AAT - Earnings call transcript Q2 2024 | American Assets Trust, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to American Assets Trust, Inc.'s Second Quarter 2024 Earnings Call.

As a reminder, today's conference is being recorded. Please note that statements made on this conference call include forward-looking statements based on current expectations, which statements 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. Yesterday afternoon, American Assets Trust's earnings release and supplemental information were furnished to the SEC on Form 8-K. Both are now available on the Investors section of its website, americanassetstrust.com. It's now my pleasure to turn the call over to Ernest Rady, Chairman and CEO of American Assets Trust.

Ernest Rady

Good morning, everyone. At American Assets Trust, I can assure you, every strategic and operational decision is driven by our commitment to maximize both long and short-term value. in in our to our sector. once continuous ensuring real remain in reflected balance a irreplaceable particularly again is QX estate, market they and markets. In sentiment amidst sheet investment optimistic the exceeded dedication expectations, our operating office much maintain efforts robust properties, XXXX, even This our respective of fundamentals pessimistic the the in commercial enhancing surrounding upsetting Very me, frankly. to

more, pleased highlights once our people, growth Adam Wyll, to to drive the remainder and properties, raise quality now our of Our our our trajectory who's confidence of strong our ability performance been prompted our earnings guidance with and in team XX has creation. On of us long-term wealth us years, full-year XXXX. right? the who I'm announce of our shareholder underscoring for the for exceptional This that expertise the note, that success exceptional

Adam Wyll

Correct.

Ernest Rady

a and His XXXX, good contributing right, our goodness, to transition invaluable lead assure Board understanding X, I'm seamless. and organization (sic) joined and of all toward X expertise, Adam? I and his Congratulations, again, will success. the Thank the industry to for our our and in CEO You Executive Board were Meetings natural XXXX. President deep on our success. our stepping January American an to to part team, January COO ability Adam Chairman our role health, Adam. of Trust, To you that confidence company that at will [ assume skills will be want is of and executional our role I into portfolio promotion progression strategy. and Assets of to of continuing integral decades. thank X, investors CEO estate on levels real thanks for both reflecting stakeholders, been and this the us him leadership, be current and Our been has ] has the steer when Adam. Adam's you X, CEO have continued in you,

of results this team's mutual for share various talented, continued success. support will shortly. your has Executive sense respect, cohesion, long-tenured remain Abigail I'd in our paid our CFO, at highlights the collaborative at strong on challenges The when fosters them I'm and express guidance Bob, and your Chris record allow suggests financial steward another cover and our the Management strong he trust dividend decade Additionally, Directors our approved Adam, to enabling on least. Team and for I'm which intact, announce XX of long-term, him sincere September on drive quarterly Board's emphasize innovation. My a and will X. company. be spirit belief like he and gratitude September has including dividend who Barton, confidence to of to us and He shareholders continually AAT incredibly will experience, performance effectively financial to pleased colleagues tackle X. Bob the was This Steve, of by update a impressed joined our third Board to $X.XXX our segments, quarter. asset and first, But decision per dedicated,

future over into outlook. dive Now, quarterly commence a I'll our call deeper to hand Adam the to and performance

Adam Wyll

my also have Bob's for exceptional on I'm my in team. development the the CEO of well spirit, start but Ernest. I'm entrepreneurial placed Ernest, and also to only management mentorship colleagues the which are our you we for leadership. appreciate thankful management of as team, for grateful. pivotal have immensely trust, I on as your Board acumen support, leadership, business take sincerely role Thanks, all my for been not at XXXX. honored entire the visionary and our

Our the Ernest navigated over the resilience we've many Teamwork numerous daily a at the and thrive successes and challenges collaboration has of fostered set celebrated as to Trust, sense years. tone thanks us, top. true among at family has American Assets

results. Turning our to

unpredictability, volatile we meeting in to This we performance us across again economy, it operating once mixed-use real all to business what particularly including demands control. diversified adapting and delivered and retail, is properties. in and times on quality our a Ernest market mentioned, office, segments highest crucial As economic focus for evolving can commercial In means estate. strong of multifamily have portfolio, of the

confident will proven and markets. We track high-quality platform steadfast that overcoming estate have a the of operating record are despite financial portfolio and remain real our we resilience, with challenges volatile

forward, will outperformance. financial we strategy base long-term believe will to decision-making continue our drive actions and Moving we on

On utilization tenants that and QX those our stable to remained office indicate of has usage the office estimates front, relatively from our QX.

Bellevue that to XX% Specifically, mandates these San XX%. more known and from understand San increase were north nationwide at utilization while levels. by utilization we with once office Francisco XX%, can and Diego experiencing just and at XX% rates are is tenants XX% Portland tenants, driven We of San by about implemented, Landmark, our anticipate existing pre-pandemic between X anchor that return-to-office largely a year-end. Meanwhile, few figures of Francisco

our are and competitors in amenities to key leasing we mention Of are the utilization, the XX% In quality location NOI, differentiators sector, the our represents leased. the to currently our course, submarkets. we and about robust our of higher portfolio XX% not of retail compared which buildings in efforts office offer

and renewed We XXXX expirations year nearly begun renewals. executing lease have successfully our this on all have

quarter several on a cash a over anticipated, our on a transactions. a with have comparable continued increase X% and XX% As leasing increase past basis positively straight-line spreads QX basis for retail years, trend to the each

retail often properties. at are consumer our spending asked about We

space given spending limited vacant at demographics limited our are not supporting Foot growth densely very submarket. for strong, believe with shopping more we our we properties, While well-managed top-tier supply slowdown, in potential insulated our from centers. especially traffic populated completely has in demand resilient areas the favorable a surrounding that is ongoing remained the consumer the

a among of X achieved portfolio our highest the rent IPO, that QX per retail its peers square retail top in average base the foot As we which track. since our result, ranks

prior our Turning specifically communities. and our is The XX% QX portfolio units leases leased occupancy due Ridge that of We were the an seasonal Pacific of average a of offered. ended lower increase dip rate an Diego minimal a rate X%, of in saw units to approximately average rented at the occupancy multifamily of than apartments. that experienced at mainly for largely to XX%. at while San tenancies percentage our for X% with of an due XX-plus renewed premiums vacant concessions note to expiring We percent average increase students move-out with X% base over rents, holdovers, prior month-to-month blended resulting in rate

rents, our stronger Eighth Portland, spring community in has XX% in leasing our QX, offered. move-ins Hassalo flat slowdown allowed percentage blended the at renewals, steady multifamily with began year renewals. In new QX lease and us in to and we increase on holding season a on the at the concessions summer on between rates rates, and While with maintained especially basis minimal

QX. flat optimistic achieved slight noting positively still worth While an it's increase we had at highest Portland. prior portfolio hoped about multifamily has represents in over for we Hassalo, improvement begun in rates are blended that our rates, and this QX its we quarters sustaining a our momentum. Meanwhile, maintaining our QX, for ever now XX% net in almost saw same-store year-over with to QX NOI average year strong increase base year-over-year effective multifamily XXXX. X% portfolio rent IPO, our collections rents in very are higher entire as And QX since for compared

corporate highlighting operations Report our XXXX QX, Sustainability we including and and governance topics, various on our social capital. in Finally, responsibility, our sustainability, showcasing human and vision released initiatives environmental

can results in I'll it detail. the and we updated to guidance hope You more website, informative. With call it financial on turn to find over find discuss Bob and our you that,

Robert Barton

Adam, Thanks, everyone. and morning, good

I group pleasure the which well-deserved, it's congratulate promotion second want many of American Adam on all, I night, all years. a of and Adam, shareholders FFO family quarter at creating to great forward per for Trust, to having over his more Ernest working wealth years we focused First reported look fun with on we a our while $X.XX with tight-knit it. Last 'XX to been of working and and of do share. this CEO, Adam professionals is Assets

share. income to Second quarter attributable XXXX $X.XX common per was stockholders net

Second $X.XX quarter share primarily FFO per to XXXX, the by compared decreased FFO of first to XXXX things. approximately $X.XX due quarter to X

one-time per as we a previously QX First, settlement was approximately $XX received in litigation second by share, million which approximately the may FFO of reducing the per you quarter. FFO share 'XX, in recall, $X.XX FFO $X.XX

our 'XX FFO QX Same-store X of updated approximately combined approximately updated QX properties as together for each quarter. Breaking growth share contributed QX $X.XX it to properties of third, outperformance was the FFO 'XX $X.XX that $X.XX not compare sectors and year-over-year cash 'XX. multifamily our all per 'XX to guidance. outperformance in in follows. our was included not previously segment XXXX taken per FFO in contributed to share These our is second items from NOI previously in retail X.X% in included by And the out share was reduced that $X.XX 'XX FFO for 'XX guidance. per Second, QX QX in

related primarily Our Bellevue. contractual and same-store rent Corporate San Crossing Solana in flat lease due renewals in NOI Campus to to QX, in was our East abatements at III office portfolio's Diego office

Monte Beach to higher in Monterey in Center Towne X.X% primarily and our Center Our Oahu, was Del due retail NOI at portfolio's in positive same-store Hawaii. in Diego, QX, Solana rents Centre Waikele San base

Ridge. Our was primarily primarily in Embassy particularly Diego to Pacific positive at positive and the Waikiki. higher-than-expected our mixed-use at portfolio's, a multifamily Suites, higher At due X.X% revenue was NOI revenue same-store QX, NOI in to multifamily our San QX, portfolio's expenses due X.X% a properties, lower-than-expected

$XXX comprised on to QX XX% credit 'XX. the 'XX, of line million at quarter, QX matured drew on Liquidity, million, pay was off we of million in liquidity credit. Subsequent cash to was on NOI of $XXX in July to approximately that equivalents the end notes approximately $XXX in Series cash $XXX F our down in end, availability line $X.X XX% in of approximately $XXX $XXX revolving had compared QX approximately QX million and to $X.X we to second the million paid compared $XXX 'XX. to was $XXX RevPAR million occupancy compared of and quarter of our 'XX. 'XX. ADR compared XX. QX in was Specifically,

leverage, trailing measure which quarter, basis. debt-to-EBITDA of quarter net X.Xx on As was of we the end terms our on in annualized and of basis X.Xx a second XX-month the a

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

end fixed closely of we to basis. monitoring manage the the the note, both trailing the our and and access capital for Please on coverage coverage XX-month X.Xx this basis from action interest many taking sources, ratios while upcoming an markets We anticipate Our year. are debt debt to annualized were charge quarter have public we on maturities. before

our Let's XXXX about talk guidance.

We had our X.X% to are updated per per $X.XX $X.XX increasing to share, a share midpoint range increase guidance XXXX midpoint $X.XX a previously FFO a guidance per from that of FFO $X.XX $X.XX. share a our of with of range $X.XX to with FFO

'XX up our through the most walk this FFO items Let's in guidance. increase of that make

properties First, included lower in year guidance. have per updated our our percentage 'XX FFO and this expenses debt were operating higher share additional retail bad approximately previously contributed rents from that and an $X.XX not

in Second, our this income share contributed in And have tenant this previously our contributed San contributed expenses bad fee year. previously in $X.XX lower has 'XX not higher lease guidance. $X.XX and that $X.XX FFO approximately X share that our XXXX base September share property additional date optimistic the years office multifamily added when additional next a fee $X.XX an the 'XX, we together our an share through at FFO lower per X on if be from have lease These turnkey adjustments fifth, properties paid re-let has operating also updated and additional per a few Reserve represent $X.XX And of XXXX. The approximately of guidance. Torrey this Diego per of year properties have within FFO guidance. will that tenant approximately share their QX we the included interest and that in existing an approximately be new not and cover earlier. years previously space termination approximately in 'XX termination from debt was G&A additional a can the third, XX were are over midpoint for will Fourth, FFO will their and rent recognized net updated included contribute not rent per our we remaining that years, termination our an FFO year the received per increase

tenants earnings to office do best date we it guidance call, of estimate In reserve the upper or through this While is we we the believe continue could the or this towards possible their our majority as to of perform year-end. we is of 'XX range. of must the rents retail also this that, do the believe that first, pay end order that that

the remaining, for $X.XX reserves we per As have $X.XX end retail. of approximately of share QX, office of FFO and $X.XX for

we expenses. outperform our by increasing Second, less rents to multifamily and/or need continuing occupancy and to guidance see

and tourism to see ensuing It's matter of Waikiki a than we meaningful optimistic from Third, a about, Japanese in timing. this return travel more if not just later to which needs guests, come. the year are our years to cautiously

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

financial and office with segment. as of that any earnings to reconciled that to Steve? analysis Senior on we've best We Properties, Steve in are non-GAAP NOI measures like to our Vice discussed of I you information. I'll share our turn Office supplemental financial call for results quarterly a will over note now continue update our Center, our also brief numbers. and the GAAP transparent want President our as interpretations possible and briefly release to our be

Steve Center

prior of end office Thanks, increase of over XX Bob. At points portfolio the XX.X% quarter. was an quarter, the the second basis our leased,

XX,XXX quarter, leases feet, While existing office the leases rentable rent with cash & basis And the totaling First approximately office San leasing XX as square & cash square basis of QX in square straight-line we foot XX,XXX straight-line Reserve experience comparable for Coastal and closings, office of by feet, square X rentable a on rentable totaling executed approximately as an and and feet, than a rentable rentable were activity continued San increases square including continue leases XX,XXX square including they basis, XX% more City foot some Collection X offset approximately square rentable new Center X XX% to a feet tenants on Torrey approximately and renewal leases including tenant the XX,XXX lease on small XX,XXX at X% a a Bellevue. Torrey comparable in Main rentable non-comparable comprised totaling Main at rentable at of with feet follows. at rentable totaling of second QX XX,XXX In Diego. for rent rentable X X% momentum Coastal Portland. a square the has feet. leases in leases on few Collection we Portland. XX feet, totaling basis, today square at increases XX,XXX XX,XXX at square XX,XXX X,XXX and Diego, And at a Reserve leases leasing foot executed lease rightsizing into approximately First follows. We've X

totaling new renewables the outpaced lease approximately approximately which approximately square foot the square basis. is leasing, XXXX a rentable new X feet, have has and feet which rentable We time is on documentation, square first that in deals leasing XX% documentation square our is XX,XXX feet of lease Including XX,XXX deals of since rentable new rentable leasing.

modest the down to lease signed year-to-date, exposure deals is X,XXX square average of the remainder We're size expiration rolling approximately of through X% in XXXX, Our approximately deal XXXX. rentable given October feet. This termination the the portfolio includes will X. or XX,XXX feet, Bob hit rentable X% on the Torrey that Plaza that early for at mentioned square of approximately tenant of with

with submarket Diego. have III approximately the square the X,XXX of average rolling development, Jolla with deal some insights approximately in X% new the La our of feet. Concluding in rentable of We San portfolio on UTC XXXX, size Commons

third are the lease floor. in currently We documentation for

on for of the a are X We alternatives XXth floor. lease X

firm been law shortlisted have for by X floors. We a

Note vacancy, and of of feet. are that up environment tenant management rentable RFPs that are toured, keep with tenants in Net for A+ and have vacancy. Prospective best and energy tax most, legal, with tenants and to rentable with strong. X The X consulting and total the advisory, We feet engage prospective a to talent assurance, which expected UTC software, all of we have include banking, best remaining A engage square if for are They has floors, several of discussions one X.X%. vacancy the construction, X,XXX Diego and industries X's seeking technology. attract remains is competitor Tower vacancies, direct only experience submarket to direct San and X that their that are square just and Class the one that is the about the just customers. XX,XXX not

office success our for turn call prospects Q&A. our about throughout the excited entire and now X back operator to are We Tower over the portfolio. I'll for at

Ernest Rady

job, Good and Steve Bob.

Operator

comes first Today's Haendel St. Instructions] question [Operator from

Mizuho. Juste with

Haendel St. Juste

know I team. impact first a And Adam, I you strategic this question, maybe medium-term second, early, I might we I curious, broadly, there's short, the guide? priorities more the a any guess, for had X-parter. my role? congratulations to but and the as have if guess, any Adam you from transition I'm should guess I expect in you, first I And announcement year's guess, on, or mind to G&A CEO in it's goals that

Adam Wyll

first -- all Don't this anticipate think year. be going to thanks, any Appreciate Haendel. impact don't January year. G&A next I it. effective It's as and foremost, of

of it's in a going this of of lot think Bob's So, of rely we're mean, what on folks. change same group can through the at, you respects, looking team, year. same in modeling And I I forward terms the

continue on you've the look have Same for We and and from a not years. for lot brainstorm that us value. strategy front, ways the same thing will XX we'll create past but to change to heard

Haendel St. Juste

Got it. Got it.

any like sounds you're on Okay. quarter. about curious termination terminated? in why And tenant, similar conversations? here for Or And us office? more perhaps of or think maybe having the I'm what you any optimistic fee in expecting tell can next couple Bob the you then here read-through It the lease mentioned. hearing or are one I more, then they years, the any backfilling maybe on

Adam Wyll

situation, tenant that direction, mentioned had in And balance whose it our actually guidance this not list going they approvals of sheet. were this the in was and with earlier on we Well, was fair specifically, we right cash tenant a life on reserve science the year, FDA Haendel. a had one had this amount

their So mutually to forward, with come with deal. with acceptable we going engage and burn up a their situation cash them

were we so outcome. And with pleased the

chime is also script, build were I space. space headquarters old they for the they turnkey that mentioned was in in in did lease. our on great But general. tenant have could seen run -- a deal as well. a as the leasing They're can space XX this But seeing at out. It's this fruits a public the think of we prospects months not and Steve Bob net-net, company. where that that is money out within of a his

a turned think, we so situation, And to it out for sides. be both great

Steve Center

Yes, the below place, Haendel, lease rates about annually are $XX in market.

got XX,XXX which We've well And floor, got we've built-out in contiguous one space. is really below situation. on square a So, unique feet market marketplace. it's the

encouraged we're by our there. So, prospects

Haendel St. Juste

Got have outpaced segment it. you, I color, think leasing some time I And that the years. while you office your renewals first maybe mentioned for new Got in it, Steve. the in

the you're on And leasing new renewals, with CapEx. I like, I in going guess more level the should than I'm interest curious uptick seeing? that So, then, I near-term and tours an leasing for guess, the in what that look result prospects of assume

be would color that appreciated. So, any on

Steve Center

interesting. It's

over is Our historic the CapEx, last actually point the at last that years. X hitting average on

So it costs although up, are hasn't up. ticked

judicious back. we're build -- to speaks it we get about -- what out, we just about what we're it conscientious and very So

in And X renewals So, spaces expensive we as to rolled instances we we've not re-tenant. is. that last years had are had that built where many are the out numerous

Google terms up. is mind, are third first than much Autodesk year. that pretty activity? And leasing QX on you'll in costs was mean, on was that feet. from a monster weighted best So, Activity see if of We're XXXX the our is basis XX,XXX a And higher and QX. to I this or a question pace continues, year our your trend QX in muted. What which do was year, volume keep average will it be perspective. in year

deal are the from perspective the square size So leasing ever is X per dollar the -- activities a and years. average in deal last highest furthermore,

So we're bullish.

our properties in off. investments Our are paying

Our margins remain good.

We that And and they're still the experience rightsizing we choice. with with tenants property staying are even of us. are that,

leases So, they downsize, but higher their rental may renew at they rates.

we're prospects. about So, the excited

Ernest Rady

choice they're tenants. well has our a properties of after are and not property which strategy. culture we our The maintain is of important introduced look us serves a very customers, Steve tenants, We they well.

Operator

comes from question Capital Keybanc Antara our And with Nag-Chaudhuri next Markets.

Antara Nag-Chaudhuri

the Antara line Thomas. Todd This is on for

First, I a luck couple say on just of... the to had good I and congrats retirement, Ernest. just Adam, on promotion, wanted

Ernest Rady

retiring. is do. Wait and as me company a got lot millions me. has congratulations, Adam me if so a the minute. think of got do retiring. to reasons I've I I glad this I'm of ain't -- but important why God not help job

Adam Wyll

You knew Antara. better,

Antara Nag-Chaudhuri

All Series in right. the using the it. million. balance regarding I But just you notes around F have of XXXX a that the paid sheet, couple are know Got down you and maturities line, $XXX

markets? So, of you the in debt are in looking permanently advance? to the And updated some move refinance thoughts any have that given you do

Robert Barton

is This Antara. Yes, here. Bob

in $XXX we paid that I million As the due July mentioned script, was 'XX. off

the either for ability have it. a check We write to

of cash that. to have on credit. X% the which on is We the draw on the line We line We decided earning plus or credit. the the on balance return keep sheet on draw of cash balance sheet,

we bit. remaining 'XX We've the and possibly. We've been where that's the In terms swap $XXX to little of a noticed to to coming it. what's due XXXX, monitoring are on that just market came right in We've probably it we're see the down. fall a time market the in noticed lock early million since continues contract

treasury. XX I on this think it was points morning like basis the

of banking past part just at transactions team, very looking done. working we've But entry good syndicate that with, successful a the we've look we're experience, at point. that right been our the we're for our you and have we So, if

before So year, we're of hopeful. engaged. the sooner. hopefully end We're something bed And put we this to hopefully,

Antara Nag-Chaudhuri

office segment aware the that be in about there of XXXX as are any Okay. we're and just Perfect. of, we known the other XXXX? end should thinking move-outs And

Ernest Rady

question? the What's

Steve Center

move-outs. Known

good we're already X no, a They're XXXX, So be actually floors, existing we've XXXX, one to floors floors. we X of vacating result know an in subtenant. the shape. leased clear and will those tenant in

So, a one floors to with X negotiations subtenant with of existing We're portion go. floors we've well. those in of an got as

Ernest Rady

Main. & First That's

Robert Barton

best-in-class completing yes. end We're Main, of by as just a there it's the the & amenities And building. year, program First well.

And so well positioned backfill space. top It's that Top we're of stack signage It's is space. building. to beautiful available. the

So, optimistic we're there.

Ernest Rady

aura this concerning. has But office there's and which is about there's then Office it, office.

First of all, Steve does a great job.

Second located. of that very all, properties we got are well

Third shape. of all, we maintain them in first-class

Second blessed of treat as a the we look -- of and them third can. all, is we really of our best lot tenants competition after customers all, not Fourth as we of treat all, with have. of quality and B, commissions. the tenant we improvements assures the the A, leasing liquidity our advantages that we'll that and have properties, we'll we pay the our tenants, The maintain do

we seems and themselves. on and the office, that market does and the to We're mark bears of it. lay it do, that black there's the we properties the speak best-in-class. think the then the well office for We're not what team very off So at there's We're office. proud that

Antara Nag-Chaudhuri

provide And Okay. the updates progress one in. I on could you Jolla? One if leasing. on additional Got La What leasing you any in have could at just Beach if it. that was wondering I is more sneak Makes sense.

Adam Wyll

a small tenants. tenant asking Beach? tenant X This market Yes. be right One building Commons La is You're III Beach, or a candid. is Jolla I'll either Francisco single and now. about One San just

for to some take there. going average requirement to get So Francisco the time in size it's San

Jolla at prospects at and Our Commons X, UTC excellent. Tower are La

Ernest Rady

covered that And earlier? I think you

Adam Wyll

got yes. of Yes, We've a activity lot there.

Ernest Rady

very I you've it If you think transcript, covered look at the well.

Adam Wyll

vacancy And for busy space in I Tower We're mentioned, as just Class Yes. A at submarket is X.X%. Yes. the X. that direct very

it's healthiest the to think, submarket, I be So the got country. in

are we think So, good. our really prospects

Ernest Rady

is Beach, for problem not ours. And is the problem San Francisco's. One The

have market in that's is We great market. location a But completely the property great the a repositioned.

Operator

And our next from comes Stanley. Morgan Kamdem Ronald with question today

Ronald Kamdem

not and Ernest, role on engagement, in First, congrats, your congrats, Adam, too, retirement. continued a obviously,

well deserved. Really, everyone. really to congrats So

So on little just just to just gears a switching bit -- office here.

activity do I color, opening a there's hoping bit the reflection see like, your I is you that better, the sort been And comments some and of quality? better of of in trends? little to give sort in to can the the are think of see is more think portfolio sort of of, actually trying seems broader market like activity forth. just so the we you the that market. just was a starting a broader trends Or lot signs

Adam Wyll

It's interesting. San our And It's yet And read strongest it's of challenging. market, is you Diego. when account the one strong. of not CBRE's markets

have think need said I've in our in negative positive large absorption flight-to-quality. And submarkets market I it to that part, even a I So, I a it's don't to in which absorption succeed. are, before, need people net to happen. our of the market, fortunate and many net pick properties, we've been

are -- in looking when environment But of the tenants many to their get they downsizing. downsize, leasing office. So, they're of the is are for that new the back best much people

nice want So, we've about. talked really they of want all properties. They amenities the

So, that's how we're winning.

I activity Bellevue of will our market's a in the say, up flight-to-quality recovering. in that market. So, I indicative say is would than the strength that it though, is particular, of more

well City to then Our continues really are and Center Bellevue picking property the suburbs up. do

vacancy there. encouraged properties is XXX got a our are up there, active I'm in We've feet. Corridor So, our well. XXX,XXX multiple And got portfolio. I-XX of chunk going overall as on X our the the then big corridor, proposals on tourism In we've which

improving. So, is Bellevue

Ernest Rady

to of the landlord's flight-to-quality landlord view, ability with leasing the you point of would building's point of the if the from from financial work Steve, from think, the I the ability the agents. view, from paraphrase of landlord perform, to

in the and categories. really significant, all multi-tier those I believe, top we're, So, that's market it's tier, a tier top and

Steve Center

It's a really balance sheet. is It just estate point, not our Ernest. the real itself. good It's

our service. is customer well Our balance Also our our sheet flexibility. as strength as

shorter term You'll is see, flex weighted part average quarter this than quarters, previous actually, in our we the customers. lease our because with

solutions need them. with work jam don't shorter-term Some them. we We that

our suite hey, spec that a the And need. improvements. we're going me We've will pay now, up too. the long X.X said, and way, into I years and tenant so but expanded know revisit a I was law And expansion. that contribute short-term deal got the to term I'll yes. foot firm X,XXX I you here's answer for free just called goes from principal a me? rent this the And with to need work

all it's things. So those

good So Ernest, a right? point, it's

Ernest Rady

of the brush same that everybody really It's disappointing. part that It's estate market. real in the

the office are average not We landlord.

I excellent and qualified do an are, We very believe, job.

Ronald Kamdem

on and priorities do my trying leasing Xx? into question right come of that protecting capital Great. acquisitions Or when of that and also picture thinking the rounding the to was But capital sort are that below play potentially that through. just to now? sort then, offense clearly, balance second is sort allocation. does working back out the leverage acquisition? you're about think mean, how look, And developments capital how allocation, balance the but on you looking of you get even with guys just sheet, So a I

Ernest Rady

that Well, Steve wants that. that rating. debt-to-EBITDA of we occasion is to violent at are and perhaps looking that range La and [Indiscernible] enhances at Commons moment. our fall III. on And credit first maintains into went all, acquisitions through be can net the Jolla The not secret a even

that though continue the Jolla wish we'll off of can have, seems to a top-tier moment, Commons we're the at for is list do. then I because come fashion. reputation to what think in our and even about, back we the waiting La to office at it the moment, But of we success watching perform sitting and of kind So III see

Adam Wyll

Yes.

capital finish $XXX about Jolla to prudent, just think have allocation Let and me a return With it's said, We Commons let's La III, on like invested And balance is the to III. the we there sheet. great, we what that, we leasing yes, is Ernest important to with Commons property mentioned, Jolla La just really add great million a want Ron, to, the the get that. over in do protect market. Ernest is need

let's lease up that So, first.

if overseeing is We assets. We'd to buy one and assets. great many pivot to looking at We are multifamily that, thing we what continuing great returns. to love we've all that more told to and look not got any got. we like is But office. Steve We retail got this we're we that we of dedicated for way. value ourselves believer sprinkle do from I'm creating out as well. a the on at to you in continue have a each And along our of here will that history to big the of look throw probably But that investors. company,

Ernest Rady

not we're are daily While acquiring, we in our improving properties. investing

how handles have? Jerry, now So, projects going do to many approve we you construction, what who have

Jerry Gammieri

We well going on. projects XXX have over

Ernest Rady

investment without risk what sitting back of our that's acquisition. it -- and for to happen. better. not we're We're waiting improving the an something So, on making And

Operator

And from Burzinski Green our comes next with question Street. Dylan

Dylan Burzinski

but just say All have deserved. to wanted Adam. my questions asked, been congrats to Well

Adam Wyll

Thanks, Dylan. Great questions.

Ernest Rady

He got of is only intelligent, a humor. he's great sense not

Operator

to our Rady this to closing remarks. conference I'd question-and-answer gentlemen, like session. Thank any for Mr. and Ladies you. concludes turn over back the

Ernest Rady

for Thank company. you, all you, your of our interest in

results the We significant, are on continue the our point, to will the and will some estate it. difference real us company best market behalf. the recognize at do average your prove between and hope We

for interest your you all and questions. good thank your So,

Operator

you. our Thank call. this conference gentlemen, and Ladies concludes

day. You a rest may now wonderful the have lines, your of disconnect and

American Assets Trust (AAT) 31 Jul 242024 Q2 Earnings call transcript