What changed in this filing

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Item 1A. Risk Factors

2026-02-06 compared with 2025-02-12 · 36 added, 35 removed, 631 unchanged (10% of the section changed)

17 unchanged sentences

In 2025, approximately 52% of our net operating income was from our office properties.

Work from home, flexible work schedules, open workplaces, videoconferencing, and teleconferencing have become more common, particularly as a result of the pandemic.

Work from home, flexible work schedules, open workplaces, videoconferencing, and teleconferencing have become common, particularly as a result of the pandemic.

These practices may enable businesses to reduce their office space requirements.

4 unchanged sentences

At December 31, 2025, we also had a third amended and restated credit facility with a capacity of $500 million, consisting of a revolving line of credit of $400 million and an unsecured term loan of $100 million (Term Loan A).

On September 17, 2024, the Operating Partnership issued $525 million of senior unsecured notes (6.150% Senior Notes), the net proceeds of which were used to repay $300 million of debt maturities and the remaining of which will be used for general working capital and for corporate purposes.

Payments of principal and interest on borrowings may leave us with insufficient cash resources to operate our properties or to pay the dividends currently contemplated or necessary to maintain our REIT qualification.

151 unchanged sentences

• one or more lenders under our third amended and restated credit facility could refuse to fund their financing commitment to us or could fail and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.

Changes in Trade Policies, Including the Imposition of Tariffs, Could Adversely Affect Our Tenants, Ability to Lease Space, Development Activities, and Operating Costs

Changes in international trade policies and the implementation or expansion of tariffs or other trade restrictions could adversely affect our business, financial condition, and results of operations.

Tariffs imposed on consumer goods could negatively impact the operations and profitability of some of our tenants, potentially affecting their ability to meet rent obligations or renew leases.

Tariffs may further impact our ability to lease unoccupied space by affecting market demand.

Tariffs on construction materials, appliances, fixtures, and other goods used in the development, renovation, and maintenance of our properties may lead to increased project costs and delays.

To the extent that our tenants or service providers are adversely affected by such trade policies, or if our own property-related costs increase materially, our financial performance could be adversely impacted.

A Prolonged Federal Government Shutdown Could Adversely Affect Some of Our Tenants

We lease space to U.S.

government agencies through the General Services Administration (GSA).

A prolonged federal government shutdown could result in delayed or suspended funding for these agencies, potentially affecting their ability to meet rent obligations.

In addition, some of our other tenants may rely heavily on federal funding, grants, or contracts.

A sustained shutdown could weaken their financial condition, affect their ability to meet rent obligations, and decrease the likelihood of lease renewals.

To the extent our tenants are adversely impacted by a federal government shutdown, our financial performance could be adversely impacted.

We are subject to risks that affect the general retail environment, such as weakness in the economy, the level of consumer spending, the adverse financial condition of large retailing companies and competition from discount and internet retailers, any of which could adversely affect market rents for retail space and the willingness or ability of retailers to lease space in our shopping centers.

1 unchanged sentence

This means that we are subject to factors that affect the retail sector generally, as well as the market for retail space.

The retail environment and the market for retail space have previously been, and could again be, adversely affected by weakness in the national, regional and local economies, inflation, high interest rate environments, the level of consumer spending and consumer confidence, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets, increasing competition from discount retailers, outlet malls, internet retailers (including Amazon.com) and other online businesses and communicable diseases.

Increases in consumer spending via the internet may significantly affect our retail tenants' ability to generate sales in their stores and could affect the way future tenants lease space.

79 unchanged sentences

If we lose their services, our relationships with such personnel could diminish.

Effective January 1, 2025, Mr.

Rady transitioned from the company’s Chief Executive Officer to its Executive Chairman, and Mr.

Wyll was appointed by our board of directors to the role of President and Chief Executive Officer.

Wyll has held multiple positions on the company’s executive management team, including President and Chief Operating Officer from July 2021 until his appointment as President and Chief Executive Officer;

Executive Vice President and Chief Operating Officer from 2019 to 2021;

and Senior Vice President and General Counsel from the completion of our public offering in January 2022 until November 2019.

Wyll brings to his role more than 25 years of experience in commercial real estate, acquisitions and dispositions, structured finance, leasing, and corporate and securities matters.

Many of our other senior executives also have extensive experience and strong reputations in the real estate industry, which aid us in identifying opportunities, having opportunities brought to us and negotiating with tenants and build-to-suite prospects.

The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with lenders, business partners, existing and prospective tenants and industry participants, which could adversely affect our financial condition, results of operations, cash flow and per share trading price of our common stock.

Rady is involved in outside businesses, which may interfere with his ability to devote time and attention to our business and affairs.

We rely on our senior management team, including Mr.

Rady, for the day-to-day operations of our business.

Our employment agreement with Mr.

Rady requires him to devote a substantial portion of his business time and attention to our business.

Rady continues to serve as the chairman of the board of directors and president of American Assets, Inc.

and chairman of the board of directors of Insurance Company of the West.

Rady has certain ongoing duties to American Assets, Inc., Insurance Company of the West and other business ventures that could require a portion of his time and attention.

Although we expect that Mr.

Rady will continue to devote a majority of his business time and attention to us, we cannot accurately predict the amount of time and attention that will be required of Mr.

Rady to perform such ongoing duties.

To the extent that Mr.

Rady is required to dedicate time and attention to American Assets, Inc.

and/or Insurance Company of the West, his ability to devote a majority of his business time and attention to our business and affairs may be limited and could adversely affect our operations.

We may be subject to on-going or future litigation and otherwise in the ordinary course of business, which could have a material adverse effect on our financial condition, results of operations, cash flow and per share trading price of our common stock.

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As such, the potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate.

These may include changes in global weather patterns, which could include local changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperature averages or extremes.

These may include changes in global weather patterns, which could include local changes in rainfall and storm patterns and intensities, water shortages, increased risks of wildfires, changing sea levels and changing temperature averages or extremes.

Further, population migration may occur in response to these or other factors and negatively impact our properties.

7 unchanged sentences

Insurance costs for properties in these areas have increased, and recent intense weather conditions may cause property insurance premiums to increase significantly in the future.

We recognize that the frequency and/or intensity of extreme weather events, sea-level rise, and other climatic changes may continue to increase, and as a result, our exposure to these events may increase.

We recognize that the frequency and/or intensity of extreme weather events, wildfires, sea-level rise, and other climatic changes may continue to increase, and as a result, our exposure to these events may increase.

These weather conditions may disrupt our business and the business of our tenants, which may affect the ability of some tenants to pay rent and may reduce the willingness of tenants or residents to remain in or move to these affected areas.

4 unchanged sentences

Environmental and legal restrictions could also restrict the rebuilding of our properties.

For example, if we experienced a substantial or comprehensive loss of our Torrey Reserve Campus in San Diego, California, reconstruction could be delayed or prevented by the California Coastal Commission, which regulates land use in the California coastal zone.

For example, if we experienced a substantial or comprehensive loss of Torrey Point in San Diego, California, reconstruction could be delayed or prevented by the California Coastal Commission, which regulates land use in the California coastal zone.

Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial condition and disputes between us and our co-venturers.

51 unchanged sentences

Any failure or perceived failure by us to comply with laws, regulations, policies or regulatory guidance relating to privacy or data security may result in governmental investigations and enforcement actions, litigation, fines and penalties or adverse publicity, and could cause our customers and consumers to lose trust in us, which could have an adverse effect on our reputation and business.

We use AI Technologies in our business, and the use of these technologies involve technological and legal risks

We use artificial intelligence (“AI”) and machine learning technologies (collectively, “AI Technologies”) in our business.

As with many technological innovations, there are significant risks involved in maintaining and deploying these technologies and there can be no assurance that our investments in or use of such technologies will always enhance our services or be beneficial to our business, including our efficiency or profitability.

In particular, if the models underlying our AI Technologies are:

incorrectly designed or implemented;

trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data;

used without sufficient oversight and governance;

and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats, data privacy concerns, or material performance issues, the performance of our services and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

The regulatory framework for AI Technologies is rapidly evolving as many federal and state government bodies and agencies have enacted or are currently considering laws and regulations governing AI.

Such regulations may impact our ability to use, procure and commercialize AI Technologies in the future.

Additionally, existing laws and regulations may be interpreted or enforced in ways that would affect the operation of our AI Technologies.

As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond.

It is also possible that the AI Technologies we use may have, or may be viewed as having, unintended biases or discriminatory outcomes, exposing us to risks that we have discriminated against persons belonging to a protected class.

Any resulting investigation or litigation could have an adverse impact on our results of operations due to the associated costs and any related fines, and could also have an adverse impact on our customer relationships.

We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties.

Risks Related to the Real Estate Industry

36 unchanged sentences

Such contamination may arise from spills of petroleum or hazardous substances or releases from tanks used to store such materials.

For example, Del Monte Center is currently undergoing the final stages of remediation of dry cleaning solvent contamination from a former onsite dry cleaner, which entails the long term ground monitoring by the appropriate regulatory agency over the next five to seven years.

The prior owner of Del Monte Center entered into a fixed fee environmental services agreement in 1997 pursuant to which the remediation will be completed for approximately $3.5 million, with the remediation costs paid for through funds held in an escrow account funded by the prior owner.

We expect that the funds in this escrow account will cover all remaining costs and expenses of the environmental remediation.

However, if the Regional Water Quality Control Board - Central Coast Region were to require further work costing more than the remaining escrowed funds, we could be required to pay such overage although we may have a claim for such costs against the prior owner or our environmental remediation consultant.

In addition to the foregoing, we possess Phase I Environmental Site Assessments for certain of the properties in our portfolio, these assessments are limited in scope (e.g., they do not generally include soil sampling, subsurface investigations or hazardous materials survey) and may have failed to identify all environmental conditions or concerns.

Furthermore, we do not have Phase I Environmental Site Assessment reports for all of the properties in our portfolio and, as such, we may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio.

Although we possess environmental site assessments for certain of the properties in our portfolio, these assessments are limited in scope and may have failed to identify all environmental conditions or concerns.

Furthermore, we do not have environmental site assessment reports for all of the properties in our portfolio and, as such, we may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio.

As a result, we could potentially incur material liability for these issues, which could adversely impact our financial condition, results of operations, cash flow and the per share trading price of our common stock.

70 unchanged sentences

Certain provisions of the MGCL permit our board of directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain corporate governance provisions, some of which (e.g., a classified board) are not currently applicable to us.

These provisions may have the effect of limiting or precluding a third-party from making an unsolicited acquisition proposal for us or of delaying, deferring or preventing a change in control of us under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a

premium over the then current market price.

Our charter contains a provision whereby we elected to be subject to certain provisions the MGCL relating to the filling of vacancies on our board of directors.

167 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-K

Item 1A. Risk Factors