What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-01 compared with 2025-05-02 · 163 added, 116 removed, 866 unchanged (24% of the section changed)

3 unchanged sentences

(In Thousands, Except Share Data)

March 31, December 31,

June 30, December 31,

Real estate, at cost

22 unchanged sentences

stockholders’ equity

Common stock, $ 0.01 par value, 490,000,000 shares authorized, 61,134,730 and 61,138,238 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 490,000,000 shares authorized, 61,152,542 and 61,138,238 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,478,222 1,474,869

10 unchanged sentences

(In Thousands, Except Shares and Per Share Data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Rental income $ 101,070 $ 105,094 $ 204,021 $ 210,115

47 unchanged sentences

Stock-based compensation — — 1,670 — — — 1,670

Other comprehensive income - change in value of interest rate swaps — — — — ( 939 ) ( 253 ) ( 1,192 )

Other comprehensive loss - change in value of interest rate swaps — — — — ( 939 ) ( 253 ) ( 1,192 )

Reclassification of amortization of forward-starting swap included in interest expense — — — — ( 204 ) ( 54 ) ( 258 )

Balance at March 31, 2025 61,134,730 $ 611 $ 1,476,539 $ ( 282,387 ) $ 3,617 $ ( 46,020 ) $ 1,152,360

Net income — — — 5,662 — 1,459 7,121

Issuance of restricted stock 17,812 1 — — — — 1

Dividends declared and paid — — — ( 20,793 ) — ( 5,501 ) ( 26,294 )

Stock-based compensation — — 1,683 — — — 1,683

Other comprehensive loss - change in value of interest rate swaps — — — — ( 605 ) ( 163 ) ( 768 )

Reclassification of amortization of forward-starting swap included in interest expense — — — — ( 203 ) ( 55 ) ( 258 )

Balance at June 30, 2025 61,152,542 $ 612 $ 1,478,222 $ ( 297,518 ) $ 2,809 $ ( 50,280 ) $ 1,133,845

American Assets Trust, Inc.

10 unchanged sentences

Stock-based compensation — — 1,617 — — — 1,617

Other comprehensive loss - change in value of interest rate swaps — — — — 1,100 292 1,392

Other comprehensive income - change in value of interest rate swaps — — — — 1,100 292 1,392

Reclassification of amortization of forward-starting swap included in interest expense — — — — ( 78 ) ( 20 ) ( 98 )

Balance at March 31, 2024 60,894,491 $ 609 $ 1,470,823 $ ( 281,183 ) $ 9,304 $ ( 44,165 ) $ 1,155,388

Net income — — — 12,099 — 3,195 15,294

Issuance of restricted stock 9,180 — — — — — —

Forfeiture of restricted stock ( 2,088 ) — — — — — —

Dividends declared and paid — — — ( 20,402 ) — ( 5,421 ) ( 25,823 )

Stock-based compensation — — 1,746 — — — 1,746

Other comprehensive loss - change in value of interest rate swaps — — — — ( 669 ) ( 181 ) ( 850 )

Reclassification of amortization of forward-starting swap included in interest expense — — — — ( 78 ) ( 21 ) ( 99 )

Balance at June 30, 2024 60,901,583 $ 609 $ 1,472,569 $ ( 289,486 ) $ 8,557 $ ( 46,593 ) $ 1,145,656

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES

7 unchanged sentences

Stock-based compensation expense 3,353 3,363

Lease termination income 814 11,065

Other noncash interest expense, net ( 515 ) ( 197 )

25 unchanged sentences

(In Thousands, Except Unit Data)

March 31, December 31,

June 30, December 31,

Real estate, at cost

20 unchanged sentences

Commitments and contingencies (Note 12)

Limited partners' capital, 16,181,537 and 16,181,537 units issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Limited partners' capital, 16,181,537 and 16,181,537 units issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

( 51,560 ) ( 53,385 )

General partner's capital, 61,134,730 and 61,138,238 units issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

General partner's capital, 61,152,542 and 61,138,238 units issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

1,181,316 1,171,141

6 unchanged sentences

(In Thousands, Except Shares and Per Unit Data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Rental income $ 101,070 $ 105,094 $ 204,021 $ 210,115

43 unchanged sentences

Stock-based compensation — — — 1,670 — 1,670

Other comprehensive income - change in value of interest rate swap — — — — ( 1,192 ) ( 1,192 )

Other comprehensive loss - change in value of interest rate swap — — — — ( 1,192 ) ( 1,192 )

Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 258 ) ( 258 )

Balance at March 31, 2025 16,181,537 $ ( 47,518 ) 61,134,730 $ 1,194,763 $ 5,115 $ 1,152,360

Net income — 1,459 — 5,662 — 7,121

Issuance of restricted units — — 17,812 1 — 1

Forfeiture of restricted units — — — — — —

Distributions — ( 5,501 ) — ( 20,793 ) — ( 26,294 )

Stock-based compensation — — — 1,683 — 1,683

Other comprehensive loss - change in value of interest rate swap — — — — ( 768 ) ( 768 )

Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 258 ) ( 258 )

Balance at June 30, 2025 16,181,537 $ ( 51,560 ) 61,152,542 $ 1,181,316 $ 4,089 $ 1,133,845

Limited Partners' Capital (1)

7 unchanged sentences

Stock-based compensation — — — 1,617 — 1,617

Other comprehensive loss - change in value of interest rate swap — — — — 1,392 1,392

Other comprehensive income - change in value of interest rate swap — — — — 1,392 1,392

Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 98 ) ( 98 )

Balance at March 31, 2024 16,181,537 $ ( 47,190 ) 60,894,491 $ 1,190,249 $ 12,329 $ 1,155,388

Net income — 3,195 — 12,099 — 15,294

Issuance of restricted units — — 9,180 — — —

Forfeiture of restricted units — — ( 2,088 ) — — —

Distributions — ( 5,421 ) — ( 20,402 ) — ( 25,823 )

Stock-based compensation — — — 1,746 — 1,746

Other comprehensive loss - change in value of interest rate swap — — — — ( 850 ) ( 850 )

Reclassification of amortization of forward starting swaps included in interest expense — — — — ( 99 ) ( 99 )

Balance at June 30, 2024 16,181,537 $ ( 49,416 ) 60,901,583 $ 1,183,692 $ 11,380 $ 1,145,656

(1) Consists of limited partnership interests held by third parties.

4 unchanged sentences

(Unaudited, In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES

7 unchanged sentences

Stock-based compensation expense 3,353 3,363

Lease termination income 814 11,065

Other noncash interest expense, net ( 515 ) ( 197 )

34 unchanged sentences

We are a full service, vertically integrated, and self-administered REIT with approximately 236 employees providing substantial in-house expertise in asset management, property management, property development, leasing, tenant improvement construction, acquisitions, repositioning, redevelopment and financing.

As of March 31, 2025, we owned or had a controlling interest in 31 office, retail, multifamily and mixed-use operating properties, the operations of which we consolidate.

Additionally, as of March 31, 2025, we owned land at three of our properties that we classify as held for development and/or construction in progress.

As of June 30, 2025, we owned or had a controlling interest in 31 office, retail, multifamily and mixed-use operating properties, the operations of which we consolidate.

Additionally, as of June 30, 2025, we owned land at two of our properties that we classify as held for development and/or construction in progress.

A summary of the properties owned by us is as follows:

16 unchanged sentences

Held for Development and/or Construction in Progress

La Jolla Commons – Land

Solana Crossing – Land

3 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

Basis of Presentation

18 unchanged sentences

The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental cash flow information

10 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

Significant Accounting Policies

We describe our significant accounting policies in Note 1 to the consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no changes to our significant accounting policies during the three months ended March 31, 2025.

There have been no changes to our significant accounting policies during the six months ended June 30, 2025.

Segment Information

10 unchanged sentences

Base rents are recognized on a straight-line basis from when the tenant controls the space through the term of the related lease, net of valuation adjustments, based on management's assessment of credit, collection and other business risks.

Hotel revenue recognized at Waikiki Beach Walk Embassy Suites™ Hotel is in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” and is included within rental income on the statement of comprehensive income.

We make estimates of the collectability of our current accounts receivable and straight-line rents receivable which require significant judgment by management.

The collectability of receivables is affected by numerous different factors including current economic conditions, the impact of tenant bankruptcies, the status of collectability of current cash rents receivable, tenants' recent and historical financial and operating results, changes in our tenants' credit ratings, communications between our operating personnel and tenants, the extent of security deposits and letters of credit held with respect to tenants, and the ability of tenants to perform under the terms of their lease agreement.

The provision for doubtful accounts at March 31, 2025 and December 31, 2024 was approximately $ 1.6 million and $ 2.0 million, respectively.

The provision for doubtful accounts at June 30, 2025 and December 31, 2024 was approximately $ 1.2 million and $ 2.0 million, respectively.

Other revenue recognition policies

12 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

9 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

On February 28, 2025, we acquired Genesee Park in San Diego, California, consisting of a 192 -unit apartment community.

1 unchanged sentence

The property was acquired with cash on hand, primarily from the proceeds received on the sale of Del Monte Center on February 25, 2025.

The financial information set forth below summarizes the company’s purchase price allocation for Genesee Park during the three months ended March 31, 2025 (in thousands):

The financial information set forth below summarizes the company’s purchase price allocation for Genesee Park during the six months ended June 30, 2025 (in thousands):

Land $ 27,125

9 unchanged sentences

Liabilities assumed $ ( 264 )

The following table summarizes the operating results for Genesee Park included in the company's historical consolidated statement of operations for the period of acquisition through March 31, 2025 (in thousands):

Revenues $ 1,481

5 unchanged sentences

The sale price of this property was $ 123.5 million, less closing costs and prorations, resulting in net proceeds of approximately $ 117.8 million.

Accordingly, we recorded a gain on sale of approximately $ 44.5 million for the three months ended March 31, 2025.

Accordingly, we recorded a gain on sale of approximately $ 44.5 million for the six months ended June 30, 2025.

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

ACQUIRED IN-PLACE LEASES AND ABOVE/BELOW MARKET LEASES

The following summarizes our acquired lease intangibles and leasing costs, which are included in other assets and other liabilities and deferred credits, as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025 December 31, 2024

The following summarizes our acquired lease intangibles and leasing costs, which are included in other assets and other liabilities and deferred credits, as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

In-place leases $ 50,885 $ 49,813

24 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

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 March 31, 2025 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.

However, as of June 30, 2025 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.

As a result, we have determined that our derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.

A summary of our financial liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

7 unchanged sentences

A summary of the carrying amount and fair value of our secured financial instruments, all of which are based on Level 2 inputs, is as follows (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Carrying Value Fair Value Carrying Value Fair Value

7 unchanged sentences

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.

The following is a summary of the terms of our outstanding interest rate swaps as of March 31, 2025 (dollars in thousands):

The following is a summary of the terms of our outstanding interest rate swaps as of June 30, 2025 (dollars in thousands):

Swap Counterparty Notional Amount Effective Date Maturity Date Fair Value

8 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

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.

3 unchanged sentences

Other assets consist of the following (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Leasing commissions, net of accumulated amortization of $ 53,072 and $ 51,068 , respectively

11 unchanged sentences

Other liabilities and deferred credits consist of the following (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Acquired below market leases, net $ 11,816 $ 13,076

16 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

Debt of American Assets Trust, L.P.

Secured notes payable

The following table is a summary of our total secured notes payable outstanding as of March 31, 2025 and December 31, 2024 (in thousands):

The following table is a summary of our total secured notes payable outstanding as of June 30, 2025 and December 31, 2024 (in thousands):

Principal Balance as of Stated Interest Rate Stated Maturity Date

Description of Debt March 31, 2025 December 31, 2024 as of March 31, 2025

Description of Debt June 30, 2025 December 31, 2024 as of June 30, 2025

City Center Bellevue (1)

7 unchanged sentences

Certain loans require the Operating Partnership to comply with various financial covenants.

As of March 31, 2025, the Operating Partnership was in compliance with these financial covenants.

As of June 30, 2025, the Operating Partnership was in compliance with these financial covenants.

Unsecured notes payable

The following table is a summary of the Operating Partnership's total unsecured notes payable outstanding as of March 31, 2025 and December 31, 2024 (in thousands):

The following table is a summary of the Operating Partnership's total unsecured notes payable outstanding as of June 30, 2025 and December 31, 2024 (in thousands):

Description of Debt Principal Balance as of Stated Interest Rate Stated Maturity Date

March 31, 2025 December 31, 2024 as of March 31, 2025

June 30, 2025 December 31, 2024 as of June 30, 2025

Term Loan A $ 100,000 $ 100,000 Variable (1)

28 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

(6) The Operating Partnership entered into a treasury lock contract on April 25, 2017, which was settled on May 11, 2017 at a gain of approximately $ 0.7 million.

21 unchanged sentences

• A minimum maintenance of total unencumbered assets of 150 %.

As of March 31, 2025, the Operating Partnership was in compliance with all then in-place 3.375 % Senior Notes and 6.15 % Senior Notes covenants.

As of June 30, 2025, the Operating Partnership was in compliance with all then in-place 3.375 % Senior Notes and 6.15 % Senior Notes covenants.

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

Senior Guaranteed Notes

18 unchanged sentences

Certain loans require the Operating Partnership to comply with various financial covenants, including the maintenance of minimum debt coverage ratios.

As of March 31, 2025, the Operating Partnership was in compliance with all loan covenants.

As of June 30, 2025, the Operating Partnership was in compliance with all loan covenants.

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

Third Amended and Restated Credit Facility

3 unchanged sentences

Term Loan A matures on January 5, 2027, with no further extension options.

As of March 31, 2025, 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 $ 0.5 million of net debt issuance costs which are recorded in other assets, net on the consolidated balance sheet.

For the three months ended March 31, 2025, the weighted average interest rate on the Revolver Loan was 5.35 %.

As of June 30, 2025, 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 $ 0.3 million of net debt issuance costs which are recorded in other assets, net on the consolidated balance sheet.

For the six months ended June 30, 2025, the weighted average interest rate on the Revolver Loan was 5.53 %.

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 % to 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 % to 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.

9 unchanged sentences

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 March 31, 2025, the Operating Partnership was in compliance with all then in-place Third Amended and Restated Credit Facility covenants.

As of June 30, 2025, the Operating Partnership was in compliance with all then in-place Third Amended and Restated Credit Facility covenants.

Amended and Restated Term Loan Agreement

5 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

PARTNERS' CAPITAL OF AMERICAN ASSETS TRUST, L.P.

Noncontrolling interests in our Operating Partnership are interests in the Operating Partnership that are not owned by us.

Noncontrolling interests consisted of 16,181,537 common units (the “noncontrolling common units”), and represented approximately 21.1 % of the ownership interests in our Operating Partnership at March 31, 2025.

Common units and shares of our common stock have essentially the same economic characteristics in that common units and shares of our common stock share equally in the total net income or loss distributions of our Operating Partnership.

Investors who own common units have the right to cause our Operating Partnership to redeem any or all of their common units for cash equal to the then-current market value of one share of our common stock, or, at our election, shares of our common stock on a one -for-one basis.

During the three months ended March 31, 2025, no common units were converted into shares of our common stock.

During the six months ended June 30, 2025, no common units were converted into shares of our common stock.

Earnings Per Unit of the Operating Partnership

2 unchanged sentences

The impact of unvested Operating Partnership unit awards on EPU has been calculated using the two-class method whereby earnings are allocated to the unvested Operating Partnership unit awards based on distributions and the unvested Operating Partnership units’ participation rights in undistributed earnings.

The calculation of diluted EPU for the three months ended March 31, 2025 and 2024 does not include the weighted average of 599,868 and 585,210 unvested outstanding Operating Partnership units, respectively, as these equity securities are either considered contingently issuable or the effect of including these equity securities was anti-dilutive to income from continuing operations and net income attributable to the unitholders.

The calculation of diluted EPU for the three months ended June 30, 2025 and 2024 does not include the weighted average of 600,282 and 583,239 unvested outstanding Operating Partnership units, respectively, and for the six months ended June 30, 2025 and 2024 does not include the weighted average of 600,076 and 584,225 unvested outstanding Operating Partnership units, respectively, as these equity securities are either considered contingently issuable or the effect of including these equity securities was anti-dilutive to income from continuing operations and net income attributable to the unitholders.

EQUITY OF AMERICAN ASSETS TRUST, INC.

2 unchanged sentences

The sales of shares of our common stock made through the ATM equity program, as amended, are made in “at-the-market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended.

For the three months ended March 31, 2025, no shares of common stock were sold through the ATM equity program.

For the six months ended June 30, 2025, no shares of common stock were sold through the ATM equity program.

We intend to use the net proceeds from the ATM equity program to fund our development or redevelopment activities, repay amounts outstanding from time to time under our revolving line of credit or other debt financing obligations, fund potential acquisition opportunities and/or for general corporate purposes.

As of March 31, 2025, we had the capacity to issue up to $ 250 million in shares of our common stock under our current ATM equity program.

As of June 30, 2025, we had the capacity to issue up to $ 250 million in shares of our common stock under our current ATM equity program.

Actual future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common stock and our capital needs.

As of March 31, 2025, we have no obligation to sell the remaining shares available for sale under the ATM equity program.

As of June 30, 2025, we have no obligation to sell the remaining shares available for sale under the ATM equity program.

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

The following table lists the dividends declared and paid on our shares of common stock and noncontrolling common units during the three months ended March 31, 2025:

June 30, 2025

The following table lists the dividends declared and paid on our shares of common stock and noncontrolling common units during the six months ended June 30, 2025:

Period Amount per

1 unchanged sentence

First Quarter 2025 $ 0.340 January 1, 2025 to March 31, 2025 March 20, 2025

Second Quarter 2025 $ 0.340 April 1, 2025 to June 30, 2025 June 18, 2025

Taxability of Dividends

3 unchanged sentences

The guidance also defines a fair value-based method of accounting for an employee stock award or similar equity instrument.

The following table summarizes the activity of restricted stock awards during the three months ended March 31, 2025:

The following table summarizes the activity of restricted stock awards during the six months ended June 30, 2025:

Units Weighted Average Grant Date Fair Value

Nonvested at January 1, 2025 600,938 $ 19.40

Granted 17,812 20.21

Vested ( 9,180 ) 21.79

Forfeited ( 3,508 ) 17.67

Nonvested at March 31, 2025 597,430 $ 19.41

We recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized $ 1.7 million and $ 1.6 million for the three months ended March 31, 2025 and 2024, respectively, which is included in general and administrative expenses on the consolidated statements of comprehensive income.

Unrecognized compensation expense was $ 8.3 million at March 31, 2025.

Nonvested at June 30, 2025

606,062 $ 19.39

We recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized $ 1.7 million and $ 1.7 million for the three months ended June 30, 2025 and 2024, respectively, and $ 3.4 million and $ 3.4 million for the six months ended June 30, 2025 and 2024, respectively, which is included in general and administrative expenses on the consolidated statements of comprehensive income.

Unrecognized compensation expense was $ 7.0 million at June 30, 2025.

Earnings Per Share

1 unchanged sentence

The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating security is calculated according to dividends declared and participation rights in undistributed earnings.

The weighted average unvested shares outstanding, which are considered participating securities, were 599,868 and 585,210 for the three months ended March 31, 2025 and 2024, respectively.

The weighted average unvested shares outstanding, which are considered participating securities, were 600,282 and 583,239 for the three months ended June 30, 2025 and 2024, respectively, and 600,076 and 584,225 for the six months ended June 30, 2025 and 2024, respectively.

Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares as these unvested shares have nonforfeitable dividend equivalent rights.

Diluted EPS is calculated by dividing the net income applicable to common stockholders for the period by the weighted average number of common and dilutive instruments outstanding during the period using the treasury stock method.

For the three months ended March 31, 2025 and 2024, diluted shares exclude incentive restricted stock as these awards are considered contingently issuable.

For the three and six months ended June 30, 2025 and 2024, diluted shares exclude incentive restricted stock as these awards are considered contingently issuable.

Additionally, the unvested restricted stock awards subject to time vesting are anti-dilutive for all periods presented, and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.

2 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

The computation of basic and diluted EPS is presented below (dollars in thousands, except share and per share amounts):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 7,121 $ 15,294 $ 61,228 $ 39,917

8 unchanged sentences

Income from operations attributable to unitholders in the Operating Partnership

1,459 3,195 12,828 8,362

Net income attributable to common stockholders—diluted

12 unchanged sentences

Additionally, we classify certain state taxes as income taxes for financial reporting purposes in accordance with ASC Topic 740, Income Taxes .

A deferred tax asset is included in our consolidated balance sheets of $ 1.0 million and $ 1.0 million, and a deferred tax liability is included in our consolidated balance sheets of $ 0.8 million and $ 0.8 million as of March 31, 2025 and December 31, 2024, respectively, in relation to real estate asset basis differences and prepaid expenses for our TRS.

A deferred tax asset is included in our consolidated balance sheets of $ 1.0 million and $ 1.0 million, and a deferred tax liability is included in our consolidated balance sheets of $ 0.8 million and $ 0.8 million as of June 30, 2025 and December 31, 2024, respectively, in relation to real estate asset basis differences and prepaid expenses for our TRS.

Income tax expense is recorded in other income, net on our consolidated statements of comprehensive income.

For the three months ended March 31, 2025, we recorded income tax expense of $ 0.4 million.

For the three months ended March 31, 2024, we recorded income tax expense of $ 0.3 million.

COMMITMENTS AND CONTINGENCIES

We are sometimes involved in various disputes, lawsuits, warranty claims, environmental considerations, and other matters arising in the ordinary course of business.

Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.

For the three and six months ended June 30, 2025, we recorded income tax expense of $ 0.1 million and $ 0.5 million, respectively.

For the three and six months ended June 30, 2024, we recorded income tax expense of $ 0.2 million and $ 0.5 million, respectively.

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

COMMITMENTS AND CONTINGENCIES

We are sometimes involved in various disputes, lawsuits, warranty claims, environmental considerations, and other matters arising in the ordinary course of business.

Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.

We are currently a party to various legal proceedings.

21 unchanged sentences

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 $ 8.2 million based on operating performance through March 31, 2025.

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 $ 8.1 million based on operating performance through June 30, 2025.

American Assets Trust, Inc.

and American Assets Trust, L.P.

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

Concentrations of Credit Risk

2 unchanged sentences

Sixteen of our consolidated properties are located in Southern California, which exposes us to greater economic risks than if we owned a more geographically diverse portfolio.

Tenants in the office industry accounted for 46.8 % of total revenues for the three months ended March 31, 2025.

Tenants in the office industry accounted for 47.0 % of total revenues for the six months ended June 30, 2025.

This makes us susceptible to demand for office rental space and subject to the risks associated with an investment in real estate with a concentration of tenants in the office industry.

Furthermore, tenants in the retail industry accounted for 22.7 % of total revenues for the three months ended March 31, 2025.

Furthermore, tenants in the retail industry accounted for 22.0 % of total revenues for the six months ended June 30, 2025.

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.

For the three months ended March 31, 2025 and 2024, no tenant accounted for more than 10% of our total rental revenue.

American Assets Trust, Inc.

and American Assets Trust, L.P.

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

For the six months ended June 30, 2025 and 2024, no tenant accounted for more than 10% of our total rental revenue.

Lessor Operating Leases

13 unchanged sentences

However, the residual value of a real estate property is still subject to various market-specific, asset-specific, and tenant-specific risks and characteristics.

As of March 31, 2025, minimum future rentals from noncancelable operating leases, before any reserve for uncollectible amounts and assuming no early lease terminations, at our office and retail properties and the retail portion of our mixed-use property are as follows for the years ended December 31 (in thousands):

2025 (nine months ending December 31, 2025) $ 184,004

As of June 30, 2025, minimum future rentals from noncancelable operating leases, before any reserve for uncollectible amounts and assuming no early lease terminations, at our office and retail properties and the retail portion of our mixed-use property are as follows for the years ended December 31 (in thousands):

2025 (six months ending December 31, 2025) $ 121,147

Thereafter 251,797

1 unchanged sentence

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.

American Assets Trust, Inc.

and American Assets Trust, L.P.

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

Lessee Operating Leases

5 unchanged sentences

The extension option is included in the calculation of the right-of-use asset and lease liability as we are reasonably certain of exercising the extension option.

American Assets Trust, Inc.

and American Assets Trust, L.P.

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement in determining the present value of lease payments.

As of March 31, 2025, current annual payments under the operating leases are as follows for the years ended December 31 (in thousands):

2025 (nine months ending December 31, 2025) $ 2,662

As of June 30, 2025, current annual payments under the operating leases are as follows for the years ended December 31 (in thousands):

2025 (six months ending December 31, 2025) $ 1,792

Thereafter 5,375

3 unchanged sentences

Lease costs under the operating leases are as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Operating lease cost $ 910 $ 815 $ 1,819 $ 1,786

Sublease income ( 858 ) ( 819 ) ( 1,718 ) ( 1,678 )

Total lease cost $ 50 $ 111

Total lease cost (income) $ 52 $ ( 4 ) $ 101 $ 108

Weighted-average remaining lease term - operating leases (in years) 6.0

1 unchanged sentence

Supplemental cash flow information and non-cash activity related to our operating leases are as follow (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Operating cash flow information:

5 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

COMPONENTS OF RENTAL INCOME AND EXPENSE

The principal components of rental income are as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Lease rental income

7 unchanged sentences

Total rental income $ 101,070 $ 105,094 $ 204,021 $ 210,115

Minimum rents include $ 0.4 million and $ 2.2 million for the three months ended March 31, 2025 and 2024, respectively, to recognize lease rental income on a straight-line basis.

In addition, net amortization of above and below market leases included in lease rental income was $ 0.6 million and $ 0.7 million for the three months ended March 31, 2025 and 2024, respectively.

Minimum rents include $ 0.2 million and $ 0.4 million for the three months ended June 30, 2025 and 2024, respectively, and $ 0.6 million and $ 2.6 million for the six months ended June 30, 2025 and 2024, respectively, to recognize lease rental income on a straight-line basis.

In addition, net amortization of above and below market leases included in lease rental income was $ 0.7 million and $ 0.7 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.2 million and $ 1.4 million for the six months ended June 30, 2025 and 2024, respectively.

The principal components of rental expenses are as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Rental operating $ 13,726 $ 13,452 $ 28,343 $ 27,167

2 unchanged sentences

Marketing 533 611 1,106 1,640

Rent 662 769 1,571 1,694

Hawaii excise tax 1,049 1,040 2,054 2,075

2 unchanged sentences

The principal components of other income, net are as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Interest and investment income $ 1,045 $ 990 $ 2,377 $ 1,579

2 unchanged sentences

Total other income $ 927 $ 789 $ 1,842 $ 11,118

For the three months ended March 31, 2024, other non-operating income includes the net settlement payment of approximately $ 10.0 million received on January 2, 2024 related to building specifications for one of the existing buildings at our office project in University Town Center (San Diego).

For the six months ended June 30, 2024, other non-operating income includes the net settlement payment of approximately $ 10.0 million received on January 2, 2024 related to building specifications for one of the existing buildings at our office project in University Town Center (San Diego).

American Assets Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

RELATED PARTY TRANSACTIONS

3 unchanged sentences

Rents commenced on March 1, 2021 for an initial lease term of ten years at an average annual rental rate of $ 0.2 million.

Rental revenue recognized on the AAI lease of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2025 and 2024, respectively, is included in rental income on the statements of comprehensive income.

Rental revenue recognized on the AAI lease of $ 0.1 million and $ 0.1 million for the six months ended June 30, 2025 and 2024, respectively, is included in rental income on the statements of comprehensive income.

The Waikiki Beach Walk entities have a 47.7 % investment in WBW CHP LLC, an entity that was formed to, among other things, construct a chilled water plant to provide air conditioning to the property and other adjacent facilities.

The operating expenses of WBW CHP LLC are recovered through reimbursements from its members, and reimbursements to WBW CHP LLC of $ 0.3 million and $ 0.3 million for the three months ended March 31, 2025 and 2024, respectively, are included in rental expenses on the consolidated statements of comprehensive income.

The operating expenses of WBW CHP LLC are recovered through reimbursements from its members, and reimbursements to WBW CHP LLC of $ 0.6 million and $ 0.5 million for the six months ended June 30, 2025 and 2024, respectively, are included in rental expenses on the consolidated statements of comprehensive income.

SEGMENT REPORTING

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures.

The pronouncement requires disclosure of significant segment expenses that are regularly provided to the CODM and included within the segment measure of profit or loss.

For the three months ended March 31, 2025, the CODM for the company was comprised of our President and Chief Executive Officer and our Chief Financial Officer.

For the three and six months ended June 30, 2025, the CODM for the company was comprised of our President and Chief Executive Officer and our Chief Financial Officer.

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.

22 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

Three Months Ended March 31,

June 30, 2025

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Property revenue $ 50,818 $ 51,310 $ 101,699 $ 102,992

22 unchanged sentences

The following table is a reconciliation of segment profit to net income attributable to stockholders (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Total segments’ profit $ 67,610 $ 70,542 $ 134,912 $ 140,150

3 unchanged sentences

Gain on sale of real estate — — 44,476 —

Other income (expense), net 915 10,329

Other income, net 927 789 1,842 11,118

Net income 7,121 15,294 61,228 39,917

6 unchanged sentences

Notes to Consolidated Financial Statements—(Continued)

March 31, 2025

June 30, 2025

The following table shows net real estate and secured note payable balances for each of the reportable segments (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Net Real Estate

7 unchanged sentences

$ 75,000 $ 75,000

(1) Excludes unamortized debt issuance costs of $ 0.2 million and $ 0.2 million for each of the periods ended March 31, 2025 and December 31, 2024, respectively.

Capital expenditures for each segment for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended March 31,

(1) Excludes unamortized debt issuance costs of $ 0.2 million and $ 0.2 million for each of the periods ended June 30, 2025 and December 31, 2024, respectively.

Capital expenditures for each segment for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Capital Expenditures (1)

6 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements