Q2 2026 American Assets Trust Inc Earnings Call

July 29, 2026

Speaker #1: Good morning, and welcome to the American Assets Trust's Incorporated's second quarter 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator 2: Good morning. Welcome to the American Assets Trust Incorporated Q2 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I would now like to turn the call over to Meleana Leaverton, Associate General Counsel, American Assets Trust. Please go ahead.

Operator: Good morning. Welcome to the American Assets Trust Incorporated Q2 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I would now like to turn the call over to Meleana Leaverton, Associate General Counsel, American Assets Trust. Please go ahead.

Speaker #1: I would now like to turn the call over to Meleana Leverton, Associate General Counsel of American Assets Trust. Please go ahead.

Speaker #2: Thank you, and good morning. The statements made on this earnings call include forward-looking statements based on current expectations, which statements are subject to risks and uncertainties discussed in the company's filings with the SEC.

Meleana Leaverton: Thank you. Good morning. The statements made on this earnings call include forward-looking statements based on current expectations, which statements are subject to risks and uncertainties discussed in the company's filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, as actual events could cause the company's results to differ materially from these forward-looking statements. Yesterday afternoon, American Assets Trust earnings release and supplemental information to the SEC on Form 8-K. Both are now available on the investors section of its website, americanassetstrust.com. It is now my pleasure to turn the call over to Adam Wyll, President and CEO of American Assets Trust.

Speaker #2: You are cautioned not to place undue reliance on these forward-looking statements as actual events could cause the company's results to differ materially from these forward-looking statements.

Speaker #2: Yesterday afternoon, American Assets Trust's earnings release and supplemental. To the SEC on Form 8K. Both are now available on the investors' section of its website, americanassetstrust.com.

Speaker #2: It is now my pleasure to turn the call over to Adam Wyll, President and CEO of American Assets Trust.

Speaker #3: Good morning, everyone, and thank you for joining us today. At American Assets Trust, we manage our business with patience, discipline, and a long-term focus, regardless of where we are in the economic cycle.

Adam Wyll: Good morning, everyone, and thank you for joining us today. At American Assets Trust, we manage our business with patience, discipline, and a long-term focus regardless of where we are in the economic cycle, letting the quality of our assets and our platform do the heavy lifting. That consistency has served us well through the H1 of 2026, even as economic conditions and capital markets are still uneven. For the Q2, we generated $0.51 of FFO per diluted share ahead of our internal expectations. Portfolio-wide same-store cash NOI increased 0.3%, or 1.3%, excluding a one-time reserve for an office tenant receivable. At mid-year, our current outlook supports the midpoint of our full-year FFO guidance range, with potential to move into the upper half if several operating variables develop favorably. Bob will discuss those factors and the key moving pieces shortly.

Speaker #3: Letting the quality of our assets and our platform do the heavy lifting. That consistency has served us well through the first half of 2026, even as economic conditions and capital markets are still uneven.

Speaker #3: For the second quarter, we generated $51 of FFO per diluted share, ahead of our internal expectations. Portfolio-wide, same store, cash in Hawaii increased 0.3%, or 1.3%, excluding a one-time reserve for an office tenant receivable.

Speaker #3: At mid-year, our current outlook supports the midpoint of our full-year FFO guidance range, with potential to move into the upper half if several operating variables develop favorably.

Speaker #3: Bob will discuss those factors and the key moving pieces shortly. The broader economy presents a mixed but generally resilient picture. Growth is solid and unemployment remains low, while hiring has moderated and inflation, although still above target, eased in the latest reading.

Adam Wyll: The broader economy presents a mixed but generally resilient picture. Growth is solid and unemployment remains low, while hiring has moderated, and inflation, although still above target, eased in the latest reading. For commercial real estate, that backdrop supports tenant demand, while transaction activity has become more constructive. Retail and multifamily assets are commanding strong pricing, a favorable read-through to the value of what we own, and office transaction activity is picking up, providing greater visibility into the value of our office portfolio. Public real estate markets have strengthened as well, with listed REITs outperforming the broader equity market this year on growing investor recognition of durable cash flows, limited new supply, and high replacement costs. Still, performance is highly differentiated, and our job is to keep executing, translating leasing progress into commenced rent, cash flow growth, and ultimately, a valuation that better reflects the quality of our portfolio.

Speaker #3: For commercial real estate, that backdrop supports tenant demand, while transaction activity has become more constructive. Retail and multifamily assets are commanding strong pricing, a favorable read-through to the value of what we own, and office transaction activity is picking up, providing greater visibility into the value of our office portfolio.

Speaker #3: Public real estate markets have strengthened as well, with listed REITs outperforming the broader equity market this year, on growing investor recognition of durable cash flows, limited new supply, and high replacement costs.

Speaker #3: Still, performance is highly differentiated, and our job is to keep executing, translating leasing progress into commenced rent, cash flow growth, and ultimately a valuation that better reflects the quality of our execution, with ample liquidity and no debt maturities until March 2027, which we have multiple avenues to address.

Adam Wyll: Our balance sheet supports that execution with ample liquidity and no debt maturities until March 2027, which we have multiple avenues to address. We are deploying capital where the returns are strongest, and today that is leasing-related investment at our newer and repositioned office assets. At the same time, we continue to evaluate external opportunities selectively and have no need to force activity. Turning to portfolio updates. In office, the flight to quality continues to define the market. Nationally, trophy leasing is running above pre-pandemic averages, and the supply side is quietly repairing itself, with availability down for 8 consecutive quarters, sublease space burning off in our markets, obsolete buildings being converted or demolished, and new construction at generational lows. Tenants are concentrating demand in well-located, amenitized buildings backed by well-capitalized owners. San Diego's headline absorption remains soft but masks meaningful submarket dispersion.

Speaker #3: We are deploying capital where the returns are strongest—and today, that is leasing-related investment at our newer and repositioned office assets. At the same time, we continue to evaluate external opportunities selectively and have no need to force activity.

Speaker #3: Turning to portfolio updates, in office, the flight to quality continues to define the market. Nationally, trophy leasing is running above pre-pandemic averages, and the supply side is quietly repairing itself with availability down for eight consecutive quarters, sublease space burning off in our markets, obsolete buildings being converted or demolished, and new construction at generational lows.

Speaker #3: Tenants are concentrating demand in well-located, amenitized buildings backed by well-capitalized owners. San Diego's headline absorption remains soft but masks meaningful submarket dispersion. UTC and Del Mar Heights remain among the region's most desirable office submarkets, capturing the majority of leasing activity this quarter, with no new speculative office construction underway.

Adam Wyll: UTC and Del Mar Heights remain among the region's most desirable office submarkets, capturing the majority of leasing activity this quarter, with no new speculative office construction underway. San Francisco leasing has approached pre-pandemic levels, supported by strong demand from AI and other technology companies. The east side of Seattle just posted one of its strongest quarters of the post-COVID era, with availability falling meaningfully year over year, led by downtown Bellevue, while demand in the surrounding submarkets is building more gradually. Portland remains a challenged market, but activity is consolidating into the best buildings. We are capturing an outsized share of it and new office construction has largely stopped. Our office portfolio ended the quarter 84.4% leased. During the quarter, we executed approximately 110,000 square feet of office leases, with comparable cash spreads of 9% and straight line spreads of 10%.

Speaker #3: San Francisco leasing has approached pre-pandemic levels, supported by strong demand from AI and other technology companies. And the east side of Seattle just posted one of its strongest quarters of the post-COVID era, with availability falling meaningfully year over year, led by downtown Bellevue while is building more gradually.

Speaker #3: Portland remains a challenged market, but activity is consolidating into the best buildings. We are capturing an outsized share of it, and new office construction has largely stopped.

Speaker #3: Our office portfolio ended the quarter 84.4% leased. During the quarter, we executed approximately 110,000 square feet of office leases, with comparable cash spreads of 9% and straight-line spreads of 10%.

Speaker #3: Year to date, we've signed 14 spec suite leases, totaling approximately 76,000 square feet. The program is helping shorten downtime, attract new tenants, and steadily build occupancy.

Adam Wyll: Year to date, we've signed 14 spec suite leases totaling approximately 76,000 square feet. The program is helping shorten downtime, attract new tenants, and steadily build occupancy. We entered Q3 with approximately 200,000 square feet of signed office leases that have not yet commenced paying cash rent, representing more than $10 million of annualized based rent. We have another 73,000 square feet in lease documentation and proposals outstanding on nearly 150,000 square feet of new and expansion space. Activity is healthy, although timing can be uneven and larger leases require patience. At La Jolla Commons Tower 3, the building is currently 49% leased, with proposals representing another 33% of the building. With large blocks of quality space scarce in UTC and the campus amenity offering now complete, Tower 3 increasingly stands apart. We are actively engaged with several large prospective tenants.

Speaker #3: We entered the third quarter with approximately 200,000 square feet of signed office leases that have not yet commenced paying cash rent, representing more than $10 million of annualized base rent.

Speaker #3: We have another 73,000 square feet in lease documentation and proposals outstanding, on nearly 150,000 square feet of new and expansion space. Activity is healthy, although timing can be uneven, and larger leases require patience.

Speaker #3: At La Jolla Commons Tower 3, the building is currently 49% leased, with proposals representing another 33% of the building. With large blocks of quality space scarce and UTC, and the campus amenity offering now complete, Tower 3 increasingly stands apart.

Speaker #3: We are actively engaged with several large prospective tenants. These decisions take time and nothing is certain until leases are signed. But the quality of the activity is encouraging.

Adam Wyll: These decisions take time, nothing is certain until leases are signed, but the quality of the activity is encouraging. At 1 Beach Street, the building is currently 35% leased. Its waterfront location and distinctive character continue to resonate with the AI and technology companies driving San Francisco leasing activity. All remaining available space on the first and second floors is now under construction as spec suites, with completion expected over the next few months. Tour activity remains strong and multiple prospects have shortlisted our second-floor vacancies. As the suites near completion and prospects can evaluate finished, move-in-ready space, we expect that interest to translate into more proposal activity. Retail remains one of the tightest real estate sectors, with national availability near historic lows, limited new construction, and growing asking rents. Consumer spending is holding up, although higher prices and softer confidence are making shoppers more selective.

Speaker #3: At One Beach Street, the building is currently 35% leased. Its waterfront location and distinctive character continue to resonate with the AI and technology companies driving San Francisco leasing activity.

Speaker #3: All remaining available space on the first and second floors is now under construction as spec suites, with completion expected over the next few months.

Speaker #3: Tour activity remains strong, and multiple prospects have shortlisted our second-floor vacancies. As the suites near completion and prospects can evaluate finished, move-in-ready space, we expect that interest to translate into more proposal activity.

Speaker #3: Retail remains one of the tightest real estate sectors, with national availability near historic lows. Limited new construction and growing asking rents. Consumer spending is holding up, although higher prices and software confidence are making shoppers more selective.

Speaker #3: Our centers serve a fluent, supply-constrained trade areas with productive tenants that view these locations as strategically important. Our retail portfolio ended the quarter 98% leased.

Adam Wyll: Our centers serve affluent, supply-constrained trade areas with productive tenants that view these locations as strategically important. Our retail portfolio ended the quarter 98% leased. During the quarter, we executed approximately 139,000 square feet of leases with comparable cash spreads of 3% and straight line spreads of 20%. Tenant health across the portfolio is strong and our watch list is short. While we monitor consumer health and retailer profitability carefully, the fundamental backdrop for our portfolio is favorable. In multifamily, 2026 is shaping up as a stabilization year rather than a meaningful rent growth year. In San Diego, the recent wave of deliveries has elevated market vacancy to levels not seen in many years, even as the market continues to absorb a meaningful amount of new product. Portland is also continuing to absorb its recent deliveries, while rent growth across both markets has remained modest.

Speaker #3: During the quarter, we executed approximately 139,000 square feet of leases, with comparable cash spreads of 3% and straight-line spreads of 20%. Tenant health across the portfolio is strong, and our watchlist is short.

Speaker #3: While we monitor consumer health and retailer profitability carefully, the fundamental backdrop for our portfolio is 2026 is shaping up as a stabilization year rather than a meaningful rent growth year.

Speaker #3: In San Diego, the recent wave of deliveries has elevated market vacancy to levels not seen in many years, even as the market continues to absorb a meaningful amount of new product.

Speaker #3: Portland is also continuing to absorb its recent deliveries, while rent growth across both markets has remained modest. Encouragingly, new development activity has slowed materially in both markets, which should gradually improve the supply-demand balance over the next few years.

Adam Wyll: Encouragingly, new development activity has slowed materially in both markets, which should gradually improve the supply-demand balance over the next few years. In the meantime, our teams are concentrating on occupancy, measured concessions, resident retention, and expense control. Excluding the RV park, the portfolio ended the quarter over 94% leased. In San Diego, our communities ended the quarter 96% leased, and renewal rents grew 5%, while new lease rents declined 2%, resulting in blended growth of 3%. Consistent with prior years, occupancy at Pacific Ridge dipped seasonally at the start of the summer due to student turnover, and we expect it to rebound above 90% as we move through the peak leasing season and into the fall semester. In Portland, Hassalo on 8th ended the quarter 88% leased, and renewal rents grew 2%, while new lease rents grew 1%, resulting in blended growth of 2%.

Speaker #3: In the meantime, our teams are concentrating on occupancy measured concessions, resident retention, and expense control. Excluding the RV park, the portfolio ended the quarter over 94% leased.

Speaker #3: In San Diego, our communities ended the quarter 96% leased. In renewal rents, grew 5%, while new lease rents declined 2%, resulting in blended growth of 3%.

Adam Wyll: The urban Portland market is competitive, absorption has improved and new deliveries are moderating. Our near-term priority is occupancy and retention as conditions normalize. Of note, during the quarter, each of our office, retail, and multifamily portfolios achieved record average base rents, underscoring the underlying strength of our assets. At Waikiki Beach Walk, retail strength and bad debt collections offset rate pressure at the hotel. The Hawaii tourism backdrop was mixed. Oahu visitor arrivals were lower year over year in the spring, rate competition persisted, particularly for value-conscious domestic travelers. Even so, our Embassy Suites again led its competitive set in both occupancy and RevPAR, summer booking pace is running ahead of last year, aided in part by demand associated with the Rim of the Pacific, or RIMPAC, military exercise conducted on Oahu.

In Portland hassle on 8th ended the quarter, 888% leased and renewal rents grew 2%. While new lease rents grew 1% resulting. In Blended growth of 2%.

The urban Portland market is competitive, but absorption has improved and new deliveries are moderating.

Our near-term priority is occupancy and retention as conditions normalized.

Of note during the quarter, each of our office, retail, and multi-family portfolios achieved record average base rents, underscoring the underlying strength of our assets.

At, we keep beachwalk retail strength and bad debt collections offset rate pressure at the hotel. The Hawaii tourism backdrop, was mixed Oahu visitor, arrivals were lower year-over-year in the spring and rate competition, persisted, particularly for Value conscious domestic Travelers, even so our Embassy Suites again, let its competitive set, and both occupancy and refer. And some are booking. Pace is running ahead of last year aided in part.

Adam Wyll: Our team remains focused on rate integrity, cost control, and performance across both components of this irreplaceable fee simple asset. Our board has declared a quarterly dividend of $0.34 per share, payable on 17 September to shareholders of record as of 3 September. As we have discussed, we expect dividend coverage to improve over time as signed office leases commence and our leasing and redevelopment investments, including the office spec suite program, contribute more meaningfully to cash flow. As always, we will continue to evaluate the dividend and all capital allocation decisions prudently. We also recently published our 2025 sustainability report entitled "Committed to What Matters," now available on our website. Our approach to sustainability mirrors how we run the business. We pursue initiatives that strengthen resilience, support our stakeholders, and make economic sense over the long term.

By demand associated with the Rim of the Pacific, or RIMPAC, military exercise conducted on Oahu.

Our team remains focused on raid Integrity cost control and performance across both components of this Irreplaceable. Fee simple asset.

Our Board has declared a quarterly dividend of $0.34 per share, payable on September 17th to shareholders of record as of September 3rd. As we have discussed, we expect dividend coverage to improve over time as signed office leases commence, and our leading redevelopment investments, including the office specs suite program, contribute more meaningfully to cash flow. As always, we will continue to evaluate the dividend and all capital allocation decisions prudently.

Adam Wyll: Thank you to the many team members whose work made this report possible. In closing, at the midpoint of 2026, we are executing the plan we laid out entering the year: advancing office leasing and converting it into commenced revenue, sustaining the cash flow from our retail and multifamily platforms, operating our hotel prudently through a choppy tourism environment, remaining disciplined with our capital. The H1 brought its share of macro volatility and geopolitical uncertainty, our results reflect the durability of irreplaceable coastal real estate operated through a vertically integrated platform and managed with a long-term perspective. With that, I will turn the call over to Bob, who will walk through the financial results and our outlook in more detail. Bob?

We also recently published our 2025 sustainability report entitled committed to what matters now available in our website, our approach to sustainability mirrors, how we run the business. We pursue initiatives that strengthen resilience support our stakeholders and make economic sense over the long term. Thank you to the many team members, whose work made this report possible.

In closing at the midpoint of 2026, we are executing the plan. We laid out entering the year advancing office, Leasing and converting it into commenced Revenue sustaining. The cash flow from our retail and multifamily platforms. Operating our hotel, prudently through a choppy tourism environment, and remaining disciplined with our capital.

The first half brought a share of macro volatility and geopolitical uncertainty, but our results reflect the durability of Irreplaceable. Coastal real estate, operated through a vertically, integrated platform and managed with a long-term perspective.

Robert Barton: Thanks, Adam, good morning, everyone. Last night we reported Q2 2026 FFO of $0.51 per diluted share and net income attributable to common stockholders of $0.09 per diluted share. FFO increased modestly from Q1, primarily driven by incremental rental income from recently commenced office leases at City Center Bellevue and One Beach Street. As Adam mentioned, portfolio-wide same store cash NOI increased 0.3%, or 1.3%, excluding a one-time reserve for an office tenant receivable, in line with our expectations. This also impacted our quarter over quarter results. We expect it to grow in the H2 as previously signed leases start paying cash rents. Breaking that down by segment, compared to Q2 2025.

Bob Barton: Thanks, Adam, good morning, everyone. Last night we reported Q2 2026 FFO of $0.51 per diluted share and net income attributable to common stockholders of $0.09 per diluted share. FFO increased modestly from Q1, primarily driven by incremental rental income from recently commenced office leases at City Center Bellevue and One Beach Street. As Adam mentioned, portfolio-wide same store cash NOI increased 0.3%, or 1.3%, excluding a one-time reserve for an office tenant receivable, in line with our expectations. This also impacted our quarter over quarter results. We expect it to grow in the H2 as previously signed leases start paying cash rents. Breaking that down by segment, compared to Q2 2025.

With that, I will turn the call over to Bob who will walk through the financial results and our Outlook and more detail Bob.

Thanks, Adam, and good morning, everyone. Last night, we reported second quarter 2026 FFO of $0.51 per diluted share and net income attributable to common stockholders of $0.09 per diluted share.

Commenced office. Leases at City Center, Belleview and 1 Beach.

As Adam mentioned portfolio, wide, same store cach noi, increased 3% or 1.3%. Excluding a 1-time reserved for an office tenant receivable.

In line with our expectations.

This also impacted our quarter over quarter results. We expect it to grow in the back half of the year as previously. Signed leases start paying cash rents

Robert Barton: Office same store NOI increased 0.4%, primarily due to higher base rent from recently commenced leases at La Jolla Commons Tower 3, partially offset by scheduled tenant expirations at 14ACRES, or formerly known as Eastgate. Excluding the one-time reserve, office same store cash NOI would've been 2.4%. Our retail same store NOI declined 0.4%, reflecting the absence of a one-time real estate tax refund received during Q2 2025. Our multifamily same store NOI increased 0.9%, or 1.6%, excluding the RV park, driven by stronger rental income, particularly at Hassalo on 8th and Genesee Park, partially offset by higher real estate tax expense at Pacific Ridge. Our mixed use same store NOI increased 0.6% as a 14% increase in retail NOI resulting from a bad debt collection, which was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki.

Bob Barton: Office same store NOI increased 0.4%, primarily due to higher base rent from recently commenced leases at La Jolla Commons Tower 3, partially offset by scheduled tenant expirations at 14ACRES, or formerly known as Eastgate. Excluding the one-time reserve, office same store cash NOI would've been 2.4%. Our retail same store NOI declined 0.4%, reflecting the absence of a one-time real estate tax refund received during Q2 2025. Our multifamily same store NOI increased 0.9%, or 1.6%, excluding the RV park, driven by stronger rental income, particularly at Hassalo on 8th and Genesee Park, partially offset by higher real estate tax expense at Pacific Ridge. Our mixed use same store NOI increased 0.6% as a 14% increase in retail NOI resulting from a bad debt collection, which was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki.

breaking that down by segment. Compared to the second quarter of 2025

Off the same store. Noi increase 0.4% primarily due to higher base. Rent from Recently commenced leases at La Jolla Commons Tower 3 part of the offset by scheduled tenant expirations at 14 acres formerly known as Eastgate.

Excluding the one-time reserve off the same-store cash NOI, it would have been 2.4%.

Our retail same-store NOI declined 0.4%, reflecting the absence of a one-time real estate tax refund received during the second quarter of 2025.

Our multifamily same-store NOI increased 0.9%, or 1.6% excluding the RV park, driven by stronger rental income, particularly at House Lofts on 8th and Genesee Park. This was partially offset by higher real estate taxes and expenses at Pacific Ridge.

Robert Barton: During the quarter, occupancy increased to 90.5%, compared to 86% last year. RevPAR increased 0.9% to $308. ADR decreased 0.4% to $340. Our hotel NOI was approximately $2.5 million, compared to $2.9 million in the prior year quarter. Turning to our balance sheet and liquidity, we ended the quarter with approximately $610 million of total liquidity, including $110 million of cash and $500 million available under our revolving credit facility. As discussed during our Q1 earnings call, we successfully completed the recast and upsize of our credit facility on 1 April, extending the maturities of both our $500 million revolving credit facility and our $100 million term loan to April 2030. Net debt to EBITDA was 6.7 times on a quarterly annualized basis and 6.9 times on a trailing 12-month basis.

Bob Barton: During the quarter, occupancy increased to 90.5%, compared to 86% last year. RevPAR increased 0.9% to $308. ADR decreased 0.4% to $340. Our hotel NOI was approximately $2.5 million, compared to $2.9 million in the prior year quarter. Turning to our balance sheet and liquidity, we ended the quarter with approximately $610 million of total liquidity, including $110 million of cash and $500 million available under our revolving credit facility. As discussed during our Q1 earnings call, we successfully completed the recast and upsize of our credit facility on 1 April, extending the maturities of both our $500 million revolving credit facility and our $100 million term loan to April 2030. Net debt to EBITDA was 6.7 times on a quarterly annualized basis and 6.9 times on a trailing 12-month basis.

Our mixed-use same-store NOI increased 6%, as a for 14% increase in retail NOI, resulting from a bad debt collection, which was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki.

During the quarter, occupancy increased to 90.5% compared to 86% last year.

Grant bar, increased 0.9% to 308.

ADR decreased 0.4% to 340.

Our hotel. Noi was approximately 2.5 million compared to 2.9 Million in the prior year quarter.

Turning to our balance sheet and liquidity. We ended the quarter with approximately 610 million of total liquidity, including a 110 million of cash.

And $500 million available under our revolving credit facility.

As discussed during our first quarter earnings call, we successfully completed the recast and upsizing of our credit facility on April 1.

Extending the maturities of both our $500 million revolving credit facility and our $100 million term loan to April 2030.

Robert Barton: Our long-term target remains five and a half times or below, while both our interest coverage ratio and fixed charge coverage ratio were 3.0 times. Stepping back, we believe the key takeaway this quarter is that our portfolio continues to perform as expected while maintaining meaningful embedded earnings potential. The most significant opportunity to improve both earnings and leverage remains the lease up of our existing office portfolio. Specifically, La Jolla Commons Tower 3 represents approximately $0.15 per share of FFO. One Beach Street represents approximately $0.08 per share of FFO. Suburban Bellevue represents approximately $0.06 per share of FFO. Once stabilized, these properties are expected to generate approximately $0.29 of incremental FFO. Of that total, roughly $0.14 will come from leases already signed, with the remaining $0.15 dependent on speculative leasing.

Bob Barton: Our long-term target remains five and a half times or below, while both our interest coverage ratio and fixed charge coverage ratio were 3.0 times. Stepping back, we believe the key takeaway this quarter is that our portfolio continues to perform as expected while maintaining meaningful embedded earnings potential. The most significant opportunity to improve both earnings and leverage remains the lease up of our existing office portfolio. Specifically, La Jolla Commons Tower 3 represents approximately $0.15 per share of FFO. One Beach Street represents approximately $0.08 per share of FFO. Suburban Bellevue represents approximately $0.06 per share of FFO. Once stabilized, these properties are expected to generate approximately $0.29 of incremental FFO. Of that total, roughly $0.14 will come from leases already signed, with the remaining $0.15 dependent on speculative leasing.

Net debt to EBITDA was 6.7 times on a quarterly annualized basis and 6.9 times on a trailing 12-month basis.

Our long-term target remains 5.5 times or below, while both our interest coverage ratio and fixed charge coverage ratio were 3.0 times.

Stepping back, we believe the key takeaway this quarter is that our portfolio continues to perform as expected while maintaining meaningful embedded earnings potential.

The most significant opportunity to improve both earnings, and leverage Remains the least up of our existing office portfolio.

Specifically, the Hoy Commons Tower 3 represents a proximately 15 cents per share of ffo.

1 Beech Street represents approximately $0.08 per share of FFO.

Suburban build you represents approximately 6 cents per share of ffo.

Once stabilized, these properties are expected to generate approximately $0.29 of incremental FFO.

Of that total, roughly $0.14 will come from leases already signed.

Robert Barton: Through H1 2026, we have recognized $0.03 of the signed lease contribution, with the remaining $0.11 expected to be realized as tenants take occupancy and rent commences. As these recently signed leases commence and additional vacancy is absorbed, we expect meaningful improvement in both FFO and our leverage metrics. Beyond leasing, our liquidity gives us the flexibility to fund that lease, and to act on capital allocation opportunities as they arise. Turning to our guidance, we are reaffirming our full year FFO guidance range of $1.96 to $2.10 per diluted share with a midpoint of $2.03. This guidance reflects the continued stability of our diversified portfolio, supported by leasing momentum, contractual rent growth, and disciplined expense management.

Bob Barton: Through H1 2026, we have recognized $0.03 of the signed lease contribution, with the remaining $0.11 expected to be realized as tenants take occupancy and rent commences. As these recently signed leases commence and additional vacancy is absorbed, we expect meaningful improvement in both FFO and our leverage metrics. Beyond leasing, our liquidity gives us the flexibility to fund that lease, and to act on capital allocation opportunities as they arise. Turning to our guidance, we are reaffirming our full year FFO guidance range of $1.96 to $2.10 per diluted share with a midpoint of $2.03. This guidance reflects the continued stability of our diversified portfolio, supported by leasing momentum, contractual rent growth, and disciplined expense management.

With the remaining 15 cents dependent on speculative. Leasing

Through the first half of 2026, we've recognized $0.03 of the signed lease contribution, with the remaining $0.11 expected to be realized as tenants take occupancy and rent commences.

As these recently signed leases commenced an additional vacancy is absorbed. We expect meaningful Improvement in both ffo and our leverage metrics.

Beyond leasing, our liquidity gives us the flexibility to fund that lease.

Um, and to act on capital allocation opportunities as they arise.

Turning to our guidance. We are reaffirming our full year. Ffo guidance. Range of 1.96 to 2.10 cents per diluted share with a midpoint of 2 dollars and 3 cents.

Robert Barton: Based on our current outlook, we believe we are well positioned to achieve the midpoint of our guidance range with the potential to move further into the upper half of our guidance range should several operating trends continue to develop favorably, including retail tenants currently reserved for bad debt continuing to satisfy their rental obligations. Office lease commencements occurring earlier than currently anticipated. Multifamily occupancy and rental rate growth exceeding our current expectations. Continued improvement in tourism demand supporting performance at Embassy Suites Waikiki. As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancings that have not yet been announced. We believe the portfolio today contains meaningful embedded earnings growth. As such, leasing continues to convert signed leases into cash flow. We expect earnings, EBITDA, and leverage to improve through execution.

Bob Barton: Based on our current outlook, we believe we are well positioned to achieve the midpoint of our guidance range with the potential to move further into the upper half of our guidance range should several operating trends continue to develop favorably, including retail tenants currently reserved for bad debt continuing to satisfy their rental obligations. Office lease commencements occurring earlier than currently anticipated. Multifamily occupancy and rental rate growth exceeding our current expectations. Continued improvement in tourism demand supporting performance at Embassy Suites Waikiki. As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancings that have not yet been announced. We believe the portfolio today contains meaningful embedded earnings growth. As such, leasing continues to convert signed leases into cash flow. We expect earnings, EBITDA, and leverage to improve through execution.

The continued stability of our Diversified portfolio, supported by leasing momentum contractual rent growth, and disciplined expense management.

Based on our current outlook, we believe we are well positioned to achieve the midpoint of our guidance range, with the potential to move further into the upper half of our guidance range. Several operating trends continue to develop favorably, including retail tenants currently reserved for bad debt continuing to satisfy their rental obligations, and office lease commencements occurring earlier than currently anticipated.

Multi-family occupancy and rental rate growth exceeding. Our current expectations.

And continued Improvement in tourism demand supporting performance at Embassy Suites. Why? Kiki?

As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancing that have not yet been announced.

We believe the portfolio today. Contains meaningful embedded earnings growth.

Robert Barton: Combined with our diversified portfolio and strong liquidity position, we believe we are well positioned to create meaningful long-term shareholder value. With that, I'll turn the call back over to the operator for questions.

Bob Barton: Combined with our diversified portfolio and strong liquidity position, we believe we are well positioned to create meaningful long-term shareholder value. With that, I'll turn the call back over to the operator for questions.

As such leasing to convert signed leases into cash flow, we expect earnings evida and leveraged to improve through execution.

Combined with our diversified portfolio and strong liquidity position, we believe we are well positioned to create meaningful long-term shareholder value.

And with that, I'll turn the call back over to the operator for questions.

Operator 2: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Todd Thomas of KeyBanc. Go ahead, please.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Todd Thomas of KeyBanc. Go ahead, please.

We will now begin the question and answer session.

To ask a question, you may press star, then 1, on your telephone keypad.

If you are using a speaker-phone, please pick up your handset before pressing the keys.

if at any time your question has been addressed and you would like to withdraw your question, please press star then 2

At this time, we will pause momentarily to assemble our roster.

Sean Glass: Hi. Good morning. This is Sean Glass on for Todd. I wanted to start on office leasing. Coming into the year, I think you laid out a path from around 83% leased, expecting three to 400 basis points of occupancy from no move-outs, then back up to the mid-80s by year-end. Could you update us on where you expect office occupancy to be at by year-end now, and specifically, what level of occupancy is contemplated in guidance?

Our first question comes from Todd Thomas of keeping go ahead, please.

Hi, good morning. This is Sean glass on for Todd. I wanted to start on office. Leasing coming into the year. I think you laid out a path from around 83%. At least expecting 3 to 4 hundred basis points of occupancy from no move outs and then back up to the mid 80s by year. End, could you update us on what you expect office occupancy to be at by year end now and specifically, what level of occupancy is contemplating guidance

Adam Wyll: Hey, Sean. It's Adam. Let me take that off, and I'll let Steve kind of give a little bit more details. What I would tell you is the goal hasn't really changed, but the outcome is a bit more binary than it was earlier this year. We mentioned on earlier calls that we got a Genentech give back space, and now that's in our planning. Separate from that, we have several large requirements sitting in proposal right now that are a bit too close to call. Those deals are really the difference. If we land a couple of them on that timeline we're working towards, we're inside of the range. If they push into next year, we could finish slightly below it. We'd rather let you know honestly now than manage you to a number and have to explain it later.

Robert Barton: What I'd also say is that we're not going to chase a lease percentage at the expense of rate, term, or credit.

Adam Wyll: What I'd also say is that we're not going to chase a lease percentage at the expense of rate, term, or credit.

Steve Center: A deal that signs next year at the right economics to us is worth a bit more to this company than a deal we force into December. Look, we got the right product, the right team, the right brokers, and the demand in these markets is real, and we think we'll win our share of it. The question for us is a bit more of timing. Maybe Steve can layer on a little bit more.

Adam Wyll: A deal that signs next year at the right economics to us is worth a bit more to this company than a deal we force into December. Look, we got the right product, the right team, the right brokers, and the demand in these markets is real, and we think we'll win our share of it. The question for us is a bit more of timing. Maybe Steve can layer on a little bit more.

Uh hey Sean. It's Adam, let me take that off and I'll let Steve kind of give a little bit more details. What I would tell you is the goal hasn't really changed but the outcome is a bit more binary than it was earlier. This year. We mentioned on earlier calls that we got a genetech, give back space and now that's in our planning and separate from that, we have several large requirements sitting in proposal right now that are a bit too close to call. Um, so those deals are really the difference, if we land a couple of them on that timeline, we're working towards we're inside of the range. If they push into next year, we could finish slightly below it and we'd rather let you know honestly now than manage you to a number and have to explain it later. But what I'd also say is that we're not going to chase a lease percentage at the expense of rate term or credit. So, a deal that signs next year at the right. Economics to us is worth a bit more to this company than a deal. We force in the December. So, um, look, we got the right product, the right team, the right Brokers and the demand in these markets is real and we think we'll win our show.

Steve Center: Honestly, now, you've covered it all. We do have several large prospects, especially in UTC. Large tenant demand is increasing, including an RFP that we expect to get for 100,000 to 120,000 feet, which could figure not into tower three, but actually tower one activity. Binary is a good term for it. We've got multiple proposals on the same space, and we just don't know how those are going to play out. We're at the finish line on one in particular, and we'll see how that goes. Behind it, we've got additional tenant demand that we know is coming. Another two-floor prospect that will be touring the market in the next few months. It's a wait and see, and we just can't predict it at this time.

The question for us is a bit more about timing. Maybe Steve can layer on a little bit more?

I I, I honestly, now you, you, you covered it all. Uh, we do have several large prospects, uh, especially in UTC, uh, large head demand is is increasing including a an RFP that we expect to get for 100 to 120 feet. Which could figure it not into Tower 3 but actually Tower 1 activity. So uh but binary is a good term for it, you know, we've got

Multiple proposals on the same space.

And we just don't know how those are going to play out. Where if there's Finish Line on 1 in particular and we'll see how that goes but behind it we've got additional tenant demand that we know is coming another 2 floor prospect. That will be touring the market in the next few months. So um it's it's a wait and see and we just can't predict it at this time.

Sean Glass: Okay. That's helpful. Following up, could you talk a little about the tenant at Torrey Reserve? Maybe when does the lease expire, and what might be anticipated there in the near term?

Okay, that that's helpful. Um,

Following up, could you talk a little about the tenant at Toy Reserve? For example, when does the lease expire, and what might be anticipated there in the near term?

Adam Wyll: Are you talking about the reserve we mentioned?

Sean Glass: Correct.

Are you talking about the reserve we mentioned?

Adam Wyll: All right. I'll take a stab at this, and Bob can chime in. This was an office tenant we had on our watch list last year in 2025, Sean. We did not include any revenue from that tenant in our 2026 guidance. In the Q2 of this year, we reserved about $1.1 million, $1.2 million, and that's cash receivables and straight-line rent that we had previously accrued in prior years. We'll continue to pursue recovery of that, but no recovery is assumed in our outlook for this year. Most importantly, we've already backfilled that space, so the forward operating impact is limited. It was kind of an accounting adjustment. Did I get that right, Bob?

Correct.

That was an office tenant we had on our watch list last year, in 2025, Sean. We did not include any revenue from that tenant in our 2026 guidance.

Robert Barton: Yeah, you sound like you're the CFO. No, that's exactly correct. We just wrote off that debt expense and the straight-line receivable that was on the books. We'll see what happens.

Bob Barton: Yeah, you sound like you're the CFO. No, that's exactly correct. We just wrote off that debt expense and the straight-line receivable that was on the books. We'll see what happens.

But in the second quarter of this year, we reserved about 1.1, 1.2 million dollars and that's cash receivables and straight line rent that we had previously accrued and prior years and so we'll continue to pursue recovery of that. But no recovery is assumed in our outlook for this year. Um, and most importantly we've already backfilled that space, so the forward operating impact is limited. So it was kind of an accounting adjustment. Did I get that right up?

Yeah, you sound like you're the CFO. Uh, no. That's that's exactly correct. Uh, you know, we just wrote off the that debt expense and the straight line uh receivable that was uh on the books and so we'll see what happens.

Sean Glass: Got it. That makes sense. Turning to the developments, it sounds like there's a lot of activity at La Jolla and One Beach. Could you give us some color on the leasing pipeline there? Are there any additional leases out for signature or in documentation? Then where you might expect each asset to be by year-end.

Got it. That makes sense.

Um, turning to the the developments, you know, it sounds like there's a lot of activity at La Jolla in 1 Beach, could you give us some color on the leasing pipeline there? It's, you know, are there any additional leases out for Signature or in documentation and then where you might expect each asset to be by your end?

Steve Center: Great question. We just touched on that and some big activity that will come to conclusion in the next, could be days for one of them. There are several out there. Hard to predict. I'll tell you, at La Jolla Commons, we spec'd out the second and fourth floors. We have one suite on each floor remaining out of that spec suite effort, and we have proposals out on one of those, and we have another spec suite on seven that we're building in relation to having to build the corridor on the seventh floor for Baker Tilly, and we're in proposals on that space. The rest of the activity is on the full floors on eight, nine, and 10.

Great question. We just touched on that and and some big big activity that will come to conclusion in the next.

Steve Center: Two of the deals that we're in proposals on are for nine and 10, then we have a third that's in proposals for eight, nine, and 10. That's where we are with that. In terms of One Beach, tour activity's been excellent in spite of the construction that Jerry's people are doing. It's difficult to tour construction on every space in the building except for Suite 300, which is occupied now. That being said, we think we've sent out a final proposal, hopefully, on Suite 250, with a prospective tenant, then we've been shortlisted for Suite 200 by two others. We don't have the RFPs or proposals in yet, but we expect those to come. The second floor is in play, then we've got some prospects for our smaller first-floor suite.

It could be days for one of them. But there are several out there, so it's hard to predict. I'll tell you, at La Jolla Commons, we specced out the second through fourth floors. We have one suite on each floor remaining out of that spec suite effort, and we have proposals out on one of those. We have another spec suite on seven that we're building, in relation to having to build the corridor on the seventh floor for Baker Tilly, and we have proposals on that space. The rest of the activity is on the full floors on eight, nine, and ten. Two of the deals that we're in proposals on are for nine and ten, and then we have a third that's in proposals for eight, nine, and ten. So that's where we are with that.

In terms of 1 Beach, activity tour activities have been excellent in spite of the construction that Jerry's people are doing. It's, it's a—

Steve Center: In that marketplace, until you're within about 60 days of delivering a space ready for occupancy, the tenant activity is hesitant to commit to it. We're nearing completion in the next, what, 60 days, Jerry?

It's difficult to tour, uh, construction on every space in the building except for Suite 300, which is occupied now. And, uh, but that being said, we, uh, we think we sent out a final proposal, hopefully on Suite 250, uh, with a prospective tenant. And then we've been shortlisted for Suite 200 by two others. And, uh, we don't have the RFPs or proposals in yet, but we expect those to come. So the second floor is in play. And then, uh, we've got some prospects for our smaller first floor.

Jerry Gammieri: Yep.

Jerry Gammieri: With that completion, we expect to convert tours to proposals to deals.

This week. So, uh, you know, in that marketplace, until you're within about 60 days of delivering the space ready for occupancy, the tenants are hesitant to commit to it. So, we're nearing completion in the next, what, 60 days, Jerry?

and and with that completion, we we expect to convert tours to proposals to deals.

Sean Glass: Okay. Thank you. That's great color. If I could slip one more in, just switching gears. As you mentioned, you're prepared to mark. We've seen transaction activity pick up pretty meaningfully. You guys sold Del Monte Center last year. Are you considering any capital recycling in the current environment?

Thank you, that's great color.

If I could slip one more in—just switching gears, and as you mentioned in your prepared remarks, we've seen transaction activity pick up pretty meaningfully.

Uh, you guys sold Del Monte Center last year? Are you considering any Capital recycling in the current environment?

Adam Wyll: That's a good question, Sean. We're looking at every asset in our portfolio through the same lens, which is whether the capital is better deployed somewhere else on a risk-adjusted basis. Two things have to be right for us to transact. First, the pricing would have to be compelling, and we would need line of sight on a replacement that maintains or improves the overall portfolio quality. Second, the basis in what we're selling is likely fairly low, so the tax consequences are real. Any transaction would need to be structured in a way that is efficient for AAT and the shareholders. The exchange matters as much as the exit. It's kind of a long-winded way of saying we're looking, but we're not going to force anything. We have been actively pursuing things here and there that we think make sense.

Um, you know, that's a good question, Sean, we're looking at every asset in our portfolio through the same lens, which is whether the capital is better deployed somewhere else on a risk adjusted basis and 2, things have to be right for uh, for us to transact first. The pricing would have to be compelling um and we would need line of sight on a replacement that maintains or improves the overall portfolio quality and second the basis and what we're selling is likely fairly low. So the tax consequences are real and any transaction. We need to be structured in a way that is efficient for aat and the shareholders. So the exchange matters as much as the exit. So it's kind of a long-winded way of saying we're looking, uh, but we're not going to force anything, um but we have been actively pursuing.

Adam Wyll: Nothing to announce at this point.

Things here and there that we think make sense.

Nothing to announce at this point.

Sean Glass: Okay. Thank you.

Okay, thank you.

Operator 2: The next question comes from Haendel St. Juste of Mizuho. Go ahead, please.

Operator: The next question comes from Haendel St. Juste of Mizuho. Go ahead, please.

Haendel St. Juste: Hey guys, good morning. Thanks for taking my question. I wanted to follow up on the question around the office reserves. Adam, you mentioned you have someone lined up to take the space. Can you give us a sense of the timing there, when that new tenant would be taking the space? When would cash flows start? Ballpark level of rents you're expecting?

The next question comes from Handel St. Juste of Mizuho. Go ahead, please.

Hey guys, uh, good morning. Uh, thanks for taking my question. Um, so I wanted to follow up on the question, around the, the office reserves. Uh, Adam, you mentioned, you have someone lined up to take the space.

Of of rents, You're Expecting.

Steve Center: May 1st commencement. Lease is signed. I think the rent was $63, $64.

Uh, May 1st commencement.

Lisa sign.

Uh, and uh,

I think the rent was $60.

Let's see. 63 64.

Haendel St. Juste: Okay. I'm assuming there's some free rent period before you get to the cash flow.

Steve Center: Give you the details. Let me find it here.

Okay, I'm assuming there's some 3 3 rent per period before you get to the cash flow.

Haendel St. Juste: Yep.

Give me the details. Let me find it here.

Yep.

Steve Center: Bear with me. Okay. Stratos. Yeah, 1 May commencement, 84 months, seven months free, 3% bumps.

Bear with me.

okay, Stratos

Yeah, May 1st commencement 84 months.

7 months free. Uh,

Steve Center: Yeah, I was right, it's a $63 start rate.

3% bumps.

Yeah, and I was right. It's...

Haendel St. Juste: Got it. Appreciate that. We also saw a nice uptick in the office cash spreads from last quarter, 4.8% to now we're 9% this quarter. Is that lease mix driven? Do you think it's durable? Curious how you see that trend line over the next foreseeable future, couple quarters.

$63, uh, start rate.

Got it, got it. Appreciate that. Um,

Steve Center: Well, if you look back over years, we've been managing to thread the needle of working on occupancy while delivering positive cash spreads pretty consistently. Now, they may vary from quarter to quarter, but I think the spreads are a testament to the quality of the assets, especially as we've improved them even further with the addition of amenities and some renovations, which incidentally, we're down to our last lobby renovation on our office portfolio, which is happening at Southport 1. It's a Coastal Collection at Torrey Reserve. That's where this newest lease to backfill the troubled tenant is, along with another We're close to letter to tenant on a second floor, and an early renewal of the top two floors, which is a major law firm. That's the last big lift in terms of capital in this office portfolio.

Also saw a nice, uh, uptick in the office, cash, spreads from last quarter, 4.8% to about 9%, this quarter is that lease mixed driven? Do you think it's durable? Curious, kind of how you see that that trend line over the next. I don't know foreseeable future a couple quarters.

Well, if you look back over the years, we've been

Managing to thread the needle of working on occupancy while delivering positive cash spreads pretty consistently. Now, they may vary from quarter to quarter, but I think the spreads are a testament to the quality of the assets, especially as we've...

Improved them even further with the addition of amenities and some renovations. Incidentally, we're down to our last lobby renovation on our office portfolio, which is happening in Southport 1. It's a Coastal Collection tour to reserve. That's where this newest lease at Bakfield is located.

The, uh, troubled tenant is along with another.

We're close to the letter of intent on the second floor, and then in that early renewal of the top two floors, which is a major law firm.

Steve Center: Couple that with completing our spec suite initiatives, our capital demands are going to drop pretty significantly going forward because the heavy lifting has been done, and it's all about execution. The great news about the spec suite program is quickly getting people in and paying rent. We typically spec suites below 10,000 feet, and of the 207,000 feet of new leasing below 10,000 feet, 12 of the 17 deals, or 71% by deal, 62% by square footage were done as a result of that spec suite initiative. Even above 10,000 feet, we did 130,000 feet of new deals. Two of those were spec suites. It's working. We don't even have to build it necessarily to lease it. We've leased many of these suites when they're in the design phase.

So that's the last big list in terms of capital in this office portfolio. Couple that with completing our spec Suite initiative, our our Capital demands are going to drop pretty significantly going forward because the heavy lifting has been done and it's all about execution.

And the great news about the specs we program is is, uh, quickly, you know, getting people in and, uh, paying rent. So, uh, you know, we typically expect sweeps below 10,000 feet and of the

207,000 ft of new leasing. We, you know, below 10,000 ft. 12 of the 17 deals with 71%, by deal. 62%, by square footage. We're done as a result of that spec Suite initiative and then even above 10,000 ft. We did 130,000 ft in New Deals. Uh, 2 of those were spec Suites. Uh, so it's it's working, we

We initiate—we don't even have to build, necessarily, to lease.

Steve Center: If you look at the spec suite program we've got in place, it represents 7.1% of the portfolio. That's a good path to 90% plus leased. We're going to get there most quickly by having those suites ready to go.

We've leased many of these suites when they're in their design phase. So, um,

If you look at the spec suite program we've got in place, it represents 7.1% of the portfolio, so that's a good path to 90% plus leased.

And then we're going to get there most quickly.

Adam Wyll: Haendel, spreads in any given quarter are largely a function of which leases happen to roll recently. With our quarterly denominator being relatively small, one or two leases can move that number pretty easily. We expect the portfolio to continue producing positive spreads over the long term, but we're not going to guide to a number, and we'd expect variability quarter to quarter. We'd say look back four quarters at a time, and you can see the trend.

By having those suites ready to go and handle, you know, spreads in any given quarter are largely a function of which leases happen to roll recently. So with our quarterly denominator being relatively small, one or two leases can move that number pretty easily. So we expect the portfolio to continue producing positive spreads over the long term.

Steve Center: Yeah.

Haendel St. Juste: Yep. Fair enough, appreciate the color there, Steve. Last one, if I may, for Bob. You quantified $0.29 of FFO upside potential, $0.14 from leases already signed. Curious if you could give us a little sense of timing on that $0.14, how much we expect this year versus next year, maybe 2028, just ballpark, trying to get a sense for at least of the visibility you have, how that's going to lay out the next couple of years. Thanks.

But we're not going to guide you to a number and we'd expect variability quarter to quarter. We'd say, look back 4 quarter and you can see the trend. Yeah.

Robert Barton: Well, of that $0.14, that's coming from leases already signed. Steve, do you have any input on that in terms of the timing of that? Of the $0.14, we got $0.03 that's already on the books, but now we need the remaining.

Bob Barton: Well, of that $0.14, that's coming from leases already signed. Steve, do you have any input on that in terms of the timing of that? Of the $0.14, we got $0.03 that's already on the books, but now we need the remaining.

Yep. Yep, fair enough and appreciate the the color there. Steve. Uh last 1 if I met for Bob. Um you Quantified 29 cents of FFL, upside potential, 14 cents from Lisa's already signed curious. If you give us a little sense of timing on that 14 cents, how much you expect this year versus next year? Maybe 28, just ballpark trying to get a sense for at least of the visibility. You have how that's going to lay out the next couple of years. Thanks.

Well of of that uh 14 cents, you know, that that's coming from Lisa's already signed. So I uh,

Steve, do you have any input on that, in terms of the timing?

Robert Barton: I've got that one, actually.

Steve Center: I've got that one, actually.

Robert Barton: You got that one?

Bob Barton: You got that one?

Robert Barton: Yeah. So far, we've recognized, Haendel, $0.03 this year. There's going to be another $0.02 in the back half of the year, so $0.05 for this year that's in place, and then $0.09 next year based on in-place signed leases.

Steve Center: Yeah. So far, we've recognized, Haendel, $0.03 this year. There's going to be another $0.02 in the back half of the year, so $0.05 for this year that's in place, and then $0.09 next year based on in-place signed leases.

So, we got on the 14 cents; we got 3 cents that's already on the books, but now we need the remaining. I've got that one, actually. Yeah, so, so far we've recognized, hand out, 3 cents this year—there's going to be another 2 cents in the back half of the year. So, 5 cents for this year, that's in place, and then 9 cents next year.

Based on in place, signed leases.

Haendel St. Juste: Got it. Great. Helpful. Thank you, guys. I'll yield.

Got it. Okay, helpful. Thank you guys. I'll yield

Steve Center: Thank you, Haendel.

Thank you handle.

Operator 2: The next question comes from Ronald Kamdem of Morgan Stanley. Go ahead, please.

Operator: The next question comes from Ronald Kamdem of Morgan Stanley. Go ahead, please.

[Analyst] (Morgan Stanley): Hey, guys. This is Matt on for Ron, Thanks for taking the time. I just wanted to ask about some of the top tenants in the office space. Just looking at the Smartsheet specifically, it looks like you guys took care of about 20-ish thousand square feet of the expiration. Could you guys just talk to the dynamics there, any other large expirations coming due, and if there's been any activity on the Genentech space?

The next question comes from Ronald Campton of Morgan Stanley. Go ahead, please.

Hey guys, this is Matt on for Ron and uh thanks for taking the time. I just wanted to ask about some of the the top 10 tenants in the office space just looking at the Smart sheet specifically. Uh it looks like you guys took care of about 20 20-ish thousand square feet of the expiration. Could you guys just talk to the Dynamics there? Any other large expirations come and do um and like if there's been any activity on the jnn tech space,

Steve Center: With regard to Smartsheet, I think they've shed all the space they're going to shed. They remain committed to the second-floor space, which is roughly 35,000, 36,000 feet. We backfilled their third-floor space, which was coming back in October, it's already leased. The tenant, we got access to the space early so that the tenant could do improvements and occupy the space before that was ever going to expire. That building has consistently performed in that regard, where we've had churn or spaces coming back, they get backfilled quickly. We're sitting at 4.9% vacancy right now at City Center Bellevue. We're doing very well there. With regard to Genentech, no hits on Genentech yet. It's three floors, two of which are interconnected by a stair. It's beautifully built out.

With regard to Spark Sheet, I think they've shed all the space they're going to shed. They remain committed to the second floor space, which is roughly 35,000 to 36,000 square feet. We backfilled their third floor space, which was coming back in October—it's already leased.

And the tenant, we got access to the space early so that the tenant could do improvements and occupy the space before that was ever going to expire.

Steve Center: It's not, in our opinion, going to be a heavy lift to relet it, but it's a big chunk of space in a very challenged market. That being said, we've had recent success at First & Main, where we just leased about 31,000 feet to an accounting firm that was just acquired by a bigger accounting firm. That lease will commence, I think, next August. It's going to be a big lift in terms of construction and tenant improvements. We've got other activity in that building as well as Lloyd. In spite of that being a very challenging market, I think Adam talked about the flight to quality and the results we're achieving are due to that flight to quality.

So, that building has consistently performed in that regard, where we've had churn or spaces coming back, they get back till quickly. We're sitting at 4.9 vacancy right now. It's City Center Belleview. So we're we're we're doing very well there. Um, with regard to janete. No, no hips on janete yet it's 3 floors 2 of which are interconnected by a stair. It's beautifully built out. Uh and so it's not in our opinion. You're going to be a heavy lift to

Rachel Smith: Got it. Just looking to Bellevue more generally, I know there's been a lot of leasing optimism from AI tenants. Would you guys say you guys are seeing signs on the ground that the tenant interest is broadening at all, or would you just say it's more still concentrated towards AI and just more of the same there?

[Analyst] (Morgan Stanley): Got it. Just looking to Bellevue more generally, I know there's been a lot of leasing optimism from AI tenants. Would you guys say you guys are seeing signs on the ground that the tenant interest is broadening at all, or would you just say it's more still concentrated towards AI and just more of the same there?

To re-let it. But it's a big chunk of space and a very challenged Market, uh, that being said, we, we've had recent success at first in Maine, where we just, at least about 31,000, ft to an accounting firm. That was just acquired by a bigger accounting firm and so, uh, that, that lease will commence. I think next August is going to be a big lift in terms of construction and improvements. Uh, and we've got other activity in that building as well as Lloyd, so. So in spite of that being a very challenging Market, I think Adam talked about the flight to Quality and the the results were achieving our results or due to that flight to Quality. So,

Got it and then um, just just look into Belleview more generally. I I know there's been a lot of wheezing optimism from AI tenants.

What do you guys say? Like, you guys are seeing signs on the ground that the tenant interest is broadening at all? Or would you just say it's more still concentrated towards the AI and

Steve Center: Oh, it's not all AI. It's broader. It's a whole spectrum of companies. I'm just looking at 14ACRES. I just look back over time. This year, we leased Kent Water Sports 10,000 feet. That's their corporate headquarters. They make kayaks and all kinds of outdoor equipment. They're owned by Goldman Sachs. Lydig Construction, Evergreen Law. Back to last year, MacDonald-Miller, which is an engineering firm, Hensel Phelps Construction. We actually have become kind of the construction hub at 14ACRES. We've done multiple construction companies there. We're also seeing some healthcare related uses because the neighborhood that it sits in, which is highly affluent, we're getting some traction in some spaces there. It's broader for us. Especially at City Center Bellevue, we've done AI deals in the spec suites, where they're early stage.

Um, yeah, just more of the same there.

Oh, it it's not all AI. It's, it's, it's broader. It's a whole spectrum of companies. I'm just looking at at 14 acres, I just look back over time. Uh, this year we leased tent water sports 10,000 feet. That's their corporate headquarters. They make kayaks and all kinds of Outdoor Equipment. They're owned by Goldman Sachs lighted construction Evergreen law.

Back to last year, MacDonald Miller dowel which is engineering firm. Hensel, Phelps construction. We actually have become kind of a construction Hub at 14 acres.

Steve Center: When I say early stage, they have $100 million in funding, they need to be in space right away. We've done well there. Again, I've just outlined a bunch of other types of tenants that are leasing space as well.

Rachel Smith: Got it. Thank you, guys.

Operator: Got it. Thank you, guys.

We've done multiple construction companies there, we're also seeing uh, some some healthcare related uses because the neighborhood that it sits in uh which is highly affluent. And uh so we're getting some traction with in some cases there. So it's, it's broader for us. I mean, we have especially at City Center value, we've done a ideals and the specs we are there. They're, you know, early stage, when I say early stage even hundred million dollar million dollars in funding and they need to be in space right away. So, we've done well there, um, and uh, but, but again, I've just outlined a bunch of other types of tenants that are that are leasing space as well.

Steve Center: Thanks, Matt.

Got it. Thank you guys.

Thanks man.

Operator 2: This concludes our question and answer session. I would like to turn the conference back over to Adam Wyll for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Adam Wyll for any closing remarks.

This concludes our question-and-answer session. I would like to turn the conference back over to Adam Wyll for any closing remarks.

Adam Wyll: Thanks again, everybody. We appreciate all your support and those who attended our call or listened to it on recorded line. Your support of AAT means a lot to us. We hope you enjoy the rest of your summer, and stay safe, and go Padres.

Thanks again everybody. We appreciate all your support and those who attended our call or listen to it on uh recorded line uh your support of a team means a lot to us. We hope you enjoy the rest of your summer and stay safe and go Padres.

Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2026 American Assets Trust Inc Earnings Call

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