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 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.

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 June 30, 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 June 30, 2025, we owned land at two of our properties that we classified as held for development and/or construction in progress. La Jolla Commons - Land, related to the build-out of La Jolla Commons III, was previously classified as held for development. The build out of La Jolla Commons III is now complete and the building, inclusive of the land, was placed in operations as of April 1, 2025. 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 June 30, 2025. Accordingly, we consolidate the assets, liabilities and results of operations of our Operating Partnership.

Previous wording

On February 25, 2025, we sold Del Monte Center, which is located in Monterey, California and was previously included in our retail segment. The sale price of this property of approximately $123.5 million, less closing costs and prorations, resulted in net proceeds of approximately $117.8 million. Accordingly, we recorded a gain on the sale of approximately $44.5 million for the three months ended March 31, 2025.

Current wording

On February 25, 2025, we sold Del Monte Center, which is located in Monterey, California and was previously included in our retail segment. The sale price of this property of approximately $123.5 million, less closing costs and prorations, resulted in net proceeds of approximately $117.8 million. Accordingly, we recorded a gain on the sale of approximately $44.5 million for the six months ended June 30, 2025.

Previous wording

While there is judgment surrounding changes in designations, we typically reclassify significant development, redevelopment or expansion properties into same-store properties once they are stabilized. Properties are deemed stabilized typically at the earlier of (i) reaching 90% occupancy or (ii) four quarters following a property's inclusion in operating real estate. We typically remove properties from same-store properties when the development, redevelopment or expansion has or is expected to have a significant impact on the property's annualized base rent, occupancy and operating income within the calendar year. Our evaluation of significant impact related to development, redevelopment or expansion activity is based on quantitative and qualitative measures including, but not limited to, the following: the total budgeted cost of planned construction activity compared to the property’s annualized base rent, occupancy and property operating income within the calendar year; percentage of development, redevelopment or expansion square footage to total property square footage; and the ability to maintain historic occupancy and rental rates. In consideration of these measures, we generally remove properties from same-store properties when we see a decline in a property's annualized base rent, occupancy and operating income within the calendar year as a direct result of ongoing redevelopment, development or expansion activity. Acquired properties are classified into same-store properties once we have owned such properties for the entirety of comparable period(s) and the properties are not under significant development or expansion.

Current wording

While there is judgment surrounding changes in designations, we typically reclassify significant development, redevelopment or expansion properties into same-store properties once they are stabilized. Properties are deemed stabilized typically at the earlier of (i) reaching 90% occupancy or (ii) four quarters following a property's inclusion in operating real estate. We typically remove properties from same-store properties when the development, redevelopment or expansion has or is expected to have a significant impact on the property's annualized base rent, occupancy and property operating income within the calendar year. Our evaluation of significant impact related to development, redevelopment or expansion activity is based on quantitative and qualitative measures including, but not limited to, the following: the total budgeted cost of planned construction activity compared to the property’s annualized base rent, occupancy and property operating income within the calendar year; percentage of development, redevelopment or expansion square footage to total property square footage; and the ability to maintain historic occupancy and rental rates. In consideration of these measures, we generally remove properties from same-store properties when we see a decline in a property's annualized base rent, occupancy and operating income within the calendar year as a direct result of ongoing redevelopment, development or expansion activity. Acquired properties are classified into same-store properties once we have owned such properties for the entirety of comparable period(s) and the properties are not under significant development or expansion.

Previous 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.

Current wording

Below is a summary of our same-store and redevelopment same-store composition for the three and six months ended June 30, 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 and six months ended June 30, 2024, as it was sold on February 25, 2025. Genesee Park is classified as a non-same-store property because it was acquired on February 28, 2025, and thus has not been owned for the comparable period. La Jolla Commons III is classified as non-same store when compared to the designations for the three and six months ended June 30, 2024, as it was placed in operations on April 1, 2025. La Jolla Commons III is a part of the La Jolla Commons office project, and not a stand-alone property.

Previous 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.

Current wording

Retail same-store operating income increased approximately 5.5% for the six months ended June 30, 2025 compared to the same period in 2024. Office same-store operating income decreased 2.1% for the six months ended June 30, 2025 compared to the same period in 2024.

Previous 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.

Current wording

During the three months ended June 30, 2025, we signed 20 office leases for a total of 102,290 square feet of office space including 69,363 square feet of comparable space leases (leases for which there was a prior tenant), at an average rental rate decrease on a cash basis and increase on a GAAP basis of 2.0% and 9.6%, respectively. New office leases for comparable spaces were signed for 50,765 square feet at an average rental rate decrease on a cash basis and increase on a GAAP basis of 5.2% and 9.2%, respectively. Renewals for comparable office spaces were signed for 18,598 square feet at an average rental rate increase on a cash and GAAP basis of 6.4% and 10.7%, respectively. Tenant improvements and incentives were $48.15 per square foot of office space for comparable new leases for the three months ended June 30, 2025, mainly due to new tenants at 14Acres and Lloyd District.

Previous wording

During the three months ended March 31, 2025, we signed 16 retail leases for a total of 157,644 square feet of retail space including 155,944 square feet of renewals for comparable space leases, at an average rental rate increase on a cash and GAAP basis of 13.3% and 21.0%, respectively. There were no new retail leases, tenant improvements, or incentives on retail space for comparable new leases during the three months ended March 31, 2025.

Current wording

During the three months ended June 30, 2025, we signed 32 retail leases for a total of 220,247 square feet of retail space including 213,073 square feet of comparable space leases (leases for which there was a prior tenant), at an average rental rate increase on a cash and GAAP basis of 7.4% and 21.9%, respectively. New retail leases for comparable spaces were signed for 20,654 square feet at an average rental rate increase on a cash and GAAP basis of 6.9% and 263.2%, respectively. The rental rate increase on a GAAP basis is primarily attributable to our recognition of the prior tenant's rental revenue on a cash basis and the new tenant's rental revenue on a straight line basis. Renewals for comparable retail spaces were signed for 192,419 square feet at an average rental rate increase on a cash and GAAP basis of 7.5% and 13.7%, respectively. Tenant improvements and incentives were $33.48 per square foot of retail space for comparable new leases for the three months ended June 30, 2025, mainly due to new tenants at Gateway Marketplace, Alamo Quarry Market and Solana Beach Towne Centre.

Previous 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.

Current wording

We capitalized external and internal costs related to new development, redevelopment, expansion and repositioning activities combined of $8.6 million and $4.8 million for the three months ended June 30, 2025 and 2024, respectively, and $10.6 million and $8.3 million for the six months ended June 30, 2025 and 2024, respectively.

Previous 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.

Current wording

We capitalized external and internal costs related to other property improvements combined of $12.8 million and $14.6 million for the three months ended June 30, 2025 and 2024, respectively, and $25.2 million and $24.1 million for the six months ended June 30, 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 $1.4 million and $2.1 million for the three months ended March 31, 2025 and 2024, 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. Since the build out of La Jolla Commons III is now complete and the building, inclusive of the land, was placed in operations as of April 1, 2025, there were no capitalized interest costs related to development activities for the three months ended June 30, 2025. We capitalized interest costs related to development activities of $2.1 million for the three months ended June 30, 2024 and $1.4 million and $4.2 million for the six months ended June 30, 2025 and 2024, respectively.

Previous 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.

Current wording

The following summarizes our consolidated results of operations for the three months ended June 30, 2025 compared to our consolidated results of operations for the three months ended June 30, 2024. As of June 30, 2025, our operating portfolio was comprised of 31 retail, office, multifamily and mixed-use properties with an aggregate of approximately 6.8 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. Additionally, as of June 30, 2025, we owned land at two of our properties that we classified as held for development and/or construction in progress. As of June 30, 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 June 30, 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 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:

Current wording

Total property revenues. Total property revenue consists of rental revenue and other property income. Total property revenue decreased $3.0 million to $107.9 million for the three months ended June 30, 2025 compared to $110.9 million for the three months ended June 30, 2024. The percentage leased was as follows for each segment as of June 30, 2025 and 2024:

Previous 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):

Current wording

Rental revenues. Rental revenue includes minimum base rent, cost reimbursements, percentage rents and other rents. Rental revenue decreased $4.0 million, or 4%, to $101.1 million for the three months ended June 30, 2025 compared to $105.1 million for the three months ended June 30, 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: (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.

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, (iv) La Jolla Commons III (office), which was placed into operations on April 1, 2025 and (v) land held for development (office).

Previous 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.

Current wording

Same-store office rental revenue decreased $1.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to lower occupancy and annualized base rents at Torrey Reserve Campus and First & Main, lower occupancy at Lloyd Portfolio, and a decrease in cost recoveries of $0.3 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

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.

Current wording

Same-store retail rental revenue increased $0.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to new tenant leases and scheduled rent increases at Carmel Mountain Plaza, Geary Marketplace, Alamo Quarry Market and Solana Beach Towne Center. These increases were offset by a decrease of $0.2 million in cost recoveries.

Previous wording

Same-store multifamily revenue increased $0.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an overall increase in average monthly base rent and a slight decrease in occupancy. Same-store average monthly base rent and occupancy was $2,777 and 90.5%, for the three months ended March 31, 2025, respectively, compared to $2,681 and 92.3%, for the three months ended March 31, 2024, respectively.

Current wording

Same-store multifamily revenue decreased $0.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to an overall decrease in occupancy. Same-store average monthly base rent and occupancy was $2,791 and 89.0%, for the three months ended June 30, 2025, respectively, compared to $2,730 and 90.8%, for the three months ended June 30, 2024, respectively.

Previous 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.

Current wording

Total mixed-use rental revenue decreased $0.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to a decrease in tourism, which led to a decrease in average occupancy and revenue per available room to 86.0% and $305 for the three months ended June 30, 2025, respectively, compared to 86.4% and $317 for the three months ended June 30, 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 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):

Current wording

Other property income. Other property income increased $1.1 million, or 18%, to $6.9 million for the three months ended June 30, 2025 compared to $5.8 million for the three months ended June 30, 2024. Other property income by segment was as follows (dollars in thousands):

Previous 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):

Current wording

Rental Expenses. Rental expenses increased $0.2 million, or 1%, to $29.7 million for the three months ended June 30, 2025 compared to $29.5 million for the three months ended June 30, 2024. Rental expense by segment was as follows (dollars in thousands):

Previous wording

Office rental expense increased $0.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a $0.3 million increase at La Jolla Commons Tower III related to new operations and amenities and a $0.4 million increase related to higher utilities expense and insurance expense.

Current wording

Office rental expense increased $0.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to an increase at La Jolla Commons Tower III related to new operations and amenities. Same-store office rental expense decreased $0.1 million due to lower parking garage expense and other operating expense.

Previous 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.

Current wording

Mixed-use rental expense increased $0.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to an increase in room related expenses at the hotel portion of our mixed-use property and an increase in repairs and maintenance expense and excise tax expense at the retail portion of our mixed-use property.

Previous 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):

Current wording

Real Estate Taxes. Real estate taxes decreased $0.2 million, or 2%, to $10.6 million for the three months ended June 30, 2025 compared to $10.8 million for the three months ended June 30, 2024. Real estate tax expense by segment was as follows (dollars in thousands):

Previous wording

Same-store office real estate taxes decreased $0.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in property tax assessments at City Center Bellevue, 14Acres and Timber Ridge, partially offset by an increase at First & Main due to real estate tax refunds received during the three months ended March 31, 2024.

Current wording

Same-store office real estate taxes decreased $0.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to a decrease in property tax assessments at City Center Bellevue, 14Acres and Timber Ridge, partially offset by an increase at La Jolla Commons due to real estate tax refunds received during the three months ended June 30, 2024.

Previous 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):

Current wording

Property operating income decreased $2.9 million, or 4%, to $67.6 million for the three months ended June 30, 2025, compared to $70.5 million for the three months ended June 30, 2024. Property operating income by segment was as follows (dollars in thousands):

Previous 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.

Current wording

Same-store office operating income decreased $1.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a decrease in rental revenue driven primarily by lower occupancy and annualized base rents at Torrey Reserve Campus and First & Main, lower occupancy at Lloyd Portfolio, a decrease in cost recoveries, and a decrease in parking garage expense and other operating expense.

Previous wording

Same-store multifamily net operating income 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 overall increase in average monthly base rent and a slight decrease in occupancy. Same-store average monthly base rent and occupancy was $2,777 and 90.5%, for the three months ended March 31, 2025, respectively, compared to $2,681 and 92.3%, for the three months ended March 31, 2024, respectively. These increases were offset by higher insurance expense across our same-store multifamily properties.

Current wording

Same-store multifamily operating income decreased $0.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to a decrease in occupancy. Same-store average monthly base rent and occupancy was $2,791 and 89.0%, respectively, for the three months ended June 30, 2025, compared to $2,730 and 90.8%, respectively, for the three months ended June 30, 2024. Additionally, there was an increase in utilities expense and repairs and maintenance expense across most of our other multifamily properties.

Previous 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.

Current wording

General and Administrative. General and administrative expenses increased $0.1 million, or 1%, for the three months ended June 30, 2025, compared to the three months ended June 30, 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 $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.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased $1.8 million, or 6%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This increase was primarily due to $1.0 million related to the recent acquisition of Genesee Park on February 28, 2025, $0.9 million related to La Jolla Commons III, which was placed in service on April 1, 2025, and $0.6 million related to acceleration of depreciation of assets attributable to a lease for which the tenant vacated their space early at Waikiki Beach Walk - Retail. 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 $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.

Current wording

Interest Expense, net. Interest expense increased $3.5 million, or 21%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This increase was primarily due to the closing of our 6.150% Senior Notes on September 17, 2024 and a decrease in capitalized interest related to La Jolla Commons III being placed in service on April 1, 2025. 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, Series B Notes on December 2, 2024, Term Loan B and Term Loan C on January 2, 2025 and Series C Notes on February 3, 2025.

Previous 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.

Current wording

Total Property Expenses. Total property expenses consist of rental expenses and real estate taxes. Total property expenses increased by $0.2 million to $81.6 million for the six months ended June 30, 2025, compared to $81.4 million for the six months ended June 30, 2024. This increase in total property expenses was attributable primarily to the factors discussed below.

Previous 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.

Current wording

Retail rental expenses decreased $1.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to $0.5 million written off during the first quarter of 2024 for non-recurring costs related to construction in progress for then-prospective construction at Waikele Center and a $1.3 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 utilities expense and facilities services.

Previous 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.

Current wording

Multifamily rental expenses increased $1.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the acquisition of Genesee Park and an overall increase in insurance expense, utilities expense and repairs and maintenance expense across most of our other multifamily properties.

Previous 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.

Current wording

Same-store office real estate taxes decreased $0.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to a decrease in property tax assessments at City Center Bellevue, 14Acres and Timber Ridge, partially offset by an increase at La Jolla Commons due to real estate tax refunds received during the six months ended June 30, 2024.

Previous 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.

Current wording

Other Income, net. Other income, net decreased $9.3 million, or 83%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This decrease 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). This decrease was partially offset by an increase in interest and investment income attributed to higher yield on our average cash balance during the period.

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 March 31, 2025, we held $143.9 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 June 30, 2025, we held $143.7 million in cash and cash equivalents.

Previous wording

Our overall capital requirements for the remainder of 2025 will depend upon acquisition opportunities and the level of improvements and redevelopments on existing properties. Our capital investments will be funded on a short-term basis with, among other sources of capital, cash on hand, cash flow from operations and/or our revolving line of credit. On a long-term basis, our capital investments may be funded with additional long-term debt, including, without limitation, mortgage debt and unsecured notes. Our ability to incur additional debt will be dependent on a number of factors, including, without limitation, our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our capital investments may also be funded by issuing additional equity including, without limitation, shares issued by American Assets Trust, Inc. under its ATM equity program or through an underwritten public offering. Although there is no intent at this time, if market conditions deteriorate or fail to improve, we may also delay the timing of future development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy.

Current wording

Our overall capital requirements for the remainder of 2025 and for the first half of 2026 will depend upon acquisition opportunities and the level of improvements and redevelopments on existing properties. Our capital investments will be funded on a short-term basis with, among other sources of capital, cash on hand, cash flow from operations and/or our revolving line of credit. On a long-term basis, our capital investments may be funded with additional long-term debt, including, without limitation, mortgage debt and unsecured notes. Our ability to incur additional debt will be dependent on a number of factors, including, without limitation, our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our capital investments may also be funded by issuing additional equity including, without limitation, shares issued by American Assets Trust, Inc. under its ATM equity program or through an underwritten public offering. Although there is no intent at this time, if market conditions deteriorate or fail to improve, we may also delay the timing of future development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy.

Previous wording

Cash, cash equivalents, and restricted cash were $143.9 million and $98.6 million at March 31, 2025 and 2024, respectively.

Current wording

Cash, cash equivalents, and restricted cash were $143.7 million and $114.9 million at June 30, 2025 and 2024, respectively.

Previous wording

Net cash provided by operating activities decreased $17.9 million to $36.9 million for the three months ended March 31, 2025 compared to $54.8 million for the three months ended March 31, 2024. The decrease in cash from operations was primarily due to the net settlement received during the first quarter of 2024 relating to the building specifications for one of the existing buildings at our office project in University Town Center (San Diego), and a decrease in rental revenue and changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities decreased $28.0 million to $86.0 million for the six months ended June 30, 2025 compared to $114.1 million for the six months ended June 30, 2024. The decrease in cash from operations was primarily due to the net settlement received during the first quarter of 2024 relating to the building specifications for one of the existing buildings at our office project in University Town Center (San Diego), lease termination fees received at Torrey Reserve Campus during the second quarter of 2024 and a decrease in rental revenue and changes in operating assets and liabilities.

Previous wording

Net cash provided by investing activities increased $46.0 million to $32.7 million for the three months ended March 31, 2025 compared to cash used in investing activities of $13.3 million for the three months ended March 31, 2024. The increase in cash provided was primarily due to the proceeds from the sale of Del Monte Center, offset by the use of cash for the acquisition of Genesee Park and an increase in capital expenditures related to new office tenant improvement projects and continuous efforts to build out La Jolla Commons.

Current wording

Net cash provided by investing activities increased $40.0 million to $9.6 million for the six months ended June 30, 2025 compared to cash used in investing activities of $30.4 million for the six months ended June 30, 2024. The increase in cash provided was primarily due to the proceeds from the sale of Del Monte Center, offset by the use of cash for the acquisition of Genesee Park and an increase in capital expenditures related to new office tenant improvement projects, leasing commissions and continuous efforts to build out La Jolla Commons III.