American Assets Trust, Inc. (AAT) | Investment Case

1. Company Snapshot

1.a. Company Description

American Assets Trust, Inc.is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California.The company has over 50 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington, Texas and Hawaii.

The company's office portfolio comprises approximately 3.4 million rentable square feet, and its retail portfolio comprises approximately 3.1 million square feet.In addition, the company owns one mixed-use property (including approximately 97,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,112 multifamily units.In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

Show Full description

1.b. Last Insights on AAT

American Assets Trust's recent performance was driven by strong Q1 2025 earnings, beating estimates with FFO of $0.52 per share and revenue exceeding expectations. The company's diversified portfolio in high-demand coastal markets and strategic capital recycling position it for steady FFO/share growth. Additionally, American Assets Trust offers a compelling 7.1% dividend yield with a conservative 69% payout ratio, making it attractive for income investors. The stock's current price presents a significant discount to its historical valuation, indicating strong value.

1.c. Company Highlights

Last Price	18.73
Change Percentage	-0.79%
Open	18.84
Previous Close	18.88
Market Cap ( Millions)	1145
Volume	253078
Year High	28.41
Year Low	16.69
M A 50	19.48
M A 200	19.88

FCF Yield	8.15%
Dividend Yield	7.26%
ROE	5.20%
Debt / Equity	144.30%
Net Debt / EBIDTA	662.28%
Price To Book	0.97
Price Earnings Ratio	18.45
Price To FCF	12.27
Price To sales	2.61
EV / EBITDA	11.52

2. American Assets Trust Posts Steady Q3 Earnings

American Assets Trust reported funds from operations (FFO) of $0.49 per diluted share for the third quarter, in line with expectations. Net income attributable to common stockholders was $0.07 per diluted share, and total revenue was $110 million for the quarter. The company's same-store cash NOI combined decreased by 0.8% in the third quarter of 2025 compared to the same period in 2024, generally in line with expectations. The results were driven by a strong performance in the office and retail portfolios, with same-store office NOI increasing by 3.6% and retail NOI remaining stable.

Publication Date: Nov -04

                                    📋 Highlights
                                    FFO Performance:
                                                Funds from operations (FFO) for Q3 2025 were $0.49 per diluted share, exceeding internal projections.
Office Leasing Momentum:
                                                Completed 180,000 sq ft of office leasing with cash rent spreads up 9% and straight-line spreads up 18%.
Retial Portfolio Strength:
                                                98% leased with 125,000 sq ft of new/renewal leases, achieving cash spreads over 4% and straight-line spreads 21%.
Guidance Adjustment:
                                                Full-year 2025 FFO guidance raised to $1.93–$2.01 per share, reflecting a $0.02 increase from prior estimates.
Balance Sheet Leverage:
                                                Net debt-to-EBITDA at 6.7x trailing 12-months, with $539 million liquidity and plans to reduce leverage to 5.5x long-term target.

                                

Segment Performance

The office portfolio ended the quarter 82% leased, with same-store office NOI increasing positively for the quarter, ahead of expectations. The company completed approximately 180,000 square feet of office leasing during the quarter, with comparable rent spreads increasing 9% on a cash basis and 18% on a straight-line basis. The retail portfolio continues to perform well, with 98% leased at quarter end and 2% signed but not commenced paying cash rents.

Guidance and Outlook

The company is raising its full-year 2025 guidance range to $1.93 to $2.01 per FFO share, with a midpoint of $1.97, representing a $0.02 increase from the prior guidance midpoint. The management remains confident in the long-term performance of its Hawaii hotel, citing a 14% year-over-year increase in Japanese nationals traveling overseas in August 2025. Analysts estimate next year's revenue growth at 3.0%.

Valuation and Leverage

With a P/E Ratio of 18.67 and a Dividend Yield of 7.15%, the stock appears to be reasonably valued. The company's Net Debt-to-EBITDA ratio was 6.7x on a trailing 12-month basis, and management is committed to reducing leverage toward its long-term target of 5.5x or lower. The rating agencies have a stable outlook, and the company is aiming to reach its target leverage ratio.

Operational Highlights

The company's multifamily segment remains resilient, with 95% of its units leased. Office leasing is strong, with a broad base of tenants, and the company is seeing a flight to quality, with tenants gravitating towards the best properties and space that's ready to go. The management expects to go positive in office occupancy in 2026, driven by new leasing activity.

3. NewsRoom

American Assets Trust, Inc. $AAT Shares Sold by Ensign Peak Advisors Inc

Dec -01

Source: defenseworld.net

B&I Capital AG Buys Shares of 295,620 American Assets Trust, Inc. $AAT

Nov -27

Source: defenseworld.net

Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

American Assets Trust: The Diversified Portfolio Is An Asset

Nov -17

Source: seekingalpha.com

Agree Realty (NYSE:ADC) versus American Assets Trust (NYSE:AAT) Head-To-Head Survey

Nov -16

Source: defenseworld.net

Bailard Inc. Acquires Shares of 37,900 American Assets Trust, Inc. $AAT

Nov -15

Source: defenseworld.net

Wave Life Sciences Reports Third Quarter 2025 Financial Results and Provides Business Update

Nov -10

Source: globenewswire.com

American Assets Trust (AAT) Upgraded to Buy: Here's Why

Oct -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.79%)

6. Segments

Office

Expected Growth: 1.8%

American Assets Trust's 1.8% office segment growth is driven by strong demand in coastal markets, particularly in California and Washington. The company's focus on high-quality, amenity-rich properties and strategic leasing efforts have contributed to increased occupancy rates and rental growth. Additionally, the ongoing shift towards experiential office spaces and the growth of the tech industry have supported the segment's expansion.

Retail

Expected Growth: 1.5%

American Assets Trust's retail segment growth of 1.5% is driven by increasing demand for experiential retail, strategic leasing efforts, and a strong tenant mix. Additionally, the company's focus on high-quality, grocery-anchored centers and its presence in affluent demographics contribute to its growth. Furthermore, the implementation of omnichannel retailing and investment in technology also support the segment's growth.

Mixed-Use

Expected Growth: 1.9%

American Assets Trust's Mixed-Use segment growth of 1.9% is driven by increasing demand for live-work-play environments, rising urbanization, and growing e-commerce penetration, leading to higher retail and office occupancy rates. Additionally, the segment benefits from a diversified tenant base, strategic property locations, and effective cost management.

Multifamily

Expected Growth: 2.1%

American Assets Trust's multifamily segment growth of 2.1% is driven by increasing demand for rental housing, particularly in coastal markets, coupled with a strong job market and rising wages. Additionally, the company's strategic focus on value-add opportunities, renovations, and operational efficiencies has contributed to the growth.

7. Detailed Products

Office Properties

American Assets Trust, Inc. owns and operates a portfolio of high-quality office properties, providing tenants with modern and amenity-rich workspaces.

Retail Properties

The company's retail properties offer a diverse range of shopping and dining experiences, with a focus on convenience, accessibility, and community engagement.

Multifamily Properties

American Assets Trust, Inc. develops and manages a portfolio of luxury multifamily communities, offering residents upscale amenities and convenient locations.

Mixed-Use Properties

The company's mixed-use properties combine office, retail, and residential spaces, creating vibrant and dynamic communities.

Hotel Properties

American Assets Trust, Inc. owns and operates a select portfolio of high-quality hotels, offering guests exceptional service and amenities.

8. American Assets Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

American Assets Trust, Inc. operates in a competitive industry, but its diversified portfolio and strong brand recognition mitigate the threat of substitutes.

Bargaining Power Of Customers

American Assets Trust, Inc.'s customers have limited bargaining power due to the company's strong market position and diversified tenant base.

Bargaining Power Of Suppliers

American Assets Trust, Inc. has a moderate level of dependence on its suppliers, but its scale and diversified portfolio mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the real estate industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The real estate industry is highly competitive, and American Assets Trust, Inc. faces intense rivalry from other REITs and real estate companies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	60.21%
Debt Cost	3.95%
Equity Weight	39.79%
Equity Cost	10.50%
WACC	6.55%
Leverage	151.34%

11. Quality Control: American Assets Trust, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Gladstone Commercial

A-Score: 6.4/10

Value: 5.3

Growth: 4.7

Quality: 6.9

Yield: 10.0

Momentum: 2.0

Volatility: 9.7

1-Year Total Return ->

One Liberty Properties

A-Score: 6.3/10

Value: 5.2

Growth: 4.2

Quality: 6.5

Yield: 10.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

Urban Edge

A-Score: 6.1/10

Value: 4.9

Growth: 3.1

Quality: 7.8

Yield: 8.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

CTO Realty Growth

A-Score: 6.0/10

Value: 5.7

Growth: 5.2

Quality: 3.4

Yield: 10.0

Momentum: 2.0

Volatility: 9.3

1-Year Total Return ->

American Assets Trust

A-Score: 5.7/10

Value: 5.2

Growth: 4.3

Quality: 4.7

Yield: 10.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

Presidio Property Trust

A-Score: 2.8/10

Value: 5.6

Growth: 0.8

Quality: 2.6

Yield: 5.0

Momentum: 3.0

Volatility: 0.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.22%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.55%

American Assets Trust, Inc. - US0240131047

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AAT

1.c. Company Highlights

Average Yield

Average Growth

Stable Momentum

Earnings Miss

Earnings Beats

Medium Volatility

Revenues Beats

Strong Momentum

Revenues Miss

Better Quality

Average Quality

Fairly Valued

2. American Assets Trust Posts Steady Q3 Earnings

Segment Performance

Guidance and Outlook

Valuation and Leverage

Operational Highlights

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.79%)

6. Segments

Office

Expected Growth: 1.8%

Retail

Expected Growth: 1.5%

Mixed-Use

Expected Growth: 1.9%

Multifamily

Expected Growth: 2.1%

7. Detailed Products

Office Properties

Retail Properties

Multifamily Properties

Mixed-Use Properties

Hotel Properties

8. American Assets Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: American Assets Trust, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.73$

Current Price

18.73$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA