we continue to over-deliver our prefer done have we on update approach, we results somewhat So and based conservative and see we

approximately is NOI cash $X.XXX retail increase increase in to $X.XX or or approximately cash share share X% is in XXXX. XXXX. Same-store Same-store FFO per expected to X.X% per multifamily FFO NOI expected

to expenses, anticipating mentioned incur operating security as San maintenance that are both along expect Portland the rent and earlier, growth markets, increased and and We in Diego with insurance, repairs 'XX. Adam particularly decelerating in we

per to FFO X.X% expect our increase revenue XXXX X% expenses $X.XXX approximately multifamily increase to expected We to X.X% Same-store mixed-use cash share or we XXXX over while over our in in is increase expect XXXX. XXXX in NOI multifamily XXXX.

retail an Our at the manage. ground guidance they have partners on hotels boots and awareness prepared is from that XXXX Waikiki by in other and Waikiki in have our Embassy and/or Outrigger that own properties

in Waikiki is the XXXX. food to is labor XXXX Our to expected expected is increase to in operating for and such daily X.X% and XXXX; Hotel expected average the expenses the Hawaii, X% based 'XX; X.X% by inflationary expenses on or to increase approximately cost, 'XX; approximately as rate operating to overhead; 'XX guidance X% expected on to due occupancy increase expected and to RevPAR in is impact Embassy increase are is $XXX Suites approximately in to following: ADR increase $XXX in revenue in approximately X.X%

much from X% guests compared Suites Japan. increased Japan Embassy XXXX by note, to XXXX tourism year-to-date without expected return approximately to and to matter not in if, due XXXX been primarily Unfortunately, even Oahu. when, compared currency. in It XX.X% for than way a a more Oahu Of the Japanese our by weakness to NOI has is Japanese Hotel our the of slower meaningful the in

is $X.XX fill per two, of III. Tower Commons Combined, One Beach, properties. they share FFO regarding in will guidance, La approximately Building XXX number to and leasing expected FFO Non-same-store Oregon decrease 'XX. Jolla by these includes Square are Steve you in which

is which allocated of be allocated reserves risk revenue credit of reserves believe the $X.XX sector. let's retail $X.XX based probability by than approximately of are needed will now per debt expected million the likely are reasonable are it to These we reserves. these bad that our sector expense 'XX. reserves XXXX. are reserves, reserves during share a the is or the and talk $X.XX office in XXXX, to FFO believe not reserves Of the our just total $X.XX on more three, where decrease Number FFO These over approximately to of in of constitute that Estimated X% internal percentage. assessment about we expected reserves $X.X

particularly year, taking are to potential as Similar and to risk last the unpredictable paid. reduce conservative the amounts each somewhat in rents tenants, these quarter certain we are of view a economic environment hope with

of are five, notes, relates Number for Number approximately and being Series interest rate will F be Once is of due million on to XXXX. July to in maturing $XXX July. likely by four, the markets. increase to flat is FFO FFO increase This we refinance much expected $X as XXXX. G&A in are again, therefore, $X.XX per from share interest expense rates the to modeling decreased increase we expected to the the are less XXXX. million than the conservative X.XX% X.X% in that be volatility to which Hopefully, the

buildings net net FFO XXXX. This XXXX. per reflects straight-line Number litigation a our per the decrease share January a on XXXX, received we increase Building UTC net Eighth one XXXX. in reflects net this January settlement $XX at FFO $X.X offset the difference The in million will mentioned six, GAAP settlement in increase on in approximately XXXX will basis regarding over adjustments million Adam, rents FFO primarily FFO Systems $X.XX of of or to building which by by $X.XX in $X.X FFO million. share the specifications Number in regarding Hassalo related existing XXXX, seven, by received or $X.X increase million FFO we settlements approximately for for in payment which

per decrease when FFO midpoint in share, These be the XXXX represents FFO together adjustments share. over approximately XXXX added net will per $X.XX a

the earnings of date believe that range. the possible do of upper perform While we towards this it is that could the guidance best end our we we XXXX estimate of this guidance call, believe as is

outperform less we by rents need occupancy guidance see to increasing to first, multifamily our than order do and/or budgeted. In expenses continuing to and that,

and Secondly, retail the we through the office year. to tenants continue rents pay that reserve for

And less occur to the return than Series travel of are a be Third, expense additional speculative see optimistic to and cautiously on meaningful about. X.X%. Waikiki tourism fifth, this year. to our and from office needs of Fourth, needs QX which guests, F QX we needs interest leasing notes Japanese to refinance in our

to occupancy office our same-store XX/XX/XX our modeled at XX.X% have be XX.X%. office to total and portfolio we be occupancy Lastly,

We year-end retail at to modeled 'XX. occupancy be our same-store have also XX.X%

to Our for be million approximately operating capital the expenditures is year-ended $XX estimated 'XX.

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

continue to reconciled earnings are I share supplemental will of our any our like financial also note our be release that as you financial NOI we've information. We results non-GAAP best transparent interpretations numbers. as discussed to to our in analysis that want and briefly and our possible quarterly and GAAP measures with

the Steve Office Senior our our Vice a for Center, to now Steve? I'll segment. Office Officer on call Properties, update turn over of brief

Steve Center

Thanks, quarter, At dropping portfolio move-outs to was Bob. our XX basis leased, XX% office points, known due fourth the end the primarily of Portland. X in

we move On of move rentable Lloyd on the basis square increases of rentable XX.X% over basis on feet Center out a feet backfill out, straight-line X.X% for XX,XXX XX,XXX Tower out cash for first square have the new signature to a the already leases and deal. on with

On into square at vacated a tenant an live the we potential downsized construction. tenant. XX,XXX through an from second And XX,XXX-foot out, full floor interest occupied floor corridor remodel move feet from rather Lloyd in a actually that and already rentable XXX replacement than have approximately the full

executed rental approximately Netting a totaling Starbucks X leases Commons out leases X Main. XX new we new approximately in the First basis totaling basis restaurant increases totaling and a office XX,XXX fourth comparable of renewal cash a at and & executed retail on and Meanwhile, a those III XX.X% executed lease feet feet, La follows: square noncomparable rentable on included square Jolla rentable straight-line rentable as we XX,XXX approximately approximately X leases we leases X,XXX XX,XXX quarter, rent square leases, feet. XX.X% and which feet at with executed square we for renewal

is approximately relatively XX,XXX strong was rentable as square leases date quiet net start. a square expected, totaling are square approximately deals XX,XXX have to feet, feet The square a lease net on XX leases feet are totaling with documentation rentable QX a tour on cash feet on While XX.X% basis. which tenant. prior XX,XXX XX.X% straight-line over no in prior a which cash straight-line increases we deals Approximately have absorption. feet, XX,XXX with rentable approximately and XX,XXX to And approximately proposals new leases already remaining at is a basis. is feet XXXX activity rents of We've basis executed XX,XXX basis rental in off play is And XX,XXX increases square rentable XX.X% additional square absorption. with X feet additional of comparable and rentable increasing. we on of Approximately rentable square and were XX.X%

Commons III Jolla Let's for talk a moment. about La

a restaurant As San French earlier, acclaimed mentioned with partner of we in wing. Travis top most restaurant the tower's of chefs signed [indiscernible], restaurants and concept to Diego the X country's one Magazine. [indiscernible], in new lease XXXX's a one open

by premier designed with Health permit. and Diego this underway Gensler Layouts is next for center fitness to San month amenity. city fitness for Our into construction be commencing of the operated by Fitness are

tower tour albeit a bit out activity leases negotiation and for and is X,XXX days. in more Our the approximately first we decision-making have is several for increasing, stages proposals time feet, of these office taking various in signature square new

are is rates and top-tier proposals very Tower a for scarcity healthy, of for new approaching rates pro our remains evidenced Tower X, there spaces by achieved Nevertheless, as and the X. made the forma market which recently in UTC submarket

just rolling to square X,XXX feet. XXXX, average of the new X.X% While X,XXX due being in down with conditions, the with to rentable activity deals we current the deal the by size approximately square remainder portfolio year-to-date size we rolling average feet. approximately approximately We're are and of is per immune additional discussed. attrition And signed have leasing of given deal of to attrition XXXX, approximately not the offset X% in the waning continued

a with As focus disciplined Ernest focus. business decisions making said, we continue long-term on to

both these Our negative despite continued our because stickiness the will our of portfolio initiatives performance launched stubborn drive office quality, we in turbulent in the premium strategic to NOI headwinds. long are those flight XXXX tenants new spec stability despite that and believe exceptional amenities and for and rents occupancy early We investments suites, experience achieving and press existing term. times expiring created by new customers attributes and drive the leases with growth for solid market through

important also silver of to to hybrid home, work to linings granular exactly that's the office observed the be [indiscernible] and what challenged note change the call I operator is think work I'll though remain from that can markets with over back and the Q&A. because own. primarily likely secular level it's to at continuing turn now and a premier market we for perform, to

Operator

first Our from with Instructions] [Operator is Capital Thomas Todd KeyBanc question Markets.

Todd Thomas

office feet around and a new can bit little retention absorption a you about guess, You the what you're in question, assumptions bit year-to-date just around leasing you bit talk the appreciate making little talk XXX,XXX mentioned, First the detail, the expirations I a about and the square detail, I more what's Can and net been lease Steve? address and there. signed pipeline? little more of

Steve Center

Sure. Good questions.

you're it With new was First a regard seeing leasing, quarter. to the commitments. all, longer-term of light

year-to-date, feet, weighted pending XX average lease And months. XX,XXX done term XX weighted XX,XXX the feet of term months. the So for average is is lease the the

up So longer and step we're seeing tenants terms commitments. for making those

that's So for us. exciting

that think, quarter do was past this I legacy leases. remarks and they shorter-term that report places reaching your crossing don't some age noted, like in tenants where in retirement the smaller salon want from go We your are term. long to You have

customers. those X- we're some deals So X- doing X-year with and and of

just what quarter-by-quarter, we're depends just so facing. it And on

rollover we existing of spaces rolling the already going see, with for see, tenants or we're tenants on let's let's -- vacant. of in backfilling X/X XXXX, about renewing we are either play space terms that in have In know about

well already on engaged that. we're So

achieve to really we amenities. we've continue got great push that, good premiums to Beyond properties -- -- it's we rent keep rents and we're with because able just

So good. we feel

Ernest Rady

us. not have X for things Todd, but easy, It's going we

The does first job. excellent is Steve an

are well second have And well. to The we're enjoying. third we think located is I have as excellent thing And thing allowing us what and the the we that do properties what's in an financial the this and that's amenitized. stability the well reputation we promise performance marketplace is

Todd Thomas

in office expirations think but portfolio, Bob, in lease it, they 'XX certain the I of can then, embedded the are sort sorry certain the And may office in assets this, you year-end? talk in Are you What's have I or about concentrated if missed submarkets? mentioned occupancy expectation at guidance?

Robert Barton

in Todd. Yes, guidance, the

people So the in here in for up to it And permits, that mentioned occupancy 'XX. the takes from pushing what our to same-store seen model XXX,XXX worried not be call total is but longer longer decisions decrease that it in about One relates is that make office at worried, office feet modeled and we've leased be square do in the to that, And across. to Beach it our we combined if between portfolio -- coming in of XX.X% out -- that with for our and X XXXX office to not -- XX.X%. just we've occupancy this we're takes

guidance for we promise. And over took to we that a that was 'XX the on out do to right What the approach don't want that. thought by do conservative is pushing So we approach.

Steve Center

Portland rollovers rather is San question terms than XX% year. just rollover [indiscernible] by is XX% the Todd, and to answer in occurring, Diego, 'XX and for XX% of of I've the 'XX in your one where in Bellevue. in both got

evenly split. So San Francisco lease it's rolling. just kind is one of

been and X in XXXX with leases it. suites those one floors suite, So spec got already. tour intent good got one result And then we're -- Diego to backfill of got we've a just one we've rolling recently, with to a activity. San last strong. letter the of deals, and and clear [indiscernible] the responded Portland and We've of already we surprising, Friday, Todd. lot from really out has is and tenant we X of had floors spec May of proposal we've of had other the -- really And our activity

floor we've Lloyds that that the tenant backfill XXX. full floor I and So -- got full another mentioned at may

diving been has surprisingly the these Portland rents. not we're getting premium [indiscernible] really we're So -- on strong. for are rents, And

Ernest Rady

I ability as important a [indiscernible]. the think gives perform as commissions are tenant to that buildings questionable other and their lease even improvements some of far for us

Todd Thomas

Okay. you sort the related said guidance, by I increasing I in talk That's And regard largely then $X.XX. the Bob, is decrease and the to to expected FFO schedule for Can burning with about capitalization helpful. guess, and you you know cost completion capitalization of just and little guess, I One Jolla cost non-same-store like of That's, just to to, for back the cost La Beach where it further those expenses the What's date as pertains schedule March. primarily a assets capitalization pushed bit impact? to terms X off.

Robert Barton

we got in back Todd. Beach, the beginning completion of for Yes, August. certificate One of so question, Good Yes.

in so we'll we'll the of the the what have in capitalize continue we is real end So 'XX. estate to do taxes until July -- the interest

from of Xst January Jolla the of Commons, La -- starting For we basically 'XX. January end 'XX until from are the

to have in because of be But building security 'XX should the capitalization the all -- creating 'XX, is to this of terms continue way $X.XX. and the what's handlers, operating and So real the the also it conditioners, that's expand interest the during the that's in we just causing next keep cost to year air have La estate the causing taxes. that now is of we Jolla the $X.XX what's Commons is

Todd Thomas

Okay.

-- million be you the litigation $XX you received said just just Okay. you so impact Got received was so January. to then, $XX payment year-over-year lastly million. the it. that And Bob, clear, in -- but about January, that in

that XQ results, 'XX recognize $X.XX is in So or that right? that's in you'll guidance

Robert Barton

Correct. Correct.

we 'XX, received $X.X so million the year 'XX, just So we reconciling million, -- and but received that's 'XX so last what $X.X coming taking yes, in reducing you're to on of $XX million.

So is increase the net $X.X million.

We will January year recognize of the first million quarter. that or this in $XX

Operator

is with Stanley. Morgan Kramer from question Next Adam

Adam Kramer

kind to to well. I the is the just end suss end, guidance try high the in everyone And hope the both maybe kind low of of conservatism and to true embedded what of of wanted I cause could some embedded come about into ask end? as of doing out kind kind of assumptions high there's any versus if kind there low and the well?

Robert Barton

Adam. standpoint -- mentioned more script but the that growth thanks, XXX,XXX multifamily being that, we're But expense a be successful will that if bit, mean, which multifamily I higher hopeful pushed pretty Interest that little We we're having if on a of. refinancing, out additive, on the fruition, much, rate we it we're mean, obviously. in just I comes that and leasing to from lower that conservative year-over-year. is Yes. being

So have to but a $XXX. getting are at of range end X, of just those shot we the high the

Ernest Rady

we is will I that Also the successful of those all is San Jolla III is course, upside, successful. best challenge. location. on mentioning and the you Diego in a La be I in Commons it the in big best believe is reserves, collect if if market building were anybody leasing It's just the building But think

Robert Barton

we've purposes, guidance out. that left for And Yes.

Adam Kramer

No, it. makes sense. that total Got

kind are we today spend then given about and net just where think to redevelopment then an spend, debt the walk of timing us us the the and balance sheet. bond EBITDA, what you will just rate know to And on where you remind Just future remind this development offering offering on get? left mentioned maybe kind potentially were maybe in and debt-to-EBITDA think through on you would of given I for potential just of of acquisitions, if you about when kind bond do you kind to year. do offering. of kind Maybe should net trend? modeling how think And kind for today us of

Ernest Rady

We this of successful have until And bond a rest the to Board of -- a the odds are have a getting of it add favor lower time -- some decided the rate to the anything in wait is cost us expires. has the terms what of if in and year we to do you Bob, that? of would picture date. until that issuance, Board more the

Robert Barton

Yes.

answering from beginning. start me Let your the questions

We to time you've going Steve's what month big will vary of comments on That's terms about year. III. X.X a just in to know change X.X throughout down leasing Commons I heard he's think marketplace. a make to is The in XX of matter a to the really up seeing EBITDA key net the were it's Jolla La getting and it difference. trailing the debt and

terms pricing, -- of we've lot there's a In discussion. of

in possibility exists of point I could so And be the public that today, in in lot We would in would the we that July market it mid-Xs. somewhere we that range. to at quickly. mean, of have guidance the $XXX in credit a And volatility, things X are We've modeled optionality. because our priced change months. the for favorable due is One in 'XX. use that million 'XX, line of X% option be hopeful At comes the we'll rate our the in that be just on time, first But X.X% was considering time. But quarter then go that you'll about back probably the that debt we're probably see. if the

Adam Kramer

when Got And the kind is only that That's about tourism. see kind case? shouldn't and Or one, really on What's could a the think really maybe there? that just of kind it. guys. is on [indiscernible] just you and maybe kind timing last something the of view of of full and recovery base Hawaii helpful,

Ernest Rady

don't best out, as But reputation. Do property. an it. it Suites Bob? don't the because over you Hawaii have eventually, keep know excellent any answer has in the Embassy we Well, Bob is a recover, fantastic shape, We is something, add to control will we pointed first-class want really

Robert Barton

Yes. about as XXX. be pre-COVID it In high XXX XXX. used to Japanese coming at XXX. as down It's down Adam, It's the It's gone XXX. been sticky to to yen. it's to really,

to guests there that's factoring our additional that. that, So an cost Japanese are --

when we saw percentage. a So a Japanese but were seeing much it's at in last the Hawaii over team time and there, we end guests December, smaller of our

know, we as we that we mentioned, this time -- just think think, when at know Ernest timing it's a that it's don't just that we don't not So that occurs, know matter we but point. of

Ernest Rady

the not if the revenue Japanese. extent, void but has the it that to In with would were market domestic the meantime, filled same some the come

Adam Wyll

Oahu levels a of XX% said is last at Asian this the about the to Adam. tourists yesterday were saw I report that pre-COVID year. Adam,

So plenty room of to grow.

timing uncertain. is Just

Ernest Rady

must great phone, going a the things be Adams We got it's X on -- day.

Operator

[Operator St. Instructions] question from Haendel The is next

with Juste Mizuho.

Ravi Vaidya

Haendel. doing guys the on Ravi I all you hope is line for well This Vaidya are here.

same-store Just negative office Or the the the projection? XXXX? think negative? office same-store what's remain this will the timing of inflection of you expect you it kind speculative portfolio. the year like about leasing? driving Is question an do long back a How of And do in the into half

Ernest Rady

to Steve, I've really Steve I That's got that the and question really feel? question a know. have to ask, good you don't answer do because really

Steve Center

isn't 'XX municipality on to we on Bob well is QX, X you it lease Well, take months just because on really out the our signed construction X by X it's taking can [indiscernible]. months depending to remarked and -- in permit to as the -- hit up depending if comments, a and pushed on the it

That got -- to So ready we're smaller I given suites the mentioned. just we've more that of the you, on much that with we being should be timing erred side But happen go, are just and being caution conservative say, regard. in I smaller that quickly. said, honest leases those smaller to and could

Ernest Rady

we're to in, as the And we're anybody. well think statement? doing fair safe it's say that markets I a Is as

Steve Center

say we're doing would I better.

Ernest Rady

happen, So can is Steve going to it if happen. make it

Ravi Vaidya

it. Got

hearing pricing how unit landlord conversations about and dramatically kind We're within your multi the increased Just power. incremental what's the sequentially, a average that supply your broader Is bit. portfolio? multifamily broader per weighing here it's of but portfolio, happening pretty discussions decreased occupancy and on rent of

Ernest Rady

I'll is Abigail happening going revenue our that's and things expenses up, then the side. answer of let one are Well, the

Abigail Rex

online to San came were X,XXX that In market. the there rental Diego, approximately units

little are renters rents our offering bit So managers decreasing been property competing for have renters lease-ups. a to new are as their fill because trying concessions

our reposition the we're we great rental So we're have push and trying residents, great for here, continuing The big that, experiences rates, they team we're are to mentioned multifamily the and properties, offering with to them. competing that although floor fleets.

continue best as So pushing we're going the given as possible market. to

Adam Wyll

slower traditionally leasing QX is Ravi, our And for a period multifamily.

mentioned, has Abigail as rates so occupancy a bit. soften little And

Ernest Rady

costs is costs going insurance labor pointed happening up. up more out, as going see and competition there's we and Abigail What's

but produce likely And XX they've if will the properties. comparable you So next squeeze, years, there been XX at the years great a hiccups. it's but a be results, will very look and they're last bit profitable of

Ravi Vaidya

it. Got That's helpful.

tenants more Just are many demand some one you more here. the Within about and your power and retail how risks for portfolio, of your talk can your tenant -- space. moment? pricing -- credit what is How maybe [indiscernible] at watchlist retailer you

Adam Wyll

I are heard script, They're as Ravi, properties well. now. in think right you the in retail our performing locations dominant

there's of So interest. a quite bit

retail Of of our course, we peers. don't as have as properties some many

whole we lot don't year. have a this So expiring

that's feet, on fact, XX,XXX incredibly which think one is one performing we year square have well. over Alamo roster at Old I is Navy's our of In the left tenant only this Quarry, which

So right perfect, trending retail we're feeling We but really good know the nothing portfolio well. about is everything is now.

for shake been little You emerge may say, with that knowing with how things -- challenges. not, guys retail. a mention not we trying [indiscernible] we're put just successfully [indiscernible] having those reserve conservative, knowing we they a around still Bob if like not mentioned some or reserves be have example, to out, but have last more heard a have year, around has some deal we we And little

those, hope rents we We they're around We are on but We little locations. guys. X those may be currently. a we those of have reserve put and wrong on current

so small rent on. Carmel go out the Plaza just we that a to hope little keeping on finances. put format through and what -- them them, when these and figure figure their We And paying keep are we're out reserve we them. then eye try and we they [indiscernible] renewed are Mountain probabilities have we But just an one they

way a really under or not. being we're their whether properties. said, our overly we on over numbers retail we'd own otherwise, can analysts promise about or feel investors conservative and Bob it's for run rather But deliver. like But So good

Operator

Rady concludes closing remarks. to This like conference would back turn the I our Ernest question-and-answer to over any session. for

Ernest Rady

"When competent get thank get My all tell through this going." we your perfect who but Again, and in was tough, well have interest. your past as the late properties, as great a else. been Things they and father you used have management anybody a the not anybody very are and gynecologist team, we'll for times better attention than me as as toughs get hopefully to liquidity,

you thank and your interest So for your again, confidence.

Operator

today's presentation. for The you conference attending has now concluded. Thank

You disconnect. may now

American Assets Trust (AAT) 7 Feb 242023 Q4 Earnings call transcript