Q4 2021 American Assets Trust Inc Earnings Call

Speaker 1: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Adam Wild, the President and Chief Operating Officer. Please go ahead.

There will be a question and answer session that a question during the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Adam.

President and Chief operating Officer. Please go ahead.

Thank you operator, good morning, everyone and welcome to American Assets Trust, Inc. Fourth quarter and year end 2021 earnings call yesterday afternoon, our earnings release and supplemental information were furnished to the SEC form 8-K. Both are now available on the investors section of our website American assets Trust's Dot com.

Speaker 2: Thank you, operator. Good morning, everyone. Welcome to American Asset Trust Inc.'s fourth quarter year-end 2021 earnings call. Yesterday afternoon, our earnings release and supplemental information were furnished to the SEC on Form 8K. Both are now available on the investors section of our website, AmericanAssetsTrust.com.

Speaker 2: During this call, we will discuss non-GAAP financial measures which are reconciled to our GAAP financial results and our earnings release and supplemental information.

During this call we will discuss non-GAAP financial measures, which are reconciled to our GAAP financial results in our earnings release and supplemental information you will also be making forward looking statements based on our current expectations, which statements are subject to risks and uncertainties discussed in our SEC filings you are cautioned not to place undue reliance on these forward looking statements is actually.

Speaker 2: We will also be making forward-looking statements based on our current expectations, which statements are subject to risk and uncertainties discussed in our SEC files.

Speaker 2: Your caution not to place undue reliance on these forward looking statements as actual events could cause our results to differ materially from these forward looking statements, including due to the impact of COVID-19.

Events could cause our results to differ materially from these forward looking statements, including due to the impact of COVID-19, and with that I'll turn the call over to Ernest Rady, Our chairman and CEO to begin the discussion of our fourth quarter and year end 2021 results.

Speaker 2: And with that, I'll turn the call over to Ernest Rady, our Chairman and CEO , to begin the discussion of our fourth quarter and year-end 2021 results. Ernest? Thank you very much, Adam.

Thank you very much Adam and good morning, everyone first and foremost I would like to wish all of our stakeholders continued health and safety as we hopefully find 2022 ushering in a more manageable phase of this pandemic.

Speaker 2: Good morning, everyone. First and foremost, I would like to wish all of our stakeholders continued health and safety as we hopefully find 2022 ushering in a more manageable phase of this pandemic. As you all know, we remain...

As you all know we remain very optimistic.

The high quality irreplaceable properties in asset class diversity of our portfolio combined with the strength of our balance sheet.

Speaker 2: high quality, irreplaceable properties, an asset class diversity of our portfolio, combined with the strength of our balance sheet, ample liquidity, top notch management team, and that said with all due modesty, an efficient operating platform will allow us to grow our earnings and net asset value for our shareholders on a decreed basis on a long term.

Ample liquidity top notch management team and that said with all due modesty and efficient operating platform will allow us to grow our earnings and net asset value for our shareholders on an accretive basis on a long term basis.

Speaker 2: I recall at the outset of the pandemic, I thought we might be in for another Great Depression.

Recall at the outset of the pandemic I thought we might be in for another great depression.

Like the 19 thirties.

Speaker 2: But thanks to the incredible ingenuity and perseverance of Americans in modern science, particularly in regard to the push for effective vaccines and antiviral drugs, the U.S. economy only felt a limited recession, and meanwhile capital markets rebounded quickly in most industries.

To the inkjet incredible ingenuity and perseverance of Americans and modern science, particularly in regard to the push for effective vaccine and anti viral drugs. The U S economy, only felt eliminate recession and Meanwhile, capital markets rebounded quickly in most industries. However.

Speaker 2: However, our economy is less managing the unprecedented fiscal stimulus that no doubt has contributed to what is likely to be more than short-term inflation. Along those lines with the consumer price index experienced its largest gain in 30 years, approximately 7%, we are confident in the thesis of our portfolio being an effective protection against inflation.

Our economy is less managing the unprecedented fiscal stimulus.

No doubt as contributor it was likely to be more than short term inflation.

Along those lines with the consumer price index experienced its largest gain in 30 years approximately 7%. We are confident in the thesis of our portfolio being an effective protection against inflation based on one our ability to increase both base rents in annual rent escalators.

Speaker 2: Based on one, our ability to increase both base rents and annual rent escalators at least expire within our portfolio to keep up with inflation.

As leases expire within our portfolio to keep up with inflation.

Our visibility of significantly higher demand and limited supply in our markets for higher quality assets like the ones, we own and third the replacement cost.

Speaker 2: our visibility of significantly higher demand and limited supply in our markets for higher quality assets like the ones we own, and third, the replacement cost of our properties continues to rise. This is particularly more compelling with high barrier to entry, modern, amenitized properties like ours that are in the path of growth.

All of our properties continues to rise this is particularly more compelling with high barrier to entry modern a minute type property like ours that are in the path of growth.

Speaker 2: education, and innovation. Therefore, we can likely withstand the impacts of long-term inflation, if not ultimately thrive. These are amongst the reasons why I personally have purchased our stock during prior open periods, as in my view we are trading significantly below our net asset value and believe that the recent broker transaction in our markets and asset classes support this view.

Education and innovation, therefore, we can likely withstand the impact of long term inflation if not ultimately thrive. These are amongst the reasons why I personally have purchased our stock during prior open periods.

As in my view, we are trading significantly below our net asset value and believe that the recent broker transaction in our markets and asset classes support this view.

With respect to our financial results.

Speaker 2: I was pleased to see our considerable rebound in 2021 as compared to 2020 and continue to be optimistic about our growth in 2022 and particularly the years thereafter. As such, I want to mention that the Board of Directors has approved a quarterly dividend.

I was pleased to see our considerable rebound in 2021 as compared to <unk> 20, and continue to be optimistic about our growth in 2022, and particularly the years thereafter as such I want to mention that the board of directors has approved a quarterly dividend.

Speaker 2: 32 cents a share for the fourth quarter, an increase of two cents or approximately 7% from our previous dividend, which we believe is supported by our financial results and an expression of our board's confidence in the embedded growth of our portfolio this year and beyond. The dividend will be paid on March 24th to shareholders of Vectored March 10th.

<unk> 32, a share for the fourth quarter, an increase of two cents or approximately 7% from our previous dividend, which.

Which we believe is supported by our financial results and an expression of our boards confidence in the embedded growth of our portfolio. This year.

And beyond that dividend will be paid on March 24th.

To shareholders of record March test.

Speaker 2: Finally, on the development front both La Jolla Commons 3 and 1 Beach Beach remain on time and on budget. And though we remain optimistic by the leasing process, we do not have any specific views to share on that front at this time. Adam Bobenstein will go into more details on our various assets segment.

Finally on the development front, both on why your comments III and one beach be remain on time and on budget and though we remain optimistic by the leasing prospects, but we do not have any specific used to share on that front at this time, Adam Bob and Steve will go into more details on our various asset segments.

<unk> financial results and guidance and I will be available for any questions that you may have at the conclusion of our prepared.

Speaker 2: financial results and guidance and I will be available for any questions that you may have at the conclusion of our prepared remarks.

Our remarks.

Speaker 2: Again, on behalf of all of us at American Affairs Trust, we thank you for your confidence in allowing us to manage your company and for your community.

Again on behalf of all of US at American assets Trust. We thank you for your confidence in allowing us to manage our truck and.

Thank you for your continued support.

Speaker 2: I'm now going to call back over to Adam. Adam, please. Thanks, Ernest. In 2021, our fiscal and operational results showed a meaningful rebound from 2020, which as Bob will describe in a few minutes, we expect to see continued growth in 2022 and beyond. Among a few of our accomplishments in 2021, we're closing our inaugural public bond offering the $500 million that was over four times over subscribe.

<unk>.

Ill turn the call back over to Adam Adam. Please thanks, Ernest in 2021, our physical and operational results showed a meaningful rebound from 2020, which as Bob will describe in a few minutes. We expect to see continued growth in 2022 and beyond among a few of our accomplishments in 2021 were closing our inaugural public bond off.

And a $500 million that was over four times oversubscribed acquiring two office projects in Bellevue, Washington for a total of approximately 440000 square feet for a combined cost of approximately $210 million further establishing our critical mass and economies of scale within our Bellevue office portfolio.

Speaker 2: requiring two office projects in Bellevue, Washington, for a total of approximately 440,000 square feet for a combined cost of approximately $210 million.

Speaker 2: further establishing our critical mass and economies of scale within our Bellevue office portfolio.

Speaker 2: a market in which we believe the municipality has properly planned for growth with light rail alignment and other transit nodes, and with a spectrum of housing options for workers intended to minimize commute.

<unk>, which we believe the municipality is properly plan for growth with light rail alignment and other transit nodes and with a spectrum of housing options for workers intended to minimize commute to help create up-and-coming urban neighborhoods around downtown to capitalize on what we believe will be continued growth on the east side markets.

Speaker 2: to help create up and coming urban neighborhoods around downtown to capitalize on what we believe will be continued growth in the east side of March.

We also leased approximately 255000 square feet of office space, and 410000 square feet of retail space and increased our portfolio multifamily leased occupancy from 86% to 96% year over year. We also maintained our investment grade credit ratings from all three major U S credit rating credit rating agencies.

Speaker 2: We also leased approximately 255,000 square feet of office space and 410,000 square feet of retail space and increased our portfolio multi-family lease occupancy from 86 to 96% year over year. We also maintained our investment grade credit rating from all three major US credit rating agencies.

Speaker 2: And we remain vigilant and focused on the safety and well-being of our stakeholders and achieve the 99% COVID-19 vaccination rate among all AAT employees.

And we remain vigilant and focused on the safety and wellbeing of our stakeholders and achieved a 99% COVID-19 vaccination rate among all <unk> employees. We also increased our collection percentage sequentially for the sixth consecutive quarter since the onset of the pandemic to over 98% in Q4, including collecting over 96% of <unk>.

Speaker 2: We also increased our collection percentage sequentially for the six consecutive quarters and beyond set of the pandemic to over 98% in Q4, including collecting over 96% of deferred rent payments due in Q.

Program payments due in Q4.

Speaker 2: We also continued our ESG initiatives with a focus on the positive impact that being both a steward of the environment as well as fostering a culture of diversity inclusion has on the strength of our business and in partnership with our communities. Along those lines we are pleased to have increased our GREZ score in 2021 for the third consecutive year in line with our peer average and above GREZ average.

We also continued our ESG initiatives with a focus on the positive impact of being both a steward of the environment as well as fostering a culture of diversity and inclusion has on the strength of our business and in partnership with our communities along those lines. We are pleased to have increased our grids score in 2021 for the third consecutive year in line with our peer average and above.

<unk> averages.

Speaker 2: We also increased our total dividends by 16% in 2021 over 2020. And we negotiated our amended and mandated credit facility which closed a few days into this year, which increased our borrowing capacity extended the maturity dates of our revolver and term loan and transitioned from our borrowings to sofa.

<unk> increased our total dividends by 16% in 2021 over 2020, and renegotiated our amended and restated credit facility, which closed a few days into this year, which increased our borrowing capacity extended the maturity dates of our revolver and term loan and transition of our borrowings to sofa.

Speaker 2: And as Ernest mentioned, we further development activity and local commons in one beach, on time and on budget, despite the headline headwinds of supply chain shortages, bender staffing challenges and governmental delays.

And as Ernest mentioned, we further development activity in La Jolla, Commons and one beach on time and on budget, despite the headline headwind or supply chain shortages vendor staffing challenges and governmental delays.

Speaker 2: Meanwhile, on the external growth front, we continue to be active, yet disciplined, as we evaluate acquisition opportunities in our target markets and various asset classes, as well as our ability to take advantage of low interest rates, while obviously keeping an eye on our cost of capital.

Meanwhile, on the external growth front, we continue to be active yet disciplined as we evaluate acquisition opportunities in our target markets and various asset classes as well as our ability to take advantage of low interest rates, while obviously, keeping an eye on our cost of capital.

And finally, I am more than pleased to announce that we promoted two key employees this month and to vice President positions Abigail <unk>, who is now our VP of multifamily San Diego and MLB mandates Who's now our VP regional manager at Portland, Bellevue and.

Speaker 2: Finally, I'm more than pleased to announce that we promoted two key employees this month into vice president positions. Abigail Rex, who is now our VP of multi-family San Diego, an Emily Mandick, who is now our VP regional manager of Portland, DELVU. And those are promotions we're based on merit and their accomplishments with AAT. We are more than happy to further strengthen our commitment to diversity among our managers.

And the other promotions were based on merit and their accomplishments with AT&T, we are more than happy to further strengthen our commitment to diversity among our management team with that I'll turn the call over to Bob to discuss financial results and guidance in more detail.

Speaker 2: With that, I'll turn the call over to Bob to discuss financial results and guidance in more detail.

Speaker 2: Thanks Adam and good morning everyone. Last night we reported fourth quarter, 2021, FFO for share of 54 cents and fourth quarter, 2021 net income attributable to common shareholders for share of 14 cents.

Thanks, Adam and good morning, everyone.

We reported fourth quarter 2021, <unk> per share of <unk> 54.

In fourth quarter 2021, net income attributable to common shareholders shareholders per share of <unk> 14.

Speaker 2: Fourth quarter results are primarily comprised of the following. Actual FFO decrease.

Fourth quarter results are primarily comprised of the following.

Actual <unk> decreased.

Speaker 2: In the fourth quarter by approximately 5.3% to 54 cents per FFO share, compared to the third quarter of 2021, primarily from the following four items.

In the fourth quarter by approximately five 3% to 54 cents per <unk> share compared to the third quarter of 2021, primarily from the following four items.

Speaker 2: First, as you may recall on our Q3 earnings call, our expectation for Q4 was for approximately 47 cents per FFO share. The assumption we made for Q4 was our best estimate at that time, but what increased the FFO from our Q4 guidance was the following four items.

First as you may recall on our Q3 earnings call our expectation for Q4 was for approximately <unk> 47 per <unk> share the.

The assumption we made for Q4 was our best estimate at that time, but would increase the <unk> from our Q4 guidance was the following four items.

Speaker 2: First, a YKKB-Walk mixed-use property contributed 4 cents per FFO share. A half from Embassy Suites and half from YKKB-Walk Retail, which we did not anticipate in Q4 due to the lower than average tourism as a result of the Delta and Omicron variant.

First our Waikiki Beach walk mixed use property contributed <unk> <unk> per <unk> share.

<unk> from embassy suites, and half from Waikiki Beach walk retail, which we did not anticipate in Q4 due to the lower than average tourism as a result of the Delta Omicron variants.

Speaker 2: Second, our retail portfolio in San Diego performed a penny of FFO better than expected. Third, our office portfolio performed a penny of FFO better than expected.

Our retail portfolio in San Diego performed a <unk> better than expected.

Third our office portfolio performed a penny of that but I feel better than expected.

Speaker 2: And fourth, our multi-family performs a penny of FFO better than expected.

And fourth our Boelter family performs <unk> better than expected.

Speaker 2: Add in the V7 sense of FFO per share to our Q3 guidance of 47 cents for Q4 gets you back to where we ended at 54 cents per share of FFO for the fourth quarter.

Adding <unk> <unk> per share to our Q3 guidance of <unk> 47 for Q4. It gets you back to where we ended at 54 per share.

For the fourth quarter.

Speaker 2: Same store cash NOI overall was strong in 2021, ending at 20% growth year over year for the fourth quarter. It should also be noted that mixed use was added back to the same store pool in Q4.

Same store cash NOI overall was strong in 2021, ending at 20% growth year over year for the fourth quarter.

It should also be noted that mixed used was added back to the same store pool in Q4.

Speaker 2: absent the mixed-use sector in Q4, same-store cash and Y would have been approximately 11.6 percent growth, which we are still very pleased with.

Absent the mixed use sector in Q4 same store cash NOI would have been approximately 11, 6% growth, which we are still very pleased with.

Speaker 2: As it relates to liquidity at the end of the fourth quarter, we had liquidity of approximately 539 million, comprised of approximately 139 million in cash, and cash equivalents.

As it relates to liquidity at the end of the fourth quarter, we had liquidity of approximately $539 million comprised of approximately $139 million in cash and cash equivalents.

Speaker 2: and 400 million of availability on a revolving line of credit. Our leverage, which we measure in terms of net debt to EBITDA was 6.8 times. Our objective is to achieve and maintain a net debt to EBITDA of 5.5 times or below.

And $400 million of availability on our revolving line of credit our leverage which we measure in terms of net debt to EBITDA was six eight times.

Our objective is to achieve and maintain a net debt to EBITDA of five five times or below.

Speaker 2: We do recognize that our net debt to EBITDA has increased during COVID. As a result of lower EBITDA, primarily from our retail portfolio and our mixed-use property in YKK, we believe these reductions are temporary and our expectations is that our EBITDA will increase over time to pre-COVID levels. Our retail centers on the mainland are generally full with increasing sales, but still have a way to go.

We do recognize that our net debt to EBITDA has increased during COVID-19 .

As a result of lower EBITDA, primarily from our retail portfolio and our mixed used property in Waikiki.

We believe these reductions are temporary and our expectations is that our EBITDA will increase overtime to pre COVID-19 levels. Our retail centers on the mainland are generally full with increasing sales, but still have a way to go.

Speaker 2: As you may recall, we have historically provided a pro-formic cash NOI bridge to help all stakeholders understand the un- the un-batted growth that we see in our portfolio, as well as what we are anticipating in the next year or two. We expect to update our cash NOI bridge to reflect our expectations for 2023 in the next 60 days or sooner.

As you May recall, we have historically provided a pro forma cash NOI bridge to help all stakeholders understand.

The embedded growth that we see in our portfolio as well as what we are anticipating in the next year or two we expect to update our cash NOI bridge to reflect our expectations for 2023 in the next 60 days or sooner.

Speaker 2: Our current cash NOI bridge through 2022 reflects that cash NOI in 2021 has finally surpassed 2019 cash NOI and is expected to increase another 6% in 2022.

Our current cash NOI bridge through 2022 reflects that cash NOI in 2021.

Finally surpassed 2019 cash NOI and is expected to increase another 6% in 2022.

This increase is largely resulted from the strong consistent growth from our office portfolio.

Speaker 2: This increase has largely resulted from the strong, consistent growth from our office portfolio. This also shows the importance of a high-quality, diversified real estate portfolio, such as American assets trust.

This also shows the importance of our high quality diversified real estate portfolio, such as American assets Trust.

Speaker 2: I also need to point out that cash in online is a non-gab supplemental earnings measure which the company considers meaningful in measuring its operating performance.

Also need to point out that cash NOI is.

This is a non-GAAP supplemental earnings measure.

The company considers meaningful and measuring its operating performance.

Speaker 2: a reconciliation of cash, an NY to net income is included in our supplemental, which you can access on our website.

Reconciliation of cash NOI to net income is included in our supplemental which you can access on our website.

Speaker 2: our interest coverage and fixed charge coverage ratio into the quarter at 3.8 times. Let's talk about 2020.

Our interest coverage and fixed charge coverage ratio ended the quarter at three eight times.

Let's talk about 2022 guidance.

Speaker 2: We are introducing our 2022 FFO for share guidance range of $2.9 to $2.17 per FFO share with a midpoint of $2.13 per FFO share, which is approximately a 6.5% increase over 2021 actual of $2 per FFO share.

We are introducing our 2022.

<unk> per share guidance range.

$2 nine to $2 17 per <unk> share with a midpoint of $2 13 per <unk> share, which is approximately a six 5% increase over 2021 actual of $2 per <unk> share.

Speaker 2: Let's walk through the following nine items that make up the increase in our 2022 FFO guidance over 2021 FFO action.

Let's walk through the following nine items that make up the increase in our 2022 <unk> guidance over 2021 <unk> actual.

Speaker 2: First, same-store office cash NOI is expected to increase approximately 9% or 14 cents per FFO share.

First same store office cash NOI is expected to increase approximately 9% or <unk> 14 per <unk> share.

Speaker 2: Second, same store retail cash NOI is expected to decrease approximately 5% or 5 cents per 250?

Second same store retail cash NOI is expected to decrease approximately 5% or <unk> <unk> per <unk> share.

Speaker 2: Third, same-store multifamily cash NOI is expected to increase approximately 5% or two century-old customer service.

Third.

Same store multifamily cash NOI is expected to increase approximately 5% or <unk> <unk> per <unk> share.

Fourth.

Speaker 2: Same-store mixed-use cash NLI is expected to increase approximately 15% or 3% per FFO share. And it's attributable to approximately 1 cent of FFO to YKKBCHWC retail and 2 cents of FFO to embassy suites YKKBCHWC.

Same store mixed use cash NOI is expected to increase approximately 15% or <unk> <unk> per <unk> share and is attributable to approximately <unk> of <unk> two.

Waikiki Beach walk retail and <unk> to embassy suites Waikiki.

Speaker 2: All four sectors combined above are expected to generate a total same-store cash and a Y growth year over year in 22 of approximately 5% or 14% of FFO for share.

All four sectors combined above are expected to generate a total same store cash NOI growth year over year and 22.

Of approximately 5% or 14 of them.

<unk> per share.

Fifth.

Speaker 2: Non-same-store guidance includes our two acquisitions and Bellevue, Washington in 2021. Combined, they are expected to contribute approximately seven cents of FFO for share in 2022.

Non same store guidance includes our two acquisitions in Bellevue, Washington, and in 2021 combined they are expected to contribute approximately 700.

<unk> per share in 2022.

Speaker 2: GNA is expected to increase approximately 3 million and decrease FFO by 4 cents per share. Interest expense is expected.

G&A is expected to increase approximately $3 million in decrease <unk> by <unk> <unk>.

<unk> per share.

Interest expense is expected to be flat.

Speaker 2: Other expenses expected to decrease by approximately 4.4 million and increase FFO by approximately six cents per FFO per share year over year, resulting from a one-time early prepayment fee on the 150 million unsecured loan paid with a portion of the proceeds from our inaugural bond offering in January of 2021 and which will not occur in 2022.

Other expense is expected to decrease by approximately $4 4 million and increased <unk> by approximately <unk> <unk> per <unk> per share year over year, resulting from a onetime early prepayment fee on the $150 million unsecured loan paid with a.

Portion of the proceeds from our inaugural bond offering in January of 2021.

And which will not occur in 2022.

Speaker 2: Gap adjustments primarily relating to straight line grants will decrease FFO by approximately 7.5 million or 10 cents per FFO share.

GAAP adjustments primarily related to straight line rents will decrease <unk> by approximately $7 5 million.

10 cents per <unk> share.

These adjustments when added together will be approximately <unk> 13 per <unk> share and represent the increase in 2022 over 2021 <unk> per share.

Speaker 2: These adjustments, when added together, will be approximately 13 cents for FFO share and represents the increase in 2022 over 2021 FFO per share.

Speaker 2: While we believe the 2022 guidance is our best estimate, as of this earnings call, we do believe that it is also possible that we could outperform the upper end of this guidance range in both the multifamily and in the mixed use sector of our portfolio.

While we believe the 2022 guidance is our best estimate as of this earnings call. We do believe that it is also possible that we could outperform the upper end of this guidance range.

In both.

The multifamily and in the mixed use sector of our.

Portfolio.

Speaker 2: So in order to do that, tourism and travel to Waikiki on the Hawaiian Island of Oahu needs to return in full force, including our guest from Japan.

So in order to do that tourism and travel to Waikiki on the Hawaiian Island of Oahu needs to return in full force, including our guests from Japan.

Speaker 2: We are cautiously optimistic that the Embassy suites YKK will outperform our guidance, but we won't know that until most likely the end of Q3 2022.

We are cautiously optimistic that the embassy suites, Waikiki will outperform our guidance, but we won't know that until most likely at the end of Q3 2022.

Speaker 2: As always, our guidance, our NOI bridge, and these prepared remarks exclude any impact from future acquisitions, dispositions, equity issuances or repurchases for future debt refinancing or repayments other than what we have already discussed.

As always our guidance our NOI bridge in these prepared remarks exclude any impact from future acquisitions dispositions equity issuances or repurchases future debt refinancings or <unk>.

Payments other than what we have already discussed we will continue our best to be as transparent as possible and share with you.

Speaker 2: We will continue our best to be as transparent as possible and share with you.

Speaker 2: our analysis and interpretations of our quarterly numbers. I'll now turn the call over to Steve Center, our senior vice president of office properties, for a free-up date on our office segment. Steve.

Our analysis interpretations of our quarterly numbers I will now turn the call over to Steve Center, Our senior Vice President of office properties for a brief update on our office segment Steve.

Speaker 2: Thanks Bob. At the end of the fourth quarter, net of one beach, which remains under redevelopment, our office portfolio is good at 93% least, but 8.5% expiring in 2022.

Thanks, Bob at the end of the fourth quarter net of one beach, which remains under redevelopment our office portfolio stood at 93% leased with eight 5% expiring in 2022.

Speaker 3: Our office portfolio is gaining momentum. In the fourth quarter, we executed 18 leases totaling approximately 130,000 rentable square feet, including approximately 31,000 rentable square feet of comparable new leases, with increases over prior rent of 32% and 45% on a cash and straight-life basis respectively.

Our office portfolio is gaining momentum.

In the fourth quarter, we executed 18 leases totaling approximately 130000 rentable square feet, including approximately 31000 rentable square feet of comparable new leases with increases over prior rent of 32% and 45% on a cash and straight line basis, respectively.

Speaker 3: Approximately 37,000 rentable square feet of comparable renewal eases, but increases over a prior rent of 6% and 10% on a cash and straight line basis.

Approximately 37000 rentable square feet of comparable renewal leases with increases over prior rent of 6% and 10% on a cash and straight line basis, respectively.

Speaker 3: Approximately 62,000 rentable square feet of non-comparable new leases, including deals with the top 100 law firm for approximately 26,000 rentable square feet in the Torrey Reserve. And the global technology company for approximately 17,000 rentable square feet at La Jolla Commons 1.

Approximately 62000 rentable square feet of non comparable new leases, including deals with a top 100 law firm for approximately 26000 rentable square feet at Torrey Reserve and a global technology company for approximately 17000 rentable square feet at La Jolla Commons one.

Speaker 3: Throughout our office portfolio, we have been employing multiple initiatives to drive occupancy and rent growth, including renovating buildings with significant vacancy and or rollover, adding or further enhancing amenities at the project level.

Throughout our office portfolio, we have been employing multiple initiatives to drive occupancy and rent growth, including renovating buildings with significant vacancy and or rollover.

Adding or further enhancing amenities at the project level <unk>.

Speaker 3: aggregating and white boxing larger blocks of space where there is scarcity.

Aggregate and white boxing larger blocks of space, where there is scarcity.

Speaker 3: and approving our smaller spaces to be a new moving ready condition.

And improving our smaller spaces to be a new move in ready condition.

Speaker 3: We realize meaningful increases in occupancy and rent growth resulting from these initiatives in 2021, with additional increases realized or in process and Q1 as follow.

We've realized meaningful increases in occupancy and rent growth, resulting from these initiatives in 2021 with additional increases realized or in process in Q1 as follows.

Speaker 3: In Bellevue, we have signed approximately 18,000 rentable square feet of expansions with another 12,000 rentable square feet of new visas and expansions in least documentate.

In Bellevue, we have signed approximately 18000 rentable square feet of expansions with another 12000 rentable square feet of new leases and expansions in lease documentation.

Speaker 3: In San Diego, we have signed approximately 23,000 Renable Square feet of new leases and expansions, with another 19,000 Renable Square feet of new leases pending.

In San Diego, we have signed approximately 23000 rentable square feet of new leases and expansions with another 19000 rentable square feet of new leases pending include.

Speaker 3: including this Q1 activity, we believe that our Office portfolio is on track to absorb an additional 71,000 rentable square feet or nearly 2% of the Office portfolio's available rent spreads. As a result, we believe that strategic investments in our portfolio will position us to continue to capture more than our fair share of that absorption at premium rents as Office Markets rebound. I'll now turn the call back over to the operator for Q&A.

Including this Q1 activity, we believe that our office portfolio is on track to absorb an additional 71000 rentable square feet or nearly 2% of the office portfolio and favorable rent spreads as a result, we believe the strategic investments in our portfolio will position us to continue to captured more than our fair share of that absorption at premium.

His office markets rebound.

Now I'll turn the call back over to the operator for Q&A.

Sure.

Thank you.

Speaker 1: Thank you. As our reminder, Jack, a question you'll need to press star one on your telephone to withdraw your question. Press the palm key. Please stand by. We can pause the Q&A.

Remind me Jack a question you will need to press star one on your telephone to withdraw your question Christa pound Keith Please standby, we compile the Q&A roster.

Speaker 1: Our first question comes from Ann Dells and Juice with Mugulo. You may proceed with your question.

Our first question comes from Sandoz in juice with Mizuho you May proceed with your question.

Speaker 4: Hey, good morning out there. Just early good morning to you guys.

Hey, good morning out there early good point do you guys.

Speaker 2: Hermes, a question for you. You mentioned that you bought back some stock in the fourth quarter. I don't think I know that. Oh, I bought back the stock. The company didn't buy back the stock. I bought the stock personally and are kind of affiliates. Right.

A question for you.

Much of that you bought back some stock in the fourth quarter.

Thank you Arnaud.

They had bought back to stock the company Didnt buyback the stock hypothesis stock personally.

Affiliates right right right now that's what I'm getting at I guess, you bought but the company did not.

Speaker 4: Right, right, no, that's what I'm getting at. So I guess you bought that the company did not.

Speaker 4: And so clearly you see a value proposition here. You talked about the stock being discounted. So maybe you can help me better understand the decision to raise the dividend versus perhaps buying back the stock here in light of the discount you highlighted.

So clearly you see a value proposition here you talked about the stock being discounted. So maybe you can help me.

Better understand the decision to raise the dividend versus perhaps buying back.

Stock here in light of the discount you highlighted.

Speaker 2: You know, and this is something that is discussed in depth because as a of our reach side, we're on the smallest side relative to the absorption of the cost of being public.

And this is something that is discussed in.

In depth.

<unk>.

Eight of our REIT side, where on the smaller side relative to the absorption of the cost of being public.

Speaker 2: So there's no emphasis whatsoever on becoming smaller and reducing our capacity to make acquisitions and grow. That's why I buy the shares personally. I would love to see a past or strategy for American assets trust to have more assets on its balance sheet, more income from all these additional assets, and spread the overhead of being public over these additional assets. That's the law.

There is no emphasis whatsoever on becoming smaller and reducing our capacity to make acquisitions and growth. That's why I buy the shares personally I would love to see a path or a strategy for American assets Trust to have more assets on its balance sheet.

More income from all these additional assets and spread the overhead of being public over these additional assets that's the logic.

Speaker 4: No, I appreciate that or anything. So I certainly appreciate the comments there. But then also on the leverage Bob, maybe you can understand you outline getting to that mid-five level. But I don't think you outlined a timeline. So any updated perspective there is that something we can expect by next year in light of perhaps some of the delayed recovery in certain parts of the portfolio.

No I appreciate that our nickel. So I certainly appreciate the comments there, but then also on the the leverage Bob maybe you can help us understand you outlined getting to that mid five.

Level, but I don't think you've outlined a timeline so any any updated perspective, that's something we can expect by.

Next year in light of perhaps some of the.

Delayed recovery.

Certain parts of the portfolio.

Yes.

Speaker 2: Yeah, Handel, I can't put a date on that, but it's really the ebidaw that we, that has temporarily gone down, it's really resolved of COVID. And so as soon as we can get white key key beachwap, beachwap back with the embassy suite.

I can't put a date on that but its really the EBITDA that we that has temporarily gone down is really a result of COVID-19 and so as soon as we can get at Waikiki Beach Walk Beach walk back with the embassy suites.

Speaker 2: and have our Japanese guests return to the island. I think you're gonna see a significant growth. I think you're gonna see a significant growth this year as it is, and I think we have a good shot at outperforming if those things happen, which will increase our EBITDA and start working our net debt to EBITDA back down. But we also need to, I mean, I think this whole COVID environment, there has been a repricing on the retail side.

And however, Japanese guests return to the island.

I think youre going to see a significant growth I think youre going to see a significant growth. This year as it is and I think we have a good shot at outperforming if those things happen, which will increase our EBIT.

Start work at our net debt to EBITDA back down, but we also need to I mean, I think this whole COVID-19 environment. There is has been a repricing on the retail side, but like I mentioned on the script. The sales have been strong sales continued to improve but we.

Speaker 2: But, just like I mentioned on the script, these cells have been strong, cells continue to improve, but we gotta see more in the retail side as well.

Got to see more on the retail side as well.

Speaker 4: I'm preparing a speech at the comments. Maybe a comment on pricing power overall in the portfolio, certainly a differentiator amongst the asset classes we look across the streets. Can you compare and contrast the pricing power across the key corridors of the portfolio, apartment, office, open-air centers? Do you think that will be enough in the near-term offset to the rising cost, the inflation that we're seeing?

Fair enough appreciate the comment that maybe a comment on tightening power overall in the portfolio.

A differentiator amongst the asset classes, if you look at the last week.

Can you compare and contrast.

The pricing power across the key corridors of the portfolio apartment office open air centers and do you think that'll be enough.

Near term to offset the rising costs.

Placement, we're seeing thanks.

Speaker 2: You know, somehow or other, we've got a bad connection, Handel. Is there something you could do, maybe, step back a little bit from the microphone and repeat the question? Because it's not coming through. Hi, Paula. Is that better?

Somehow rather we've got a bad connection handout is there something you could do maybe step back a little bit from the microphone and repeat the question because it's not coming through.

I apologize is that better.

Speaker 4: That's better, yeah, thank you. Okay, anything could be better. Probably greater. Well, I was hoping for some comments on pricing power across the portfolio. You know, certainly a key differentiator amongst the asset classes. I was hoping you could compare and contrast the pricing power across the key corridors of the portfolio apartments off the shopping centers. If you think that'll be enough to offset the near term rise in cost and inflation.

That's better. Thank you, okay anything can be better.

Well I was hoping for some comments on pricing power across the portfolio certainly a key differentiator amongst the asset classes.

I was hoping you could compare and contrast, the pricing power across the key corridors the portfolio apartments office shopping centers, if you think that'll be it.

To offset the near term rise in cost of in place. Thanks.

Sure. That's a very good question and it's something that we can think about.

Speaker 2: That's a very good question. It's something that we can think about frequently. First of all, as Bob pointed out, retail is getting repriced to some extent. Our retail will do as well as anybody that retailed by definition now is being extremely affected by our stock. Our residential strong, really optimistic that we're going to have a very good year in residential.

Frequently first of all as Bob pointed out retail.

Getting repriced to some extent at.

Retail will do as well as anybody at retail by definition now.

It's been affected.

Our residential strong I'm really optimistic that we're going to have a very good year.

In residential and office.

Speaker 2: And office Steve went through the fact that an outline of facts that our office properties are in the past of growth.

Steve went through.

Factset.

And outline the fact that our.

<unk> properties are in the path of growth.

Speaker 2: We're improving the immunization of words which he has taught me. And we're preparing offices so that when the smaller tenants want to occupy, they can occupy it more quickly.

Improving the monetization of work, which he has taught me and we're preparing offices so that when the smaller tenants want to occupy they can occupy it more quickly. So there is because of our offices in the path of growth, we're optimistic that it's going to be a.

Speaker 2: So there is because of our office in the past, I've grown, we're optimistic that it's going to be a significant contributor to the growth of the-

Can contributor to that.

So the growth of the company and of course, we're Jolla Commons is under construction and that could add significantly.

Speaker 2: And of course, you know, Lehoia Commons is under construction and that could add significantly and we have the property in San Francisco or reposition. Portland is completed and there's no lease on it yet.

The property in San Francisco repositioning Portland is completed there's no lease on it yet.

Speaker 2: It's all good property and if anybody can make it, our properties can do equally as well as the market. And I cost it. I'm hopeful it's not cost it.

It's all it's all good property and if anybody can make it.

Our properties can do equally as well as the market and I'm confident.

Not I'm hopeful if not confident that we will outperform the market.

Speaker 2: Hey, hey, Handel, let me just add to that, too, is that in the supplemental, we talk about the leasing spreads.

Hey, Tien Tsin, let me, let me just add to that too is that in the supplemental we talk about the leasing spreads.

On new leases and if you look.

Speaker 2: And if you look on a comparable basis, our cash basis percentage change over the prior red on the leases we did.

On a compare comparable basis or cash basis percentage change over the prior rents on the leases we did.

Speaker 2: For retail, it's down 6% on the cash basis, but on a gap basis, it was 5.2% positive. So they had some free rent initially, but once it's straight line over the term, obviously it's a positive 5.2%.

For retail was down 6% on a cash basis, but on a GAAP basis. It was five 2% positive. So they had some free rent initially, but once it's straight line over the term obviously, it's a positive five 2% on the office sector is strong 17%.

Speaker 2: on the office sector, it's strong. 17, 18% in a cash increase, cash basis percentage change over the prior rent, and on a gap basis, it's like 26, 27%. So, I think we're in the right exactors. I think we got the right product. It's just the retail is a little bit slower and Steve would agree we have tax on management.

18% in a cash increase.

Increase cash basis percentage change over the prior rents and on a GAAP basis, it's like 26, 27%. So I think we're in the right sectors I think we've got the right product. It's just.

Yes.

The retail just a little bit slower and Steve would agree we have excellent management.

<unk>.

Wonderful alright, guys. Thank you so much for the time.

Speaker 2: Thank you, Ed Dell. Thanks for your continued interest. Hope to see you sometime soon.

Thank you and thanks for your continued interest and hope to see it sometime soon.

Why.

Speaker 1: Thank you all and next question comes from Todd Thomas and Keebank. You may proceed with your question.

Thank you. Our next question comes from Todd Thomas with Keybanc. You May proceed with your question.

Speaker 5: I thought I ate the morning. Hi, Harry. So a couple of questions on some of the segments as it pertains to guidance. You know, first, can you talk a little bit more about the mixed-use segment, you know, the guidance you discussed?

Hi, Good morning, Hi, how are you.

So a couple of questions on some of the segments as it pertains to guidance.

First can you talk a little bit more about the mixed use segment.

The guidance you discussed.

Speaker 5: Sounds like there's some uncertainty, but perhaps also some conservatism embedded in the forecast. And I was just wondering if you could maybe elaborate a little bit more around bookings and what the guidance translates into for rev-part growth throughout the year in 2020.

It sounds like there is there is some uncertainty, but perhaps also some conservatism embedded in the forecast and I was just wondering if you could.

Maybe elaborate a little bit more around bookings and what the guidance translates into for Revpar growth.

The year end 2002.

Speaker 2: You know Todd, that's probably the most difficult part of the whole portfolio to predict what's going to happen because we don't know what's going to happen to the virus. We don't know whether the Japanese tourists will return. We don't know what the governor of Hawaii is going to do to encourage or discourage tourism, but the properties we own are first-class shapes.

Todd that's probably the most difficult part of the whole portfolio to predict what's going to happen because we don't know what's going to happen to the virus, we don't know whether the Japanese tourists will return.

Don't know what the governor of Hawaii is going to do to encourage or discourage tourism.

The properties, we own are in first class shape.

Speaker 2: They're simple. And so it's not a question of if they return. It's a question of when they return.

<unk>.

They are simple.

Simple.

And so it's not a question.

They return it's a question of when they return and it's the wind that we find difficult to quantify do you want to add something Bob yes, So so Todd.

Speaker 3: the wind that we find difficult to quantify. Do you want to add something Bob? Yeah, so Todd, thanks for the question. Yeah, so as we mentioned, our guidance for that same-store mixed use is 15% increase.

For the question, yes, so so as we mentioned our guidance for that same store mixed use is 15% increase.

Speaker 2: which is three cents of approximately three cents of FFO per share. We rely heavily on our Outrigger team that has the boots on the ground out there. We're in contact with our general manager and our team out there, so we know what's going on. We know the dad, in fact, we're visiting this coming March face to face with everybody.

Which is <unk> of approximately <unk> <unk> per share we rely heavily on our outrigger team that has the boots on the ground out there.

We're in contact with.

Our general manager and our team out there. So we know what's going on and we know that that in fact revisiting.

This coming March face to face with everybody. So that really is the upside in like Ernest mentioned.

Speaker 2: So that really is the upside and like Ernest mentioned, you know, the return of the Japanese gas is really important. But if that portion is delayed, we're seeing even strength on the US, West and US East side.

The return of our Japanese guests is really important but.

If that portion is delayed we're seeing even strength on the U S west and USC side.

Speaker 2: You know, let me give you a quick update on the embassy suite, so tell. And so what's interesting is that the paid occupancy for the month of December was 86%. What we've shown on a quarterly basis, it was 73% average for the fourth quarter, but it really was strong in December . Our paid ADR average daily rate.

No.

Let me give you a quick update.

On the embassy suites hotel and so what's interesting is that the pay to occupancy for the month of December was 86% what we've shown on a quarterly basis. It was 73% average for the fourth quarter, but it really was strong and December are paid.

Our average daily rate.

Speaker 2: for the average quarter or for the fourth quarter average was 215. But in December it spiked up to 350. That's a strong month.

For the average quarter or for the fourth quarter average was 215 budget in December it spiked up to $3 15 Thats.

Strong month.

Speaker 3: And then Rev Par also increased similarly to that 315 as well, versus 215 on an average.

And then Revpar also increased similarly to that.

<unk> 15, as well versus $2 15 on an average.

Speaker 2: And as of mid-January, Japan was experiencing its six ways of COVID, this time around largely from Omicron. And Japan is better prepared today with 30% more capacity in hospitals and a more flexible home care recommendation. For all but the serious cases of infection.

And as of mid January Japan was experiencing at six wave of Covid. This time around largely from omni chron.

And Japan is better prepared today with 30% more capacity in hospitals in a more flexible homecare recommendation for all but the serious cases of infection.

Speaker 2: Vaccination data, as of yesterday, when I just checked it, was 80% of Japan's total population was partially vaccinated, and 79% was fully vaccinated with the second shot.

Vaccination data as of yesterday, when I just checked it was 80% of Japan's total population was partially vaccinated and 79% was fully vaccinated with the second shot.

Speaker 2: And the Japanese government is speeding up its rollout of booster shots and shorting the interval between second and third shots. So they've made positive strides in the vaccination rates since last July . And we are hopeful that, you know, they too will get through this as we have and we look forward to welcoming them back. And that's really the key to outperforming on this guidance.

And the Japanese government is speeding up its rollout of booster shots and shorten the interval between second and third shots. So they've made positive strides in the vaccination rates since last July and we are hopeful that they too will get through this as we have and we look forward to walk them back and that's really the key to two.

Outperforming.

On this guidance.

Speaker 5: I'm so hopeful. I mean, you know, the fourth quarter exceeded your expectations. You know, you talked about half of that force sent delta being, you know, the hotel half being retail. It seems like occupancy and NADR outperform. Despite, you know, sort of delta, Omekron, you know, how are bookings trending through the spring and some.

Thanks Thats helpful.

The fourth quarter exceeded your expectations.

About half of that for <unk>.

Delta being the hotel half being retail.

Like occupancy and <unk>.

Outperform.

Despite sort of delta.

John .

Yes.

Or how are bookings.

Trending through through the spring and summer.

Speaker 2: Because of the omnichron, they're still slow. And we expect them to pick up for the March spring break. That's always a popular destination. So they're not like pre-COVID at this point in time, but we are seeing the growth. I don't have the exact number of programming.

Because because of the omni kron theres still slow.

And we expect them to pick up for the March spring break that's always a popular destination.

So they're not like pre COVID-19 at this point in time, but we are seeing the growth I don't have the exact number in front of me.

Speaker 5: Okay. And then shifting over to the retail segment and apologies if I missed this, but just trying to understand the down 5% same-storner wide growth forecast for 22, a little bit better. What's the impact year-to-year from out of period collections that were recognized during 21? And do you have that number for the fourth quarter? Just trying to get sort of a better run rate heading into the new year for that second.

Okay, and then shifting over to the retail segment and apologies if I missed this but just trying to understand the down 5% same store NOI growth.

Forecast for 'twenty, two a little bit better what's what's the impact year over year from out of period collections that were recognized during during 'twenty, one and do you have that number for the fourth quarter, just just trying to get sort of a better run rate heading into the new year for that segment.

Speaker 2: Yeah, I don't have it for that segment, but I can tell you that our change in accounts receivables, which is where we book the collections from, our down approximately 600,000 in the fourth quarter. We were about a million of collections in the third quarter from prior quarter collections.

Yes.

I don't have it for that segment.

But I can tell you that our change in accounts receivables, which is where we book.

Collections from are down approximately 600000.

Sure.

In the fourth quarter, we were we were about $1 million.

Collections in the third quarter.

Prior quarter collections.

Speaker 1: And in the fourth quarter, that was down to like about, you know, 400,000 or less. So it wasn't...

In the fourth quarter that was down to like about 400000 or less so it wasn't that meaningful.

And then going into 2022 terms of our guidance we have nothing in there for.

Speaker 2: and then going into 2022, terms of our guidance, we have nothing in there for prior collections. Every time we do a desplotification, we try to go back and get as much as we can at that point in time, and then it's generally in a deferral that we will build and collect in the current month.

Prior collapsed.

<unk>.

Every time, we do a lease modification, we try to go back to get as much as we can at that point in time and then it's generally in a deferral.

That we will bill and collect in the current model.

Speaker 5: Okay, that's helpful. And then just last question on office.

Okay.

And then just last question on office.

Two things here, if we could can we get an update at all around the leasing or pre leasing for for the tower in La Jolla, and then can you also provide an update in the office portfolio around the.

Speaker 5: all around the leasing or pre-leasing for the tower at La Jolla. And then can you also provide an update in the office portfolio around the late 22 aspirations that you have, I think, the MWARE and auto desk. If there's any updates there and any sort of activity that we should be thinking about, late in the year heading into 23. at satisfies.

Late 'twenty two expirations that you have I think Vmware and Autodesk, if theres any update there and any sort of.

Activity.

We should be thinking about late in the year heading into 'twenty three.

Speaker 3: I think Steve should handle that. He's in some middle of the involved with it. There's one analyst, Steve. Sure. Are you scared? Well, no, no. You addressed power three. We've got activity, but nothing to report at this point. But the market remains very strong. It's tight for big blocks of space.

I think Steve <unk> handle that he's intimately involved with them as one analyst deeply sure.

<unk>.

You address tower three we've got activity, but nothing nothing to report at this point.

But the market remains very strong.

Tight for big blocks of space and there are a number of large users that are looking long term at aggregating space. So.

Speaker 3: And there are a number of large users that are looking long-term at aggregating space. So we're still very bullish on tower three and the eventual outcome there. With regard to the 22 roll over, we had come to terms with Autodesk on that second floor renewal and we're favoring that deal right now. And then we expect to get an RFP from VMware in the next week.

We're still very bullish on tower, three and the eventual outcome there with regard to the 'twenty two rollover.

Come to terms with Autodesk on that second floor renewal and we're papering that deal right now and then.

We expect to get an RFP from Vmware in the next week or two to.

Speaker 2: to engage in that discussion. That market where LaLoya comments is, is very strong. We did find it. I just nodded.

To engage in that discussion that market, where we're Jolla Commons is very strong we bid.

It's not an adjoining property but.

Speaker 2: 200 yards away and we got out there by

A few hundred yards away.

We got outbid by 25%.

Speaker 2: And we reached for it too because that is a great mark.

<unk>.

We reached for it too because it is that is a great market.

Speaker 2: So it's a strong market. I don't know what the outcome will be. It's far as leasing.

So it's a strong market I don't know what the outcome would be as far as leasing goes but.

Speaker 2: based on the activity in the area, the outcome ought to be positive.

Based on the activity in the area.

After the positive.

Okay alright, thank you.

Thank you thanks, Doug.

Speaker 1: thank you and next question comes from Sweiptorclist with ankle america in their proceed video

Thank you. Our next question comes from Craig Schmidt with Bank of America, keeping your question.

Speaker 6: Thank you. I just want to talk a little bit about the increase in 10-A improvements in leasing commissions in office. I see that it's related to the new level of...

Thank you.

Could you talk a little bit about the increase in tenant improvements leasing commissions and office I assume it's related to the new level.

Speaker 6: the new leases, but as you can comment, especially on trends for 2022 on those measures.

The new leases.

If you could comment.

Especially on trend for 2022.

Our measures.

Thank you.

Speaker 3: Yeah, and I'm just looking at the numbers, you know, overall, and I'm focused on comparable new leases

Yes.

I'm just looking at the numbers overall and I'm focused on.

Comparable new leases in 'twenty, one if you look at the outcome, we increased NOI on those deals by $9 12.

Speaker 3: in 21 if you look at the outcome we increase that why on those deals by $9.12.

Speaker 3: or about 22% over the rents prior in place. And if you just apply a fire cap to that increase, it's worth about $102 bucks a foot. So in terms of investment, for example, on the renovations we did, and Torrey Reserved, and both Torrey Plaza and Northport One, I think.

Or about 22%.

The rents prior in place and if you just apply a five cap to the to that increase it's worth about 192 Bucks a foot so.

In terms of investment for example on the renovations we did at Torrey Reserve in both Torrey Plaza North Port One I think you spent about $15 a foot on those renovations and achieved outsized.

Speaker 3: spent about $15 a foot on those renovations, and she's outsized increases in NOI, as well as lease them quickly. The big block initiative is paid off, as evidenced in due for by the top 100 law firm, lease that we did in 26,000 feet in Northport 1. So our average, our way to average, TI is on new leases last year was $50 a foot. You're touching spaces that in some respects, the lighting package hasn't changed in 20 years.

Increases in NOI as well as lease them quickly the big block initiative has paid off.

As evidenced in Q4 by the top 100 law firm lease that we did in 2000 6000 feet in North Port one so our average a weighted average.

On new leases last year was $50 a foot.

Youre touching spaces in some respects the lighting package hasnt changed in 20 years, so youre going comparable advice to new.

Speaker 3: And what bez

Speaker 3: a new lighting package, LED. And so that's a $10 foot swing right there. You're also saying less.

Sure.

New lighting package.

And so that's a $10 swing right there youre also seeing less.

Speaker 3: full-drop ceiling and more a combination of cloud ceiling and open ceiling, which requires rigid duct distribution of air. And that's another $10 a foot to a TI package. So we're seeing higher NTIs and we're also seeing really big co-investment on part of the tent.

Full drop ceiling and more a combination of cloud ceiling and opened ceiling, which requires rigid <unk> distribution of the air and that's another $10 a foot. So a ti package. So we're seeing higher Ncis and we're also seeing really big co investment on the part of tenants.

Speaker 3: So while RTI contribution is up, our tenants and some respects are putting two accents of the space and...

So while our Ti contribution is up our tenants in some respects are putting <unk> into this space.

Speaker 3: and even more in certain cases. So, yes, the investments are bigger, but the increased N-O-I that we're achieving and the quicker lease-up we're achieving, way more than not in the safe for the additional cost.

Even more and in certain cases, so yes, the investments bigger by the increase in NOI that we're achieving in a quicker lease up we're achieving weighing more than compensate for the additional costs and how.

Speaker 2: How will we describe the markets that our offices are in relative to?

How would you describe the market that our offices are in relative to.

Okay.

Yes.

Speaker 3: I would talk about our assets within those markets. And I touched on renewing auto desk, and it's a great customer of ours, and it's a great building, and we achieve it all, I'll follow win-win outcome in a market.

I would I would talk about our assets within those markets and I touched on renewing Autodesk and it's a great customer of ours and it's a great building and we achieved but I'll follow up men went outcome in a market thats choppy, but when you have exceptional assets and markets even.

Speaker 3: But when you have exceptional assets in markets, even if it's choppy around you.

If it's choppy around you.

Speaker 3: The outcomes are good because people just want to be here.

The outcomes are good because people just want to be there.

Speaker 3: So that applies to Bellevue, that applies to San Francisco and even our holdings in Portland, especially in Lloyd, we're, you know, full, essentially in Lloyd. So we've done very well there. And then San Diego, it's really fun right now because we've made these investments, I mentioned, toward a reserve. And we're seeing the results right now. It's a lot of fun. So...

So that that applies to belvieu that applies to San Francisco and even our holdings in Portland, especially at Boyd.

Paul essentially at Lloyd So we've done very well there and then San Diego.

It's really fun right now because we've made these investments I mentioned Torrey reserve and.

We're seeing the results right now is a lot of fun so.

Speaker 3: Yeah, the unique properties were in good markets, even in the markets that are a good shoppy right now, Portland and Stanton Cisco, were performing really well. I'll say that our management teams take really good care of our customers, and that's a huge part of success, especially in renewing tennis. But you know, on the new leasing front, our managers are very customer service oriented, engaging, and they do a terrific job.

We have unique properties, we're in good markets, even in the markets that are a bit choppy right now Portland and San Francisco.

We're performing really well suited our management teams take really good care of our customers and that's a huge part of success, especially in renewing tenants.

The new leasing front, our manager is a very customer service oriented and engaging and they do a terrific job.

Speaker 3: Let me add to what's he saying. I think the first part of your question was about the operating gap X.

And Craig Let me, let me add to what Steve said is that I think the first part of your question was about the operating Capex.

Speaker 3: which drove down our undevelopable for distribution this quarter. And really, without relates to is a one-time GI reimbursement for a largest tenant at LAM work.

Which drove down our funds available for distribution this quarter.

And really what that relates to is a.

One time.

Ti reimbursement for our largest tenant at landmark.

Speaker 2: And that's what drove that down. That's been out there for some time and we finally got the invoice. So with the police, I have that talent. And just as a matter of information, that talent spent, I think, another hundred million dollars.

And that's what drove that that's been out there for some time and we finally got the invoice.

We're pleased to have that talent and just as a matter of information that tenant I.

I think another $100 million of their own.

All right.

Yes.

Speaker 2: We're investing wisely and I know you're very familiar with all the other markets we're in, but San Diego is on fire. I've been around here for a lot of years and I've never seen the accounts. San Diego economy is strong as it is today.

We're investing wisely.

And I know, you're very familiar with all of the other markets San Diego is on fire I've been around here for a lot of years and I've never seen the account San Diego economy as strong as it is today.

Biotech lab space, it's amazing.

We're in the right place at the right time.

Speaker 6: Thank you for that. And then just one small follow up. The lower occupancy at Del Monte Center, is that due to the previous vacant forever 21, or is that smaller, especially businesses driving to the ADG.1% out?

Thank you for that and then just one small follow up.

The lower occupancy at del Monte Center.

Is that due to the previous peak in forever 21, or is that smaller specialty businesses driving to the the atg, 1% occupancy.

Speaker 2: two vacancies there. You know, one is Macy's abandoned, the furniture store, and the other is Forever 21, and we're doing our best to replace those tenants. But of all the properties we have, whereas proud of Del Monte is any other, but it does not have enough population around it to really make it into what we would want.

Theres two vacancies there one is macy's abandoned the furniture store and the other is forever 21, and we're doing our best to.

Replace those tenants, but of all the properties, we have whereas proud of del Monte as any other but it does not have enough population of rapid to really make it into what we would like it to be.

Speaker 2: But it's all it can be, but it can, all it can be is limited by the fact that the population is not as dense as it should be in that area. Great. I think, I mean, I guess that's a better position V and then have the...

It's all it can be.

It can all it can be is limited by the fact that the population is.

Not as dense as it should be in that area.

Great.

Yes, it is a better position to be in that.

Especially hit so hard.

Thank you for that update.

Thank you Craig and hope to see you soon.

Yeah.

Speaker 1: Thank you our next question comes from Richard Hill with Morgan Stanley . You may proceed with your question.

Thank you. Our next question comes from Richard Hill with Morgan Stanley You May proceed with your question.

Speaker 7: Hey guys, there's Adam on. Hey, it's Adam on from Rich. Hope you guys are all well. And thanks for taking the question and appreciate the bridge earlier to kind of the guidance, you know, really, really helpful. Once I ask about kind of the mixed use asset.

Hey, guys. This is Adam on Hey.

It's Adam on for Rich Hope you guys are all well.

And thanks for thanks for taking the question and I appreciate the bridge earlier to kind of the guidance really really helpful. I wanted to ask about kind of the mixed use asset.

Speaker 7: It's kind of in terms of recovery to pre-COVID-NY. I think your other property types, if they didn't recover in 21, should recover to 2019 levels and exceed those results. Just wondering what you kind of think about recovery to pre-COVID-NY and mixed use, whether that's a 23, 24 event, and just kind of how you think about that.

Just kind of in terms of kind of a recovery to pre COVID-19 NOI I think your other property types.

Didn't recover in 'twenty, one should should kind of recover to 2019 levels.

Feed those results.

I'm wondering what.

What are you kind of think about recovery to pre COVID-19 NOI and mixed use whether that's a 'twenty three 'twenty four events, it's kind of how you think about about that.

Speaker 2: You know from what I read, the American tourist is anxious to travel.

For what from what I read the American.

Tourists.

He is anxious to travel.

Speaker 2: And right now, we just don't know when. But I think when this thing opens up, people are anxious to get out and have vacation. And I suspect maybe I hope for unprecedented demand for our health, for our own problems.

And right now we just don't know when but I think when this thing opens up people are anxious to get out and have vacation I suspect.

Maybe I hope for.

Unprecedented demand for our.

Hawaii properties.

Speaker 2: People are anxious to travel, to stay at home. We don't know when, and we don't know what extent. I'd like to tell you that we do because we don't. You probably know as well as I, you read the newspaper.

People are anxious to travel as sick and tired of stay at home. So we don't know when and we don't know what extent.

That we do because we don't you probably know as well as you read the newspapers as well as we do we're hopeful to see a significant outperformance beginning in the third quarter, but again thats debts.

Speaker 2: We're hopeful to see a significant out performance beginning in the third quarter. But again, let's get rid of this code, but it's not anything you can predict. It's not something you can hope for, and it's something that we honestly expect, but we don't know.

Let's get rid of this COVID-19 not anything you can predict it's something you can hope for and it's something that we.

Honestly expense, but we don't know the timing yes.

Speaker 7: okay that's all really helpful thank you uh... and just want to ask about acquisitions uh... you recognize kind of made made too large a deal last year uh... you know what what what's the appetite today for for future acquisition further acquisitions uh... you know kind of given that that levels but also kind of given that you could have to recover right so you're you're not that you but i'll just look better organically and kind of recover organically

Okay.

Really helpful. Thank you I just wanted to ask about what kind of acquisitions.

Recognize kind of mid to larger deals last year.

I guess kind of whats the appetite today for future acquisition further acquisitions kind of given the debt levels, but also kind of given that EBITDA is obviously recovering right. So your net debt to EBITDA will just look better organically kind of recover organically.

Speaker 7: So what are the types of you focused on for acquisitions here? And what are you thinking there in terms of valuation and further acquisition?

So kind of what asset types that you're focused on for acquisitions here and kind of what are you thinking there in terms of valuation.

For further acquisitions.

Speaker 2: You couldn't have asked the question, which is more contentious or more internally debated than the question you just asked. I think that money costs today are modest compared to inflation. If you can borrow money at 3% or 4%.

You Couldnt have asked the question, which is more contentious are more internally debated than the question you just asked.

That money cost today are.

A modest compared to inflation, if you can borrow money at 3% or 4% and inflation of 7%.

Speaker 2: and inflation is 7%, you know, the economy is paying you to take the money. If you can buy a property which will return more than the cost of the money, there is a creation. There is a great internal debate about net debt to ebit up. And we've been examining those numbers very thoroughly. So if we found something that would, and the prices are...

Economies au to take the money if you can buy a property, which will return more than the cost of the money. There is accretion there is a great internal debate about net debt to EBITDA and we've been examining those numbers very thoroughly.

No.

If we found something that the prices are.

Speaker 2: The prices are not compelling. The prices are really high. So you have to find something that is below replacement cost that you can add to and increase the value. And that's what we've been successful at doing.

The prices are or.

Are not compelling the prices are really high. So you have to find something that is below replacement cost that you can add to and increase the value and that's what we've been successful at doing.

Speaker 2: And so we continue to exhort, explore all the possibilities, including the retention of our net debt fee, but including the enhancements of the shareholder value because of inflation, including the cost of the fact that all of our properties replacement cost is increasing dramatically.

And so we continue to exhort explore all the possibilities, including the retention of our net debt to EBITDA, including the attachment to the shareholder value because of inflation, including the top of the fact that all of our properties replacement.

Cost is increasing dramatically.

Speaker 2: Jerry estimates that if we were to have to buy out Lahoyak Commons today

Sure.

Jerry estimates, but if we were to have to buy out of La Jolla Commons to date.

Speaker 2: First is when we bought it at the bottom, bought the contract out at the bottom of the...

Versus when we bought it at the bottom phosphate the contracts out at the bottom of the.

The coronavirus go.

Speaker 2: Go ahead. What did you put in my mouth? What have been up with the 30% more? And what size is a contract? On $100 million. Under me. So that's 30 million bucks. This is happening across our portfolio. It doesn't happen if the demand isn't there to compensate for the cost.

Go ahead.

But I think there's a 30 per hectare foot in my mouth would've been upwards of 30% more.

On what on what size of the contract on $100 million. So that's 30 million Bucks. This is happening across our portfolio. It doesn't happen if the demand isn't there to compensate for the cost, but this is happening across our portfolio and that's why I'm, so optimistic about the quality and.

Speaker 2: but this is happening across our portfolio. And that's why I'm so optimistic about.

Speaker 2: the quality and the position of the American Assets Trust portfolio. It's not only a great inflation edge, I think its performance over the midterm will.

Position of the American assets Trust portfolio, it's not only a great inflation hedge I think its port format performance over the midterm will outpace inflation.

Speaker 7: got it and just kind of a problem you know by property type i mean is there more of an appetite for office rather than multi-family um... you know if you got a yet to kind of power rank the different property types you know what will be the first day that you buy

Got it and just kind of in terms of a property by property type I mean is there more of an appetite for office rather than multifamily.

If you could kind of get to kind of power rank the different property types.

What would kind of be first that you would buy.

Speaker 2: I hate to tell you this, but our appetite is governed by greed. If we find there's an opportunity in office which we have in Bellevue because we're very optimistic about that market, we did it. If we could find apartments which are now trading in the mid-3 cap where we could improve them. We clear the fair,?, starting, and $100.9.

I hate to tell you this but our appetite is governed by greed. If we find that there is an opportunity in office, which we have in Bellevue, because we're very optimistic about that market. We did it if we could find departments, which are now trading in the mid three cap, where we could improve them and.

Sure.

Speaker 2: improve the returns, we do that. If we could find retail that there was upside, we do that. So we have the advantage of looking at three product types in several markets and we're going to do what we think enhances the underlying value of our stockholders, for our stockholders at best.

Improve the returns.

We do that if we could find retail that there was upside we do that so we have the advantage of looking at three product types in several markets and we're going to do what we think enhances the underlying value of our stock holding for our stockholders as best we can.

Speaker 2: So obviously the emphasis has been on office because we've found a couple of office products. But at the same time, we're investing in our residential dramatically improving the properties we have. At the same time, we're looking at every opportunity we can for retail. So.

Obviously, the emphasis has been in office because we found a couple of office products, but at the same time, we're investing in our residential dramatically improving the properties. We have at the same time, we're looking at every opportunity we can for retail so.

Speaker 2: We've got our, whether I appeal, to find something that will add to the value of our shares. And at eight East.

We've got our.

Alright.

Another IPO.

Something that will add to the value of our shares at an H E. B I think thats easy to see that money cost our rates are moderate in relation to inflation, but then you have to find a product that is not over priced and sold.

Speaker 2: The thing that's easy is to see that money costs are moderate in relation to inflation, but then you have to find a product that is not overpriced. And so it's a creative.

Accretive.

Got it thanks for the time really appreciate it.

Thank you for your interest.

Speaker 1: Thank you and as a reminder that the question you'll need to press star one on your telephone Our next question goes from time we'll see who it was far better than you've received in your question

Thank you and as a reminder, that's a question you will need to press star one on your telephone. Our next question comes from Tim <unk> with.

Wells Fargo proceed with your question.

Speaker 8: Thank you very much. Wondering, I guess, a couple of questions. It's given the increased leasing activity that you saw in the fourth quarter. It drove your signs, but not opened, rent to get more than double what was reported in the third quarter. Is, can you just talk about how much of that? Thank you. Thank you. With somehow rather than something wrong with our speaker system here, if you kind of step back from your microphone, we might be able to hear you better, please. Okay, is this better?

Thank you very much.

I'm wondering.

I guess a couple of questions just given the increased leasing activity that you saw in the fourth quarter.

It drove your signed but not opened brands to more than double what was reported in the third quarter can you just talk about how much of that back.

Tammy with somehow rather there's nothing wrong with our our speaker system here, if you kind of step back from your microphone, we might be able to hear you better. Please.

Okay is this better.

Is that better we hope so.

Speaker 2: Okay. Not a good excuse. Not a good excuse in person though Tammy, I can tell you that. Do not know. Do not know.

Okay not as good.

Let me sneak in personnel Tammy I can tell you that.

Good enough.

Speaker 8: Given the increased leasing activity in the quarter quarter that drove your sign but not open rents to more than double what you reported in the third quarter, I guess can you just talk about how much of that you expect to come online in 2022?

Given the increased leasing activity in the fourth quarter.

Drove you are signed but not open rents to more than double what you reported in the third quarter. I guess can you just talk about how much of that you expect to come online in 2022, and then secondly related are you generally delivering spaces to tenants on time, given the supply and labor constraints in the market today.

Speaker 8: And then secondly, but related, are you generally delivering spaces to tenants on time given the supply and labor constraints in the market today?

Do you want to handle that Steve.

Speaker 3: I'll go ahead, Jared. You should make it. You know, we're doing well in terms of timing because

Alright, thank you.

Okay.

We're doing well in terms of timing because.

Speaker 3: We're integrated from having in-house legal to having a really talented construction team. So we get on front of it. We don't work parallel paths while we're going through a transaction. So as a result, we come to the least execution we typically have in a fruit plan that we can readily go into CDs. And we do everything we can to expedite the process because our tests...

We're integrated from having in house legal to having a really talented construction team. So we got out in front of them. We don't we work parallel path, while we're going through a transaction. So as a result, when we signed the lease execution. We typically have an approved plan that we can readily go into Cds and we did.

I think we can expedite the process because.

Our tests.

Speaker 3: have time constraints and we take those on as our own. So we perform well. That being said, there are delays in permitting. There are delays in certain materials. With attempts to have an urgency to get in, we'll have them move in. And if we have a long lead time, I don't want a certain mill work, they'll move in and start operating. And then we'll do the mill work after they move in. So you make those kinds of moves to meet their needs to operate and give them the space they want. So we're adapting, but we do it really well.

We have time constraints and we take those on as our own. So we performed well that being said there are delays in permitting there are delays.

In certain materials with tends to have an urgency to get in we will have that move in and if we have a long lead time item on certain millwork. They all move in and start operating and then we will.

We'll do the millwork after they've moved in so you make those kinds of moves to meet their needs to operate and again on the space that they want so we're in that but we do it really well.

Speaker 2: It's difficult, but we do as well as anybody I think that would be the way to phrase it. I agree, I agree again.

Difficult, but we do as well as anybody I think that would be the way to phrase it I agree I agree.

Speaker 3: No, it is not. The supply chain is strained and there are labor constraints, but you know, one of the points that we made and Steve has really brought to us is we instituted this program of spec suites. So I like to call those ready rooms and then as we found tenants, the least some of those faces it might have been adding one office or taking out one office. So we were able to adapt pretty quickly and you know, we had some inventory. So we've timing spent the truck.

No. It is not at the supply chain is strained and there are labor constraints, but one of the points that we made and Steve is really brought to us as we instituted this program of spec suites, so I'd like to call those ready rooms, and then as we found tenants the lease some of those spaces. It might've been.

Adding one office or taking out one office. So we were able to adapt pretty quickly and we had some inventory. So we've timing has been good for us.

Speaker 2: It's all due immotesty. I think we have a great team. It's doing a great job. But it ain't easy. No.

I'll do Immodesty I think we have a great team is doing a great job.

Yes.

Speaker 8: I appreciate that. And then maybe following up on your discussion around your appetite to be a larger company, is what do you see as the best pathway to getting to the level that you feel you're maximizing your DNA cross? Is it just slow and steady or is there a bigger transaction that you see you could do to get there quicker, just wondering if you can give us your perspective on that and what kind of governing that?

Okay. Appreciate that and then maybe following up on your discussion around your appetite to be a larger company.

Do you see as the best pathway to.

Getting to the level that you feel you are maximizing your G&A cost is it just slow and steady or is there a bigger transaction.

You see you can do to get there quicker just wondering if you could give us your perspective on that and what kind of governance.

Speaker 2: If our stock was fairly priced, that would be a path to be larger. But at the price of our stock today, that's not a path. If another path would be to find somebody who would like to throw their lot in with ours, that ain't easy either. So I would say the ultimate outcome is slow but steady win-to-risk path that we're worth.

If our stock was fairly priced that would be a path to be larger but at the price of our stock to date, that's not a path. If another path would be to find somebody who would like to draw your locked in with ours that either so I.

I'd say, what the ultimate outcome is slow but steady rate.

Hi.

Speaker 2: by piece by piece. You can see that when we issue that $500 million of bonds, we were a year early, but now interest rates are moving up, but that fixed rate has allowed us some flexibility.

By that piece by piece you can see that when we issued that $500 million.

<unk> bonds.

We were a year early but now interest rates are moving up but that fixed rate.

The fixed rate on that bonds for 10 years has allowed us some flexibility.

Speaker 2: We recently extended a bank loan and locked in the rate. So it's slow to steady when the rate, we started, when we started this company, but it's a public entity that has $1.7 billion in assets.

Yes.

We recently extended a bank loan and locked in the rates. So it's slow but steady win at the rate we start when we started this company.

Public entity it at $1 $7 billion in assets now I estimate our underlying value was one 5% to 6 billion.

Speaker 2: Now I estimate our underlying value is about five to six billion. So, and we didn't do anything dramatic. We just knew if we had our nose down and our <expletive> off and just said, look at the deal. And somehow we find a way to enhance shared over value. The inconsistent.

No.

And we didn't do anything dramatic.

Yes.

If we had our our nose down on our <expletive> off and just looking at deals and somehow we find a way to enhance shareholder value.

Inconsistency.

Speaker 2: is that the stock market doesn't seem to recognize that. So the way I put it, I can buy real estate T-shirt and Wall Street that I got on Main Street. When we can buy, when the reverse is true, we'll be able to take advantage of that opportunity hopefully for the benefit of all our stockholders. So stick with us.

Is that the stock market doesn't seem to recognize that so the way I put it I can buy real estate cheaper on wall Street and that kind of main street. When we can buy when the reverse is true we'll be able to take advantage of that opportunity hopefully for the benefit of all of our stockholders so stick with us.

Speaker 8: Okay, and then maybe just a follow up on that in an earlier comment on the broker transactions that you said, you know, supportive you that you're trading at a discount to any V. I'm just wondering if if a team can provide some more specific data points to help give us a sense for cap rates in your markets for your different asset types.

Okay, and then and then maybe just a follow up on that in an earlier comment.

And that the broker transactions that you said support a view that you are trading at a discount to any b I'm. Just wondering if if the team can provide some more specific data points to help give us a sense for cap rates in your markets.

You have to produce that type.

Speaker 2: That's a really good question. And they're asking, is there a guidance available for the NAD law? You're not coming through clearly. That's why I'm translating.

That's a really good question.

They are asking is there.

Guidance available for you.

You're not coming through clearly thats why im translating it thank you.

Speaker 2: Thank you, Bob. Okay. Is you, are you planning on guidance for the NAB? I can tell you that by seat is a PAN. I see who we've got to pay. And then I extrapolate that to what we own. And I said, oh my God, what a disconnect. Now, Bob, do you have anything that is concrete? Yeah, we haven't published that for the last two years during COVID, but the intent would be, is to issue an NAB.

Are you planning on guidance for <unk> I can tell you that by seat of the pants ICU. We've got it and then I extrapolate that to what we own and I know my God. What a disconnect now Bob do you have anything concrete yet we haven't published that for the last two years during COVID-19 .

The intent would be is to issue an NAV.

Speaker 3: because we are a diversified re-tried to help people understand how we're thinking but it's something to board approval and you know we need to look at it and discuss it but we feel good about where the NAB is last time we looked at it and you know we look forward to going through that process. It would probably be at the beginning of the third quarter. If apartments are selling it through...

Because we are a diversified we try to help people understand how we're thinking but it's subject to board approval.

We need to look at it and discuss it but we're we feel good about where the NAV is last time, we looked at it.

We look forward to going through that process. It would probably be at the beginning of the third quarter.

<unk> or selling it at $3 five cap.

Speaker 2: what our apartments were. If office, where we're improving them and grants are going up dramatically and we're having to find particular properties where we can improve them, what are our office properties, where some of which are...

What are our apartments worth if office, where we're improving them and.

And rents are going up dramatically and we're having to find.

Particular properties, where we can improve them.

Office properties worth some of which are stellar.

Speaker 2: Our retail, even retail is trading at cap rates that don't seem to discount the, what's affecting retail. So I'd love to buy some more retail, but there's no bargains out there. So you look around and say, this is what the market tells you. And then we look what we have, and there's this giant disconnect.

Our retail even retail is trading at cap rates that don't seem to discount.

<unk>.

What's affecting retail so I would love to buy some more retail theres not theres no bargains out there. So you look around and say this is what the market tells you and then we look what we have and there is this giant disconnect.

Speaker 8: Okay, it makes sense. I look forward to the updated NAV. And then just one last question if I could. I know you have cash on the balance sheet. I got $140 million today. Is that your mark at this point forward development spending in 22? Bob, maybe just if you could give us some color on the sources and uses of capital underlying your 2022 guidance.

Okay makes sense I look forward to the updated Nev and then just one last question if I could I know you have cash on the balance sheet of about $140 million okay.

That earmarked at this point for development spending in 'twenty to Bob maybe just if you could give us some color on the sources and uses of capital underlying.

2022 guidance.

Speaker 3: Yeah, so we have about 140 million of cash in the bank today. And we got a $400 million dollar line of credit that did not even been touched. So yeah, I mean, in theory, that cash would be used for finishing low-end comments, finishing our renovation of one beach. So one beach is expected to be finished in the third quarter of theicia

Yes, so we have.

About $140 million of cash of the bank and we got.

$400 million line of credit.

It's not even been touched so yes, I mean in theory we're.

Cash will be used for finishing la Jolla comments.

Finishing our renovation of one so long beach is expected to be finished in the second and the third quarter of.

'twenty two.

Speaker 3: And we expect to have revenue coming in by July , by the third quarter sometime in 23. And we're whole, and again, that's something to leasing, but we feel good about that renovation. And then LaHoye Common Street, we're hopeful to have that completed.

And we expect to have revenue coming in.

By July by the third quarter, some time in 2003.

We're all in.

Yes.

Subject to leasing, but we feel good about that renovation and then well Jolla Commons three.

We're hopeful to have that completed.

Speaker 3: And by the end of the second quarter in 23 with revenue coming in to beginning of 24. Again, that's based on what we know in the marketplace. Nothing's been committed or signed at this point in time. But we don't think that is unrealistic. But we'll see.

And the by the end of the second quarter and 23 with revenue coming in.

At the beginning of 2004 again thats.

Based on what we know in the marketplace and nothing has been committed or signs at this point in time.

We don't think that is unrealistic.

But we'll see.

Speaker 2: If you want somebody to manage your cash, you couldn't find anybody that better than Bob Barton. He is very cruel. He is analysis of how every penny is spent. And we do our best to spend it wisely.

If you want somebody to manage your cash you couldnt find anybody better than ballpark.

He is.

It is very profitable.

In this analysis of how every penny has meant that we do our best to spend it wisely.

Okay, great. Thank you so much for your time.

Thanks, David.

Speaker 1: Thank you and I'm not showing any further questions at this time. I would not like to turn the call back over to Ernest Rady for any further remarks.

Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Ernest Rady for any further remarks.

Speaker 2: Okay, stay well you guys. Don't get any viruses. Wear a mask and we hope to see you soon and give you all a hug. And we get through this nonsense that we've been to so last two years. But I've always been, unfortunately it will come through better off than when we began. And I think that's still our way to go. Thank you all.

Okay stay well you guys don't get any viruses wear a mask and we hope to see you soon and give you all a hug.

When we get through this nonsense that we've been to fill last two years, but I've always said that portfolio will come through better off than when it began and I think that's still high whitefield. Thank you all.

Speaker 1: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

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Speaker 1: Hello and thank you for standing by and welcome to the Q4 and year end 2021 American assets Trust Inc. earnings conference call at this time all participants are going to listen only most after the speaker presentation. There will be a question and answer session.

Hello, and thank you for standing by and welcome to the Q4 and year end 2021 American Assets Trust, Inc. Earnings Conference call. At this time, all participants are in a listen only mode. After the speaker presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

Speaker 1: If that's a question during the session, you'll need to press star one on your telephone.

Speaker 1: Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would not like to end the conference over to your speaker today. Adam Wong, the president and chief operating officer, please go ahead.

Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your Speaker today, Adam Walsh, President and Chief Operating Officer. Please go ahead.

Speaker 3: Thank you operator. Good morning everyone. Welcome to American asset trusting's fourth quarter and year end 2021 earnings call. Yesterday afternoon, our earnings release and supplemental information were furnished to the SEC on form 8K. Both are now available on the investor section of our website, Americanadsetstrust.com.

Thank you operator, good morning, everyone and welcome to American Assets Trust, Inc. Fourth quarter and year end 2021 earnings call yesterday afternoon, our earnings release and supplemental information were furnished to the SEC on form 8-K. Both are now available on the investors section of our website American assets Trust Dot com. During this call we will just.

Speaker 2: During this call, we will discuss non-gaft financial measures which are reconciled to our GAAP financial results and our earnings release and supplemental information.

non-GAAP financial measures, which are reconciled to our GAAP financial results in our earnings release and supplemental information you will also be making forward looking statements based on our current expectations, which statements are subject to risks and uncertainties discussed in our SEC filings.

Speaker 3: We will also be making forward-looking statements based on our current expectations, which statements are subject to risk and uncertainties discussed in our FEP file.

Speaker 3: Your caution at the place, undo reliance on these forward-looking statements as actual events could cause our results to differ materially from these forward-looking statements, including due to the impact of COVID-19.

So not to place undue reliance on these forward looking statements as actual events could cause our results to differ materially from these forward looking statements, including due to the impact of COVID-19, and with that I'll turn the call over to Ernest Rady, Our chairman and CEO to begin the discussion of our fourth quarter and year end 2021 results.

Speaker 3: And with that, I'll turn the call over to Ernest Brady, our chairman and CEO to begin the discussion of our fourth quarter and year end 2021 results. Ernest, thank you very much, Adam.

Thank you very much Adam.

Speaker 2: Good morning everyone. First and foremost, I would like to wish all of our stakeholders continued health and safety as we hopefully find 2022 ushering in a more manageable phase of this pandemic. As you all know, we remain.

Good morning, everyone first and foremost I would like to wish all of our stakeholders continued health and safety as we hopefully find a 2022 ushering in a more manageable phase of this pandemic.

As you all know we remain very optimistic.

Speaker 2: high quality, irreplaceable properties, and asset class diversity of our portfolio, combined with the strength of our balance sheet, ample liquidity, top notch management team, and that said with Aldi Modesty, an efficient operating platform who will allow us to go our earnings and net asset value for our shareholders on a creative basis on a long term.

High quality.

Irreplaceable properties in asset class diversity of our portfolio combined with the strength of our balance sheet ample liquidity top notch management team and that said with all due modesty and efficient operating platform will allow us to grow our earnings and net asset value for our shareholders on an accretive.

On a long term basis.

Speaker 2: I recall at the outset of the pandemic, I thought we might be in for another great depression, like tonight.

I recall at the outset of the pandemic I thought we might be in for another great depression like.

Like the 19 thirties, but thanks to the inkjet incredible ingenuity and perseverance of Americans and modern science, particularly in regard to the push for effective vaccines and anti viral drug in the U S economy, only felt eliminate recession and Meanwhile, capital markets rebounded quickly.

Speaker 2: But thanks to the incredible ingenuity and perseverance of Americans and modern science, particularly regard to the push for effective vaccine and anti-viral drugs, the US economy only felt a limited recession, and meanwhile, capital markets rebounded quickly in most industries.

And most industries.

Speaker 2: However, our economy is less managing the unprecedented, the fiscal stimulus that no doubt has contributed to it was likely to be more than short term inflation. Along those lines with the Consumer Price Index experience its largest gain in 30 years, approximately 7%. We are confident in the thesis of our portfolio of being an effective protection against inflation.

However, our economy is less managing the unprecedented fiscal stimulus that no doubt is contributor it was likely to be more than short term inflation.

Along those lines with the consumer price index experienced its largest gain in 30 years approximately 7%.

We are confident in the thesis of our portfolio of being an effective protection against inflation.

Speaker 2: Based on one, our ability to increase both base rents and annual rent escalators as the least expired within our portfolio to keep up with inflation.

Based on one our ability to increase both base ramps and annual rent escalators as leases expire within our portfolio to keep up with inflation.

Speaker 2: Our visibility of significantly higher demand and limited supply in our markets for higher quality assets like the ones we own and third, the replacement cost of our properties continues to rise. This is particularly more compelling with high barrier to entry, modern, and meditized property like ours that are in the path of growth.

Our visibility of significantly higher demand and limited supply in our markets for higher quality assets like the ones, we own and third the replacement cost of our.

Of our properties continues to rise this is particularly more compelling with high barrier to entry modern amenities property like ours that are in the path of growth.

Speaker 2: education and innovation. Therefore, we can likely withstand the impacts of long-term inflation, if not ultimately thrive. These are amongst the reasons why personally a protestar start during prior open periods, as in my view here at trading significantly below our net asset value, and believe that the recent broker transaction in our markets and asset classes support this view.

Education and innovation, therefore, we can likely withstand the impact of long term inflation if not.

From Italy thrive.

Are amongst the reasons why I personally purchased our stock during prior open periods as in my view, we are trading significantly below our net asset value and believe that the recent broker transactions in our markets and asset classes support this view.

With respect to our financial results.

Speaker 2: I was pleased to see our considerable rebound in 2021 that compared to 2020 and continue to be optimistic about our growth in 2022, and particularly the years thereafter. As such, I want to mention that the Board of Directors has approved a quarterly dividend.

I was pleased to see our considerable rebound in 2021 as compared to <unk> 20, and continue to be optimistic about our growth in 2022, and particularly the years thereafter.

Such I want to mention that the board of directors has approved a quarterly dividend.

Speaker 2: 32 cents a share for the force quarter, an increase of two cents or approximately seven percent from our previous dividend, which we believe is supported by our financial results and the expression of our board's confidence in the embedded growth of our portfolio this year and beyond. The dividend will be paid on March 24th to share holders of record March 10th.

Of 32 cents a share for the fourth quarter, an increase up to approximately 7% from our previous dividend, which.

Which we believe is supported by our financial results and an expression of our boards confidence in the embedded growth of our portfolio. This year.

And beyond that dividend will be paid on March 24th to.

<unk> to shareholders of record March test.

Speaker 2: Finally, on the development front both with Roya Carmen's tree and one beach beat remain on time and on budget. And though we remain optimistic by the leasing process, though we not have any specific views to share on that front at this time, Adam Bob and Steve are going to more details on our various asset segments.

Finally on the Belmond brand, both Laguardia comments, III and one BP remain on time and on budget.

Though we remain optimistic by the leasing prospects, but we not have any specific news to share on that front at this time, Adam Bob and Steve will go into more details on our various asset segments financial results and guidance and I will be available for any questions that you may have at the conclusion of our prepared.

Speaker 2: financial results and guidance. And I will be available for any questions that you may have at the conclusion of our prepared remarks.

Speaker 2: Again, on behalf of all of us at American Astros, we thank you for your confidence in allowing us to manage your company and you for your company.

<unk> remarks.

Again on behalf of all of US at American assets Trust. We thank you for your confidence in allowing us to manage our dropdown and you for your continued support I'm now going to turn the call back over to Adam Adam. Please thanks, Ernest in 2021 or fiscal and operational results showed a meaningful rebound from <unk>.

Speaker 2: and how it going to turn the call back over to Adam. Please. Thanks, Ernest. In 2021, our fiscal and operational results show the meaningful rebound from 2020, which has Bob will describe in a few minutes. We expect to see continued growth in 2022 and beyond. Among a few of our accomplishments in 2021 were closing our inaugural public bond offering of $500 million that was over four times over subscribe.

'twenty, which as Bob will describe in a few minutes, we expect to see continued growth in 2022 and beyond among a few of our accomplishments in 2021 were closing our inaugural public bond offering of $500 million that was over four times oversubscribed acquiring two office projects in Bellevue, Washington for a total of approximately 400.

Speaker 10: acquiring two office projects in Belvue, Washington, for a total of approximately $440,000 square feet for a combined cost of approximately $210 million.

<unk> 40000 square feet for a combined cost of approximately $210 million.

Speaker 10: We're establishing our critical mass and economies of scale within our del view office portfolio.

Establishing our critical mass and economies of scale within our Bellevue office portfolio, a market in which we believe the municipality has properly plan for growth with light rail alignment and other transit nodes and with a spectrum of housing options for workers intended to minimize commute and to help create up and coming urban neighborhoods around downtown to.

Speaker 10: A market in which we believe the municipality has properly planned for growth with light rail alignment and other transit nodes, and with a spectrum of housing options for workers intended to minimize commute.

Speaker 10: to help create up and coming urban neighborhoods around downtown to capitalize on what we believe will be continued growth in the east side of March.

And what we believe will be continued growth on the east side markets.

Speaker 10: We also leased approximately 255,000 square feet of office space and 410,000 square feet of retail space and increased our portfolio multi-family lease occupancy from 86 to 96% year over year. We also maintained our investment grade credit ratings from all three major US credit rating agencies.

We also leased approximately 255000 square feet of office space, and 410000 square feet of retail space and increased our portfolio multifamily leased occupancy from 86% to 96% year over year. We also maintained our investment grade credit ratings from all three major U S credit rating credit rating agencies and we <unk>.

Speaker 10: And we remain vigilant and focused on the safety and well-being of our stakeholders and achieve the 99% COVID-19 vaccination rate among all AAT employees.

Vigilant and focused on the safety and wellbeing of our stakeholders and achieved a 99% COVID-19 vaccination rate among all <unk> employees. We also increased our collection percentage sequentially for the sixth consecutive quarter since the onset of the pandemic to over 98% in Q4, including collecting over 96% of deferred.

Speaker 10: We also increased our collection percentage sequentially for the six consecutive quarters since the onset of the pandemic to over 98% in Q4, including collecting over 96% of deferred rent payments due like Q.

Rent payments due in Q4.

Speaker 10: We also continued our ESG initiatives with a focus on the positive impact that being both a steward of the environment as well as fostering a culture of diversity inclusion has on the strength of our business and in partnership with our communities. Along those lines we are pleased to have increased our GREZ score in 2021 for the third consecutive year in line with our peer average and above GREZ average.

We also continued our ESG initiatives with a focus on the positive impact that being both a steward of the environment as well as fostering a culture of diversity and inclusion has on the strength of our business and in partnership with our communities along those lines. We are pleased to have increased our <unk> score in 2021 for the third consecutive year in line with our peer average and above.

Speaker 10: We also increased our total dividends by 16% in 2021 over 2020. And we negotiated our amended and stated credit facility which closed a few days into this year, which increased our borrowing capacity extended the maturity dates of our revolver and term loan and transition from our borrowings to sofa.

<unk> averages. We also increased our total dividends by 16% in 2021 over 2020, and renegotiated our amended and restated credit facility, which closed a few days into this year, which increased our borrowing capacity extended the maturity dates of our revolver and term loan and transitioned our borrowings to sofa.

Speaker 10: And as Ernest mentioned, we further development activity at La Jolla Commons in one beach, on time and on budget, despite the headline headwinds of supply chain shortages, bender staffing challenges and governmental delays.

And as Ernest mentioned, we further development activity in La Jolla, Commons and one beach on time and on budget, despite the headline headwinds or supply chain shortages vendors staffing challenges and governmental delays.

Speaker 10: Meanwhile, on the external growth front, we continue to be active, yet disciplined, as we evaluate acquisition opportunities in our target markets and various asset classes, as well as our ability to take advantage of low interest rates, while obviously keeping an eye on our cost of capital.

Meanwhile, on the external growth front, we continue to be active yet disciplined as we evaluate acquisition opportunities in our target markets in various asset classes as well as our ability to take advantage of low interest rates, while obviously, keeping an eye on our cost of capital.

Speaker 10: Finally, I'm more than pleased to announce that we promoted two key employees this month into vice president positions. Abigail Rex, who is now our VP of multi-family San Diego, an Emily Mandick, who is now our VP regional manager of Portland, DELVU. And those are promotions we're based on merit and their accomplishments with AAT. We are more than happy to further strengthen our commitment to diversity among our managers.

And finally, I am more than pleased to announce that we promoted two key employees. This month's anti vice president positions Abigail <unk>, who is now our VP of multifamily San Diego and MLB mandates Who's now our VP regional manager at Portland in Bellevue.

And the other promotions were based on merit and their accomplishments with AT&T, we are more than happy to further strengthen our commitment to diversity among our management team with that I'll turn the call over to Bob to discuss financial results and guidance in more detail.

Speaker 10: With that, I'll turn the call over to Bob to discuss financial results and guidance in more detail.

Speaker 3: Thanks Adam and good morning everyone. Last night we reported fourth quarter, 2021 FFO for share of 54 cents and fourth quarter, 2021 net income attributable to common shareholders for share of 14 cents.

Thanks, Adam and good morning, everyone last night, we reported fourth quarter 2021, <unk> per share of <unk> 54.

<unk> fourth quarter 2021, net income attributable to common shareholders shareholders per share up 14.

Speaker 3: Fourth quarter results are primarily comprised of the following. Actual FFO decrease.

Fourth quarter results are primarily comprised of the following.

Actual <unk> decreased.

Speaker 3: in the fourth quarter by approximately 5.3% to 54 cents per FFO share compared to the third quarter of 2021, primarily from the following four items.

In the fourth quarter by approximately five 3% to 54 cents.

Per <unk> share compared to the third quarter of 2021, primarily from the following four items.

Speaker 3: First, as you may recall on our Q3 earnings call, our expectation for Q4 was for approximately 47 cents per FFO share. The assumption we made for Q4 was our best estimate at that time, but what increased the FFO from our Q4 guidance was the following four items.

First as you may recall on our Q3 earnings call. Our expectation for Q4 was for approximately <unk> 47 per <unk> share. The assumption. We made for Q4 was our best estimate at that time, but would increase the <unk> from our Q4 guidance was the following four items.

Speaker 3: First, our Waikiki Beachwalk mixed-use property contributed force fence for FFO share. A half from Embassy Suites and half from Waikiki Beachwalk Retail, which we did not anticipate in Q4 due to the lower than average tourism as a result of the Delta and Omicron variant.

<unk>.

First our Waikiki Beach walk mixed used property contributed <unk> <unk> per <unk> share.

From embassy suites, and half from Waikiki Beach walk retail, which we did not anticipate in Q4 due to the lower than average tourism as a result of the delta in omicron variance.

Speaker 3: Second, our retail portfolio in San Diego performed a penny of FFO better than expected. Third, our office portfolio performed a penny of FFO better than expected.

Second our retail portfolio in San Diego performed a penny of <unk> better than expected third our office portfolio performed <unk> better than expected.

Speaker 3: and fourth are multi-family, performed with any of FFF, both better than expect.

And fourth our multifamily performed a penny of <unk> better than expected.

Speaker 3: Add in the D7 sense of FFO for share to our Q3 guidance of 47 cents for Q4 gets you back to where we ended at 54 cents per share of FFO for the fourth quarter.

Adding <unk> <unk> per share to our Q3 guidance of 47% for Q4. It gets you back to where we ended at 54 per share of <unk> for the fourth quarter.

Speaker 3: Same store cash N O I overall was strong in 2021, ending at 20% growth year over year for the fourth quarter. It should also be noted that mixed use was added back to the same store pool in Q4.

Same store cash NOI overall was strong in 2021, ending at 20% growth year over year for the fourth quarter.

It should also be noted that mixed use was added back to the same store pool in Q4.

Speaker 3: absent the mixed-use sector in Q4, same-store cash and a Y would have been approximately 11.6% growth, which we are still very pleased with.

Absent the mixed use sector in Q4 same store cash NOI would have been approximately 11, 6% growth, which we are still very pleased with.

Speaker 3: As it relates to liquidity at the end of the fourth quarter, we had liquidity of approximately 539 million, comprised of approximately 139 million in cash and cash equivalents.

As it relates to liquidity at the end of the fourth quarter, we had liquidity of approximately $539 million comprised of approximately $139 million in cash and cash equivalents.

Speaker 3: and 400 million of availability on a revolving line of credit. Our leverage, which we measure in terms of net debt to EBITDA was 6.8 times. Our objective is to achieve a maintaining net debt to EBITDA of 5.5 times or below.

And $400 million of availability on our revolving line of credit our leverage which we measure in terms of net debt to EBITDA was six eight times. Our objective is to achieve and maintain a net debt to EBITDA of five five times or below.

Speaker 3: We do recognize that our net debt to EBITDA has increased during COVID. As a result of lower EBITDA, primarily from our retail portfolio and our mixed-use property in YKK, we believe these reductions are temporary. And our expectations is that our EBITDA will increase over time to pre-COVID levels. Our retail centers on the mainland are generally full with increasing sales, but still have a way to go.

We do recognize that our net debt to EBITDA has increased during COVID-19 .

As a result of lower EBITDA, primarily from our retail portfolio and our mixed used property in Waikiki we.

We believe these reductions are temporary and our expectations is that our EBITDA will increase overtime to pre COVID-19 levels. Our retail centers on the mainland are generally full with increasing sales, but still have a way to go.

Speaker 3: As you may recall, we have historically provided a pro-formic cash NOI bridge to help all stakeholders understand the un- the unbatted growth that we see in our portfolio, as well as what we are anticipating in the next year or two. We expect to update our cash NOI bridge to reflect our expectations for 2023 in the next 60 days or sooner.

As you May recall, we have historically provided a pro forma cash NOI bridge to help all stakeholders understand.

The embedded growth that we see in our portfolio as well as what we're anticipating in the next year or two we expect to update our cash NOI bridge to reflect our expectations for 2023 in the next 60 days or sooner.

Speaker 3: Our current cash NOI bridge through 2022 reflects that cash NOI in 2021 has finally surpassed 2019 cash NOI and is expected to increase another 6% in 2022.

Our current cash NOI bridge through 2022 reflects that cash NOI in 2021 has finally surpassed 2019 cash NOI.

And is expected to increase another 6% in 2022.

Speaker 3: This increase has largely resulted from the strong, consistent growth from our office portfolio. This also shows the importance of a high-quality, diversified real estate portfolio, such as American assets trust.

This increase is largely resulted from the strong consistent growth from our office portfolio. This also shows the importance of our high quality diversified real estate portfolio, such as American assets Trust I also need to point out that cash NOI.

Speaker 3: I also need to point out that cash and OI is a non-gap supplemental earnings measure which the company considers meaningful in measuring its operating performance.

It's a non-GAAP supplemental earnings measure.

The company considers meaningful and measuring its operating performance.

Speaker 3: a reconciliation of cash, and a wide and net income is included in our supplemental, which you can access on our website.

A reconciliation of cash NOI to net income is included in our supplemental which you can access on our website.

Speaker 3: our interest coverage and fixed charge coverage ratio and to the quarter at 3.8 times. Let's talk about 2020.

Our interest coverage and fixed charge coverage ratio ended the quarter at three eight times.

Let's talk about 2022 guidance, we are introducing our 2022 <unk> per share guidance range.

Speaker 3: We are introducing our 2022 FFO for share guidance range of $2.09 to $2.17 per FFO share with a midpoint of $2.13 per FFO share, which is approximately a 6.5% increase over 2021 actual of $2 per FFO share.

$2 nine to $2 17 per <unk> share with a midpoint of $2 13 per <unk> share, which is approximately a six 5% increase over 2021 actual of $2 per <unk> share.

Speaker 3: Let's walk through the following nine items that make up the increase in our 2022 FFO guidance over 2021 FFO action.

Let's walk through the following nine items that make up the increase in our 2022 <unk> guidance over 2021 <unk> actual first same store office cash NOI is expected to increase approximately 9% or <unk> 14 per <unk> share.

Speaker 3: First, same-store office cash NOI is expected to increase approximately 9% or 14 cents per FFO share.

Speaker 3: Second, same store retail cash NOI is expected to decrease approximately 5% or 5 cents per FFRO share.

Second same store retail cash NOI is expected to decrease approximately 5% or <unk> <unk> per <unk> share.

Speaker 3: Third, same-sword multifamily cash in OI is expected to increase approximately 5% or 2 cents per FFO share.

Third.

Same store multifamily cash NOI is expected to increase approximately 5% or <unk> <unk> per <unk> share.

Speaker 3: Same-store mixed-use cash NLI is expected to increase approximately 15% or 3% per FFO share. And it's attributable to approximately 1 cent of FFO to YKKB-Walk retail and 2 cents of FFO to embassy suites YKKB.

Fourth <unk>.

Same store mixed use cash NOI is expected to increase approximately 15% or <unk> <unk> per <unk> share and is attributable to approximately one set of <unk> to <unk>.

Kiki Beach walk retail and <unk> to embassy suites Waikiki.

Speaker 3: All four sectors combined above are expected to generate a total same-store cash and a Y growth year over year in 22 of approximately 5% or 14 cents of FFO for share.

All four sectors combined above are expected to generate a total same store cash NOI growth year over year and 22.

Of approximately 5% or 14 of <unk> per share.

Speaker 3: Non-same-store guidance includes our two acquisitions in Bellevue, Washington in 2021. Combined, they are expected to contribute approximately $0.7 of FFO per share in 2022.

Yes.

Non same store guidance includes our two acquisitions in Bellevue, Washington in 2021, combined they are expected to contribute approximately <unk> <unk> per share in 2022.

Speaker 3: GNA is expected to increase approximately 3 million and decrease FFO by 4 cents per share. Interest expenses,

G&A is expected to increase approximately $3 million in decreased <unk> by <unk> <unk> per share.

Interest expense is expected to be flat.

Speaker 3: Other expenses expected to decrease by approximately 4.4 million and increase FFO by approximately six cents per FFO per share year over year, resulting from a one-time early prepayment fee on the 150 million unsecured loan paid with a portion of the proceeds from our inaugural bond offering in January of 2021 and which will not occur in 2022.

Other expense is expected to decrease by approximately $4 4 million.

And increased <unk> by approximately <unk> <unk> per <unk> per share year over year, resulting from a onetime early prepayment fee on the $150 million unsecured loan paid with a portion of the proceeds from our inaugural bond offering in January of 2021 and <unk>.

Which will not occur in 2022.

GAAP adjustments, primarily relating to straight line rents will decrease <unk> by approximately $7 5 million or 10 cents per <unk> share.

Speaker 3: These adjustments, when added together, will be approximately 13 cents for FFO share and represent the increase in 2022 over 2021 FFO for share.

These adjustments when added together will be approximately 13 per <unk> share and represent the increase in 2022 over 2021 <unk> per share.

While we believe the 2022 guidance is our best estimate as of this earnings call. We do believe that it is also possible that we could outperform the upper end of this guidance range.

In both.

The multifamily and in the mixed use sector of our.

Speaker 3: So in order to do that, tourism and travel to Waikiki on the Hawaiian island of Oahu needs to return in full force, including our guests from Japan.

Portfolio.

So in order to do that tourism and travel to Waikiki on the Hawaiian Island of Oahu needs to return in full force, including our guests from Japan.

We are cautiously optimistic that the embassy suites, Waikiki will outperform our guidance, but we won't know that until most likely at the end of Q3 2022 as.

Speaker 3: As always, our guidance, our NOI bridge, and these prepared remarks exclude any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt refinancing, or repayments other than what we have already discussed.

As always our guidance our NOI bridge in these prepared remarks exclude any impact from future acquisitions dispositions equity issuances or repurchases for future debt refinancings or <unk>.

Payments other than what we have already discussed we will continue our best to be as transparent as possible and share with you.

Speaker 3: We will continue our best to be as transparent as possible and share with you.

Speaker 3: our analysis and interpretations of our quarterly numbers. I'll now turn the call over to Steve Center, our senior vice president of office properties, for a free-up date on our office segment. Steve.

Our analysis interpretations of our quarterly numbers I will now turn the call over to Steve Center, Our senior Vice President of office properties for a brief update on our office segment Steve.

Speaker 2: Thanks Bob. At the end of the fourth quarter, net of one beach, which remains under redevelopment, our office portfolio is stood at 93% least, at 8.5% expiring in 2022.

Thanks, Bob at the end of the fourth quarter net of one beach, which remains under redevelopment our office portfolio stood at 93% leased with eight 5% expiring in 2022.

Speaker 10: Our office portfolio is gaining momentum. In the fourth quarter, we executed 18 leases totaling approximately 130,000 rentable square feet, including approximately 31,000 rentable square feet of comparable new leases, with increases over prior rent of 32% and 45% on a cash and straight life basis perspective.

Our office portfolio is gaining momentum.

In the fourth quarter, we executed 18 leases totaling approximately 130000 rentable square feet, including approximately 31000 rentable square feet of comparable new leases with increases over prior rent of 32% and 45% on a cash and straight line basis, respectively.

Speaker 10: Approximately 37,000 rentable square feet of comparable renewal eases, but increases over prior rent of 6% and 10% on a cash and straight line basis.

Approximately 37000 rentable square feet of comparable renewal leases with increases over prior rent of 6% and 10% on a cash and straight line basis, respectively.

Speaker 10: Approximately 62,000 rentable square feet of non-comparable new visas, including deals with the top 100 law firm for approximately 26,000 rentable square feet in a Tory reserve. And the global technology company for approximately 17,000 rentable square feet at La Jolla Commons 1.

Approximately 62000 rentable square feet of non comparable new leases, including deals with a top 100 law firm for approximately 26000 rentable square feet at Torrey Reserve and a global technology company for approximately 17000 rentable square feet at La Jolla Commons one.

Speaker 10: Throughout our office portfolio, we have been employing multiple initiatives to drive off the C&R at growth, including renovating buildings with significant vacancy and or rollover, adding or further enhancing amenities at the project level.

Throughout our office portfolio, we have been employing multiple initiatives to drive occupancy and rent growth, including renovating buildings with significant vacancy and or rollover.

Adding our further enhancing amenities at the project level.

Speaker 10: Aggregating and white boxing larger blocks of space where there is scarcity.

Aggregating and white boxing larger blocks of space, where there is scarcity and.

Speaker 11: and approving our smaller spaces to be a new moving ready condition.

And improving our smaller spaces to be a new move in ready condition.

Speaker 11: We realize meaningful increases in occupancy and rent growth resulting from these initiatives in 2021, with additional increases realized or in process and Q1 as follow.

We realized meaningful increases in occupancy and rent growth, resulting from these initiatives in 2021 with additional increases realized or in process in Q1 as follows.

Speaker 11: In Bellevue, we have signed a process from the 18,000 Renable Square feet of expansions with another 12,000 Renable Square feet of new visas and expansions in least documentate.

In Bellevue, we assigned approximately 18000 rentable square feet of expansions with another 12000 rentable square feet of new leases and expansions in lease documentation.

Speaker 11: In San Diego, we have signed approximately 23,000 Renable Square feet of new leases and expansions, with another 19,000 Renable Square feet of new leases pending.

In San Diego, we have signed approximately 23000 rentable square feet of new leases and expansions with another 19000 rentable square feet of new leases pending.

Speaker 11: including this Q1 activity, we believe that our office portfolio is on track to absorb an additional 71,000 rentable square feet or nearly 2% of the office portfolio's available rent spreads. As a result, we believe that strategic investments in our portfolio will position us to continue to capture more than our fair share of that absorption at premium rents as office markets rebound. I'll now turn the call back over to the operator for Q&A.

Including this Q1 activity, we believe that our office portfolio is on track to absorb an additional 71000 rentable square feet or nearly 2% of the office portfolio and favorable rent spreads as a result, we believe the strategic investments in our portfolio will position us to continue to capture more than our fair share of that absorption at premium.

Rents as office markets rebound.

I'll now turn the call back over to the operator for Q&A.

Yes.

Speaker 1: Thank you. As our reminder, Jack, take question. You'll need to press star one on your telephone to withdraw your question. Press the palm key. Please stand by. We can pause the Q&A rock.

Thank you as a reminder, Jack a question you will need to press star one on your telephone to withdraw.

Gary a question press the pound key please standby, we compile the Q&A roster.

Speaker 1: Our first question goes from Handel Tendu, so with Mugulo, you may proceed with your question.

Our first question comes from Sandoz and juice with Mizuho you May proceed with your question.

Speaker 4: Hey, good morning out there. Just early good morning to you guys.

Hey, good morning out there early good point do you guys.

Speaker 2: Ernest, a question for you. You mentioned that you bought back some stock in the fourth quarter. I don't think I know that. Oh, I bought back the stock. The company didn't buy back the stock. I bought the stock personally and or kind of till you. Right.

A question for you.

You mentioned that you bought back some stock in the fourth quarter I don't think I don't know how that.

I bought back the stock the company Didnt buyback the stock I thought the stock personally in affiliates right.

Speaker 4: Right, right, no, that's what I'm getting at. So I guess you bought, but the company did not.

Right now that's what I'm getting at I guess, you bought but the company did not.

Speaker 4: And so clearly you see a value proposition here. You talked about the stock being discounted. So maybe you can help me, or better understand the decision to raise the dividend versus perhaps buying back the stock here in light of the discount you highlighted.

And so clearly you see a value proposition here, you talked about the stock being discounted as well maybe you can help me.

Alright, better understand the decision to raise the dividend versus perhaps buying back.

The stock here in light of the discount you highlighted.

Speaker 2: You know, and this is something that is discussed in depth because as a of our reach side, we're on the smallest side relative to the absorption of the cost of being public.

And this is something that is discussed.

In depth because.

All of our REIT size.

On the smaller side relative to the absorption of the cost of being public. So there is no emphasis whatsoever on becoming smaller and reducing our capacity to make acquisitions and grow thats why I buy the shares personally I would love to see a path.

Speaker 2: So there's no emphasis whatsoever on becoming smaller and reducing our capacity to make acquisitions and grow. That's why I buy the shares personally. I would love to see a past or strategy for American assets trust to have more assets on its balance sheet, more income from all these additional assets, and spread the overhead of being public over these additional assets. That's the law.

Our strategy for American assets Trust to have more assets on its balance sheet.

<unk> income from all these additional assets and spread the overhead of being public over these additional assets that's the logic.

Speaker 4: No, I appreciate that or anything. So I certainly appreciate the comments there. But then also on the leverage, Bob, maybe you can help us understand you outline getting to that mid-five level. But I don't think you outlined a timeline. So any updated perspective there is that something we can expect by next year in light of perhaps some of the delayed recovery in certain parts of the portfolio.

No I appreciate that and I can tell.

Certainly.

The comments there, but then also on the the leverage Bob maybe you can help us understand you outlined getting to that mid five.

Level, but I don't think you outlined a timeline so any any updated perspective, there that's something we can expect by.

Next year in light of perhaps some of the.

Delayed recovery.

Certain parts of the portfolio.

Speaker 3: Yeah, Handel, I can't put a date on that, but it's really the ebidot that has temporarily gone down is really result of COVID. And so as soon as we can get white-key-key beachwap, or beachwap back with the M-disease suite.

Yes.

I can't put a date on that but its really the EBITDA that we that is temporarily gone down is really a result of COVID-19 and so as soon as we can get at Waikiki Beach Walk Beach walk back with the embassy suites.

Speaker 3: and have our Japanese guests return to the island. I think you're gonna see a significant growth. I think you're gonna see a significant growth this year as it is, and I think we have a good shot at outperforming if those things happen, which will increase our EBITDA and start working our net debt to EBITDA back down. But we also need to, I mean, I think this whole COVID environment, there has been a repricing on the retail side.

And have our Japanese guests return to the island.

I think youre going to see a significant growth I think youre going to see a significant growth. This year as it is and I think we have a good shot at outperforming if those things happen, which will increase our EBITDA.

To start work at our net debt to EBITDA back down, but we also need to I mean, I think this whole COVID-19 environment. There is has been a repricing on the retail side, but like I mentioned on the <unk>.

Speaker 3: But, just like I mentioned on the script, these cells have been strong, cells continue to improve, but we gotta see more on the retail side as well.

Grip the sales have been strong sales continued to improve but we.

We got to see more on the retail side as well.

Speaker 4: You know, if you're in a free-tech environment, maybe a comment on pricing power overall in the portfolio, certainly a differentiator amongst the asset classes we look across streets. Can you compare and contrast the pricing power across the key corridors of the portfolio, apartment, office, open-air centers? And do you think that'll be enough in the near-term asset that the rising cost, the inflation that we're saying? Okay.

Fair enough.

Maybe a comment on tightening power overall in the portfolio.

French yater amongst the asset classes, we look across Reed.

Can you compare and contrast the.

Pricing power across the key corridors of the portfolio apartment office open air centers and do you think that'll be enough in the near term to offset the rising costs.

Notwithstanding.

Speaker 2: You know, somehow or other, we've got a bad connection, Handel. Is there something you could do, maybe, step back a little bit from the microphone and repeat the question? Because it's not coming through. Hi, follow-up, is that better?

Somehow or other but we've got a bad connection handout is there something you could do maybe step back a little bit from the microphone and repeat the question because it's not coming through.

I apologize is that better.

Speaker 4: That's better, yeah, thank you. Okay, anything can be better. Other great questions. Well, I was hoping for some comments on pricing power across the portfolio. Certainly a key differentiator amongst the asset classes. I was hoping you could compare and contrast the pricing power across the key corridors of the portfolio apartments off this shopping center. If you think that'll be enough to offset the near term rise in cost and inflation. Thanks.

That's better. Thank you, okay anything can be better.

Well I was hoping for some comments on pricing power across the portfolio certainly a key differentiator amongst the asset classes.

I was hoping you could compare and contrast, the pricing power across the key corridors. The portfolio apartments office shopping centers. If you think that'll be enough to offset the near term rise in cost and in place.

Speaker 2: That's a very good question. It's something that we can think about frequently. First of all, as Bob pointed out, retail is getting repriced to some extent. Our retail will do as well as anybody retail by definition now is being as soon affected by our stock. Our residential strong, really optimistic that we're going to have a very good year in residential.

Sure. That's a very good question and it's something that we should think about.

Frequently first of all as Bob pointed out retail is.

Getting repriced to some extent at.

Retail will do as well as anybody.

<unk> by definition now.

It's been affected.

Our residential strong I'm really optimistic that we're going to have a very good year.

Speaker 2: And office Steve went through the fact that an outline of facts that our office properties are in the past of growth.

Residential and office, Steve went through.

The fact that.

And outline the fact that our.

<unk> properties are in the path of growth.

Speaker 2: We're improving the immunization of words which he has taught me. And we're preparing offices so that when the smaller tenants want to occupy, they can occupy it more quickly.

Improving monetization award, which he has taught me and we're preparing offices so that when the smaller tenants want to occupy they can occupy more quickly. So there is because of our offices in the path of growth, we're optimistic that it's going to be a.

Speaker 2: So there is because of our office in the past, I've grown, we're optimistic that it's going to be a significant contributor to it.

<unk> contributor to the growth of the company and of course, La Jolla Commons is under construction and that could add significantly.

The property in San Francisco, we're repositioning Portland is completed there's no lease on it yet.

Speaker 2: You know, it's all good property and if anybody can make it, our properties can do equally as well as the market. And I'm cost.

It's all about the product.

Property and if anybody can make it.

Our properties can do.

Really as well as the market and I'm confident.

Speaker 2: not and hopeful is not confident that we will improve.

If not I'm hopeful it's not confident that we will outperform the market.

Speaker 3: Hey, hey, Handel. Let me just add to that too, is that, you know, in the supplemental, we talk about the leasing spreads.

Hey, Tien Tsin, let me, let me just add to that too is that in the supplemental we talk about the leasing spreads.

Speaker 3: And if you look on a comparable basis, our cash basis percentage change over the prior red on the leases we did.

On new leases and if you look.

On a compare comparable basis or cash basis percentage change over the prior rents on the leases we did.

Speaker 3: For retail, it's down 6% on the cash basis, but on a gap basis, it was 5.2% positive. So they had some free rent initially, but once it's straight line over the term, obviously, it's a positive 5.2%.

For retail was down 6% on a cash basis, but on a GAAP basis. It was five 2% positive. So they had some free rent initially, but once it's straight line over the term obviously, it's a positive five 2% on the office sector is strong $17.

Speaker 3: on the office sector, it's strong. 17, 18% in a cash increase, cash basis percentage change over the prior rent, and on a gap basis, it's like 26, 27%. So, I think we're in the right exactors. I think we got the right product. It's just the retail is a little bit slower. And Steve would agree we had that fun management.

18% in a cash.

Increase cash basis percentage change over the prior rents and on a GAAP basis, it's like 26, 27%. So I think we're in the right sectors I think we got the right product. It's just.

Yes.

The retail is a little bit slower and Steve would agree we have excellent management.

Sure.

Wonderful alright, guys. Thank you so much.

Speaker 2: Thank you, Eddell. Thank you for your continued interest. Hope to see you sometime soon.

Thank you <unk>. Thanks for your continued interest and hope to see it sometime soon.

And why.

Speaker 1: Thank you our next question comes from Todd Thomas and Keebank. You may proceed with your question.

Thank you. Our next question comes from Todd Thomas with Keybanc. You May proceed with your question.

Speaker 5: I thought I ate good morning. Hi, Harry. So a couple of questions on some of the segments as it pertains to guidance. You know first can you talk a little bit more about the mixed-use segment? You know the guidance you discuss.

Hi, Good morning, Hi, how are you.

So a couple of questions on some of the segments as it pertains to guidance.

First can you talk a little bit more about the mixed use segment.

Guidance you discussed.

Speaker 5: Sounds like there's some uncertainty, but perhaps also some conservatism embedded in the forecast. I was just wondering if you could maybe elaborate a little bit more around bookings and what the guidance translates into for Rev Par Growth throughout the year in 2020.

It sounds like there is there is some uncertainty, but perhaps also some conservatism embedded in the forecast and I was just wondering if you could.

Maybe elaborate a little bit more around bookings and what the guidance translates into for Revpar growth.

Speaker 2: You know Todd, that's probably the most difficult part of the whole portfolio to predict what's going to happen because we don't know what's going to happen to the virus. We don't know whether the Japanese tourists will return. We don't know what the governor of Hawaii is going to do to encourage or discourage tourism, but the properties we own are in first-class shape.

The year end 2002.

Todd that's probably the most difficult part of the whole portfolio to predict what's going to happen because we don't know what's going to happen to the virus, we don't know whether the Japanese tourists will return.

Don't know what the governor of Hawaii is going to do to encourage or discourage tourism.

The properties, we own our first class shape.

Speaker 2: They're simple. And so it's not a question of if they return. It's a question of when they return.

They are.

They're simple and so it's not a question of if.

They return it's a question of when they return and it's the wind that we find difficult to quantify do you want to add.

Speaker 3: Thanks for the question. As we mentioned, our guidance for that same-store mix use is 15% increase.

On something Bob.

So so Todd thanks for the question, yes. So so as we mentioned our guidance for that same store mixed use is 15% increase.

Speaker 3: which is three cents of approximately three cents of FFO per share. We rely heavily on our Outrigger team that has the boots on the ground out there. We're in contact with our general manager and our team out there. So we know what's going on. We know the data. In fact, we're visiting this coming March face to face with everybody.

Which is <unk> approximately <unk> <unk> per share we rely heavily on our outrigger team that has the boots on the ground out there.

We are in contact with.

Our general manager and our team out there. So we know what's going on and we know that that in fact revisiting.

This coming March face to face with everybody. So that really is the upside in like Ernest mentioned.

Speaker 3: So that really is the upside in like Ernest mentioned, you know, the return of the Japanese gas is really important. But if that portion is delayed, we're seeing even strength on the US, West, and US East side.

The return of our Japanese guests is really important but if that if that portion is delayed we're seeing even strength on the U S west and USC side.

Speaker 3: Let me give you a quick update on the embassy suite so tell. And so what's interesting is that the paid occupancy for the month of December was 86%. What we've shown on a quarterly basis, it was 73% average for the fourth quarter, but it really was strong in December . Our paid ADR average daily rate.

Let me give you a quick update.

The embassy suites hotel and so what's interesting is that the pay to occupancy for the month of December was 86% what we've shown on a quarterly basis. It was 73% average for the fourth quarter, but it really was strong and December are paid.

Our average daily rate.

Speaker 3: for the average quarter or for the fourth quarter average was 215. But in December , it spiked up to 350. That's a strong month.

For the average quarter or for the fourth quarter average was 215 budget in December it spiked up to $3 15.

Speaker 3: And then Rev Par also increased similarly to that 315 as well, versus 215 on an average.

It is a strong month.

And then Revpar also increased similarly to that.

<unk> 15, as well versus $2 15 on an average.

Speaker 3: And as of mid-January, Japan was experiencing its six ways of COVID, this time around largely from Omicron. And Japan is better prepared today with 30% more capacity in hospitals and a more flexible home care recommendation. For all but the serious cases of infection.

And as of mid January Japan was experiencing its six wave of Covid. This time around largely from omni chron.

And Japan is better prepared today with 30% more capacity in hospitals in a more flexible homecare recommendation for all but the serious cases of infection.

Speaker 3: Vaccination data, as of yesterday, when I just checked it, was 80% of Japan's total population was partially vaccinated, and 79% was fully vaccinated with the second shot.

Vaccination data as of yesterday, when I just checked it was 80% of Japan's total population was partially vaccinated and 79% was fully vaccinated with the second shot.

Speaker 3: And the Japanese government is speeding up its rollout of booster shots and shortening the interval between second and third shots. So they've made positive strides in the vaccination rates since last July . And we are hopeful that, you know, they too will get through this as we have and we look forward to, you know, them back. And that's really the key to, to, uh, outperforming, uh, on the skydend.

And the Japanese government is speeding up its rollout of booster shots and shorten the interval between second and third shots. So they have made positive strides in the vaccination rates since last July and we are hopeful that they too will get through this as we have when we look forward to walk them back and that's really the key to two.

Outperforming.

On this guidance.

Speaker 5: I'm hopeful. I mean, you know, the fourth quarter exceeded your expectations. You know, you talked about half of that force sent Delta being, you know, the hotel half being retail. It seems like, you know, occupancy and NADR, you know, outperformed. Despite, you know, sort of Delta, Omicron. You know, how are bookings, you know, trending through the spring and some.

That's helpful.

The fourth quarter exceeded your expectations, you talked about half of that 4%.

Delta being the hotel half being retail scene.

It seems like occupancy and ADR.

Perform despite sort of delta on micron.

Yes.

How are bookings.

Trending through through the spring and summer.

Speaker 3: Because of the Omnichron, they're still slow. And we expect them to pick up for the March spring break. That's always a popular destination. So they're not like pre-COVID at this point in time, but we are seeing the growth. I don't have the exact number in front of me.

Because because of the omni kron theres still slow.

And we expect them to pick up for the March spring break that's always a popular destination.

So they're not like pre COVID-19 at this point in time, but we are seeing the growth I don't have the exact number in front of me.

Speaker 5: Okay, and then shifting over to the retail segment and apologies if I missed this, but just trying to understand the down 5% same-storner high growth forecast for 22, a little bit better. What's the impact year-to-year from out of period collections that were recognized during 21? And do you have that number for the fourth quarter? Just trying to get sort of a better run rate heading into the new year for that segment.

Okay, and then shifting over to the retail segment and apologies if I missed this but just trying to understand the down 5% same store NOI growth <unk>.

Forecast for 'twenty, two a little bit better what's what's the impact year over year from out of period collections that were recognized during during 'twenty, one and do you have that number for the fourth quarter, just trying to get sort of a better run rate heading into the new year for that segment.

Speaker 3: Yeah, I don't have it for that segment, but I can tell you that our change in accounts receivables, which is where we book the collections from our down approximately 600,000 in the fourth quarter. We were about a million of collections in the third quarter from prior quarter collections.

Yes.

I don't have it for that segment.

But I can tell you that our change in accounts receivables, which is where we book the collections from are down approximately 600000.

In the fourth quarter, we were we were about $1 million of.

Sections in the third quarter.

Prior quarter collections.

Speaker 3: And in the fourth quarter, that was down to like about, you know, 400,000 or less. So it wasn't...

In the fourth quarter that was down to like about 400000 or less so it wasn't that meaningful.

Speaker 3: and then going into 2022, terms of our guidance, we have nothing in there for prior collections. Every time we do a desplotification, we try to go back and get as much as we can at that point in time, and then it's generally in a deferral that we will build and collect in the current month.

And then going into 2022 terms of our guidance we have nothing in there for.

Prior collections.

Sure.

Every time, we do a lease modification, we try to go back and get as much as we can at that point in time and then it's generally in a deferral.

That we will bill and collect in the current month.

Speaker 5: Okay, that's helpful. And then just last question on office.

Okay.

Helpful. And then just last question on on office.

Two things here, if we could can we get an update at all around the leasing or pre leasing for for the tower in La Jolla, and then can you also provide an update in the office portfolio around the.

Speaker 5: all around the leasing or pre-leasing for the tower at La Jolla. And then can you also provide an update in the office portfolio around the late 22 aspirations that you have, I think, the MWARE and auto desk. If there's any updates there and any sort of activity that we should be thinking about, late in the year, heading into 23. I think Steve Shenhandle that he's in somebody's role with one hand.

The late 'twenty two expirations that you have I think Vmware and Autodesk, if theres any update there and any sort of.

Activity.

We should be thinking about late in the year heading into 'twenty three.

Speaker 11: I think Steve should handle that piece in some middle involved with it. There's one analyst, Steve. Sure. Are you scared? Well, no, no. You addressed power three. We've got activity, but nothing to report at this point. But the market remains very strong. It's tight for big blocks of space.

I think <unk> handle that he's intimately involved with one analyst deeply sure.

<unk>.

You address power three we've got activity, but nothing nothing to report at this point.

But the market remains very strong it's tight for big blocks of space and there are a number of large users that are looking long term asset aggregating space. So.

Speaker 11: And there are a number of large users that are looking long-term at aggregating space. So we're still very bullish on tower three and the eventual outcome there. With regard to the 22 roll over, we had come to terms with Autodesk on that second floor renewal and we're favoring that deal right now. And then we expect to get an RFP from VMware in the next week or two.

We're still very bullish on tower, three and the eventual outcome there with regard to the 'twenty two rollover.

Come to terms with Autodesk on that second floor renewal and we're papering that deal right now and then.

We expect to get an RFP from Vmware in the next week or two to.

Speaker 2: to engage in that discussion. That market where Australia comments is is very strong. We did find it. I just nodded it.

To engage in that discussion that market, where we're Jolla Commons is very strong.

Hi.

It's not an adjoining property but.

Speaker 2: 200 yards away and we got out there by 25

A few hundred yards away.

We got outbid by 25% so.

Speaker 2: And we reached for it too because that is a great mark.

And we reached for it too because that is a great market.

Speaker 2: So it's a strong market. I don't know what the outcome will be. It's far as pleased.

So it's a strong market I don't know what the outcome will be as far as leasing goes but.

Speaker 2: based on the activity in the area of the outcome ought to be positive.

Based on the activity in the area.

Some are pretty positive.

Okay alright, thank you.

Thank you thanks, Doug.

Speaker 1: Thank you all. Nice question comes from Christchurch with Enkel America. You may proceed with your...

Thank you. Our next question comes from Craig Schmidt with Bank of America proceed with your question.

Speaker 6: Thank you. I just want to talk a little bit about the increase in 10-day improvements in leasing commissions in office. I assume it's related to the new level of...

Thank you.

Could you talk a little bit about the increase in tenant improvements leasing commissions and office I assume it's related to the new level.

Speaker 6: the new leases, but as you can comment, especially on Trend for 2022 on those measures.

The new leases, but if you could comment.

Especially on trend for 2022.

Our measures.

Speaker 11: Yeah, and I'm just looking at the numbers, you know, overall, and I'm focused on comparable new leases

Okay.

Yes.

I'm just looking at the numbers overall and I'm focused on.

Comparable new leases in 'twenty, one if you look at the outcome, we increased NOI on those deals by $9 12.

Speaker 11: in 21 if you look at the outcome we increase that Y on those deals by $9.12.

Speaker 11: or about 22% over the rents prior to in place. And if you just apply a fire cap to that increase, it's worth about $182 a foot. So in terms of investment, for example, on the renovations we did, a Tory reserve and both Tory Plaza and Northport one, I think.

Or about 22%.

The rents prior in place and if you just apply a five cap to the to that increase and it's worth about 192 Bucks a foot so and.

In terms of investment for example on the renovations we did at Torrey Reserve in both Torrey Plaza North Port One I think you spent about $15 a foot on those renovations and achieved outsized.

Speaker 11: spent about $15 a foot on those renovations, and achieved out size increases in NOI, as well as lease them quickly. The big block initiative is paid off, as evidenced in due for by the top 100 law firm lease that we did in 26,000 feet in Northport 1. So our average, our way to average, TI is on new leases last year with $50 a foot. You're touching spaces that in sub respects, the lighting package hasn't changed in 20 years.

Creases in NOI as well as lease them quickly the big block initiative has paid off.

Evidenced in Q4 by the top 100 law firm lease that we did in 2006 thousand feet in North Port one so our average weighted average Ti is on new leases last year was $50 a foot.

You're touching spaces in some respects the lighting package hasnt changed in 20 years, so youre going comparable it likes to new.

Speaker 11: And I do want to add yourbuyapons search of vehicles atrek Forest Facebook background page and

Speaker 11: a new lighting package, LED. And so that's a $10 foot swing right there. You're also saying less.

New lighting package.

And so that's a $10 swing right there youre also saying less.

Speaker 11: full-drop ceiling and more a combination of cloud ceiling and open ceiling, which requires rigid duct distribution of air. And that's another $10 a foot to a TI package. So we're seeing higher NTIs and we're also seeing really big co-investment on part of the tent.

We'll drop ceiling and more a combination of cloud ceiling and opened ceiling, which requires <unk>.

Distribution of the air and that's another $10 a foot to a ti package. So we're seeing higher Ncis and we're also seeing really big co investment on the part of tenants.

Speaker 11: So while RTI contribution is up, our tenants and some respects are putting two Xs into the space.

While our Ti contribution is up our tenants in some respects, we're putting two accidents in the space.

Speaker 11: and that even more in certain cases. So, yes, the investments are bigger, but the increased N.O.I. that we're achieving and the quicker lease-up we're achieving, way more than common safety additional costs.

And even more in certain cases, so yes, the investments bigger by the increase in NOI that we're achieving in a quicker lease up we're achieving weighing more than compensate for the additional costs. How would you describe the market that our offices are in relative to what.

Speaker 2: Hello, how do you describe the markets that our offices are in relative to?

Okay.

No the losses.

Speaker 11: I would talk about our assets within those markets. And I touched on renewing auto desk, and it's a great customer of ours, and it's a great building, and we achieve it all, I'll follow win-win outcome in a market.

I would I would talk about our assets within those markets and I touched on.

Renewing autodesk and it's a great customer of ours, and it's a great building and we achieved what I'll call a win win outcome in a market.

Speaker 11: But when you have exceptional assets in markets, even in this choppy around you.

But when you have exceptional assets and markets, even if it's choppy around you.

Speaker 11: The outcomes are good because people just want to be here.

The outcomes are good because people just want to be here.

Speaker 11: So that applies to Bellevue, that applies to San Francisco. And even our holdings in Portland, especially in Lloyd, we're full, essentially, at Lloyd. So we've done very well there. And then San Diego, it's really fun right now because we've made these investments, and I mentioned, Tori Reserve. And we're seeing the results right now. It's a lot of fun.

So that that applies to belvieu that applies to San Francisco and even our holdings in Portland, especially at Lloyd.

We are.

Paul essentially at Lloyd So we've done very well there and then San Diego.

It's really fun right now because we've made these investments I mentioned Torrey reserve and.

We're seeing the results right now is a lot of fun so.

Speaker 11: Yeah, the unique properties were in good markets. Even in the markets that are a good shoppy right now, Portland and San Francisco were performing really well. I'll say their management teams take really good care of our customers. And that's a huge part of success, especially in renewing tennis. But you know, on the new leasing front, our managers are very customer service oriented, engaging in and they do a terrific job.

We have unique properties, we're in good markets, even in the markets that are a bit choppy right now Portland and San Francisco.

Perform really well I'll say that our management teams take really good care of our customers and that's a huge part of success, especially in renewing tenants, but even on the new leasing front, our managers are very customer service oriented engaging and they do a terrific job.

Speaker 3: Let me add to what he's saying. I think the first part of your question was about the operating cat-backs.

Craig Let me, let me add to what Steve said is that I think the first part of your question was about the operating Capex.

Speaker 3: which drove down our undevelopable for distribution this quarter. And really, without relates to is a one-time TI reimbursement for a largest tenant at that moment.

Which drove down our funds available for distribution this quarter and really what that relates to is a one time.

Ti reimbursement for our largest tenant at landmark.

Speaker 2: And that's what drove that down. That's been out there for some time and we finally got the invoice. So with the police, I have that telling me that just as a matter of information, that kind of spanned, I think, another hundred million.

And that's what drove that that's been out there for some time and we finally got the invoice.

We're pleased to have that talent and just as a matter of information that tenant.

I think another $100 million of their own.

So yes.

Speaker 2: We're investing wisely and I know you're very familiar with all the other markets or in but San Diego is on fire. I've been around here for a lot of years and I've never seen the accounts. San Diego economy is strong as it is today.

We're investing wisely and.

No you are very familiar with all the other market sort of a San Diego is on fire I've been around here for a lot of years and I've never seen the account San Diego economy as strong as it is today.

Biotech lab space, it's amazing.

We're in the right place at the right time.

Speaker 6: Thank you for that. And then just one small follow up. The lower occupancy at Del Monte Center, is that due to the previous vacant forever 21, or is that smaller, especially businesses driving to the ADG.1% out?

Thank you for that and then just one small follow up.

The lower occupancy at del Monte Center is that due to the previous peak in forever 21 or is that smaller specialty businesses driving the atg, 1% occupancy.

Speaker 2: two vacancies there. You know, one is Macy's Abandoned, the furniture store, and the other is Forever 21, and we're doing our best to replace those tenants. But of all the properties we have, whereas proud of Del Monte is any other, but it does not have enough population around it to really make it into what we would want.

There's two vacancies there one is macy's abandoned the furniture store and the other is forever 21, and we're doing our best to.

Place those tenants, but of all the properties, we out whereas proud of del Monte as any other but it does not have enough population of rapid to really make it into what we would like it to be but it's all it can be.

Speaker 2: But it's all it can be, but it can, all it can be is limited by the fact that the population is not as dense as it should be in that area. Great. I think, I mean, I guess that's a better position being than have the...

It can all it can be is limited by the fact that the population is not as dense as it should be in that area.

Great I think I mean, I guess, it's a better position to be in that.

The specialty yet so hard.

You for that update.

Thank you Greg.

See you soon.

Speaker 1: Thank you our next question comes from Richard Hill with Morgan Stanley . You may proceed with your question.

Thank you. Our next question comes from Richard Hill with Morgan Stanley You May proceed with your question.

Speaker 7: Hey guys, there's Adam on. Hey, it's Adam on from Rich. Hope you guys are all well. And thanks for taking the question and appreciate the bridge earlier to kind of the guidance, you know, really, really helpful. Once I ask about kind of the mixed use asset,

Hey, guys. This is Adam on.

It's Adam on for Rich Hope you guys are all well.

And thanks for thanks for taking the question and I appreciate the bridge earlier to kind of the guidance really really helpful wanted to ask about kind of the mixed use asset.

Speaker 7: It's just kind of in terms of kind of recovery to pre-COVID-NY. I think your other property types, if they didn't recover in 21, should kind of recover to 2019 levels and exceed those results. Just kind of wondering what you kind of think about recovery to pre-COVID-NY and mixed use, whether that's a 23, 24 event, and just kind of how you think about that.

Just kind of in terms of kind of a recovery to pre COVID-19 NOI I think your other property types now if they didn't recover in 'twenty, one should should kind of recover to 2019 levels.

Feed those results.

I'm kind of wondering what.

What are you kind of think about recovery to pre COVID-19 NOI and mixed use whether that's a 'twenty three 'twenty four events, it's kind of how you.

Think about about that.

Speaker 2: You know from what I read, the American tourist is anxious to travel.

You know from what from what I read the American.

Tourists.

Speaker 2: And right now, we just don't know when. But I think when this thing opens up, people are anxious to get out and have vacation. And I suspect maybe I hope for unprecedented demand for our hope for I improv.

Anxious to travel.

And right now we just don't know when.

Think when this thing opens up people are anxious to get out and have vacation I suspect.

Maybe I hope for.

Unprecedented demand for our <unk>.

Speaker 2: that people are anxious to travel, it's the entire stay at home. So we don't know when and we don't know what extent. And I'd like to tell you that we do, because you probably know as well as I, you read the newspaper.

<unk> properties.

People are anxious to travel as sick and tired of stay at home. So we don't know when and we don't know what extent and I would like to that we do because we don't you probably know as well as you read the newspapers as well as we do we're hopeful to see a significant outperformance beginning in the third quarter, but again thats.

Speaker 2: We're hopeful to see a significant health performance beginning in the third quarter. But again, let's get rid of this code, but it's not anything you can predict. It's not something you can hope for, and it's something that we honestly expect that we don't know.

Yes.

Let's get rid of this COVID-19 not anything you can predict it.

So you can hope for and it's something that we.

Honestly expect but we don't know the timing.

Speaker 7: Okay, that's all really helpful. Thank you. I just want to ask about acquisitions. Recognize it's made to a larger deal last year. I guess what's the appetite today for future acquisitions, further acquisitions, given the debt levels, but also given that EBITDA is obviously recovering. So your Ntheti Bidal will just look better organically and recover organically.

Okay. That's all really helpful. Thank you I just wanted to ask about the acquisitions.

And I, just kind of mid to larger deals last year.

I guess kind of whats the appetite today for future acquisition further acquisitions.

Given the debt levels, but also kind of given that EBITDA is obviously recovering right. So your net debt to EBITDA will just look better organically kind of recover organically.

Speaker 7: So what are the types of you focused on for acquisitions here? And what are you thinking there in terms of valuation and further acquisition?

So kind of what asset types that you're focused on for acquisitions here and kind of what are you thinking there in terms of valuation.

For further acquisitions.

Speaker 2: You couldn't have asked the question, which is more contentious or more internally debated than the question you just asked. I think that money costs today are modest compared to inflation. If you can borrow money at 3% or 4%.

You Couldnt have asked the question, which is more contentious are more internally debated than the question you just asked.

I think that money cost today.

Sure.

A modest compared to inflation.

If you can borrow money at 3% or 4%.

Speaker 2: and inflation is 7%, you know, the economy is paying you to take the money. If you can buy a property which will return more than the cost of the money, there is a creation. There is a great internal debate about net debt to e-bets up, and we've been examining those numbers very thoroughly. So if we found something that would, and the prices are...

Inflation of 7%.

Economy is aiming to take the money.

You can buy a property, which will return more than the cost of the money. There is accretion there is a great internal debate about net debt to EBITDA and we've been examining those numbers very thoroughly so.

Sure.

If we found something that and the prices are.

Speaker 2: The prices are not compelling. The prices are really high, so you have to find something that is below replacement cost that you can add to and increase the value. And that's what we've been successful at doing.

The prices are or.

Are not compelling the prices are really high. So you have to find something that is below replacement cost that you can add to and increase the value and that's what we've been successful at doing.

Speaker 2: And so we continue to exhort, explore all the possibilities, including the retention of our net debt fee, but including the entantsments of the shareholder value because of inflation, including the fact that all of our properties replacement cost is increasing dramatically.

And so we continue doing exhort explore all the possibilities, including the retention of our net debt to EBITDA, including the attachment to the shareholder value because of inflation, including the top of the fact that all of our properties replacement.

Cost is increasing dramatically.

Speaker 2: Jerry estimates that if we were to have to buy out La Jolla Commons today

Sure.

Jerry estimates, but if we were to have to buy out of La Jolla Commons to date.

Speaker 2: First is when we bought it at the bottom, bought the contracts out at the bottom of the...

Versus when we bought it at the bottom phosphate the contracts out at the bottom of the.

Speaker 2: Go ahead. But what's your point in my mouth? What have been up to 30% more? And what size of a contract? On $100 million. Under $30 million. So that's 30 million bucks. This is happening across our portfolio. It doesn't happen if the demand isn't there to compensate for the cost.

The Corona virus.

Go ahead.

But I think there's a 30 per lateral foot in my mouth would've been upwards of 30% more.

On what on what size of the contract on $100 million. So that's 30 million Bucks. This is happening across our portfolio. It doesn't happen if the demand isn't there to compensate for the cost, but this is happening across our portfolio and that's why I'm, so optimistic about the quality and.

Speaker 2: but this is happening across a portfolio. And that's why I'm so optimistic about.

Speaker 2: the quality and the position of the American Assets Trust portfolio. It's not only a great inflation edge, I think it's performance over the midterm will.

Position of the American assets Trust portfolio, it's not only a great inflation hedge I think its port format performance over the midterm will outpace inflation.

Speaker 7: got it and just kind of a problem you know by property type i mean is there more of an appetite for office rather than multi-family um... you know if you can kind of get the kind of power rink different property types you know what what would kind of be be first that you say bye

Got it and just kind of in terms of a property by property type I mean is there more of an appetite for office rather than multifamily.

If you could kind of get to kind of power rank the different property types.

What we are going to be first that you buy.

Speaker 2: I hate to tell you this, but our appetite is governed by greed. If we find there's an opportunity in office which we have in Belle-Due because we're very optimistic about that market, we did it. If we could find apartments which are now trading in the mid-3 cap where we could improve them. and oh-would starters.

I hate to tell you this but our appetite is governed by greed. If we find that there is an opportunity in office, which we have in Bellevue, because we're very optimistic about that market. We did it if we could find departments, which are now trading in the mid three cap, where we could improve them and.

Speaker 2: improve the returns, we do that if we could find retail that there was upside, we do that. So we have the advantage of looking at three project types in several markets and we're gonna do what we think enhances the underlying value of our stockholders at best.

Sure.

Improve the returns.

We do that if we could find retail that there was upside we do that so we have the advantage of looking at three product types in several markets and we're going to do what we think enhances the underlying value of our stockholders for our stockholders as best we can.

Speaker 2: So obviously the emphasis has been on office because we found a couple of office products. But at the same time, we're investing in our residential dramatically improving the properties we have. At the same time, we're looking at every opportunity we can for retail. So.

Obviously, the emphasis has been in office because we found a couple of office products, but at the same time, we're investing in our residential dramatically improving the properties. We have at the same time, we're looking at every opportunity we can for retail so.

Speaker 2: We've got our, whether I appeal, to find something that will add to the value of our shares and it ain't easy. The thing that's easy is to see that money costs are moderate in relation to inflation, but then you have to find a product that is not overpriced. So it's a creative. Thank you.

We've got our.

Alright.

Whether IPO to find something that will add to the value of our of our shares and it <unk> easy.

That's easy to see that money cost our rates are moderate in relation to inflation, but then you have to find a product that is not over priced and so it's accretive.

Got it thanks, Thanks for the time really appreciate it.

Thank you for your interest.

Speaker 1: Thank you and as a reminder that the question you'll need to press star one on your telephone. Our next question goes on time with CK with the most part when you've received it your question.

Thank you and as a reminder to ask a question you will need to press star one on your telephone. Our next question comes from Tim Willi with wells.

Wells Fargo. Please proceed with your question.

Speaker 8: Thank you very much. Wondering, I guess, a couple of questions. It's given the increased leasing activity that you saw in the fourth quarter. It drove your sign, but not opened, rent to more than double what was reported in the third quarter. Is, can you just talk about how much of that? No, thanks. Tammy, with some how rather than something the wrong with our speaker system here, if you kind of step back from your microphone, we might be able to hear you better, please. Okay, this that our.

Thank you very much.

Wondering I guess.

Couple of questions just given the increased leasing activity that you saw in the fourth quarter.

It drove your signed but not opened to more than double what was reported in the third quarter. I guess can you just talk about how much of that.

Tammy with somehow rather do something wrong with our our speaker system here, if you kind of step back from your microphone, we might be able to hear you better. Please.

Okay is this better.

Is that better we hope so.

Speaker 2: Okay. Not a good... Not a single person, though, Tammy. I can tell you that. Do it enough. Do it enough.

Okay.

Let me sneak in person and autonomy I can tell you that.

Speaker 8: Given the increased leasing activity in the quarter quarter that drove your sign but not open rents to more than double what you reported in the third quarter, I guess can you just talk about how much of that you expect to come online in 2022?

Good enough.

Given the increased leasing activity in the fourth quarter.

That drove your signed but not opened rents to more than double what you've reported in the third quarter. I guess can you just talk about how much of that you expect to come online in 2022.

Speaker 8: And then secondly, but related, are you generally delivering spaces to tenants on time given the supply and labor constraints in the market today?

And then secondly related are you generally delivering spaces to tenants on time, given the supply and labor constraints in the market today.

Do you want to handle that Steve.

Speaker 11: I'll go ahead, Jared. You should do that. You know, we're doing well in terms of timing because...

I'll, let <unk>.

We're doing well in terms of timing because.

Speaker 11: We're integrated from having in-house legal to having a really talented construction team. So we got on front of it. We don't work parallel paths while we're going through a transaction. So as a result, we come to lease execution. We typically have an approved plan that we can readily go into CD and we do everything we can to expedite the process. Because our tests...

We're integrated from.

Adding in house legal to having a really talented construction team. So we got out in front of it.

We work parallel pads, while we're going through a transaction. So as a result, when we signed the lease execution. We typically have an approved plan that we can readily go into Cds and we do everything we can to expedite the process.

Speaker 11: have time constraints and we take those on as our own. So we perform well. That being said, there are delays in permitting. There are delays in certain materials. With TANF that have an urgency to get in, we'll have them move in. And if we have a long lead time, I don't want a certain mill work. They'll move in and start operating. And then we'll do the mill work after they move in. So you make those kinds of moves to meet their needs to operate and give them the space they want. So we're adapting, but we do it really well.

Our tests.

Time constraints and we take those on as our own. So we performed well that being said there are delays in permitting there are delays.

Certain materials with tends to have an urgency to get in we will have that move in and if we have a long lead time item on certain millwork I'll move in and start operating and then we'll do the millwork. After they've moved in so you make those kinds of moves to meet their needs to operate and again on the space that they want so we're in that but we do.

Speaker 2: It's difficult, but we do as well as anybody I think that would be the way to present. I agree, agree.

Do it really well.

It's difficult, but we do as well as anybody I think that would be the way to phrase it would be great.

Speaker 3: No, it is not. The supply chain is strained and there are labor constraints, but you know, one of the points that we made and Steve has really brought to us is we instituted this program of spec suites. So I like to call those ready rooms and then as we found tenants, at least some of those faces it might have been adding one office or taking out one office. So we were able to adapt pretty quickly and you know, we had some inventory. So we've timing spent good for us.

No. It is not in the supply chain is strained and there are labor constraints, but one of the points that we made and Steve is really brought to us as we instituted this program of spec suites, so I'd like to call those ready rooms, and then as we found tenants the lease some of those spaces it might.

<unk> been adding one office or taking out one office. So we were able to adapt pretty quickly.

We had some inventory so we've timing has been good for us.

Speaker 2: It's all due immodesty. I think we have a great team with doing a great job. But it ain't easy. No.

So I'll do Immodesty I think we have a great team is doing a great job.

Speaker 8: I appreciate that. And then maybe following up on your discussion around your appetite to be a larger company, is what do you see as the best pathway to getting to the level that you feel you're maximizing your DNA cross? Is it just slow and steady or is there a bigger transaction that you see you could do to get there quicker, just wondering if you can give us your perspective on that and what kind of governing that?

Yes.

Okay. Appreciate that and then maybe following up on your discussion around your appetite to be a larger company.

You see as the best pathway to getting to the level that you feel you are maximizing.

Your G&A costs is it just slow and steady or is there a bigger transaction.

You see you can do to get there quicker just wondering if you could give us your perspective on that and what kind of governance.

Speaker 2: If our stock was fairly priced, that would be a path to be larger. But if the price of our stock today, that's not a path. If another path would be to find somebody who would like to throw their lot in with ours, that ain't easy either. So I would say the ultimate outcome is slow but steady win-to-risk

If our stock was fairly priced that wouldn't be a path to be larger.

Price of our stock today, that's not a path.

Another path would be to find somebody who would like to draw your locked in with ours at either so I would say the ultimate outcome is slow but steady rate.

Speaker 2: by piece by piece you can see that when we issued that $500 million of bonds we were a year early but now interest rates are moving up but that fixed rate has a lot of that fixed rate on that bonds for 10 years has allowed us some flexibility.

Where we are.

Bye bye.

<unk> you can see that when we issued that $500 million.

<unk> bonds.

We were a year early but now interest rates are moving up but that fixed rate is a lot of that fixed rate on that bond Street 10 years has allowed us some flexibility.

Speaker 2: We recently extended a bank loan and locked in the rate. So it's slow but steady when the rate, we start, when we started this company, as a public entity, it had $1.7 billion in assets.

Hi.

We recently extended.

Bank loan and locked in the rates, so it's slow but steady wins the race we start when we started this company.

Public entity and had $1 $7 billion in assets now I estimate our underlying value as well, 5% to $6 billion.

Speaker 2: Now I estimate our underlying value is a five to six billion. So, and we didn't do anything dramatic. You know, if we had our nose down and our <expletive> off and just look at the deal and somehow we find a way to enhance shared over the value of the inconsistent.

So and.

We didn't do anything dramatic.

Sure.

We had our our nose down on our <expletive> off and just.

Looking at deals.

How do we find a way to enhance shareholder value.

Speaker 2: is that the stock market doesn't seem to recognize that. So the way I put it, I can buy real estate, cheaper and Wall Street than I got on Main Street. When we can buy, when the reverse is true, we'll be able to take advantage of that opportunity hopefully for the benefit of all our stockholders. So stick with us.

Inconsistency is that the stock market doesn't seem to recognize that so the way I put it I can buy real estate teacher on Wall Street and again on <unk>.

Main street, when we can buy.

The reverse is true we'll be able to take advantage of that opportunity hopefully for the benefit of all of our stockholders so stick with us.

Speaker 8: Okay, and then maybe just a follow up on that in an earlier comment.

Okay, and then and then maybe just a follow up on that in an earlier comment.

Speaker 8: on the subroper transactions that you said, you know, supportive you that you're trading at a discount to any B. I'm just wondering if a team can provide some more specific data points to help give us a sense for capital and your markets for your different asset types.

And that the broker transactions.

Said support a view that you're trading at a discount to any of the.

I'm just wondering if the team can provide some more specific data points to help give us a sense for cap rates in your markets.

You have different asset types.

Speaker 2: That's a really good question. And they're asking, is there a guidance available for the NAD law? You're not coming through clearly. That's why I'm translating.

That's a really good question.

They are asking is there.

<unk> available for you.

You're not coming through clearly thats why im translating them. Thank you.

Speaker 2: Thank you. Thank you. Is you are you plighting on guidance for the NEV? I can tell you that by seat is a pants. I see who we've got to pay. And then I extrapolate that to what we own. And I said, oh my God, what a disconnect. Now, Bob, do you have anything that is concrete? Yeah, we haven't published that for the last two years during COVID, but the intent would be is to issue an NAV.

Are you planning on guidance for the <unk> I can tell you that by seat of the pants ICU, but we've got it and then I extrapolate that to what we own and I know my God. What a disconnect now Bob you have anything that is concrete yet.

We haven't published that for the last two years during the Covid, but.

The intent would be is to issue an NAV.

Speaker 3: because we are a diversified re-tried to help people understand how we're thinking but it's something to board approval and you know we need to look at it and discuss it but we're we feel good about where the NAB is last time we looked at it and you know we look forward to going through that process it would probably be at the beginning of the third quarter if apartments are selling it

Because we are a diversified REIT try to help people understand how we're thinking but is subject to board approval.

We need to look at it and discuss it but we're we feel good about where the NAV is last time, we looked at it.

We look forward to going through that process. It would probably be at the beginning of the third quarter.

<unk> or selling it at three and a half cap.

Speaker 2: What are our apartments worth? If office, where we're improving them and grants are going up dramatically and we're having to find particular properties where we can improve them, what are our office properties where some of which are?

What are our apartments words, if office, where we're improving them and.

And rents are going up dramatically and we're having to find.

Particular properties, where we can improve them.

Speaker 2: Our retail, even retail is trading at cap rates that don't seem to discount the, what's affecting retail. So I'd love to buy some more retail, but there's no farsens out there. So you look around and say, this is what the market tells you. And then we look what we have, and there's this giant disconnect.

Office properties worth some of which are stellar.

Our retail even retail is trading at cap rates that don't seem to discount.

What's affecting retail so I'd love to buy some more retail theres not theres no bargains out there. So you look around and say this is what the market tells you and then we look what we have and there is this giant disconnect.

Speaker 8: Okay, it makes sense. I look forward to the updated NEV. And then just one last question if I could. I know you have cash on the balance sheet. We've got $140 million today. Is that your mark at this point forward development spending in 22? Bob, maybe just if you could give us some color on the sources and uses of capital underlying your 2022 guidance.

Okay makes sense I look forward to updated Nev and then just one last question if I could I know you have cash on the balance sheet of about $140 million today.

That earmarked at this point for development spending in 'twenty to Bob maybe just if you could give us some color on the sources and uses of capital underlying.

2022 guidance.

Speaker 3: Yeah, so we have about 140 million of cash in the bank today. And we got a $400 million line of credit that has not even been touched. So yeah, I mean, in theory, that cash would be used for finishing low end comments, finishing our renovation of one beach. So one beach is expected to be finished in the third quarter of

Yes, so we have.

About $140 million of cash of the bank today, we got for.

$400 million line of credit.

It has not even been touched so yes, I mean in theory, we're that cash would be used for finishing la Jolla comments.

Finishing our renovation of one so long beach is expected to be finished in the second and the third quarter.

Speaker 3: And we expect to have revenue coming in by July , by the third quarter sometime in 23. And we're whole, and again, that's something that's eliciting, but we feel good about that renovation. And then LaHoye Common Street, we're hopeful to have that completed.

'twenty two.

And we expect to have revenue coming in.

By July by the third quarter, some time in 2003.

And again that's subject.

Subject to leasing, but we feel good about that renovation and then the Jolla Commons three.

We're hopeful to have that completed.

Speaker 3: And by the end of the second quarter in 23 with revenue coming in, the beginning of 24. Again, that's based on what we know in the marketplace. Nothing's been committed or signed at this point in time. But we don't think that is unrealistic. But we'll see.

In the by the end of the second quarter in 'twenty three with revenue coming in.

At the beginning of 'twenty four again thats.

Based on what we know in the marketplace and nothing has been committed or signs at this point in time.

We don't think that is unrealistic.

Speaker 2: If you want somebody to manage your cash, you couldn't find anybody that better than Bob Barton. He is very cruel. It is analysis of how every penny is spent. And we do our best to spend it wisely.

But we'll see.

If you want somebody to manage your cash you couldnt find anybody better than ballpark.

Keith is very portable and his analysis of how every penny is passed and we do our best to spend it wisely.

Okay, great. Thank you so much for your time.

Speaker 1: Thank you and I'm not showing any further questions at this time. I would not like to turn the call back over to Ernest Rady for any further remarks.

Thank you Jeremy.

Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Ernest Rady for any further remarks.

Speaker 2: Okay, stay well you guys. Don't get any viruses. Wear a mask and we hope to see you soon and give you all a hug. And we get through this nonsense that we've been to so last two years. But I've always been, unfortunately it will come through better on than when we began. And I think that's still how I feel. Thank you all.

Okay stay well you guys don't get any viruses wear a mask and we hope to see you soon and give you all a hug.

When we get through this nonsense that we've been to fill last two years.

I always said that portfolio will come through better off than when it began and I think that's still highways deal. Thank you all.

Speaker 1: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.