American Assets Trust Inc

Previous wording

•the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus (such as the outbreak of COVID-19 and its variants) and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate;

Current wording

•the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate;

Previous wording

We are a full service, vertically integrated and self-administered REIT that owns, operates, acquires and develops high quality retail, office, multifamily and mixed-use properties in attractive, high-barrier-to-entry markets in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. As of September 30, 2024, our portfolio was comprised of twelve retail shopping centers; twelve office properties; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center; and six multifamily properties. Additionally, as of September 30, 2024, we owned land at three of our properties that we classified as held for development and/or construction in progress. Our core markets include San Diego, California; the San Francisco Bay Area, California; Bellevue, Washington; Portland, Oregon and Oahu, Hawaii. We are a Maryland corporation formed on July 16, 2010 to acquire the entities owning various controlling and noncontrolling interests in real estate assets owned and/or managed by Ernest S. Rady or his affiliates, including the Ernest Rady Trust U/D/T March 13, 1983, or the Rady Trust, and did not have any operating activity until the consummation of our initial public offering on January 19, 2011. Our Company, 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 September 30, 2024. 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 retail, office, multifamily and mixed-use properties in attractive, high-barrier-to-entry markets in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. As of March 31, 2025, our portfolio was comprised of twelve office properties; eleven retail shopping centers a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center; and seven multifamily properties. Additionally, as of March 31, 2025, we owned land at three of our properties that we classified as held for development and/or construction in progress. Our core markets include San Diego, California; the San Francisco Bay Area, California; Bellevue, Washington; Portland, Oregon and Oahu, Hawaii. We are a Maryland corporation formed on July 16, 2010 to acquire the entities owning various controlling and noncontrolling interests in real estate assets owned and/or managed by Ernest S. Rady or his affiliates, including the Ernest Rady Trust U/D/T March 13, 1983, or the Rady Trust, and did not have any operating activity until the consummation of our initial public offering on January 19, 2011. Our Company, 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 March 31, 2025. Accordingly, we consolidate the assets, liabilities and results of operations of our Operating Partnership.

Previous wording

We identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2023. We have not made any material changes to these policies during the periods covered by this report, other than those described in Footnote 1.

Current wording

We identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024. We have not made any material changes to these policies during the periods covered by this report.

Previous 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.

Current wording

Below is a summary of our same-store and redevelopment same-store composition for the three months ended March 31, 2025 and 2024. 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. Del Monte Center was removed as a same-store and redevelopment same-store property when compared to the designations for the three months ended March 31, 2024, as it was sold on February 25, 2025. Genesee Park is classified as a non-same-store property, as it was acquired on February 28, 2025.

Previous 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.

Current wording

Retail same-store net operating income increased approximately 5.0% for the three months ended March 31, 2025 compared to the same period in 2024. Office same-store net operating income decreased 2.9% for the three months ended March 31, 2025 compared to the same period in 2024.

Previous wording

We intend to opportunistically pursue projects in our development pipeline, including future phases of La Jolla Commons, Lloyd Portfolio and development of multifamily units at Lomas Santa Fe Plaza, as well as other redevelopments at Waikele Center and One Beach Street. 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.

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, Carmel Mountain Plaza and Genesee Park. 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.

Previous wording

Our same-store growth is primarily driven by increases in rental rates on new leases and lease renewals and changes in portfolio occupancy. Over the long-term, we believe that the infill nature and strong demographics of our properties provide us with a strategic advantage, allowing us to maintain relatively high occupancy and increase rental rates. Furthermore, we believe the locations of our properties and diversified portfolio will mitigate some of the potentially negative impact of the current economic environment. However, in 2020 through 2022, due to COVID-19, we saw a meaningful negative impact on certain of our tenants' operations and ability to pay rent, primarily in the retail sector. Any reduction in our tenants' abilities to pay base rent, percentage rent or other charges will adversely affect our financial condition and results of operations.

Current wording

Our same-store growth is primarily driven by increases in rental rates on new leases and lease renewals and changes in portfolio occupancy. Over the long-term, we believe that the infill nature and strong demographics of our properties provide us with a strategic advantage, allowing us to maintain relatively high occupancy and increase rental rates. Furthermore, we believe the locations of our properties and diversified portfolio will mitigate some of the potentially negative impact of the current economic environment.

Previous 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.

Current wording

During the three months ended March 31, 2025, we signed 19 office leases for a total of 139,616 square feet of office space including 44,422 square feet of comparable space leases, at an average rental rate increase on a cash and GAAP basis of 7.8% and 15.2%, respectively. New office leases for comparable spaces were signed for 1,913 square feet at an average rental rate increase on a cash and GAAP basis of 4.4% and 0.6%, respectively. Renewals for comparable office spaces were signed for 42,509 square feet at an average rental rate increase on a cash and GAAP basis of 8.0% and 16.0%, respectively. There were no new tenant improvements or incentives on office space for comparable new leases during the three months ended March 31, 2025.

Previous 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.

Current wording

We capitalized external and internal costs related to both development and redevelopment activities combined of $2.0 million and $3.5 million for the three months ended March 31, 2025 and 2024, respectively.

Previous 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

Current wording

We capitalized external and internal costs related to other property improvements combined of $12.3 million and $9.6 million for the three months ended March 31, 2025 and 2024, 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 $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.

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 $1.4 million and $2.1 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

The following summarizes our consolidated results of operations for the three months ended September 30, 2024 compared to our consolidated results of operations for the three months ended September 30, 2023. As of September 30, 2024 and September 30, 2023, our operating portfolio was comprised of 31 retail, office, multifamily and mixed-use properties with an aggregate of approximately 7.2 million rentable square feet of retail and office space, including the retail portion of our mixed-use property, 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of September 30, 2024 and September 30, 2023, we owned land at three of our properties that we classified as held for development and/or construction in progress.

Current wording

The following summarizes our consolidated results of operations for the three months ended March 31, 2025 compared to our consolidated results of operations for the three months ended March 31, 2024. As of March 31, 2025, our operating portfolio was comprised of 31 retail, office, multifamily and mixed-use properties with an aggregate of approximately 6.6 million rentable square feet of retail and office space, including the retail portion of our mixed-use property, 2,302 residential units (including 120 RV spaces) and a 369-room hotel. As of March 31, 2024, our operating portfolio was comprised of 31 retail, office, multifamily and mixed-use properties with an aggregate of approximately 7.2 million rentable square feet of retail and office space, including the retail portion of our mixed-use property, 2,110 residential units (including 120 RV spaces) and a 369-room hotel. Additionally, as of March 31, 2025 and March 31, 2024, we owned land at three of our properties that we classified as held for development and/or construction in progress.

Previous 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:

Current wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue decreased $2.1 million to $108.6 million for the three months ended March 31, 2025 compared to $110.7 million for the three months ended March 31, 2024. The percentage leased was as follows for each segment as of March 31, 2025 and 2024:

Previous wording

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

Current wording

The decrease 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 $3.6 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):

Current wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue decreased $2.1 million, or 2%, to $103.0 million for the three months ended March 31, 2025 compared to $105.0 million for the three months ended March 31, 2024. Rental revenue by segment was as follows (dollars in thousands):

Previous 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.

Current wording

(1)For this table and tables following, the same-store portfolio excludes: (i) One Beach Street (office) due to significant redevelopment; (ii) Del Monte Center (retail), which was sold on February 25, 2025; (iii) Genesee Park (multifamily), which was acquired on February 28, 2025 and (iv) land held for development.

Previous 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.

Current wording

Total office rental revenue decreased $0.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to lower occupancy and annualized base rents at Torrey Reserve Campus, lower occupancy at Lloyd Portfolio, and a decrease in cost recoveries of $0.2 million 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 $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.

Current wording

Same-store retail rental revenue increased $0.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to new tenant leases and scheduled rent increases at Alamo Quarry Market and Solana Beach Towne Center. Additionally, there was an increase of $0.2 million in cost recoveries.

Previous wording

Total mixed-use rental revenue decreased $0.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to a decrease in average occupancy of 83.8% for the three months ended September 30, 2024, compared to 89.3% for the three months ended September 30, 2023. This decrease was partially offset by an increase in rental revenue at the retail portion of our mixed-use property, primarily due to new tenant leases commencing at higher base rents.

Current wording

Total mixed-use rental revenue decreased $0.4 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in tourism, which led to a decrease in average occupancy and revenue per available room to 84.6% and $298 for the three months ended March 31, 2025, respectively, compared to 89.8% and $320 for the three months ended March 31, 2024, respectively. This decrease was partially offset by an increase in rental revenue at the retail portion of our mixed-use property, primarily due to new tenant leases commencing at higher base rents.

Previous 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):

Current wording

Other property income. Other property income stayed flat at $5.7 million for the three months ended March 31, 2025 and March 31, 2024. Other property income by segment was as follows (dollars in thousands):

Previous 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.

Current wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased $0.2 million, or 1%, to $41.3 million, for the three months ended March 31, 2025 compared to $41.1 million for the three months ended March 31, 2024.

Previous 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):

Current wording

Rental Expenses. Rental expenses increased $0.5 million, or 2%, to $30.3 million for the three months ended March 31, 2025 compared to $29.8 million for the three months ended March 31, 2024. Rental expense by segment was as follows (dollars in thousands):

Previous wording

Retail rental expenses increased $1.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to $0.5 million written off in the three months ended March 31, 2024 for non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction at Waikele Center. Additionally, there was an increase in utilities expense, insurance expense and facilities services.

Current wording

Retail rental expense decreased $0.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to $0.5 million written off in the first quarter of 2024 for non-recurring costs relating to construction in progress for then-prospective construction at Waikele Center and a $0.2 million decrease due to the sale of Del Monte Center in the first quarter of 2025. These decreases were partially offset by an increase in facilities services and utilities expense.

Previous 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.

Current wording

Multifamily rental expense increased $0.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the acquisition of Genesee Park and an overall increase in insurance expense across our other multifamily properties.

Previous 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.

Current wording

Mixed-use rental expense increased $0.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an increase in repairs and maintenance expense and facilities services at the retail portion of our mixed-use property.

Previous 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):

Current wording

Real Estate Taxes. Real estate taxes decreased $0.2 million, or 2%, to $11.0 million for the three months ended March 31, 2025 compared to $11.2 million for the three months ended March 31, 2024. Real estate tax expense by segment was as follows (dollars in thousands):

Previous 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.

Current wording

Retail real estate taxes decreased $0.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to real estate tax refunds received at Del Monte Center during the three months ended March 31, 2024.

Previous 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.

Current wording

Multifamily real estate taxes increased $0.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the acquisition of Genesee Park and an increase in property tax assessments at Pacific Ridge Apartments.

Previous wording

Mixed-use 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 assessment.

Current wording

Mixed-use real estate taxes increased $0.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an increase in property tax assessments.

Previous 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):

Current wording

Property net operating income decreased $2.3 million, or 3%, to $67.3 million for the three months ended March 31, 2025, compared to $69.6 million for the three months ended March 31, 2024. Property operating income by segment was as follows (dollars in thousands):

Previous 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.

Current wording

Total office net operating income decreased $1.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a decrease of $0.8 million in rental revenue driven primarily by lower occupancy and annualized base rents at Torrey Reserve Campus, lower occupancy at Lloyd Portfolio, a decrease in cost recoveries, and an increase in rental expenses related to the operations and amenities at La Jolla Commons Tower III and overall increase in utilities expense and insurance expense.

Previous wording

Total retail property operating income increased $1.3 million during 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 and an increase in cost recoveries. These increases were partially offset by higher facilities services and insurance expense, and $0.5 million written off in the three months ended March 31, 2024 for non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction at Waikele Center.

Current wording

Same-store retail net operating income increased $0.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to new tenant leases and scheduled rent increases at Alamo Quarry Market and Solana Beach Towne Center and an increase in cost recoveries. Additionally there was a decrease in rental expenses due to $0.5 million written off in the first quarter of 2024 for non-recurring costs relating to construction in progress for then-prospective construction at Waikele Center, partially offset by an increase in facilities and utilities expenses.

Previous wording

Mixed-use rental revenue increased $0.8 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to an increase in average occupancy to 86.7% for the nine months ended September 30, 2024, compared to 85.3% for the nine months ended September 30, 2023. There was also an increase in rental revenue at the retail portion of our mixed-use property, primarily due to new tenant leases commencing at higher base rents.

Current wording

Total mixed-use net operating income decreased $0.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in tourism, which led to a decrease in average occupancy and revenue per available room to 84.6% and $298 for the three months ended March 31, 2025, respectively, compared to 89.8% and $320 for the three months ended March 31, 2024, respectively. This decrease was partially offset by an increase in rental revenue at the retail portion of our mixed-use property, primarily due to new tenant leases commencing at higher base rents.

Previous 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.

Current wording

General and Administrative. General and administrative expenses increased $0.5 million, or 5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to higher employee-related costs, including, without limitation, with respect to base pay and benefits for certain salaried and hourly workers.

Previous 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.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased $0.3 million, or 1%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was due to the new building improvement assets at One Beach Street placed into operations as of August 1, 2024 and the building improvement assets at 14Acres completed at the end of 2024. These increases were partially offset by lower depreciation expense at Del Monte Center, which was sold on February 25, 2025.

Previous wording

Interest Expense, net. Interest expense increased $1.9 million, or 12%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily due to the closing of our 6.150% Senior Notes on September 17, 2024 and the $100 million draw on our Revolver Loan on July 18, 2024 which was subsequently repaid on September 19, 2024. These increases were partially offset by a decrease in interest expense related to the maturity and repayment of our Series F Notes on July 19, 2024.

Current wording

Interest Expense, net. Interest expense increased $2.5 million, or 16%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to the closing of our 6.150% Senior Notes on September 17, 2024 and partially offset by a decrease in interest expense related to the maturity and repayment of our Series F Notes on July 19, 2024, Term Loan B and Term Loan C on January 2, 2025 and Series C Notes on February 3, 2025.

Previous wording

Other Income, net. Other income, net increased $5.6 million, or 77%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily due to the net settlement payment of approximately $10.0 million received during the three months ended March 31, 2024 relating to building specifications for one of the existing buildings at our office project in University Town Center (San Diego), compared to the net settlement payment of approximately $6.3 million received on January 3, 2023 related to certain building systems at our Hassalo on Eighth property and an increase in interest and investment income attributed to higher yield on our average cash balance during the period.

Current wording

Other Income, net. Other income, net decreased $9.4 million, or 91%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This decrease was primarily due to the net settlement payment of approximately $10 million received during the first quarter of 2024 relating to building specifications for one of the existing buildings at our office project in University Town Center (San Diego). This decrease was partially offset by an increase in interest and investment income attributed to a higher yield on our average cash balance during the period.

Previous wording

As of September 30, 2024, the company owned an approximate 78.8% partnership interest in the Operating Partnership. The remaining approximately 21.2% are owned by non-affiliated investors and certain of the company's directors and executive officers. As the sole general partner of the Operating Partnership, American Assets Trust, Inc. has the full, exclusive and complete authority and control over the Operating Partnership’s day-to-day management and business, can cause it to enter into certain major transactions, including acquisitions, dispositions and refinancings, and can cause changes in its line of business, capital structure and distribution policies. The company causes the Operating Partnership to distribute such portion of its available cash as the company may in its discretion determine, in the manner provided in the Operating Partnership’s partnership agreement.

Current wording

As of March 31, 2025, the company owned an approximate 78.9% partnership interest in the Operating Partnership. The remaining approximately 21.1% are owned by non-affiliated investors and certain of the company's directors and executive officers. As the sole general partner of the Operating Partnership, American Assets Trust, Inc. has the full, exclusive and complete authority and control over the Operating Partnership’s day-to-day management and business, can cause it to enter into certain major transactions, including acquisitions, dispositions and refinancings, and can cause changes in its line of business, capital structure and distribution policies. The company causes the Operating Partnership to distribute such portion of its available cash as the company may in its discretion determine, in the manner provided in the Operating Partnership’s partnership agreement.

Previous wording

We intend to use the net proceeds to fund development or redevelopment activities, repay amounts outstanding from time to time under our amended and restated credit facility or other debt financing obligations, fund potential acquisition opportunities and/or for general corporate purposes. Actual future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of the company's common stock and the company's capital needs. For the three months ended September 30, 2024, no shares of common stock were sold through the ATM equity program. We have no obligation to sell the remaining shares available for sale under the ATM equity program.

Current wording

On December 3, 2021, we entered into a new ATM equity program with five sales agents under which we may, from time to time, offer and sell shares of our common stock having an aggregate offering price of up to $250.0 million. The sale of shares of our common stock made through the ATM equity program are made in "at-the-market" offerings as defined in Rule 415 of the Securities Act of 1933, as amended. We intend to use the net proceeds to fund development or redevelopment activities, repay amounts outstanding from time to time under our amended and restated credit facility or other debt financing obligations, fund potential acquisition opportunities and/or for general corporate purposes. Actual future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of the company's common stock and the company's capital needs. For the three months ended March 31, 2025, no shares of common stock were sold through the ATM equity program. We have no obligation to sell the remaining shares available for sale under the ATM equity program.

Previous wording

Due to the nature of our business, we typically generate significant amounts of cash from operations. The cash generated from operations is used for the payment of operating expenses, capital expenditures, debt service and dividends to American Assets Trust, Inc.'s stockholders and our unitholders. As a REIT, American Assets Trust, Inc. must generally make annual distributions to its stockholders of at least 90% of its net taxable income. As of September 30, 2024, we held $533.0 million in cash and cash equivalents.

Current wording

Due to the nature of our business, we typically generate significant amounts of cash from operations. The cash generated from operations is used for the payment of operating expenses, capital expenditures, debt service and dividends to American Assets Trust, Inc.'s stockholders and our unitholders. As a REIT, American Assets Trust, Inc. must generally make annual distributions to its stockholders of at least 90% of its net taxable income. As of March 31, 2025, we held $143.9 million in cash and cash equivalents.