American Assets Trust Inc

Previous wording

We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and develops high quality office, retail, multifamily and mixed-use properties in attractive, high-barrier-to-entry markets in Southern California, Northern California, Washington, Oregon, Texas, and Hawaii. As of December 31, 2023, our portfolio was comprised of twelve office properties; twelve retail shopping centers; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center; and six multifamily properties. Additionally, as of December 31, 2023, we owned land at three of our properties that we classified as held for development or construction in progress. Our core markets include San Diego, California; the San Francisco Bay Area, California; Bellevue, Washington; Portland, Oregon, and Oahu, Hawaii. American Assets Trust, Inc., as the sole general partner of our Operating Partnership, has control of our Operating Partnership and owned 78.8% of our Operating Partnership as of December 31, 2023. Accordingly, we consolidate the assets, liabilities and results of operations of our Operating Partnership.

Current wording

We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and develops high quality office, retail, multifamily and mixed-use properties in attractive, high-barrier-to-entry markets in Southern California, Northern California, Washington, Oregon, Texas, and Hawaii. As of December 31, 2024, our portfolio was comprised of twelve office properties; twelve retail shopping centers; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center; and six multifamily properties. Additionally, as of December 31, 2024, we owned land at three of our properties that we classified as held for development or construction in progress. Our core markets include San Diego, California; the San Francisco Bay Area, California; Bellevue, Washington; Portland, Oregon, and Oahu, Hawaii. American Assets Trust, Inc., as the sole general partner of our Operating Partnership, has control of our Operating Partnership and owned 78.9% of our Operating Partnership as of December 31, 2024. Accordingly, we consolidate the assets, liabilities and results of operations of our Operating Partnership.

Previous wording

We intend to opportunistically pursue projects in our development pipeline including future phases of La Jolla Commons and Lloyd Portfolio, as well as other redevelopments at Waikele Center. The commencement of these developments is based on, among other things, market conditions and our evaluation of whether such opportunities would generate appropriate risk adjusted financial returns. Our redevelopment and development opportunities are subject to various factors, including market conditions and may not ultimately come to fruition. We continue to review acquisition opportunities in our primary markets that would complement our portfolio and provide long-term growth opportunities. Some of our acquisitions do not initially contribute significantly to earnings growth; however, we believe they provide long-term re-leasing growth, redevelopment opportunities and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance a property acquisition. Generally, our acquisitions are initially financed by available cash, mortgage loans and/or borrowings under our credit facility, which may be repaid later with funds raised through the issuance of new equity or new long-term debt.

Current wording

We intend to opportunistically pursue projects in our development pipeline including future phases of Lloyd Portfolio, other redevelopments at Waikele Center, as well as multifamily development opportunities within our existing portfolio, namely at Lomas Santa Fe Plaza, Solana Beach Towne Centre and Carmel Mountain Plaza. The commencement of these developments is based on, among other things, market conditions and our evaluation of whether such opportunities would generate appropriate risk adjusted financial returns. Our redevelopment and development opportunities are subject to various factors, including market conditions and may not ultimately come to fruition. We continue to review acquisition opportunities in our primary markets that would complement our portfolio and provide long-term growth opportunities. Some of our acquisitions do not initially contribute significantly to earnings growth; however, we believe they provide long-term re-leasing growth, redevelopment opportunities and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance a property acquisition. Generally, our acquisitions are initially financed by available cash, mortgage loans and/or borrowings under our credit facility, which may be repaid later with funds raised through the issuance of new equity or new long-term debt.

Previous wording

Below is a summary of our same-store composition for the years ended December 31, 2023, 2022 and 2021. For the year ended December 31, 2023, when compared to the designations for the year ended December 31, 2022, Eastgate Office Park and Corporate Campus East III were reclassified to same-store properties because these properties were acquired on July 7, 2021 and September 10, 2021, respectively. Because Bel-Spring 520 was acquired on March 8, 2022, it is classified as non-same-store property for the year ended December 31, 2023. One Beach Street continues to be identified as a same-store redevelopment property due to significant construction activity.

Current wording

For the year ended December 31, 2023, when compared to the designations for the year ended December 31, 2022, 14Acres and Timber Ridge were reclassified to same-store properties because these properties were acquired on July 7, 2021 and September 10, 2021, respectively. Timber Springs is classified as non-same store since it was acquired on March 8, 2022. One Beach Street continues to be identified as a same-store redevelopment property due to significant construction activity.

Previous wording

Office Leases. Our office portfolio included twelve properties with a total of approximately 4.1 million rentable square feet available for lease as of December 31, 2023. As of December 31, 2023, these properties were 86.0% leased. For the year ended December 31, 2023, the office segment contributed 47.1% of our total revenue. Historically, we have leased office properties to tenants primarily on a full service gross or a modified gross basis and to a limited extent on a triple-net lease basis. We expect to continue to do so in the future. A full-service gross or modified gross lease has a base year expense stop, whereby the tenant pays a stated amount of certain expenses as part of the rent payment, while future increases in property operating expenses (above the base year stop) are billed to the tenant based on such tenant's proportionate square footage of the property. The increased property operating expenses billed are reflected as operating expenses and amounts recovered from tenants are reflected as rental income in the statements of operations.

Current wording

Office Leases. Our office portfolio included twelve properties with a total of approximately 4.1 million rentable square feet available for lease as of December 31, 2024. As of December 31, 2024, these properties were 85.0% leased. For the year ended December 31, 2024, the office segment contributed 47.1% of our total revenue. Historically, we have leased office properties to tenants primarily on a full service gross or a modified gross basis and to a limited extent on a triple-net lease basis. We expect to continue to do so in the future. A full-service gross or modified gross lease has a base year expense stop, whereby the tenant pays a stated amount of certain expenses as part of the rent payment, while future increases in property operating expenses (above the base year stop) are billed to the tenant based on such tenant's proportionate square footage of the property. The increased property operating expenses billed are reflected as operating expenses and amounts recovered from tenants are reflected as rental income in the statements of operations.

Previous wording

During the year ended December 31, 2023, we signed 49 office leases for 322,418 square feet with an average rent of $66.42 per square foot during the initial year of the lease term. Of the leases, 34 represent comparable leases where there was a prior tenant, with an increase of 2.4% in cash basis rent and an increase of 10.8% in straight-line rent compared to the prior leases.

Current wording

During the year ended December 31, 2024, we signed 67 office leases for 398,506 square feet with an average rent of $52.32 per square foot during the initial year of the lease term. Of the leases, 45 represent comparable leases where there was a prior tenant, with an increase of 6.0% in cash basis rent and an increase of 13.0% in straight-line rent compared to the prior leases.

Previous wording

Retail Leases. Our retail portfolio included twelve properties with a total of approximately 3.1 million rentable square feet available for lease as of December 31, 2023. As of December 31, 2023, these properties were 94.3% leased. For the year ended December 31, 2023, the retail segment contributed 23.7%, of our total revenue. Historically, we have leased retail properties to tenants primarily on a triple-net lease basis, and we expect to continue to do so in the future. In a triple-net lease, the tenant is responsible for all property taxes and operating expenses. As such, the base rent payment does not include any operating expense, but rather all such expenses, to the extent they are paid by the landlord, are billed to the tenant. The full amount of the expenses for this lease type, to the extent they are paid by the landlord, is reflected in operating expenses, and the reimbursement is reflected as rental income in the statements of operations.

Current wording

Retail Leases. Our retail portfolio included twelve properties with a total of approximately 3.1 million rentable square feet available for lease as of December 31, 2024. As of December 31, 2024, these properties were 94.5% leased. For the year ended December 31, 2024, the retail segment contributed 23.8%, of our total revenue. Historically, we have leased retail properties to tenants primarily on a triple-net lease basis, and we expect to continue to do so in the future. In a triple-net lease, the tenant is responsible for all property taxes and operating expenses. As such, the base rent payment does not include any operating expense, but rather all such expenses, to the extent they are paid by the landlord, are billed to the tenant. The full amount of the expenses for this lease type, to the extent they are paid by the landlord, is reflected in operating expenses, and the reimbursement is reflected as rental income in the statements of operations.

Previous wording

During the year ended December 31, 2023, we signed 86 retail leases for 405,144 square feet with an average rent of $34.18 per square foot during the initial year of the lease term, including leases signed for the retail portion of our mixed-use property. Of the leases, 75 represent comparable leases where there was a prior tenant, with an increase of 6.5% in cash basis rent and an increase of 15.4% in straight-line rent compared to the prior leases.

Current wording

During the year ended December 31, 2024, we signed 95 retail leases for 428,981 square feet with an average rent of $38.32 per square foot during the initial year of the lease term, including leases signed for the retail portion of our mixed-use property. Of the leases, 80 represent comparable leases where there was a prior tenant, with an increase of 4.5% in cash basis rent and an increase of 25.0% in straight-line rent compared to the prior leases.

Previous wording

Multifamily Leases. Our multifamily portfolio included six apartment properties, as well as an RV resort, with a total of 2,110 units (including 120 RV spaces) available for lease as of December 31, 2023. As of December 31, 2023, these properties were 92.3% leased. For the year ended December 31, 2023, the multifamily segment contributed 14.0% of our total revenue. Our multifamily leases, other than at our RV resort, generally have lease terms ranging from 7 to 15 months, with a majority having 12-month lease terms. Tenants normally pay a base rental amount, usually quoted in terms of a monthly rate for the respective unit. Spaces at the RV resort can be rented at a daily, weekly, or monthly rate. The average monthly base rent per leased unit as of December 31, 2023 was $2,619, compared to $2,483 at December 31, 2022.

Current wording

Multifamily Leases. Our multifamily portfolio included six apartment properties, as well as an RV resort, with a total of 2,110 units (including 120 RV spaces) available for lease as of December 31, 2024. As of December 31, 2024, these properties were 91.8% leased. For the year ended December 31, 2024, the multifamily segment contributed 14.3% of our total revenue. Our multifamily leases, other than at our RV resort, generally have lease terms ranging from 7 to 15 months, with a majority having 12-month lease terms. Tenants normally pay a base rental amount, usually quoted in terms of a monthly rate for the respective unit. Spaces at the RV resort can be rented at a daily, weekly, or monthly rate. The average monthly base rent per leased unit as of December 31, 2024 was $2,683, compared to $2,619 at December 31, 2023.

Previous wording

Mixed-Use Property Revenue. Our mixed-use property consists of approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel. Revenue from the mixed-use property consists of revenue earned from retail leases, and revenue earned from the hotel, which consists of room revenue, food and beverage services, parking and other guest services. As of December 31, 2023, the retail portion of the property was 95.1% leased, and for the year ended December 31, 2023, the hotel had an average occupancy of 85.2%. For the year ended December 31, 2023, the mixed-use segment contributed 15.1%, of our total revenue. We have leased the retail portion of such property to tenants primarily on a triple-net lease basis, and we expect to continue to do so in the future. As such, the base rent payment under such leases does not include any operating expenses, but rather all such expenses, to the extent they are paid by the landlord, are billed to the tenant. Rooms at the hotel portion of our mixed-use property are rented on a nightly basis.

Current wording

Mixed-Use Property Revenue. Our mixed-use property consists of approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel. Revenue from the mixed-use property consists of revenue earned from retail leases, and revenue earned from the hotel, which consists of room revenue, food and beverage services, parking and other guest services. As of December 31, 2024, the retail portion of the property was 90.5% leased, and for the year ended December 31, 2024, the hotel had an average occupancy of 85.9%. For the year ended December 31, 2024, the mixed-use segment contributed 14.8%, of our total revenue. We have leased the retail portion of such property to tenants primarily on a triple-net lease basis, and we expect to continue to do so in the future. As such, the base rent payment under such leases does not include any operating expenses, but rather all such expenses, to the extent they are paid by the landlord, are billed to the tenant. Rooms at the hotel portion of our mixed-use property are rented on a nightly basis.

Previous wording

During the twelve months ended December 31, 2023, we signed 49 office leases for a total of 322,418 square feet of office space including 261,246 square feet of comparable space leases, at an average rental rate increase of 2.4% on a cash basis and an average rental increase of 10.8% on a straight-line basis. New office leases for comparable spaces were signed for 42,739 square feet at an average rental rate increase of 19.9% on a cash basis and an average rental rate increase of 21.8% on a straight-line basis. Renewals for comparable office spaces were signed for 218,507 square feet at an average rental rate increase of 0.1% on a cash basis and increase of 9.3% on a straight-line basis. Tenant improvements and incentives were $74.83 per square foot of office space for comparable new leases for the twelve months ended December 31, 2023. There were $46.55 per square foot of office space of tenant improvement or incentives for comparable renewal leases for the twelve months ended December 31, 2023.

Current wording

During the twelve months ended December 31, 2024, we signed 67 office leases for a total of 398,506 square feet of office space including 247,551 square feet of comparable space leases, at an average rental rate increase of 6.0% on a cash basis and an average rental increase of 13.0% on a straight-line basis. New office leases for comparable spaces were signed for 84,435 square feet at an average rental rate increase of 8.0% on a cash basis and an average rental rate increase of 18.5% on a straight-line basis. Renewals for comparable office spaces were signed for 163,116 square feet at an average rental rate increase of 5.0% on a cash basis and increase of 10.4% on a straight-line basis. Tenant improvements and incentives were $37.05 per square foot of office space for comparable new leases for the twelve months ended December 31, 2024. There were $25.15 per square foot of office space of tenant improvement or incentives for comparable renewal leases for the twelve months ended December 31, 2024.

Previous wording

During the twelve months ended December 31, 2023, we signed 86 retail leases for a total of 405,144 square feet of retail space including 367,810 square feet of comparable space leases, at an average rental rate increase of 6.5% on a cash basis and an average rental increase of 15.4% on a straight-line basis. New retail leases for comparable spaces were signed for 2,634 square feet at an average rental rate increase of 75.5% on a cash basis and an average rental rate increase of 145.7% on a straight-line basis (due to the modification of prior tenants' rent to cash-basis, which precluded straight-line rent for comparison). Renewals for comparable retail spaces were signed for 365,176 square feet at an average rental rate increase of 5.7% on a cash basis and an increase of 14.7% on a straight-line basis. Tenant improvements and incentives were $30.37 per square foot of retail space for comparable new leases for the twelve months ended December 31, 2023. There were $7.25 per square foot of retail space of tenant improvement or incentives for comparable renewal leases for the twelve months ended December 31, 2023.

Current wording

During the twelve months ended December 31, 2024, we signed 95 retail leases for a total of 428,981 square feet of retail space including 392,350 square feet of comparable space leases, at an average rental rate increase of 4.5% on a cash basis and an average rental increase of 25.0% on a straight-line basis. New retail leases for comparable spaces were signed for 9,294 square feet at an average rental rate increase of 16.0% on a cash basis and an average rental rate increase of 669.3% on a straight-line basis (due to the modification of prior tenants' rent to cash-basis, which precluded straight-line rent for comparison). Renewals for comparable retail spaces were signed for 383,056 square feet at an average rental rate increase of 4.0% on a cash basis and an increase of 18.1% on a straight-line basis. Tenant improvements and incentives were $32.36 per square foot of retail space for comparable new leases for the twelve months ended December 31, 2024. There were $2.68 per square foot of retail space of tenant improvement or incentives for comparable renewal leases for the twelve months ended December 31, 2024.

Previous wording

We make estimates of the collectability of our current accounts receivable and straight-line rents receivable which requires significant judgment by management. The collectability of receivables is affected by numerous different factors including current economic trends, including the continued impact of COVID-19 on tenant's businesses and changes in tenants' payment patterns, tenant bankruptcies, the status of collectability of current cash rents receivable, tenants' recent and historical financial and operating results, changes in our tenants' credit ratings, communications between our operating personnel and tenants, the extent of security deposits and letters of credits held with respect to tenants, and the ability of the tenant to perform under the terms of their lease agreement when evaluating the adequacy of the allowance for doubtful accounts. If our assessment of these factors indicates it is probable that we will be unable to collect substantially all rents, we recognize a charge to rental income and limit our rental income to the lesser of lease income on a straight-line basis plus variable rents when they become accruable or cash collected. If we change our conclusion regarding the probability of collecting rent payments required by a lessee, we may recognize an adjustment to rental income in the period we make a change to our prior conclusion.

Current wording

We make estimates of the collectability of our current accounts receivable and straight-line rents receivable which requires significant judgment by management. The collectability of receivables is affected by numerous different factors including current economic trends, changes in tenants' payment patterns, tenant bankruptcies, the status of collectability of current cash rents receivable, tenants' recent and historical financial and operating results, changes in our tenants' credit ratings, communications between our operating personnel and tenants, the extent of security deposits and letters of credits held with respect to tenants, and the ability of the tenant to perform under the terms of their lease agreement when evaluating the adequacy of the allowance for doubtful accounts. If our assessment of these factors indicates it is probable that we will be unable to collect substantially all rents, we recognize a charge to rental income and limit our rental income to the lesser of lease income on a straight-line basis plus variable rents when they become accruable or cash collected. If we change our conclusion regarding the probability of collecting rent payments required by a lessee, we may recognize an adjustment to rental income in the period we make a change to our prior conclusion.

Previous wording

We capitalized external and internal costs related to both development and redevelopment activities combined of $24.0 million and $73.3 million for the years ended December 31, 2023 and 2022, respectively.

Current wording

We capitalized external and internal costs related to both development and redevelopment activities combined of $16.3 million and $24.0 million for the years ended December 31, 2024 and 2023, respectively.

Previous wording

We capitalized external and internal costs related to other property improvements combined of $54.2 million and $43.3 million for the years ended December 31, 2023 and 2022, respectively.

Current wording

We capitalized external and internal costs related to other property improvements combined of $52.2 million and $54.2 million for the years ended December 31, 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, more interest is capitalized, thereby decreasing interest expense and increasing net income during that period. We capitalized interest costs related to both development and redevelopment activities combined of $7.8 million and $5.8 million for the years ended December 31, 2023 and 2022, 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, more interest is capitalized, thereby decreasing interest expense and increasing net income during that period. We capitalized interest costs related to both development and redevelopment activities combined of $7.5 million and $7.8 million for the years ended December 31, 2024 and 2023, respectively.

Previous wording

The decrease in tenant improvements and leasing commissions for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily related to tenant buildouts at The Landmark at One Market, City Center Bellevue and Alamo Quarry Market completed in the year ended December 31, 2022, partially offset by new tenant buildouts at Torrey Point, Carmel Mountain Plaza and Del Monte Center during the year ended December 31, 2023.

Current wording

The increase in tenant improvements and leasing commissions for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily related to tenant buildouts at La Jolla Commons, Lloyd Portfolio, Del Monte Center, City Center Bellevue and Alamo Quarry Market during the year ended December 31, 2024, partially offset by tenant buildouts completed at Torrey Reserve Campus, Torrey Point and Carmel Mountain Plaza during the year ended December 31, 2023.

Previous wording

The increase in maintenance capital expenditures for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily related to renovations at Eastgate Office Park, City Center Bellevue and La Jolla Commons.

Current wording

The decrease in capital expenditures for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily related to the renovations completed at City Center Bellevue and La Jolla Commons during the year ended December 31, 2023, partially offset by an increase at Alamo Quarry Market during the year ended December 31, 2024.

Previous wording

The decrease in new development expenditures for the year ended December 31, 2023 compared to the year ended December 21, 2022 was primarily related to costs incurred for the development of Tower 3 at La Jolla Commons. The decrease in redevelopment expenditures for the year ended December 31, 2023 compared to the year ended December 31, 2022, was primarily related to the modernization costs of One Beach Street.

Current wording

The decrease in new development expenditures for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily related to costs incurred for the development of Tower 3 at La Jolla Commons during the year ended December 31, 2023. The decrease in redevelopment expenditures for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily related to the majority completion of the One Beach Street redevelopment during the year ended December 31, 2023.

Previous wording

Our capital expenditures during the year ending December 31, 2024 will depend upon acquisition opportunities, the level of improvements and redevelopments on existing properties and the timing and cost of development of our held for development and construction in progress properties. While the amount of future expenditures will depend on numerous factors, we expect expenditures incurred in the year ending December 31, 2024 to decrease from the year ending December 31, 2023 as we expect to reach completion of development activities at La Jolla Commons during the first quarter of 2024.

Current wording

Our capital expenditures for the year ending December 31, 2025 will depend upon acquisition opportunities, the level of improvements and renovations on existing properties and the timing and cost of development of our held for development and construction in progress properties. While the amount of future expenditures will depend on numerous factors, we expect expenditures incurred in the year ending December 31, 2025 to decrease from the year ending December 31, 2024 as we reached completion of the development activities at La Jolla Commons in the year ended December 31, 2024.

Previous wording

On March 8, 2022, we acquired Bel-Spring 520, consisting of an approximately 93,000 square feet, multi-tenant office campus in Bellevue, Washington. The purchase price was approximately $45.5 million, less seller credits of approximately $0.1 million of future rent abatement, approximately $0.6 million of contractual tenant improvements and closing costs of approximately $0.1 million.

Current wording

On March 8, 2022, we acquired Timber Springs, consisting of an approximately 93,000 square feet, multi-tenant office campus in Bellevue, Washington. The purchase price was approximately $45.5 million, less seller credits of approximately $0.1 million of future rent abatement, approximately $0.6 million of contractual tenant improvements and closing costs of approximately $0.1 million.

Previous wording

The following summarizes our consolidated results of operations for the year ended December 31, 2023 compared to our consolidated results of operations for the year ended December 31, 2022. As of December 31, 2023, our operating portfolio was comprised of 31 office, retail, multifamily and mixed-use properties with an aggregate of approximately 7.2 million rentable square feet of office and retail space (including mixed-use retail space), 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2023, we owned land at three of our properties that we classified as held for development or construction in progress. As of December 31, 2022, our operating portfolio was comprised of 30 office, retail, multifamily and mixed-use properties with an aggregate of approximately 7.2 million rentable square feet of office and retail space (including mixed-use retail space), 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2022, we owned land at three of our properties that we classified as held for development or construction in progress.

Current wording

The following summarizes our consolidated results of operations for the year ended December 31, 2024 compared to our consolidated results of operations for the year ended December 31, 2023. As of December 31, 2024, our operating portfolio was comprised of 31 office, retail, multifamily and mixed-use properties with an aggregate of approximately 7.3 million rentable square feet of office and retail space (including mixed-use retail space), 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2024, we owned land at three of our properties that we classified as held for development or construction in progress. As of December 31, 2023, our operating portfolio was comprised of 31 office, retail, multifamily and mixed-use properties with an aggregate of approximately 7.3 million rentable square feet of office and retail space (including mixed-use retail space), 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of December 31, 2023, we owned land at three of our properties that we classified as held for development or construction in progress.

Previous wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $18.5 million, or 4%, to $441.2 million for the year ended December 31, 2023, compared to $422.6 million for the year ended December 31, 2022. The percentage leased was as follows for each segment as of December 31, 2023 and 2022:

Current wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue increased $16.7 million, or 4%, to $457.9 million for the year ended December 31, 2024, compared to $441.2 million for the year ended December 31, 2023. The percentage leased was as follows for each segment as of December 31, 2024 and 2023:

Previous wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue increased $16.9 million, or 4%, to $419.4 million for the year ended December 31, 2023, compared to $402.5 million for the year ended December 31, 2022. 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 $4.2 million, or 1%, to $423.6 million for the year ended December 31, 2024, compared to $419.4 million for the year ended December 31, 2023. Rental revenue by segment was as follows (dollars in thousands):

Previous wording

(1)For this table and tables following, the same-store portfolio excludes (i) One Beach Street, due to significant redevelopment activity; (ii) Bel-Spring 520, which was acquired on March 8, 2022; (iii) the 710 building at Lloyd Portfolio which was placed into operations on November 1, 2022, approximately one year after completing renovations of the building and (iv) land held for development.

Current wording

(1)For this table and tables following, the same-store portfolio excludes One Beach Street due to significant redevelopment and land held for development.

Previous wording

Total retail rental revenue increased $3.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 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, Lomas Santa Fe Plaza, Alamo Quarry Market, Waikele Center and Del Monte Center. Additionally, there was an increase in cost recoveries of $0.7 million.

Current wording

Total retail rental revenue increased $4.0 million for the year ended December 31, 2024 compared to the year ended December 31, 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 of $1.5 million in cost recoveries.

Previous wording

Multifamily rental revenue increased $3.9 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an overall increase in average monthly base rent of $2,581 for the year ended December 31, 2023, compared to $2,349 for the year ended December 31, 2022. Average occupancy decreased to 90.0% for the year ended December 31, 2023 compared to 92.9% for the year ended December 31, 2022.

Current wording

Multifamily rental revenue increased $3.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an overall increase in average monthly base rent and an increase in occupancy. Average monthly base rent and occupancy was $2,718 and 91.0% for the year ended December 31, 2024, compared to $2,581 and 90.0% for the year ended December 31, 2023.

Previous wording

Other property income. Other property income increased $1.7 million, or 8%, to $21.8 million for the year ended December 31, 2023, compared to $20.1 million for the year ended December 31, 2022. Other property income by segment was as follows (dollars in thousands):

Current wording

Other property income. Other property income increased $12.5 million, or 57%, to $34.2 million for the year ended December 31, 2024, compared to $21.8 million for the year ended December 31, 2023. Other property income by segment was as follows (dollars in thousands):

Previous wording

Total office other property income increased $0.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in parking garage income at City Center Bellevue and La Jolla Commons.

Current wording

Total office other property income increased $11.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an approximately $11.0 million lease termination fee and and an approximately $0.6 million lease settlement fee received at Torrey Reserve Campus.

Previous wording

Retail other property income increased $0.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to lease termination fees received at Carmel Mountain Plaza and Southbay Marketplace.

Current wording

Retail other property income increased $0.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to lease termination fees received at Alamo Quarry Market and Solana Beach Towne Center in 2024, offset by lease termination fees received at Carmel Mountain Plaza and Southbay Marketplace in 2023.

Previous wording

Mixed-use other property income increased $1.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to increased tourism and hotel occupancy which led to an increase in other room rental income and excise taxes at the hotel portion of our mixed-use property and an increase in parking garage income at the retail portion of our mixed-use property.

Current wording

Mixed-use other property income increased $0.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in other room rental income at the hotel portion of our mixed-use property and an increase in parking garage 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 $11.5 million, or 8%, to $164.0 million for the year ended December 31, 2023, compared to $152.4 million for the year ended December 31, 2022. 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 $3.8 million, or 2%, to $167.7 million for the year ended December 31, 2024, compared to $164.0 million for the year ended December 31, 2023. This increase in total property expenses was attributable primarily to the factors discussed below.

Previous wording

Rental Expenses. Rental expenses increased $11.2 million, or 10%, to $118.8 million for the year ended December 31, 2023, compared to $107.6 million for the year ended December 31, 2022. Rental expense by segment was as follows (dollars in thousands):

Current wording

Rental Expenses. Rental expenses increased $4.7 million, or 4%, to $123.5 million for the year ended December 31, 2024, compared to $118.8 million for the year ended December 31, 2023. Rental expense by segment was as follows (dollars in thousands):

Previous wording

Total retail rental expenses increased $1.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in facilities services, insurance expenses and certain incomplete development costs written off in the period.

Current wording

Total retail rental expenses increased $0.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in facilities services, utilities expenses and insurance expenses.

Previous wording

Multifamily rental expenses increased $1.6 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in utilities expenses, repairs and maintenance expenses, insurance expenses and an increase in property-level personnel compensation expenses.

Current wording

Multifamily rental expenses increased $0.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in facilities services, utilities expenses, insurance expenses and an increase in property-level personnel compensation expenses.

Previous wording

Mixed-use rental expenses increased $4.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase of $4.2 million in hotel room expenses, personnel expenses and excise tax expenses at the hotel portion of our mixed-use property during the period. There was also an increase in rental expenses of $0.3 million at the retail portion of our mixed-use property related to excise taxes, employee costs and facilities expenses.

Current wording

Mixed-use rental expenses increased $0.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase of $0.4 million in hotel room expenses, personnel expenses and excise tax expenses at the hotel portion of our mixed-use property during the period. There was also an increase in rental expenses of $0.4 million at the retail portion of our mixed-use property related to excise taxes, employee costs and facilities expenses.

Previous wording

Real Estate Taxes. Real estate tax expense increased $0.4 million, or 1%, to $45.2 million for the year ended December 31, 2023, compared to $44.8 million for the year ended December 31, 2022. Real estate tax expense by segment was as follows (dollars in thousands):

Current wording

Real Estate Taxes. Real estate tax expense decreased $0.9 million, or 2%, to $44.2 million for the year ended December 31, 2024, compared to $45.2 million for the year ended December 31, 2023. Real estate tax expense by segment was as follows (dollars in thousands):

Previous wording

Retail real estate taxes decreased $0.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to a one-time real estate tax refund received during 2023 at Carmel Mountain Plaza and Del Monte Center.

Current wording

Retail real estate taxes increased $0.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in property tax assessment at Alamo Quarry Market and real estate tax refunds received at Carmel Mountain Plaza during 2023.

Previous wording

Multifamily real estate taxes increased $0.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in property value assessments across all multifamily properties.

Current wording

Multifamily real estate taxes decreased $0.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to a tax refund received at Pacific Ridge Apartments during 2024, partially offset by higher property tax assessments across all multifamily properties.

Previous wording

Mixed-use real estate taxes increased $0.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to discontinuation of a reduction in tax burden that was formerly provided by Honolulu County to hotels during 2021 and 2022 in response to the COVID-19 pandemic.

Current wording

Mixed-use real estate taxes increased $0.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in property tax assessment.

Previous wording

Property operating income increased $7.0 million, or 3%, to $277.2 million for the year ended December 31, 2023, compared to $270.2 million for the year ended December 31, 2022. Property operating income by segment was as follows (dollars in thousands):

Current wording

Property operating income increased $12.9 million, or 5%, to $290.1 million for the year ended December 31, 2024, compared to $277.2 million for the year ended December 31, 2023. Property operating income by segment was as follows (dollars in thousands):