3 unchanged sentences
American Assets Trust, Inc.
−Removed: maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its Exchange Act reports is
−Removed: recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
−Removed: In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
+Added: maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
+Added: In designing and evaluating the disclosure
+Added: controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, American Assets Trust, Inc.
44 unchanged sentences
OTHER INFORMATION
+Added: During the year ended December 31, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
+Added: In addition, on July 20, 2023, our board of directors adopted amendments to our amended and restated bylaws, which became effective the same day.
+Added: Among other things, such amendments addressed the universal proxy rules adopted by the SEC by clarifying that no person may solicit proxies in support of a director nominee other than the board of director’s nominees unless such person has complied with Rule 14a-19 under the Exchange Act, including, without limitation, applicable notice and solicitation requirements.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
15 unchanged sentences
SEC regulations require us to identify anyone who failed to file a required report or filed a late report during the most recent fiscal year.
−Removed: Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons that no Forms 5 were required for such persons, we believe that, during the fiscal year ended December 31, 2022, our named executive officers, directors and 10% stockholders complied with all Section 16(a) filing requirements applicable to them, except that Ernest Rady, our Chairman and Chief Executive Officer and a member of our Board of Directors, filed a Form 4/A on October 4, 2022 for a transaction that occurred on August 30, 2022, due to a scrivener's error solely due to Mr.
−Removed: Rady's broker failing to provide us with the correct number of shares purchased.
+Added: Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons that no Forms 5 were required for such persons, we believe that, during the fiscal year ended December 31, 2023, our named executive officers, directors and 10% stockholders complied with all Section 16(a) filing requirements applicable to them.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
29 unchanged sentences
10.9(5) Franchise License Agreement—Embassy Suites—Waikiki Beach Walk—Honolulu, Hawaii between Embassy Suites Franchise LLC and WBW Hotel Lessee, LLC, dated January 19, 2011
−Removed: 10.10(5) Deed of Trust and Security Agreement by and between AAT CC Bellevue, LLC, as Borrower, and PNC Bank, National Association, as Lender, dated October 10, 2012
−Removed: 10.11(5) Promissory Note by AAT CC Bellevue, LLC, as maker, to PNC Bank, National Association, dated as of October 10, 2012
10.12(6) American Assets Trust, Inc.
39 unchanged sentences
10.39(18) Amended and Restated Term Loan Agreement dated January 5, 2023, by and among American Assets Trust, Inc., American Assets Trust, L.P., each lender from time-to-time party thereto, and U.S.
−Removed: Bank National A ssoc i ation , as Administrative Agen t .
+Added: Bank National Association, as Administrative Agent.
21.1* List of Subsidiaries of American Assets Trust, Inc.
12 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
+Added: 97* Policy Relating to Recovery of Erroneously Awarded Compensation
101.INS* Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.
8 unchanged sentences
333-169326), filed with the Securities and Exchange Commission on September 13, 2010.
+Added: (2) Incorporated herein by reference to American Assets Trust, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2023.
(3) Incorporated herein by reference to American Assets Trust, Inc.'s Current Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2015.
1 unchanged sentence
(5) Incorporated herein by reference to American Assets Trust, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 19, 2011.
−Removed: (5) Incorporated herein by reference to American Assets Trust, Inc’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2012.
(6) Incorporated herein by reference to American Assets Trust, Inc.'s Current Report on Form 10-K filed with the Securities and Exchange Commission on February 14, 2020.
63 unchanged sentences
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on these financial statements based on our audits.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
6 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of real estate properties
9 unchanged sentences
For example, we searched for tenants or groups of tenants with large reserved balances or upcoming lease expirations that occupy a substantial portion of any particular property and searched for significant declines in operating results of any particular property due to occupancy changes, tenant bankruptcies, environmental issues, adverse changes in legal factors or natural disasters.
−Removed: Property asset acquisitions
−Removed: Description of the Matter
−Removed: During the year ended December 31, 2022, the Company completed the acquisition of Bel-Spring 520 for a purchase price of approximately $45.5 million.
−Removed: As discussed in Note 1 and Note 2 to the consolidated financial statements, the Company accounted for the purchase as an asset acquisition in accordance with the authoritative accounting guidance on acquisitions and business combinations.
−Removed: The Company’s methodology of allocating the cost of the acquisition to the assets acquired and liabilities assumed consists of use of the income, sales comparison and cost approaches.
−Removed: For acquired operating real estate properties, the purchase price is allocated to land and buildings, intangible assets such as in-place leases, and tangible assets and liabilities acquired, if any, based on their relative fair value.
−Removed: Auditing the Company’s accounting for its acquisition was complex due to the significant estimation required by management in determining the relative fair values of the acquired land and buildings and intangible assets such as in-place leases.
−Removed: The significant estimation was primarily due to the judgmental nature of inputs, including discount rates, capitalization rates and certain market assumptions such as market rental rates.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for acquisitions process.
−Removed: For example, we tested controls over the valuation of acquired land, buildings and intangible assets, including the valuation models and underlying assumptions used to develop such estimates.
−Removed: Our testing of the Company’s accounting for its acquisition included, among other procedures, reading the purchase agreement and testing the values allocated to the assets acquired and liabilities assumed by evaluating the valuation methods and significant assumptions used by management.
−Removed: For example, our real estate valuation specialists assisted us in evaluating the methodologies used by the Company and testing the consistency of the selected discount rates, capitalization rates and various market assumptions such as market rental rates with external market data sources.
−Removed: Additionally, we evaluated the completeness and accuracy of the underlying data supporting the determination of various inputs.
−Removed: Also, with the assistance of our specialists, we evaluated the incorporation of the key assumptions in the aforementioned models and tested such models for clerical accuracy.
/s/ Ernst & Young LLP
49 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of real estate properties
9 unchanged sentences
For example, we searched for tenants or groups of tenants with large reserved balances or upcoming lease expirations that occupy a substantial portion of any particular property and searched for significant declines in operating results of any particular property due to occupancy changes, tenant bankruptcies, environmental issues, adverse changes in legal factors or natural disasters.
−Removed: Property asset acquisition
−Removed: Description of the Matter
−Removed: During the year ended December 31, 2022, the Company completed the acquisition of Bel-Spring 520 for a purchase price of approximately $45.5 million.
−Removed: As discussed in Note 1 and Note 2 to the consolidated financial statements, the Company accounted for the purchase as an asset acquisition in accordance with the authoritative accounting guidance on acquisitions and business combinations.
−Removed: The Company’s methodology of allocating the cost of the acquisition to assets acquired and liabilities assumed consists of use of the income, sales comparison and cost approaches.
−Removed: For acquired operating real estate properties, the purchase price is allocated to land and buildings, intangible assets such as in-place leases, and tangible assets and liabilities acquired, if any, based on their relative fair value.
−Removed: Auditing the Company’s accounting for its acquisition was complex due to the significant estimation required by management in determining the relative fair values of the acquired land and buildings and intangible assets such as in-place leases.
−Removed: The significant estimation was primarily due to the judgmental nature of inputs, including discount rates, capitalization rates and certain market assumptions such as market rental rates.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for acquisitions process.
−Removed: For example, we tested controls over the valuation of acquired land, buildings and intangible assets, including the valuation models and underlying assumptions used to develop such estimates.
−Removed: Our testing of the Company’s accounting for its acquisition included, among other procedures, reading the purchase agreement and testing the values allocated to the assets acquired and liabilities assumed by evaluating the valuation methods and significant assumptions used by management.
−Removed: For example, our real estate valuation specialists assisted us in evaluating the methodologies used by the Company and testing the consistency of the selected discount rates, capitalization rates and various market assumptions such as market rental rates with external market data sources.
−Removed: Additionally, we evaluated the completeness and accuracy of the underlying data supporting the determination of various inputs.
−Removed: Also, with the assistance of our specialists, we evaluated the incorporation of the key assumptions in the aforementioned models and tested such models for clerical accuracy.
/s/ Ernst & Young LLP
55 unchanged sentences
Loss on early extinguishment of debt — — ( 4,271 )
−Removed: Other (expense) income, net ( 625 ) ( 418 ) 447
+Added: Other income (expense), net 7,649 ( 625 ) ( 418 )
NET INCOME 64,690 55,877 36,593
11 unchanged sentences
Net income $ 64,690 $ 55,877 $ 36,593
−Removed: Other comprehensive gain (loss) - unrealized gain (loss) on swap derivatives during the period 11,319 2,723 ( 3,649 )
+Added: Other comprehensive (loss) income - unrealized (loss) income on swap derivatives during the period ( 1,827 ) 11,319 2,723
Reclassification of amortization of forward starting swap included in interest expense, net ( 1,149 ) ( 1,477 ) ( 1,098 )
18 unchanged sentences
( 155,390 ) ( 2 ) 2 — — — —
−Removed: Conversion of operating partnership units
−Removed: 209,011 2 ( 12,003 ) — 3 11,998 —
Dividends declared and paid
3 unchanged sentences
Shares withheld for employee taxes ( 25,141 ) — ( 865 ) — — — ( 865 )
−Removed: ( 23,435 ) — ( 672 ) — — — ( 672 )
−Removed: Other comprehensive loss - change in value of interest rate swaps — — — — ( 2,885 ) ( 764 ) ( 3,649 )
+Added: Other comprehensive income - change in value of interest rate swaps — — — — 2,135 588 2,723
Reclassification of amortization of forward-starting swaps included in interest expense — — — — ( 864 ) ( 234 ) ( 1,098 )
+Added: Reclassification of amortization of forward-starting swaps included in loss on early extinguishment of debt — — — — ( 152 ) ( 41 ) ( 193 )
Balance at December 31, 2021 60,525,580 605 1,453,272 ( 217,785 ) 2,872 ( 28,841 ) 1,210,123
11 unchanged sentences
Reclassification of amortization of forward-starting swaps included in interest expense — — — — ( 1,164 ) ( 313 ) ( 1,477 )
−Removed: Reclassification of amortization of forward-starting swaps included in loss on early extinguishment of debt — — — — ( 152 ) ( 41 ) ( 193 )
Balance at December 31, 2022 60,718,653 607 1,461,201 ( 251,167 ) 10,624 ( 35,740 ) 1,185,525
9 unchanged sentences
Shares withheld for employee taxes ( 41,275 ) — ( 831 ) — — — ( 831 )
−Removed: ( 25,813 ) — ( 759 ) — — — ( 759 )
−Removed: Other comprehensive income - change in value of interest rate swaps — — — — 8,916 2,403 11,319
+Added: Other comprehensive loss - change in value of interest rate swaps — — — — ( 1,437 ) ( 390 ) ( 1,827 )
Reclassification of amortization of forward-starting swaps included in interest expense, net — — — — ( 905 ) ( 244 ) ( 1,149 )
15 unchanged sentences
Stock-based compensation expense 8,838 8,690 8,493
−Removed: Other noncash interest expense ( 1,477 ) ( 1,098 ) ( 1,330 )
+Added: Other noncash interest expense, net ( 1,149 ) ( 1,477 ) ( 1,098 )
Other, net 266 ( 252 ) 1,314
16 unchanged sentences
Repayment of secured notes payable — ( 111,000 ) —
+Added: Proceeds from unsecured term loan 225,000 — —
Proceeds from unsecured line of credit — 36,000 —
Repayment of unsecured line of credit ( 36,000 ) — ( 100,000 )
−Removed: Repayment of unsecured notes payable — ( 155,375 ) —
+Added: Repayment of unsecured term loan ( 150,000 ) — ( 155,375 )
Proceeds from issuance of unsecured notes payable — — 494,675
3 unchanged sentences
Net cash (used in) provided by financing activities ( 65,547 ) ( 102,704 ) 144,424
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash ( 89,953 ) 475 29,598
−Removed: Cash, cash equivalents and restricted cash, beginning of year 139,524 139,049 109,451
−Removed: Cash, cash equivalents and restricted cash, end of year $ 49,571 $ 139,524 $ 139,049
−Removed: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:
−Removed: Year ended December 31,
−Removed: 2022 2021 2020
−Removed: Cash and cash equivalents $ 49,571 $ 139,524 $ 137,333
−Removed: Restricted cash — — 1,716
−Removed: Total cash, cash equivalents and restricted cash shown in Statement of Cash Flows $ 49,571 $ 139,524 $ 139,049
+Added: Net increase (decrease) in cash, cash equivalents 33,317 ( 89,953 ) 475
+Added: Cash and cash equivalents, beginning of year 49,571 139,524 139,049
+Added: Cash and cash equivalents, end of year $ 82,888 $ 49,571 $ 139,524
The accompanying notes are an integral part of these consolidated financial statements.
48 unchanged sentences
Loss on early extinguishment of debt — — ( 4,271 )
−Removed: Other (expense) income, net ( 625 ) ( 418 ) 447
+Added: Other income (expense), net 7,649 ( 625 ) ( 418 )
NET INCOME 64,690 55,877 36,593
13 unchanged sentences
Net income $ 64,690 $ 55,877 $ 36,593
−Removed: Other comprehensive gain (loss) - unrealized gain (loss) on swap derivatives during the period 11,319 2,723 ( 3,649 )
+Added: Other comprehensive (loss) income - unrealized (loss) income on swap derivatives during the period ( 1,827 ) 11,319 2,723
Reclassification of amortization of forward starting swaps included in interest expense, net ( 1,149 ) ( 1,477 ) ( 1,098 )
13 unchanged sentences
Net income — 7,653 — 28,940 — 36,593
−Removed: Conversion of operating partnership units ( 209,011 ) 12,001 209,011 ( 12,001 ) — —
Issuance of restricted units — — 229,819 — — —
3 unchanged sentences
Units withheld for employee taxes — — ( 25,141 ) ( 865 ) — ( 865 )
−Removed: Other comprehensive loss - change in value of interest rate swaps — — — — ( 3,649 ) ( 3,649 )
+Added: Other comprehensive income - change in value of interest rate swaps — — — — 2,723 2,723
Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 1,098 ) ( 1,098 )
+Added: Reclassification of amortization of forward starting swaps included in loss on early extinguishment of debt — — — — ( 193 ) ( 193 )
Balance at December 31, 2021 16,181,537 ( 30,138 ) 60,525,580 1,236,092 4,169 1,210,123
7 unchanged sentences
Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 1,477 ) ( 1,477 )
−Removed: Reclassification of amortization of forward-starting swaps included in loss on early extinguishment of debt — — — — ( 193 ) ( 193 )
Balance at December 31, 2022 16,181,537 ( 39,127 ) 60,718,653 1,210,641 14,011 1,185,525
5 unchanged sentences
Units withheld for employee taxes — — ( 41,275 ) ( 831 ) — ( 831 )
−Removed: Other comprehensive income - change in value of interest rate swaps — — — — 11,319 11,319
+Added: Other comprehensive loss - change in value of interest rate swaps — — — — ( 1,827 ) ( 1,827 )
Reclassification of amortization of forward-starting swaps included in interest expense, net — — — — ( 1,149 ) ( 1,149 )
17 unchanged sentences
Stock-based compensation expense 8,838 8,690 8,493
−Removed: Other noncash interest expense ( 1,477 ) ( 1,098 ) ( 1,330 )
+Added: Other noncash interest expense, net ( 1,149 ) ( 1,477 ) ( 1,098 )
Other, net 266 ( 252 ) 1,314
16 unchanged sentences
Repayment of secured notes payable — ( 111,000 ) —
+Added: Proceeds from unsecured term loan 225,000 — —
Proceeds from unsecured line of credit — 36,000 —
Repayment of unsecured line of credit ( 36,000 ) — ( 100,000 )
−Removed: Repayment of unsecured notes payable — ( 155,375 ) —
+Added: Repayment of unsecured term loan ( 150,000 ) — ( 155,375 )
Proceeds from issuance of unsecured notes payable — — 494,675
3 unchanged sentences
Net cash (used in) provided by financing activities ( 65,547 ) ( 102,704 ) 144,424
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash ( 89,953 ) 475 29,598
−Removed: Cash, cash equivalents and restricted cash, beginning of year 139,524 139,049 109,451
−Removed: Cash, cash equivalents and restricted cash, end of year $ 49,571 $ 139,524 $ 139,049
−Removed: The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:
−Removed: Year ended December 31,
−Removed: 2022 2021 2020
−Removed: Cash and cash equivalents $ 49,571 $ 139,524 $ 137,333
−Removed: Restricted cash — — 1,716
−Removed: Total cash, cash equivalents and restricted cash shown in Statement of Cash Flows $ 49,571 $ 139,524 $ 139,049
+Added: Net (decrease) increase in cash, cash equivalents 33,317 ( 89,953 ) 475
+Added: Cash and cash equivalents, beginning of year 49,571 139,524 139,049
+Added: Cash and cash equivalents, end of year $ 82,888 $ 49,571 $ 139,524
The accompanying notes are an integral part of these consolidated financial statements.
48 unchanged sentences
All intercompany transactions and balances are eliminated in consolidation.
−Removed: Impact of COVID-19
−Removed: We are unable to predict the impact that COVID-19 and its variants will have on our financial condition, results of operations and cash flows due to numerous uncertainties.
−Removed: These uncertainties include the scope, severity and duration of the virus, the actions taken to contain it or to mitigate its impact, and the direct and indirect economic effects of the virus and containment measures, among others.
−Removed: The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.
−Removed: The Company cannot predict if previously placed governmental restrictions or social distancing measures will be reinstated in the future or if more restrictive measures will be imposed.
−Removed: Further, the willingness of customers to visit certain of out tenants' businesses may be reduced due to concerns regarding the continued risk of COVID-19 transmission and heightened sensitivity to risks associated with the transmission of other diseases.
−Removed: As a result, COVID-19 is negatively impacting almost every industry directly or indirectly, including industries in which the Company and our tenants operate.
−Removed: Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown.
Use of Estimates
22 unchanged sentences
When we determine that the tenant is the owner of tenant improvements, tenant allowances are recorded as lease incentives and we commence revenue recognition and lease incentive amortization when possession or control of the space is turned over to the tenant for tenant work to begin.
−Removed: Percentage rents, which represent additional rents based upon the level of sales achieved by certain tenants, are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved and the percentage rents are collectible.
+Added: Percentage rents, which represent additional rents based upon the level of sales achieved by
+Added: certain tenants, are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved and the percentage rents are collectible.
Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred.
3 unchanged sentences
We recognize general excise tax gross, with the amounts billed to tenants and customers recorded in other property income and the related taxes paid as rental expense.
−Removed: The general excise tax included in other income was $ 3.4 million, $ 2.5 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: The general excise tax included in other property income was $ 3.7 million, $ 3.4 million and $ 2.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement.
13 unchanged sentences
Total collectability related adjustments for rental income, which includes the allowance for doubtful accounts and deferred rent receivables, was $ 1.5 million, $ 2.3 million and $ 2.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: Due to the impacts of COVID-19, in 2020 through 2022 we provided lease concessions to certain tenants, primarily within the retail segment, in the form of rent deferrals and abatements.
−Removed: We assess each lease concession and determine whether it represents a lease modifications under Accounting Standards Codification Topic 842, Leases ("ASC 842").
−Removed: The Company has elected to account for such COVID-19-related concessions as lease modifications.
Land, buildings and improvements are recorded at cost.
15 unchanged sentences
The value of above and below market leases associated with the original noncancelable lease terms are amortized to rental income over the terms of the respective noncancelable lease periods and are reflected as either an increase (for below market leases) or a decrease (for above market leases) to rental income in the statement of comprehensive income.
−Removed: The value of the leases associated with below market lease renewal options that are likely to be exercised are amortized to rental income over
−Removed: the respective renewal periods.
+Added: The value of the leases associated with below market lease renewal options that are likely to be exercised are amortized to rental income over the respective renewal periods.
If a tenant vacates its space prior to contractual termination of its lease or the lease is not renewed, the unamortized balance of any in-place lease value is written off to rental income and amortization expense.
11 unchanged sentences
Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less costs to sell.
−Removed: As discussed above, as a result of COVID-19, certain of the our tenants may be unable to operate their businesses, maintain profitability and make timely rental payments under their leases.
Accordingly, the reduction of estimated future cash flows could result in the recognition of an impairment charge on certain of our long-lived assets.
−Removed: Management does not believe that the value of our real estate investments was impaired at December 31, 2022 or December 31, 2021.
+Added: Management has not identified indicators that the value of our real estate investments was impaired at December 31, 2023 or December 31, 2022.
There were no impairment charges during the years ended December 31, 2023, 2022 and 2021.
31 unchanged sentences
Variable Interest Entities
−Removed: Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as variable interest entities (“VIEs”).
+Added: Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as VIEs.
VIEs are required to be consolidated by their primary beneficiary.
4 unchanged sentences
We grant stock-based compensation awards to our employees and directors typically in the form of restricted shares of common stock, options to purchase common stock and/or shares of common stock.
−Removed: For the grants of market-based restricted stock awards in December 2019 (the “2019 grant”) and December 2020 grant (the “2020 grant”), we measure stock-based compensation expense based on the fair value of the award on the grant date and recognize the expense ratably over the vesting period.
−Removed: For the grants of performance and market-based restricted stock awards in December 2021 (the “2021 grant”) and December 2022 (the "2022 grant"), we measure stock-based compensation expense based on the fair value of the award on the grant date, adjusted for changes to probabilities of achieving performance targets, and recognize expense ratably over the vesting period.
+Added: For the grants of market-based restricted stock awards in December 2020 (the “2020 grant”), we measure stock-based compensation expense based on the fair value of the award on the grant date and recognize the expense ratably over the vesting period.
+Added: For the grants of performance and market-based restricted stock awards in December 2021 (the “2021 grant”), December 2022 (the "2022 grant"), and December 2023 (the "2023 grant"), we measure stock-based compensation expense based on the fair value of the award on the grant date, adjusted for changes to probabilities of achieving performance targets, and recognize expense ratably over the vesting period.
Modifications of stock-based compensation awards are treated as an exchange of the original award for a new award with the resulting total compensation cost equal to the grant-date fair value of the original award plus the incremental value of the modification to the award.
28 unchanged sentences
Recent Accounting Pronouncements
−Removed: In March 2020, the FASB issued ASU No.
−Removed: 2020-04, Reference Rate Reform (Topic 848) , which provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform.
−Removed: For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied.
−Removed: For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract.
−Removed: This guidance can be applied immediately, however, is generally only available with a newly proposed sunset date of December 31, 2024.
−Removed: We are still evaluating the impact of reference rate reform and whether we will apply any of these practical expedients.
+Added: During the year ended December 31, 2023, we entered into the Amended and Restated Term Loan Agreement, which increased the aggregate unsecured borrowings from $ 150 million to $ 225 million and extended the maturity date of Term Loan B and Term Loan C from March 1, 2023 to January 5, 2025.
+Added: The amended debt and related interest rate swap agreements are based on the applicable Secured Overnight Financing Rate (“SOFR”).
+Added: As a result of these amendments, the Company applies ASU 2020-04, Reference Rate Reform (Topic 848) related to contract modifications and changes in critical terms, as qualifying changes were made to applicable debt and derivative contracts.
A summary of our real estate investments is as follows (in thousands):
26 unchanged sentences
Property Asset Acquisitions
−Removed: On July 7, 2021, we acquired E astgate Office Park, consisting of an approximately 280,000 square feet, multi-tenant office campus in Bellevue, Washington.
−Removed: The purchase price was approximately $ 125 million, excluding closing costs of approximately $ 0.2 million.
−Removed: The property was acquired with cash on hand.
−Removed: On September 10, 2021, we acquired Corporate Campus East III in Bellevue, Washington, consisting of an approximately 161,000 square feet, multi-tenant office campus.
−Removed: The purchase price was approximately $ 84 million , less seller credits of (i) approximately $ 1.1 million of future rent abatement (ii) approximately $ 2.1 million of contractual tenant improvements and closing costs of approximately $ 0.1 million.
−Removed: The property was acquired with cash on hand.
On March 8, 2022, we acquired Bel-Spring 520 in Bellevue, Washington, consisting of an approximately 93,000 square feet, multi-tenant office campus.
39 unchanged sentences
Rental income (loss) includes net amortization from acquired above and below market leases of $ 3.1 million, $ 3.3 million and $ 3.2 million in 2023, 2022 and 2021, respectively.
−Removed: The remaining weighted-average amortization period as of December 31, 2022, is 5.9 years, 2.8 years and 10.5 years for in-place leases, above market leases and below market leases, respectively.
+Added: The remaining weighted-average amortization period as of December 31, 2023, is 5.2 years, 1.8 years and 10.9 years for in-place leases, above market leases and below
+Added: market leases, respectively.
Below market leases include $ 9.5 million related to below market renewal options, and the weighted-average period prior to the commencement of the renewal options is 7.1 years.
32 unchanged sentences
In adjusting the fair value of our derivative contracts for the effect of non-performance risk, we considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
−Removed: Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.
+Added: Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.
However, as of December 31, 2023 we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative position and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivative.
10 unchanged sentences
The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments.
−Removed: The carrying values of our line of credit and term loan set forth below are deemed to be at fair value since the outstanding debt is directly tied to monthly LIBOR or SOFR contracts.
+Added: The carrying values of our line of credit and term loan set forth below are deemed to be at fair value since the outstanding debt is directly tied to monthly SOFR contracts.
A summary of the carrying amount and fair value of our financial instruments, all of which are based on Level 2 inputs, is as follows (in thousands):
17 unchanged sentences
Other intangible assets, net of accumulated amortization of $ 1,813 and $ 1,549 , respectively
+Added: Debt issuance costs, net of accumulated amortization of $ 1,296 and $ 0 , respectively
Right-of-use lease asset, net 21,503 23,921
20 unchanged sentences
however, American Assets Trust, Inc.
−Removed: has guaranteed the Operating Partnership's obligations under the (i) amended and restated credit facility, (ii) term loans, (iii) senior guaranteed notes, and (iv) senior unsecured notes.
+Added: has guaranteed the Operating Partnership's obligations under the (i) 3.375 % senior notes, (ii) senior guaranteed notes, (iii) third amended and restated credit facility, and (iv) amended and restated term loan agreement, each discussed below.
Debt of American Assets Trust, L.P.
4 unchanged sentences
City Center Bellevue (1)
−Removed: — 111,000 3.98 % November 1, 2022
−Removed: City Center Bellevue (1)
75,000 75,000 5.08 % October 1, 2027
4 unchanged sentences
(1) Interest only.
−Removed: On September 16, 2022, the Operating Partnership repaid in full, without premium or penalty, the $ 111 million principal balance of the mortgage on City Center Bellevue.
−Removed: Concurrent therewith, the Operating Partnership entered into a new $ 75 million non-recourse mortgage on City Center Bellevue.
−Removed: The new five-year mortgage has a maturity date of October 1, 2027, bears interest at a fixed rate per annum of 5.08 % (interest only) and is secured by a first-priority deed of trust on City Center Bellevue and an assignment of all leases, rents and security deposits related to City Center Bellevue.
−Removed: Additionally, the Operating Partnership has provided a carve-out guarantee on the new mortgage at City Center Bellevue.
+Added: The Operating Partnership has provided a carve-out guarantee on the new mortgage at City Center Bellevue.
Certain loans require the Operating Partnership to comply with various financial covenants.
As of December 31, 2023, the Operating Partnership was in compliance with these financial covenants.
−Removed: Certain loans require the Operating Partnership to comply with various financial covenants, including the maintenance of minimum debt coverage ratios.
−Removed: As of December 31, 2022, we were in compliance with all loan covenants.
Unsecured notes payable
5 unchanged sentences
Term Loan B 150,000 100,000 Variable (3)
−Removed: March 1, 2023 (2)
+Added: January 5, 2025 (2)
Term Loan C 75,000 50,000 Variable (3)
−Removed: March 1, 2023 (2)
+Added: January 5, 2025 (2)
Senior Guaranteed Notes, Series F 100,000 100,000 3.78 % (4)
15 unchanged sentences
(2) On January 5, 2023, we extended Term Loan B and Term Loan C to a maturity date of January 5, 2025 with one , twelve-month extension option and increased the fully drawn borrowings thereunder to $ 150 million and $ 75 million, respectively.
−Removed: (3) The Operating Partnership has entered into an interest rate swap agreement that is intended to fix the interest rate associated with Term Loan B at approximately 3.15 % through its maturity date, subject to adjustments based on our consolidated leverage ratio.
−Removed: Effective March 1, 2018, the effective interest rate associated with Term Loan B is approximately 2.65 % through November 30, 2022, subject to adjustments based on our consolidated leverage ratio.
−Removed: The interest rate swap agreement was terminated as of November 30, 2022.
−Removed: As such, the variable interest paid from December 1, 2022 through December 31, 2022 was 5.32 %.
−Removed: (4) The Operating Partnership has entered into an interest rate swap agreement that is intended to fix the interest rate associated with Term Loan C at approximately 3.14 % through its maturity date, subject to adjustments based on our consolidated leverage ratio.
−Removed: Effective March 1, 2018, the effective interest rate associated with Term Loan C is approximately 2.64 % through November 30, 2022, subject to adjustments based on our consolidated leverage ratio.
−Removed: The interest rate swap agreement was terminated as of November 30, 2022.
−Removed: As such, the variable interest paid from December 1, 2022 through December 31, 2022 was 5.32 %.
+Added: (3) The Operating Partnership entered into interest rate swap agreements that are intended to fix the effective interest rate associated with Term Loan B and Term Loan C, subject to adjustments based on our consolidated leverage ratio, at, 5.47 % from January 5, 2023 to January 4, 2024 and at 5.57 % from January 5, 2024 to January 4, 2025.
(4) The Operating Partnership entered into a treasury lock contract on May 31, 2017, which was settled on June 23, 2017 at a loss of approximately $ 0.5 million.
6 unchanged sentences
The treasury lock contract was deemed to be a highly effective cash flow hedge, accordingly, the effective interest rate is approximately 3.88 % per annum.
−Removed: Senior Unsecured Notes
+Added: Scheduled principal payments on secured and unsecured notes payable as of December 31, 2023 are as follows (in thousands):
+Added: 2024 $ 100,000
+Added: Thereafter 750,000
+Added: 3.375 % Senior Notes
On January 26, 2021, the Operating Partnership issued $ 500 million of senior unsecured notes (the " 3.375 % Senior Notes") that mature February 1, 2031 and bear interest at 3.375 % per annum.
The 3.375 % Senior Notes were priced at 98.935 % of the principal amount with a yield to maturity of 3.502 %.
−Removed: The net proceeds of the 3.375 % Senior Notes, after the issuance discount, underwriting fees, and other costs were approximately $ 489.7 million, which were primarily used to (i) prepay our $ 150 million Senior Guaranteed Notes, Series A, with a make-whole payment (as defined in the Note Purchase Agreement for the Series A Notes) thereon of approximately $ 3.9 million, on January 26, 2021, (ii) repay our $ 100 million then outstanding balance under our Revolver Loan on January 26, 2021, (iii) fund the development of the La Jolla Commons III office building and (iv) for general corporate purposes.
−Removed: Term Loan Agreement
−Removed: On March 1, 2016, the Operating Partnership entered into a Term Loan Agreement with each lender from time to time party thereto, and U.S.
−Removed: Bank National Association, as Administrative Agent (as amended, the “Term Loan Agreement”).
−Removed: The Term Loan Agreement provides for a new, seven years unsecured term loan to the Operating Partnership of $ 100 million that matures on March 1, 2023 (“Term Loan B”).
−Removed: Concurrent with the closing of the Term Loan Agreement, the Operating Partnership drew down the entirety of Term Loan B.
−Removed: On May 2, 2016, the Operating Partnership entered into a Joinder and First Amendment to the Term Loan Agreement to provide for a new lender to fund an incremental term loan.
−Removed: The Joinder and First Amendment provides for a new, seven years unsecured term loan to the Operating Partnership of $ 50 million that matures on March 1, 2023 ("Term Loan C").
−Removed: Term Loan C has the same borrowing terms as the Term Loan Agreement noted below.
−Removed: Concurrent with the closing of the Joinder and First Amendment, the Operating Partnership drew down the entirety of Term Loan C.
−Removed: Borrowings under the Term Loan Agreement with respect to Term Loan B and Term Loan C bear interest at floating rates equal to, at our option, either (1) LIBOR, plus a spread which ranges from 1.70 % to 2.35 % based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) 0 %, (b) the prime rate, (c) the federal funds rate plus 50 bps or (d) the Eurodollar rate plus 100 bps, in each case plus a spread which ranges from 0.70 % to 1.35 % based on our consolidated leverage ratio.
−Removed: The company entered into interest rate swap agreements intended to fix the interest rates associated with Term Loan B and Term Loan C at approximately 3.15 % and 3.14 %, respectively, through the maturity dates, subject to adjustments based on our consolidated leverage ratio.
−Removed: The Term Loan Agreement contains a number of customary financial covenants, including, without limitation, tangible net worth thresholds, secured and unsecured leverage ratios and fixed charge coverage ratios.
−Removed: Subject to the terms of the Term Loan Agreement, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal or interest under Term Loan B or Term Loan C, and (ii) a default in the payment of certain other indebtedness of the Operating Partnership, the company or their subsidiaries, the principal and accrued and unpaid interest and prepayment penalties on the outstanding Term Loan B or Term Loan C will become due and payable at the option of the lenders.
−Removed: On January 9, 2018, we entered into the Third Amendment (“Third Amendment”) to the Term Loan Agreement, which maintains the $ 150 million unsecured term loan (Term Loan B and Term Loan C) to the Operating Partnership that matures on March 1, 2023 (the “$ 150 mm Term Loan”).
−Removed: Effective as of March 1, 2018, borrowings under the Term Loan Agreement with respect to the $ 150 mm Term Loan bear interest at floating rates equal to, at the Operating Partnership’s option, either (1) LIBOR, plus a spread which ranges from 1.20 % to 1.70 % based on the Operating Partnership’s consolidated leverage ratio, or (2) a base rate equal to the highest of (a) 0 %, (b) the prime rate, (c) the federal funds rate plus 50 bps or (d) the Eurodollar rate plus 100 bps, in each case plus a spread which ranges from 0.70 % to 1.35 % based on the Operating Partnership’s consolidated leverage ratio.
−Removed: The foregoing rates are intended to be more favorable than previously contained in the Term Loan Agreement.
−Removed: Additionally, the Operating Partnership may elect for borrowings to bear interest based on a ratings-based pricing grid as per the Operating Partnership’s then-applicable investment grade debt ratings under the terms set forth in the Term Loan Agreement.
−Removed: On January 5, 2023, we entered into the Amended and Restated Term Loan Agreement, which increased the aggregate unsecured borrowings from $ 150 million to $ 225 million and extended the maturity date of Term Loan B and Term Loan C from March 1, 2023 to January 5, 2025, with one , twelve-month extension option, subject to certain conditions.
−Removed: Borrowings under the Amended and Restated Term Loan Agreement bear interest at floating rates equal to, at the Operating Partnership’s
−Removed: option, either (1) the applicable Secured Overnight Financing Rate (“SOFR”), plus a SOFR adjustment and a spread (based on the Operating Partnership’s consolidated leverage ratio and applicable year of Term Loan B and Term Loan C) ranging from 1.20 % to 1.90 %, or (2) a base rate equal to the highest of (a) 0 %, (b) the prime rate, (c) the federal funds rate plus 50 bps and (d) the one-month SOFR, plus a SOFR adjustment and 100 bps, plus, in each case, a spread (based on the Operating Partnership’s consolidated leverage ratio and applicable year of the Term Loan B and Term Loan C) ranging from 0.20 % to 0.90 %.
−Removed: Additionally, the Operating Partnership may elect for borrowings to bear interest based on a ratings-based pricing grid based on the Operating Partnership’s then-applicable investment grade debt ratings under the terms set forth in the Amended and Restated Term Loan Agreement.
−Removed: Prior to entering into the Amended and Restated Term Loan Agreement, the Operating Partnership entered into interest rate swaps that are intended to fix the interest rate associated with Term Loan B and Term Loan C at approximately (1) 5.47 % for the first year of Term Loan B and Term Loan C and (2) 5.57 % for the second year of Term Loan B and Term Loan C, subject to adjustments based on the Company’s consolidated leverage ratio.
+Added: The net proceeds of the 3.375 % Senior Notes, after the issuance discount, underwriting fees, and other costs were approximately $ 489.7 million, which were primarily used to (i) prepay our $ 150 million Senior Guaranteed Notes, Series A, with a make-whole payment (as defined in the Note Purchase Agreement for the Series A Notes) thereon of approximately $ 3.9 million, on January 26, 2021, (ii) repay our $ 100 million then outstanding balance under our then-existing revolver loan on January 26, 2021, (iii) fund the development of the La Jolla Commons III office building and (iv) for general corporate purposes.
Senior Guaranteed Notes
4 unchanged sentences
On March 1, 2017, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $ 250 million of 4.29 % Senior Guaranteed Notes, Series D, due March 1, 2027 (the "Series D Notes").
−Removed: The Series D Notes were issued on March 1, 2017 and will pay interest quarterly on the last day of January, April, July and October until their respective maturities.
+Added: The Series D Notes were issued on March 1, 2017 and pay interest quarterly on the last day of January, April, July and October until their respective maturities.
On May 23, 2017, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $ 100 million of 4.24 % Senior Guaranteed Notes, Series E, due May 23, 2029 (the "Series E Notes").
−Removed: The Series E Notes were issued on May 23, 2017 and will pay interest semi-annually on the 23rd of May and November until their respective maturities.
+Added: The Series E Notes were issued on May 23, 2017 and pay interest semi-annually on the 23rd of May and November until their respective maturities.
On July 19, 2017, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $ 100 million of 3.78 % Senior Guaranteed Notes, Series F, due July 19, 2024 (the "Series F Notes").
−Removed: The Series F Notes were issued on July 19, 2017 and will pay interest semi-annually on the 31st of January and July until their respective maturities.
−Removed: On July 30, 2019, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $ 150 million of 3.91 % Senior Guaranteed Notes, Series G, due July 30, 2030 (the "Series G Notes" and collectively with the Series A Notes, Series B Notes, Series C Notes, Series D Notes, Series E Notes, and Series G Notes are referred to herein as, the “Notes".) The Series G Notes were issued on July 30, 2019 and will pay interest semi-annually on the 30th of July and January until their maturity.
+Added: The Series F Notes were issued on July 19, 2017 and pay interest semi-annually on the 31st of January and July until their respective maturities.
+Added: On July 30, 2019, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $ 150 million of 3.91 % Senior Guaranteed Notes, Series G, due July 30, 2030 (the "Series G Notes" and collectively with the Series A Notes, Series B Notes, Series C Notes, Series D Notes, Series E Notes, and Series G Notes are referred to herein as, the “Notes".) The Series G Notes were issued on July 30, 2019 and pay interest semi-annually on the 30th of July and January until their maturity.
The Operating Partnership may prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5 % of the aggregate principal amount of any series of the Notes then outstanding in the case of a partial prepayment, at 100 % of the principal amount so prepaid plus a Make-Whole Amount.
4 unchanged sentences
As of December 31, 2023, the Operating Partnership was in compliance with all loan covenants.
−Removed: Scheduled principal payments on secured and unsecured notes payable as of December 31, 2022 are as follows (in thousands):
−Removed: Thereafter 750,000
−Removed: (1) On January 5, 2023, we entered into a $ 225 million Amended and Restated Term Loan Agreement, which increased the aggregate unsecured borrowings from $ 150 million to $ 225 million and extended the maturity date of the Term Loans B & C from March 1, 2023 to January 5, 2025, with one , twelve-month extension option, subject to certain conditions.
−Removed: Credit Facility
−Removed: On January 9, 2014, the company and the Operating Partnership entered into an amended and restated credit agreement (the "Prior Credit Facility"), or the amended and restated credit facility, which amended and restated the then in-place credit facility.
−Removed: The amended and restated credit facility provides for aggregate, unsecured borrowing of $ 350 million, consisting of a revolving line of credit of $ 250 million (the "Prior Revolver Loan") and a term loan of $ 100 million ("Term Loan A").
−Removed: The Prior Credit Facility had an accordion feature that allowed the Operating Partnership to increase the availability thereunder up to an additional $ 250 million, subject to meeting specified requirements and obtaining additional commitments from lenders.
−Removed: On October 16, 2014, we entered into a first amendment to the Prior Credit Agreement that amended provisions of the Prior Credit Agreement to, among other things, (1) describe the treatment of our pari passu obligations under the amended and restated credit agreement and (2) remove the material acquisition provisions previously set forth in the Prior Credit Agreement.
−Removed: Borrowings under the Prior Credit Facility initially bore interest at floating rates equal to, at our option, either (1) LIBOR, plus a spread which ranges from (a) 1.35 %- 1.95 % (with respect to the Prior Revolver Loan) and (b) 1.30 % to 1.90 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps or (c) the Eurodollar rate plus 100 bps, plus a spread which ranges from (i) 0.35 %- 0.95 % (with respect to the Prior Revolver Loan) and (ii) 0.30 % to 0.90 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio.
−Removed: The foregoing rates were more favorable than previously contained in the credit agreement in place as of December 31, 2013.
−Removed: If American Assets Trust, Inc.
−Removed: obtained an investment grade debt rating, under the terms set forth in the Prior Credit Facility, the spreads would further improve.
−Removed: The Prior Revolver Loan initially matured on January 9, 2018, subject to the Operating Partnership's option to extend the Prior Revolver Loan up to two times, with each such extension for a six months period.
−Removed: Term Loan A initially matured on January 9, 2016, subject to our option to extend Term Loan A up to three times, with each such extension for a 12 -month period.
−Removed: The foregoing extension options were exercisable by us subject to the satisfaction of certain conditions.
−Removed: Effective as of January 8, 2018, the Operating Partnership exercised the third of three options to extend the maturity date of Term Loan A to January 9, 2019.
−Removed: Concurrent with the closing of the Prior Credit Facility, the Operating Partnership drew down on the entirety of the $ 100 million Term Loan, which remains outstanding and is included in unsecured notes payable as discussed above.
−Removed: The Prior Credit Facility provided that American Assets Trust, Inc.'s annual distributions may not exceed the greater of (1) 95 % of our funds from operations (“FFO”) or (2) the amount required for us to (a) qualify and maintain our REIT status and (b) avoid the payment of federal or state income or excise tax.
−Removed: If certain events of default exist or would result from a
−Removed: distribution, we may be precluded from making distributions other than those necessary to qualify and maintain our status as a REIT.
−Removed: American Assets Trust, Inc.
−Removed: and certain of its subsidiaries guaranteed the obligations under the Prior Credit Agreement, and certain of its subsidiaries pledged specified equity interests in our subsidiaries as collateral for our obligations under the Prior Credit Facility.
−Removed: On January 9, 2018, we entered into a second amended and restated credit agreement (the "Second Amended and Restated Credit Facility"), which amended and restated the Prior Credit Agreement.
−Removed: The Second Amended and Restated Credit Facility provided for aggregate, unsecured borrowing of $ 450 million, consisting of a revolving line of credit of $ 350 million (the "Revolver Loan") and a term loan of $ 100 million (the "Term Loan A").
−Removed: The Second Amended and Restated Credit Facility had an accordion feature that would have allowed us to increase the availability thereunder up to an additional $ 250 million, subject to meeting specified requirements and obtaining additional commitments from lenders.
−Removed: Borrowings under the Second Amended and Restated Credit Facility had interest at floating rates equal to, at our option, either (1) LIBOR, plus a spread which ranges from (a) 1.05 % to 1.50 % (with respect to the Revolver Loan) and (b) 1.30 % to 1.90 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps or (c) LIBOR plus 100 bps, plus a spread which ranges from (i) 0.10 % to 0.50 % (with respect to the Revolver Loan) and (ii) 0.30 % to 0.90 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio.
−Removed: The foregoing rates were more favorable than previously contained in the Prior Credit Facility in place as of December 31, 2017.
−Removed: The Revolver Loan initially matured on January 9, 2022, subject to our option to extend the Revolver Loan up to two times, with each such extension for a six months period.
−Removed: The extension options are exercisable by us subject to the satisfaction of certain conditions.
−Removed: On January 9, 2019, we entered into the first amendment (“First Amendment”) to the Second Amended and Restated Credit Facility, which extended the maturity date of Term Loan A to January 9, 2021, subject to three , one year extension options.
−Removed: On October 16, 2020, we exercised an option to extend the maturity date of Term Loan A to January 9, 2022.
−Removed: Additionally, in connection with the First Amendment, borrowings under the Second Amended and Restated Credit Facility with respect to Term Loan bear interest at floating rates equal to, at our option, either (1) LIBOR, plus a spread which ranges from 1.20 % to 1.70 % based on our consolidated total leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps or (c) the Eurodollar rate plus 100 bps, in each case plus a spread which ranges from 0.20 % to 0.70 % based on our consolidated total leverage ratio.
−Removed: The foregoing rates were more favorable than previously contained in the Second Amended and Restated Credit Facility (prior to entry into the First Amendment) with respect to Term Loan A.
−Removed: On January 5, 2022, we entered into the Third Amended and Restated Credit Facility, which provides for aggregate, unsecured borrowings of up to $ 500 million, consisting of a revolving line of credit of $ 400 million (the “2022 Revolver Loan”) and a term loan of $ 100 million (the “2022 Term Loan A”).
+Added: Third Amended and Restated Credit Facility
+Added: On January 5, 2022, the Operating Partnership entered into the third amended and restated credit facility (the “Third Amended and Restated Credit Facility”) , which amended and restated our then-existing credit facility.
+Added: The Third Amended and Restated Credit Facility provides for aggregate, unsecured borrowings of up to $ 500 million, consisting of a revolving line of credit of $ 400 million (the “Revolver Loan”) and a term loan of $ 100 million (“Term Loan A”).
The Revolver Loan initially matures on January 5, 2026, subject to two , six-month extension options.
−Removed: The 2022 Term Loan A matures on January 5, 2027, with no further extension options.
−Removed: Borrowings under the Third Amended and Restated Credit Agreement bear interest at floating rates equal to, at the Operating Partnership’s option, either (1) the applicable Secured Overnight Financing Rate (“SOFR”), plus the applicable SOFR Adjustment and a spread which ranges from (a) 1.05 %- 1.50 % (with respect to the 2022 Revolver Loans) and (b) 1.20 % to 1.70 % (with respect to the 2022 Term Loan A), in each case based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps, (c) the Term SOFR Screen Rate with a term of one month plus 100 bps and (d) 1.00 %, plus a spread which ranges from (i) 0.10 %- 0.50 % (with respect to 2022 Revolver Loan) and (ii) 0.20 % to 0.70 % (with respect to the 2022 Term Loan A), in each case based on our consolidated leverage ratio.
−Removed: Note that on January 14, 2022, the Operating Partnership entered into an interest rate swap agreement that is intended to fix the interest rate associated with the 2022 Term Loan A at approximately 2.70 % through January 5, 2027, subject to adjustments based on our consolidated leverage ratio.
−Removed: At December 31, 2022, there was $ 36 million outstanding under the 2022 Revolver Loan.
−Removed: Approximately $ 1.9 million of net debt issuance costs are included in the unsecured line of credit, net on the balance sheet.
+Added: Term Loan A matures on January 5, 2027, with no further extension options.
+Added: As of December 31, 2023, the entirety of the principal amount of Term Loan A was outstanding, there were no amounts outstanding under the Revolver Loan, and the Operating Partnership had incurred approximately $ 1.30 million of net debt issuance costs which are recorded in other assets, net on the consolidated balance sheet.
For the year ended December 31, 2023, the weighted average interest rate on the Revolver Loan was 6.17 %.
−Removed: Additionally, the Third Amended and Restated Credit Facility included a number of customary financial covenants that were unchanged from the Second Amended and Restated Credit Facility, including:
+Added: Borrowings under the Third Amended and Restated Credit Agreement bear interest at floating rates equal to, at the Operating Partnership’s option, either (1) the applicable SOFR, plus the applicable SOFR Adjustment and a spread which ranges from (a) 1.05 %- 1.50 % (with respect to the Revolver Loan) and (b) 1.20 % to 1.70 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps, (c) the Term SOFR Screen Rate with a term of one month plus 100 bps and (d) 1.00 %, plus a spread which ranges from (i) 0.10 %- 0.50 % (with respect to the Revolver Loan) and (ii) 0.20 % to 0.70 % (with respect to Term Loan A), in each case based on our consolidated leverage ratio.
+Added: On January 14, 2022, the Operating Partnership entered into an interest rate swap agreement intended to fix the interest rate associated with the Term Loan A at approximately 2.70 % through January 5, 2027, subject to adjustments based on our consolidated leverage ratio.
+Added: The Third Amended and Restated Credit Facility includes a number of customary financial covenants, including:
• A maximum leverage ratio (defined as total indebtedness net of certain cash and cash equivalents to total asset value) of 60 %,
4 unchanged sentences
• Recourse indebtedness at any time cannot exceed 15 % of total asset value.
−Removed: Consistent with the Second Amended and Restated Credit Facility, the Third Amended and Restated Credit Facility provided that our annual distributions may not exceed the greater of (1) 95 % of our FFO or (2) the amount required for us to (a) qualify and maintain our REIT status and (b) avoid the payment of federal or state income or excise tax.
+Added: The Third Amended and Restated Credit Facility also provides that our annual distributions may not exceed the greater of (1) 95 % of our FFO or (2) the amount required for us to (a) qualify and maintain our REIT status and (b) avoid the payment of federal or state income or excise tax.
If certain events of default exist or would result from a distribution, we may be precluded from making distributions other than those necessary to qualify and maintain our status as a REIT.
As of December 31, 2023, the Operating Partnership was in compliance with all then in-place Third Amended and Restated Credit Facility covenants.
+Added: Amended and Restated Term Loan Agreement
+Added: On January 5, 2023, we entered into the amended and restated term loan agreement he (the “Amended and Restated Term Loan Agreement”), which amended and restated our then-existing term loan agreement.
+Added: The Amended and Restated Term Loan Agreement provides to the Operating Partnership a term loan of $ 150 million (“Term Loan B”) and a term loan of $ 75 million (“Term Loan C”), each maturing on January 5, 2025, with one , twelve-month extension option, subject to certain conditions.
+Added: As of December 31, 2023, the entirety of the principal amounts of Term Loan B and Term Loan C were outstanding,
+Added: Borrowings under the Amended and Restated Term Loan Agreement bear interest at floating rates equal to, at the Operating Partnership’s option, either (1) the applicable SOFR, plus a SOFR adjustment and a spread (based on the Operating Partnership’s consolidated leverage ratio and applicable year of Term Loan B and Term Loan C) ranging from 1.20 % to 1.90 %, or (2) a base rate equal to the highest of (a) 0 %, (b) the prime rate, (c) the federal funds rate plus 50 bps and (d) the one-month SOFR, plus a SOFR adjustment and 100 bps, plus, in each case, a spread (based on the Operating Partnership’s consolidated leverage ratio and applicable year of Term Loan B and Term Loan C) ranging from 0.20 % to 0.90 %.
+Added: Additionally, the Operating Partnership may elect for borrowings to bear interest based on a ratings-based pricing grid based on the Operating Partnership’s then-applicable investment grade debt ratings under the terms set forth in the Amended and Restated Term Loan Agreement.
+Added: Prior to entering into the Amended and Restated Term Loan Agreement, the Operating Partnership entered into interest rate swap agreements that are intended to fix the interest rate associated with Term Loan B and Term Loan C at approximately (1) 5.47 % for the first year of Term Loan B and Term Loan C and (2) 5.57 % for the second year of Term Loan B and Term Loan C, subject to adjustments based on the company’s consolidated leverage ratio.
+Added: The Amended and Restated Term Loan Agreement contains a number of customary financial covenants, including, without limitation, tangible net worth thresholds, secured and unsecured leverage ratios and fixed charge coverage ratios.
+Added: Subject to the terms of the Term Loan Agreement, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal or interest under Term Loan B or Term Loan C, and (ii) a default in the payment of certain other indebtedness of the Operating Partnership, the company or their subsidiaries, the principal and accrued and unpaid interest and prepayment penalties on the outstanding Term Loan B or Term Loan C will become due and payable at the option of the lenders.
DERIVATIVE AND HEDGING ACTIVITIES
−Removed: Our objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movement.
+Added: Our objectives in using derivatives are to add stability to interest expense and to manage exposure to interest rate movement.
To accomplish these objectives, we use interest rate swaps as part of our interest rate risk management strategy.
Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
−Removed: Concurrent with the closing of our second amended and restated credit facility, we entered into an interest rate swap agreement that is intended to fix the interest rate associated with our term loan of $ 100 million at approximately 4.13 % through its original maturity date, subject to adjustments based on our consolidated leverage ratio.
−Removed: On January 29, 2016, we entered into a forward-starting interest rate swap contract with U.S.
−Removed: Bank National Association to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective $ 100 million seven-year term loan.
−Removed: The forward-starting seven years swap contract had a notional amount of $ 100 million, a termination date of March 1, 2023, a fixed pay rate of 1.4485 %, and a receive rate equal to the one-month LIBOR, with fixed rate payments due monthly commencing April 1, 2016, floating payments due monthly commencing April 1, 2016, and floating reset dates two days prior to the first day of each calculation period.
−Removed: The forward-starting seven-year swap contract accrual period, March 1, 2016 to March 1, 2023, was designed to match the expected tenor of our then prospective $ 100 million seven years term loan, which successfully closed on March 1, 2016.
−Removed: On March 23, 2016, we entered into a forward-starting interest rate swap contract with Wells Fargo Bank, National Association to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective incremental $ 50 million seven-year term loan.
−Removed: The forward-starting seven years swap contract had a notional amount of $ 50 million, a termination date of March 1, 2023, a fixed pay rate of 1.4410 %, and a receive rate equal to the one-month LIBOR, with fixed rate payments due monthly commencing June 1, 2016, floating payments due monthly commencing June 1, 2016, and floating reset dates two days prior to the first day of each calculation period.
−Removed: The forward-starting seven-year swap contract accrual period, May 2, 2016 to March 1, 2023, was designed to match the expected tenor of our then prospective incremental $ 50 million seven years term loan, which successfully closed on May 2, 2016.
−Removed: On March 29, 2016, we entered into a forward-starting interest rate swap contract with Wells Fargo Bank, National Association to reduce the interest rate variability exposure of the projected interest cash flows of our prospective new ten-year debt offering (private placement, investment grade bonds, term loan or otherwise) (anticipated to close on or before March 31, 2017).
−Removed: The forward-starting ten years swap contract had a notional amount of $ 150 million, a termination date of March 31, 2027, a fixed pay rate of 1.8800 %, and a receive rate equal to the three-month LIBOR, with fixed rate payments due semi-annually commencing September 29, 2017, floating payments due semi-annually commencing September 29, 2017, and floating reset dates the first day of each quarterly period.
−Removed: The forward-starting ten-year swap contract accrual period, March 31, 2017 to March 31, 2027, was designed to match the expected tenor of our prospective new ten years debt offering (private placement, investment grade bonds, term loan or otherwise).
−Removed: On April 7, 2016, we entered into a forward-starting interest rate swap contract with Wells Fargo Bank, National Association to reduce the interest rate variability exposure of the projected interest cash flows of our prospective new ten-year debt offering (private placement, investment grade bonds, term loan or otherwise) (anticipated to close on or before March 31, 2017).
−Removed: The forward-starting ten years swap contract had a notional amount of $ 100 million, a termination date of March 31, 2027, a fixed pay rate of 1.7480 %, and a receive rate equal to the three-month LIBOR, with fixed rate payments due semi-annually commencing September 29, 2017, floating payments due semi-annually commencing September 29, 2017, and floating reset dates the first day of each quarterly period.
−Removed: The forward-starting ten-year swap contract accrual period, March 31, 2017 to March 31, 2027, was designed to match the expected tenor of our prospective new ten years debt offering (private placement, investment grade bonds, term loan or otherwise).
−Removed: On January 18, 2017, we settled the March 29, 2016 $ 150 million and April 7, 2016 $ 100 million ten-year forward-starting interest rate swaps resulting in an aggregate gain of approximately $ 10.4 million.
−Removed: This gain is included in accumulated other comprehensive income and will be amortized to interest expense over the life of the Series D Notes.
−Removed: The forward-starting interest rate swap contracts have been deemed to be highly effective cash flow hedges and we elected to designate all the forward-starting swap contracts as accounting hedges.
−Removed: On April 25, 2017, we entered into a treasury lock contract (the "April 2017 Treasury Lock") with Bank of America, National Association, to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective new twelve years private placement.
−Removed: The April 2017 Treasury Lock had a notional amount of $ 100 million, termination date of May 18, 2017, a fixed pay rate of 2.313 %, and a receive rate equal to the ten years treasury rate on the settlement date.
−Removed: On May 11, 2017, we settled the April 2017 Treasury Lock, resulting in a gain of approximately $ 0.7 million.
−Removed: This gain is included in accumulated other comprehensive income and will be amortized to interest expense over ten years .
−Removed: The April 2017 Treasury Lock has been deemed to be a highly effective cash flow hedge and we elected to designate the April 2017 Treasury Lock as an accounting hedge.
−Removed: On May 31, 2017, we entered into a treasury lock contract (the "May 2017 Treasury Lock") with Bank of America, National Association, to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective new seven years private placement.
−Removed: The May 2017 Treasury Lock had a notional amount of $ 100 million, termination date of July 26, 2017, a fixed pay rate of 2.064 %, and a receive rate equal to the seven years treasury rate on the settlement date.
−Removed: On June 23, 2017, we settled the May 2017 Treasury Lock, resulting in a loss of approximately $ 0.5 million.
−Removed: This loss is included in accumulated other comprehensive income and will be amortized to interest expense over seven years .
−Removed: The May 2017 Treasury Lock has been deemed to be a highly effective cash flow hedge and we elected to designate the May 2017 Treasury Lock as an accounting hedge.
−Removed: On November 26, 2018, we entered into an interest rate swap agreement with Bank of America, National Association, to fix the interest rate associated with Term Loan A associated with our then prospective First Amendment at approximately 4.13 % through its maturity date of January 9, 2021, subject to adjustments based on our consolidated leverage ratio.
−Removed: On June 20, 2019, we entered into a treasury lock contract (the "June 2019 Treasury Lock") with Wells Fargo Bank, N.A., to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective eleven-year private placement.
−Removed: The treasury lock contract has a notional amount of $ 100 million, termination date of July 31, 2019, a fixed pay rate of 1.9925 %, and a receive rate equal to the ten years treasury rate on the settlement date.
−Removed: On July 17, 2019, we settled the June 2019 Treasury Lock, resulting in a gain of approximately $ 0.5 million, which is included in accumulated other comprehensive income and will be amortized to interest expense over ten years .
−Removed: The treasury lock contract has been deemed to be a highly effective cash flow hedge and we elected to designate the treasury lock contract as an accounting hedge.
−Removed: On August 11, 2020, we entered into a treasury lock contract (the "August 2020 Treasury Lock") with Wells Fargo Bank, N.A., to reduce the interest rate variability exposure of the projected interest cash flows of a then prospective future financing.
−Removed: The treasury lock contract had a notional amount of $ 200 million, termination date of November 12, 2020, a fixed pay rate of 0.7115 %, and a receive rate equal to the ten years treasury rate on the settlement date.
−Removed: We determined that there was no compelling reason from a capital requirement perspective to move forward with the prospective financing at prevailing rates and, as a result, on October 1, 2020, we settled the August 2020 Treasury Lock, resulting in no gain or loss.
−Removed: On January 14, 2022, we entered into two separate interest rate swap contracts, one with Wells Fargo Bank, National Association and one with Bank of America, National Association, to reduce the interest rate variability exposure of the interest cash flows of the 2022 Term Loan A.
−Removed: Each of the two five year swap contracts have a notional amount of $ 50 million, a termination date of January 5, 2027, a fixed pay rate of 2.7 % (both swaps combined), and a receive rate equal to the one-month SOFR, with fixed rate payments due monthly commencing February 1, 2022, floating payments due monthly commencing February 1, 2022, and floating reset dates two days prior to the first day of each calculation period.
−Removed: The five-year swap contracts accrual period, January 14, 2022 to January 5, 2027, was designed to match the tenor of our 2022 Term Loan A, which successfully closed on January 5, 2022.
−Removed: On November 30, 2022, we terminated the $ 100 million and $ 50 million forward-starting interest rate swaps entered into on January 29, 2016 and March 23, 2016, respectively, resulting in an aggregate gain of approximately $ 1.1 million.
−Removed: This gain is included in accumulated other comprehensive income and will be amortized to interest expense, net through March 1, 2023, the original maturity of the forward-starting interest rate swaps.
−Removed: The forward-starting interest rate swap contracts have been deemed to be highly effective cash flow hedges and we elected to designate all the forward-starting swap contracts as accounting hedges.
−Removed: Concurrent therewith on November 30, 2022 we entered into two separate forward-starting interest rate swap contracts, one with Wells Fargo Bank, National Association and one with Mizuho Capital Markets LLC, to reduce the interest rate variability exposure of the projected interest cash flows of our then prospective $ 225 million two-year amended and restated term loan.
−Removed: The forward-starting two years swap contract had a notional amount of $ 225 million, a termination date of January 5, 2025, a fixed pay rate of 4.17 % (both swaps combined), and a receive rate equal to the one-month SOFR, with fixed rate payments due monthly commencing February 6, 2023, floating payments due monthly commencing February 1, 2023, and floating reset dates two days prior to the first day of each calculation period.
−Removed: The forward-starting two-year swap contract accrual period, January 5, 2023 to January 5, 2025, was designed to match the expected tenor of our then prospective $ 225 million two-year term loan, which successfully closed on January 5, 2023.
The following is a summary of the terms of the interest rate swaps as of December 31, 2023 (dollars in thousands):
7 unchanged sentences
Mizuho Capital Markets LLC $ 75,000 1/5/2023 1/5/2025 $ 176
+Added: These forward-starting interest rate swap contracts are designed to fix the effective interest rates (1) associated with Term Loan A at 2.70 % through its maturity date, subject to adjustments based on our consolidated leverage ratio, (2) associated with Term Loan B at 5.47 % from January 5, 2023 to January 4, 2024 and at 5.57 % from January 5, 2024 to January 4, 2025, subject to adjustments based on our consolidated debt ratio and (3) associated with Term Loan C at 5.47 % from January 5, 2023 to January 4, 2024 and at 5.57 % from January 5, 2024 to January 4, 2025, subject to adjustments based on our consolidated debt ratio.
+Added: The forward-starting interest rate swap contracts associated with Term Loan A, Term Loan B, and Term Loan C each have accrual periods designed to match the respective tenors of these term loans.
+Added: We also previously entered into forward-starting interest rate swap contracts in connection with our Series D Notes (the “Series D Interest Rate Swaps”), which we subsequently settled.
+Added: The Series D Interest Rate Swaps fixed the effective interest rate of the Series D Notes at 3.87 % per annum.
+Added: All of the forward-starting interest rate swap contracts that we have entered into have been deemed to be highly effective cash flow hedges and have been designated as accounting hedges.
+Added: In addition, we have entered into treasury lock contracts from time to time in connection with the Operating Partnership’s Notes to reduce their interest rate variability exposure.
+Added: As a result of these treasury lock contracts (1) the effective interest rate of our Series E Notes is 4.18 % per annum, (2) the effective interest rate of our Series F Notes is 3.85 % per annum, and (3) the effective interest rate of our Series G Notes is 3.88 % per annum.
+Added: These treasury lock contracts have been deemed to be highly effective cash flow hedges and have been designated as accounting hedges.
+Added: Any gains or losses incurred upon the settlement of these treasury lock contracts are included in accumulated other comprehensive income and are amortized to interest expense over the life of the related series of Notes.
The effective portion of changes in the fair value of the derivatives that are designated as cash flow hedges are being recorded as accumulated other comprehensive income and will be subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.
−Removed: During the next twelve months, we estimate that $ 1.1 million will be reclassified as a decrease to interest expense.
−Removed: The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative.
−Removed: This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities.
+Added: For the next twelve months, we estimate that $ 0.4 million will be reclassified as a decrease to interest expense.
+Added: The valuation of these derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative.
+Added: This analysis (1) reflects the contractual terms of the derivative, including the period to maturity, (2) considers the counterparty credit risk and (3) uses observable market-based inputs, including interest rate curves, and implied volatilities.
The fair value of the interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts).
15 unchanged sentences
The Operating Partnership evaluated this guidance, including the requirement to settle in unregistered shares, and determined that these common units meet the requirements to qualify for presentation as permanent equity.
−Removed: During the years ended December 31, 2022, 2021 and 2020, approximately 0 , 0 and 209,011 , respectively, common units were converted into shares of the company's common stock.
+Added: During the years ended December 31, 2023, 2022 and 2021, no common units were converted into shares of the company's common stock.
EQUITY OF AMERICAN ASSETS TRUST, INC.
58 unchanged sentences
Up to one-third of the shares of restricted stock may vest based on such performance criteria determined as of November 30, 2024, 2025 and 2026, subject to the employee's continued employment on those dates.
−Removed: For the 2019 grants and 2020 grants, the fair value of the awards was estimated using a Monte Carlo Simulation model.
+Added: For the 2020 grants, the fair value of the awards was estimated using a Monte Carlo Simulation model.
Our stock price, along with the stock prices of the group of peer REITs, is assumed to follow the Multivariate Geometric Brownian Motion Process.
2 unchanged sentences
The expected growth rate of the stock prices over the “derived service period” of the employee is determined with consideration of the risk free rate as of the grant date.
−Removed: For the 2021 grants and 2022 grants, the fair value of the awards was estimated using a Monte Carlo Simulation model.
+Added: For the 2021 grants, 2022 grants, and 2023 grants, the fair value of the awards was estimated using a Monte Carlo Simulation model.
For the 2021, 2022, and 2023 grants, vesting is subject to multiple vesting conditions as follows:
10 unchanged sentences
Balance at end of year 585,865 $ 17.95
−Removed: We recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized $ 8.7 million, $ 8.5 million and $ 6.3 million in noncash compensation expense for the years ended December 31, 2022, 2021 and
−Removed: 2020, respectively, each of which is included in general and administrative expense on the statement of comprehensive income.
+Added: We recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized $ 8.8 million, $ 8.7 million and $ 8.5 million in noncash compensation expense for the years ended December 31, 2023, 2022 and 2021, respectively, each of which is included in general and administrative expense on the statement of comprehensive income.
Unrecognized compensation expense was $ 8.2 million at December 31, 2023, which will be recognized over a weighted-average period of 1.53 years .
39 unchanged sentences
As a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders.
−Removed: Our TRS is subject to federal and state income taxes.
+Added: Our Operating Partnership is subject to state and local income taxes and our TRS is subject to federal and state income taxes.
We lease our hotel property to a wholly owned TRS that is subject to federal and state income taxes.
17 unchanged sentences
however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued.
+Added: As of December 31, 2023, no litigation liabilities have been accrued.
Legal fees related to litigation are expensed as incurred.
17 unchanged sentences
In connection with this agreement, we are also subject to the terms of a product improvement plan pursuant to which we expect to undertake certain actions to ensure that our hotel's infrastructure is maintained in compliance with the franchisor's brand standards.
−Removed: In addition, we must pay to Embassy Suites Franchise LLC a monthly franchise royalty fee equal to 4.0 % of the hotel's gross room revenue through December 2021 and 5.0 % of the hotel's gross room revenue thereafter, as well as a monthly program fee equal to 4.0 % of the hotel's gross room revenue.
+Added: In addition, we must pay to Embassy Suites Franchise LLC a monthly franchise royalty fee equal to 5.0 % of the hotel's gross room revenue, as well as a monthly program fee equal to 4.0 % of the hotel's gross room revenue.
If the franchise license is terminated due to our failure to make required improvements or to otherwise comply with its terms, we may be liable to the franchisor for a termination payment, which could be as high as $ 7.7 million based on operating performance through December 31, 2023.
1 unchanged sentence
The environmental issue existed at purchase and is currently in the final stages of remediation.
−Removed: The final stages of the remediation will include routine, long term ground monitoring by the appropriate regulatory agency over the next five years to seven years years.
+Added: The final stages of the remediation will include routine, long term ground monitoring by the appropriate regulatory agency over the next five to seven years years.
The work performed is financed through an escrow account funded by the seller upon our purchase of the Del Monte Center.
1 unchanged sentence
However, if further work is required costing more than the remaining escrow funds, we could be required to pay such overage, although we may have a contractual claim for such costs against the prior owner or our environmental remediation consultant.
−Removed: As of December 31, 2022, the company accrued approximately $ 6.6 million for transfer taxes in connection with its Offering.
−Removed: The company believes that it has filed all necessary forms with the requisite taxing authorities.
Concentrations of Credit Risk
1 unchanged sentence
The ability of the tenants to honor the terms of their respective leases is dependent upon the economic, regulatory and social factors affecting the markets in which the tenants operate.
−Removed: Fifteen of our consolidated properties, representing 40.2 % of our total revenue for the year ended December 31, 2022, are located in Southern California, which exposes us to greater economic risks than if we owned a more geographically diverse portfolio.
−Removed: Our mixed-use property located in Honolulu, Hawaii accounted for 14.2 % of total revenues for the year ended December 31, 2022.
+Added: Fifteen of our consolidated properties, representing 41.2 % and 40.2 % of our total revenue for the year ended December 31, 2023 and 2022, respectively, are located in Southern California, which exposes us to greater economic risks than if we owned a more geographically diverse portfolio.
+Added: Our mixed-use property located in Honolulu, Hawaii accounted for 15.1 % and 14.2 % of total revenues for the year ended December 31, 2023 and 2022, respectively.
Tenants in the office industry accounted for 47.1 % and 48.1 % of total revenues for the years December 31, 2023 and 2022, respectively.
2 unchanged sentences
This makes us susceptible to demand for retail rental space and subject to the risks associated with an investment in real estate with a concentration of tenants in the retail industry.
−Removed: Two retail properties, Alamo Quarry Market and Waikele Center, accounted for 9.0 % and 9.1 % of total revenues for the years ended December 31, 2022 and 2021, respectively.
+Added: Two retail properties, Alamo Quarry Market and Waikele Center combined accounted for 9.0 % and 9.0 % of total revenues for the years ended December 31, 2023 and 2022, respectively.
For the years ended December 31, 2023 and 2022, no tenant accounted for more than 10.0% of our total rental revenue.
16 unchanged sentences
We attempt to maximize the amount we expect to derive from the underlying real estate property following the end of a lease, to the extent it is not extended.
−Removed: We maintain a proactive leasing and capital improvement program that, combined with the quality and locations of our properties, has made our properties attractive to tenants.
+Added: We maintain a proactive leasing and capital improvement program that, combined with
+Added: the quality and locations of our properties, has made our properties attractive to tenants.
However, the residual value of a real estate property is still subject to various market-specific, asset-specific, and tenant-specific risks and characteristics.
7 unchanged sentences
Total $ 1,277,971
−Removed: The above future minimum rentals exclude residential leases, which are typically range from seven months to fifteen months , and exclude the hotel, as rooms are rented on a nightly basis.
+Added: The above future minimum rentals exclude residential leases, which typically range from seven months to fifteen months , and exclude the hotel, as rooms are rented on a nightly basis.
Lessee Operating Leases
27 unchanged sentences
The subleases contain extension options, subject to our ability to extend the Annex Lease, that can extend the subleases through December 31, 2039 at the fair rental value at the time the extension option is exercised.
−Removed: At Waikiki Beach Walk, we (as sublandlord) subleased a portion of the building to Quiksilver under an operating lease effective through December 31, 2021.
−Removed: The operating lease and sublease were terminated, without penalty as of June 30, 2021.
COMPONENTS OF RENTAL INCOME AND EXPENSE
30 unchanged sentences
Income tax (expense) benefit ( 1,041 ) ( 850 ) ( 738 )
−Removed: Other non-operating (expense) income — ( 4 ) 2
−Removed: Total other (expense) income $ ( 625 ) $ ( 418 ) $ 447
+Added: Other non-operating income (expense) 6,515 — ( 4 )
+Added: Total other income (expense) $ 7,649 $ ( 625 ) $ ( 418 )
+Added: For the year ended December 31, 2023, other non-operating income income includes 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.
RELATED PARTY TRANSACTIONS
60 unchanged sentences
Depreciation and amortization ( 119,500 ) ( 123,338 ) ( 116,306 )
−Removed: Interest expense ( 58,232 ) ( 58,587 ) ( 53,440 )
+Added: Interest expense, net ( 64,706 ) ( 58,232 ) ( 58,587 )
Loss on early extinguishment of debt — — ( 4,271 )
−Removed: Other (expense) income, net ( 625 ) ( 418 ) 447
+Added: Other income (expense), net 7,649 ( 625 ) ( 418 )
Net income 64,690 55,877 36,593
77 unchanged sentences
$ 0.16 $ 0.21 $ 0.18 $ 0.18
+Added: American Assets Trust, Inc.
+Added: and American Assets Trust, L.P.
+Added: SCHEDULE III—Consolidated Real Estate and Accumulated Depreciation
+Added: (In Thousands)
SUBSEQUENT EVENTS
−Removed: On January 3, 2023, we entered into a settlement agreement relating to certain building systems at our Hassalo on Eighth in which we received a net settlement payment of approximately $ 6.3 million.
−Removed: On January 5, 2023, we entered into the Amended and Restated Term Loan Agreement, which increased the aggregate, unsecured borrowings from $ 150 million to $ 225 million and extended the maturity date of Term Loan B and Term Loan C from March 1, 2023 to January 5, 2025, with one , twelve-month extension option, subject to certain conditions.
−Removed: On January 6, 2023, we repaid in full the $ 36 million outstanding balance on our revolving line of credit under our Third Amended and Restated Credit Facility.
+Added: On January 2, 2024, we entered into a settlement agreement relating to building specifications for one of the existing buildings at our office project in University Town Center (San Diego) in which we received a net settlement payment of approximately $ 10 million.
American Assets Trust, Inc.
51 unchanged sentences
and American Assets Trust, L.P.
−Removed: SCHEDULE III—Consolidated Real Estate and Accumulated Depreciation
+Added: SCHEDULE III—Consolidated Real Estate and Accumulated Depreciation -(Continued)
(In Thousands)
14 unchanged sentences
(1) For Federal tax purposes, the aggregate tax basis is approximately $ 2.5 billion as of December 31, 2023.
−Removed: American Assets Trust, Inc.
−Removed: and American Assets Trust, L.P.
−Removed: SCHEDULE III—Consolidated Real Estate and Accumulated Depreciation -(Continued)
−Removed: (In Thousands)
Year Ended December 31,
13 unchanged sentences
Balance, end of period $ 1,036,453 $ 936,913 $ 847,390
+Added: (1) Other deductions for the years ended December 31, 2023, 2022 and 2021 represent the write-off of fully depreciated assets and certain incomplete development costs written off.
(2) Other deductions for the years ended December 31, 2023, 2022 and 2021 represent the write-off of fully depreciated assets.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.