American Assets Trust Inc

Previous wording

Below is a summary of our same-store and redevelopment same-store composition for the three and six months ended June 30, 2024 and 2023. Bel-Spring 520 is classified as a same-store property when compared to the designation for the three and six months ended June 30, 2023, because the property was acquired on March 8, 2022. The 710 building at Lloyd Portfolio is classified as same-store property when compared to the designation for the three and six months ended June 30, 2023, because the property has been in operation for a full year since it was placed in service in November of 2022. One Beach Street continues to be identified as a same-store redevelopment property due to significant redevelopment activity.

Current wording

Below is a summary of our same-store and redevelopment same-store composition for the three and nine months ended September 30, 2024 and 2023. Bel-Spring 520 is classified as a same-store property when compared to the designation for the nine months ended September 30, 2023, because the property was acquired on March 8, 2022. The 710 building within the Lloyd Portfolio is classified as same-store property when compared to the designation for the three and nine months ended September 30, 2023, because the property has been in operation for a full year since it was placed in service in November of 2022. One Beach Street continues to be identified as a same-store redevelopment property due to significant redevelopment activity. Additionally, this property was placed into operations on August 1, 2024, approximately one year after completing renovations.

Previous wording

Retail same-store net operating income increased approximately 0.3% for the six months ended June 30, 2024 compared to the same period in 2023. Office same-store net operating income decreased 0.3% for the six months ended June 30, 2024 compared to the same period in 2023.

Current wording

Retail same-store net operating income increased approximately 2.3% for the nine months ended September 30, 2024 compared to the same period in 2023. Office same-store net operating income increased 8.1% for the nine months ended September 30, 2024 compared to the same period in 2023.

Previous wording

During the three months ended June 30, 2024, we signed 18 office leases for a total of 96,042 square feet of office space including 52,618 square feet of comparable renewal office space leases (leases for which there was a prior tenant), at an average rental rate increase on a cash basis and increase on a GAAP basis of 5.2% and 14.5%, respectively. New office leases for comparable spaces were signed for 20,978 square feet at an average rental rate increase on a cash and GAAP basis of 4.1% and 26.4%, respectively. Renewals for comparable office spaces were signed for 31,640 square feet at an average rental rate increase on a cash basis and increase on a GAAP basis of 5.7% and 9.7%, respectively. Tenant improvements and incentives were $34.71 per square foot of office space for comparable new leases for the three months ended June 30, 2024, mainly due to a new tenant at First & Main.

Current wording

During the three months ended September 30, 2024, we signed 14 office leases for a total of 105,746 square feet of office space including 57,935 square feet of comparable renewal office space leases (leases for which there was a prior tenant), at an average rental rate increase on a cash basis and increase on a GAAP basis of 7.8% and 16.4%, respectively. New office leases for comparable spaces were signed for 16,671 square feet at an average rental rate increase on a cash and GAAP basis of 18.3% and 15.7%, respectively. Renewals for comparable office spaces were signed for 41,264 square feet at an average rental rate increase on a cash basis and GAAP basis of 3.8% and 16.7%, respectively. Tenant improvements and incentives were $62.04 per square foot of office space for comparable new leases for the three months ended September 30, 2024, mainly due to new tenants at Torrey Reserve Campus and City Center Bellevue.

Previous wording

During the three months ended June 30, 2024, we signed 19 retail leases for a total of 68,735 square feet of retail space including 64,127 square feet of comparable renewal retail space leases (leases for which there was a prior tenant), at an average rental rate increase on a cash and GAAP basis of 5.8% and 34.4%, respectively. New retail leases for comparable spaces were signed for 1,064 square feet at an average rental rate increase on a cash and GAAP basis of 22.7% and 0%, respectively. Renewals for comparable retail spaces were signed for 63,063 square feet at an average rental rate increase on a cash and GAAP basis of 4.7% and 17.9%, respectively. Tenant improvements and incentives were $18.80 per square foot of retail space for comparable new leases for the three months ended June 30, 2024, mainly due to a new tenant at Waikiki Beach Walk Retail.

Current wording

During the three months ended September 30, 2024, we signed 23 retail leases for a total of 133,499 square feet of retail space including 125,308 square feet of comparable renewal retail space leases (leases for which there was a prior tenant), at an average rental rate increase on a cash and GAAP basis of 4.4% and 18.7%, respectively. New retail leases for comparable spaces were signed for 505 square feet at an average rental rate decrease on a cash basis of 1.0% and increase on a GAAP basis of 5%. Renewals for comparable retail spaces were signed for 124,803 square feet at an average rental rate increase on a cash and GAAP basis of 4.5% and 18.8%, respectively. There were no tenant improvements or incentives on retail space for comparable new leases during the three months ended September 30, 2024.

Previous wording

We capitalized external and internal costs related to both development and redevelopment activities combined of $4.8 million and $5.6 million for the three months ended June 30, 2024 and 2023, respectively, and $8.3 million and $15.3 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

We capitalized external and internal costs related to both development and redevelopment activities combined of $4.6 million and $4.6 million for the three months ended September 30, 2024 and 2023, respectively, and $12.9 million and $19.9 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

We capitalized external and internal costs related to other property improvements combined of $14.6 million and $13.2 million for the three months ended June 30, 2024 and 2023, respectively, and $24.1 million and $25.5 million for the six months ended June 30, 2024 and 2023, respectively

Current wording

We capitalized external and internal costs related to other property improvements combined of $15.0 million and $15.0 million for the three months ended September 30, 2024 and 2023, respectively, and $39.1 million and $40.6 million for the nine months ended September 30, 2024 and 2023, respectively

Previous wording

Interest costs on developments and major redevelopments are capitalized as part of developments and redevelopments not yet placed in service. Capitalization of interest commences when development activities and expenditures begin and end upon completion, which is when the asset is ready for its intended use as noted above. We make judgments as to the time period over which to capitalize such costs and these assumptions have a direct impact on net income because capitalized costs are not subtracted in calculating net income. If the time period for capitalizing interest is extended, however, more interest is capitalized, thereby decreasing interest expense and increasing net income during that period. We capitalized interest costs related to development activities of $2.1 million and $1.9 million for the three months ended June 30, 2024 and 2023, respectively, and $4.2 million and $3.8 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Interest costs on developments and major redevelopments are capitalized as part of developments and redevelopments not yet placed in service. Capitalization of interest commences when development activities and expenditures begin and end upon completion, which is when the asset is ready for its intended use as noted above. We make judgments as to the time period over which to capitalize such costs and these assumptions have a direct impact on net income because capitalized costs are not subtracted in calculating net income. If the time period for capitalizing interest is extended, however, more interest is capitalized, thereby decreasing interest expense and increasing net income during that period. We capitalized interest costs related to development activities of $1.7 million and $2.0 million for the three months ended September 30, 2024 and 2023, respectively, and $5.9 million and $5.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $1.2 million to $110.9 million for the three months ended June 30, 2024 compared to $109.7 million for the three months ended June 30, 2023. The percentage leased was as follows for each segment as of June 30, 2024 and 2023:

Current wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $11.6 million to $122.8 million for the three months ended September 30, 2024 compared to $111.2 million for the three months ended September 30, 2023. The percentage leased was as follows for each segment as of September 30, 2024 and 2023:

Previous wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue increased $1.2 million, or 1%, to $105.1 million for the three months ended June 30, 2024 and June 30, 2023. Rental revenue by segment was as follows (dollars in thousands):

Current wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue stayed flat at $105.5 million for the three months ended September 30, 2024 and September 30, 2023. Rental revenue by segment was as follows (dollars in thousands):

Previous wording

Total office rental revenue decreased $1.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to a decrease of $0.6 million in cost recoveries, partially due to prior year tax refunds received at La Jolla Commons and First & Main that were passed back to tenants, and a decrease of $0.4 million in rental revenue driven by lower occupancy and annualized base rents at Lloyd Portfolio.

Current wording

Total office rental revenue decreased $1.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to a decrease of $1.2 million in rental revenue driven by lower occupancy and annualized base rents at Lloyd Portfolio, lower occupancy at Torrey Reserve Campus, and a decrease of $0.8 million in cost recoveries due to changes in tenant base years, a decrease in recoverable property expenses, and prior year tax refunds received that were passed back to tenants.

Previous wording

Total retail rental revenue increased $0.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to new tenant leases and scheduled rent increases at Solana Beach Towne Center, Waikele Center and Del Monte Center. Additionally, there was an increase of $0.4 million in cost recoveries.

Current wording

Total retail rental revenue increased $1.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to new tenant leases and scheduled rent increases at Solana Beach Towne Center, Carmel Country Plaza and Del Monte Center. Additionally, there was an increase of $0.4 million in cost recoveries.

Previous wording

Other property income. Other property income increased $0.6 million, or 6%, to $11.5 million for the six months ended June 30, 2024 compared to $10.9 million for the six months ended June 30, 2023. Other property income by segment was as follows (dollars in thousands):

Current wording

Other property income. Other property income increased $11.6 million, or 203% to $17.3 million for the three months ended September 30, 2024 compared to $5.7 million for the three months ended September 30, 2023. Other property income by segment was as follows (dollars in thousands):

Previous wording

Mixed-use other property income increased by $0.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in parking garage income at the retail portion of our mixed-use property.

Current wording

Multifamily other property income increased by $0.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in utilities meter income.

Previous wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased $0.6 million, or 1%, to $40.3 million, for the three months ended June 30, 2024 compared to $39.8 million for the three months ended June 30, 2023.

Current wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased $1.1 million, or 3%, to $42.4 million, for the three months ended September 30, 2024 compared to $41.3 million for the three months ended September 30, 2023.

Previous wording

Rental Expenses. Rental expenses increased $0.8 million, or 3%, to $29.5 million for the three months ended June 30, 2024 compared to $28.7 million for the three months ended June 30, 2023. Rental expense by segment was as follows (dollars in thousands):

Current wording

Rental Expenses. Rental expenses increased $1.4 million, or 5%, to $31.4 million for the three months ended September 30, 2024 compared to $29.9 million for the three months ended September 30, 2023. Rental expense by segment was as follows (dollars in thousands):

Previous wording

Retail rental expense increased $0.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in facilities services and repairs and maintenance expense.

Current wording

Retail rental expense increased $0.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in facilities services and marketing expense.

Previous wording

Multifamily rental expense increased $0.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in insurance expense and facilities services.

Current wording

Multifamily rental expense increased $0.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in insurance expense, utilities expense and facilities services.

Previous wording

Mixed-use rental expense increased $0.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in repairs and maintenance expense and employee related costs at the retail portion of our mixed-use property.

Current wording

Mixed-use rental expense increased $0.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in repairs and maintenance expense and employee related costs at the retail portion of our mixed-use property and an increase in room-related expenses at the hotel portion of our mixed-use property.

Previous wording

Real Estate Taxes. Real estate taxes decreased $0.2 million, or 2%, to $10.8 million for the three months ended June 30, 2024 compared to $11.1 million for the three months ended June 30, 2023. Real estate tax expense by segment was as follows (dollars in thousands):

Current wording

Real Estate Taxes. Real estate taxes decreased $0.4 million, or 3%, to $11.0 million for the three months ended September 30, 2024 compared to $11.4 million for the three months ended September 30, 2023. Real estate tax expense by segment was as follows (dollars in thousands):

Previous wording

Retail real estate taxes decreased $0.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to a real estate tax refund received at Del Monte Center.

Current wording

Retail real estate taxes increased $0.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in property tax assessment at Alamo Quarry Market and tax refunds received at Del Monte Center during the three months ended September 30, 2023.

Previous wording

Multifamily real estate taxes decreased $0.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due real estate tax refunds received at Pacific Ridge Apartments.

Current wording

Multifamily real estate taxes increased $0.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in property tax assessments at Pacific Ridge Apartments.

Previous wording

Property operating income increased $0.6 million, or 1%, to $70.5 million for the three months ended June 30, 2024, compared to $69.9 million for the three months ended June 30, 2023. Property operating income by segment was as follows (dollars in thousands):

Current wording

Property operating income increased $10.5 million, or 15%, to $80.4 million for the three months ended September 30, 2024, compared to $69.9 million for the three months ended September 30, 2023. Property operating income by segment was as follows (dollars in thousands):

Previous wording

Total office property operating income decreased $0.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to higher operating expenses related to utilities expenses, repairs and facilities services and insurance expense. Additionally, there was a decrease due to lower cost recoveries. These decreases were partially offset by higher annualized base rents at Torrey Reserve Campus, La Jolla Commons and Solana Crossing, lease settlement fees received at Torrey Reserve Campus and lower real estate taxes due to refunds received at La Jolla Commons and First & Main.

Current wording

Total office property operating income increased $9.0 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a $11.0 million in lease termination fee received at Torrey Reserve Campus and lower real estate taxes due to tax refunds received at La Jolla Commons. These increases were offset by a decrease of $1.2 million in rental revenue driven primarily by lower occupancy and annualized base rents at Lloyd Portfolio, lower occupancy at Torrey Reserve Campus, a decrease in cost recoveries, and an increase in rental expenses related to utilities expenses, insurance expense and repairs and maintenance expense.

Previous wording

Total retail property operating income increased $0.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to higher rental revenue at Solana Beach Towne Center, Waikele Center and Del Monte Center due to new tenant leases and scheduled rent increases and an increase in cost recoveries. These increases were offset by lower property income due to lease termination fees received at Carmel Mountain Plaza in 2023 and higher rental expenses attributable to facilities services and repairs and maintenance expense.

Current wording

Total retail property operating income increased $1.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to higher rental revenue at Solana Beach Towne Center, Carmel Country Plaza and Del Monte Center due to new tenant leases, scheduled rent increases and an increase in cost recoveries. These increases were offset by higher real estate tax expense and rental expenses attributable to facilities services and marketing expense.

Previous wording

Total multifamily property operating income increased $1.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an overall increase in average monthly base rent and an increase in occupancy. Average monthly base rent and occupancy was $2,730 and 90.8%, respectively, for the three months ended June 30, 2024 compared to $2,587 and 87.7%, respectively, for the three months ended June 30, 2023.

Current wording

Total multifamily property operating income increased $0.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an overall increase in average monthly base rent and an increase in occupancy. Average monthly base rent and occupancy was $2,733 and 90.1%, respectively, for the three months ended September 30, 2024 compared to $2,572 and 88.5%, respectively, for the three months ended September 30, 2023.

Previous wording

General and Administrative. General and administrative expenses increased $0.1 million, or 1%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This increase was primarily due to higher employee-related costs, including, without limitation, with respect to base pay for certain salaried and hourly workers and benefits, offset by lower stock-based compensation expense, attributable to a decrease in the number of restricted stock awards granted as part of our 2023 grant.

Current wording

General and Administrative. General and administrative expenses increased $0.2 million, or 2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily due to higher employee-related costs, including, without limitation, with respect to base pay for certain salaried and hourly workers and benefits, offset by lower legal expenses and stock-based compensation expense, attributable to a decrease in the number of restricted stock awards granted as part of our 2023 grant.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense increased $1.2 million, or 4%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This was due to new building improvements and tenant improvement assets placed into service and acceleration of assets related to a tenant vacating their space early at Torrey Reserve Campus.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased $3.7 million, or 12%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This was due to the acceleration of assets related to a tenant vacating their space early at Torrey Reserve Campus. Additionally, the increase was also due to new building improvement assets with One Beach Street placed into operations as of August 1, 2024 and new tenant improvement and leasing commission assets placed into service.

Previous wording

Other Income, net. Other income, net increased $0.5 million, or 189%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This increase was primarily due to interest and investment income attributed to higher yield on our average cash balance during the period.

Current wording

Other Income, net. Other income, net increased $1.4 million, or 442%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily due to interest and investment income attributed to higher yield on our average cash balance during the period.

Previous wording

The following summarizes our consolidated results of operations for the six months ended June 30, 2024 compared to our consolidated results of operations for the six months ended June 30, 2023.

Current wording

The following summarizes our consolidated results of operations for the nine months ended September 30, 2024 compared to our consolidated results of operations for the nine months ended September 30, 2023.

Previous wording

The following table sets forth selected data from our unaudited consolidated statements of income for the six months ended June 30, 2024 and 2023 (dollars in thousands):

Current wording

The following table sets forth selected data from our unaudited consolidated statements of income for the nine months ended September 30, 2024 and 2023 (dollars in thousands):

Previous wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $4.1 million, or 2%, to $221.6 million for the six months ended June 30, 2024 compared to $217.5 million for the six months ended June 30, 2023. The percentage leased was as follows for each segment as of June 30, 2024 and 2023:

Current wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $15.7 million, or 5%, to $344.4 million for the nine months ended September 30, 2024 compared to $328.7 million for the nine months ended September 30, 2023. The percentage leased was as follows for each segment as of September 30, 2024 and 2023:

Previous wording

The increase in total property revenue was attributable primarily to higher average monthly base rents within the multifamily segment, new tenant leases commenced within the retail segment and an increase in occupancy and rate at Waikiki Beach Walk Embassy Suites™ and factors discussed below.

Current wording

The increase in total property revenue was attributable primarily to the factors discussed below.

Previous wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue increased $3.5 million, or 2%, to $210.1 million for the six months ended June 30, 2024 compared to $206.6 million for the six months ended June 30, 2023. Rental revenue by segment was as follows (dollars in thousands):

Current wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue increased $3.6 million, or 1%, to $315.7 million for the nine months ended September 30, 2024 compared to $312.1 million for the nine months ended September 30, 2023. Rental revenue by segment was as follows (dollars in thousands):

Previous wording

Total office rental revenue decreased $0.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to a decrease of $0.9 million in cost recoveries at La Jolla Commons and First & Main as prior year tax refunds received were passed back to tenants. This decrease was offset by higher rental revenue of $0.3 million at La Jolla Commons, Torrey Reserve Campus and Solana Crossing driven by higher annualized rents offset by lower occupancy and annualized base rents at Lloyd Portfolio.

Current wording

Total office rental revenue decreased $2.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to a decrease of $1.6 million in cost recoveries due to changes in tenant base years, a decrease in recoverable property expenses, prior year tax refunds received that were passed back to tenants, and a decrease of $0.9 million in rental revenue driven primarily by lower occupancy and annualized base rents at Lloyd Portfolio.

Previous wording

Retail rental revenue increased $1.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to new tenant leases signed, scheduled rent increases and tenants previously on alternate rent reverting back to basic monthly rent. These increases are primarily related to Carmel Mountain Plaza, Solana Beach Towne Center, Alamo Quarry Market and Del Monte Center. Additionally, there was an increase in cost recoveries of $0.5 million.

Current wording

Retail rental revenue increased $2.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to new tenant leases signed, scheduled rent increases and tenants previously on alternate rent reverting back to basic monthly rent. These increases are primarily related to Carmel Mountain Plaza, Solana Beach Towne Center, Alamo Quarry Market and Del Monte Center. Additionally, there was an increase in cost recoveries of $0.9 million.

Previous wording

Other property income. Other property income stayed flat at $5.8 million for the three months ended June 30, 2024 and three months ended June 30, 2023. Other property income by segment was as follows (dollars in thousands):

Current wording

Other property income. Other property income increased $12.2 million, or 73%, to $28.7 million for the nine months ended September 30, 2024 compared to $16.6 million for the nine months ended September 30, 2023. Other property income by segment was as follows (dollars in thousands):

Previous wording

Retail other property income decreased $0.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to lease termination fees received at Carmel Mountain Plaza and Solana Beach Towne Center in 2023.

Current wording

Retail other property income increased $0.2 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to lease termination fees received at Alamo Quarry Market and Solana Beach

Previous wording

Total mixed-use other property income increased $0.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to increased tourism and hotel occupancy which led to an increase in other room rental income at the hotel portion of our mixed-use property and increase in parking income at the retail portion of our mixed-use property.

Current wording

Total mixed-use other property income increased $0.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to increased tourism and hotel occupancy which led to an increase in other room rental income at the hotel portion of our mixed-use property and increase in parking income at the retail portion of our mixed-use property.

Previous wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased by $2.5 million, or 3%, to $81.4 million for the six months ended June 30, 2024, compared to $78.9 million for the six months ended June 30, 2023. This increase in total property expenses was attributable primarily to the factors discussed below.

Current wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased by $3.6 million, or 3%, to $123.8 million for the nine months ended September 30, 2024, compared to $120.2 million for the nine months ended September 30, 2023. This increase in total property expenses was attributable primarily to the factors discussed below.

Previous wording

Rental Expenses. Rental expenses increased $3.1 million, or 6%, to $59.3 million for the six months ended June 30, 2024, compared to $56.2 million for the six months ended June 30, 2023. Rental expense by segment was as follows (dollars in thousands):

Current wording

Rental Expenses. Rental expenses increased $4.6 million, or 5%, to $90.7 million for the nine months ended September 30, 2024, compared to $86.1 million for the nine months ended September 30, 2023. Rental expense by segment was as follows (dollars in thousands):