aat-20240730false000150021700015002172024-07-302024-07-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 30, 2024
_________________________
American Assets Trust, Inc.
(Exact name of registrant as specified in its charter)
_________________________
| | | | | | | | |
| Maryland | 001-35030 | 27-3338708 |
(State or other jurisdiction
of incorporation) | (Commission
File No.) | (I.R.S. Employer
Identification No.) |
3420 Carmel Mountain Road, Suite 100
San Diego, California 92121
(Address of principal executive offices and Zip Code)
(858) 350-2600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
_________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | |
| Name of Registrant | Title of each class | Trading Symbol | Name of each exchange on which registered |
| American Assets Trust, Inc. | Common Stock, par value $0.01 per share | AAT | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On July 30, 2024, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter ending June 30, 2024. Also on July 30, 2024, the Company made available on the "Investors" page of its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter ending June 30, 2024. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.
Exhibits 99.1 and 99.2, are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 25, 2024, Ernest S. Rady, Chairman of the Board of Directors (the “Board”) and Chief Executive Officer of the Company, gave notice of his intention to transition from Chief Executive Officer to Executive Chairman effective as of January 1, 2025. In connection with Mr. Rady’s transition to Executive Chairman, the Company and Mr. Rady anticipate entering into an amended and restated employment agreement.
On July 25, 2024, the Board appointed Adam Wyll, the Company’s President and Chief Operating Officer, to fill the role of Chief Executive Officer at the Company effective January 1, 2025. Mr. Wyll’s position as President of the Company will remain unchanged. The full biography and other information with respect to Mr. Wyll required by Item 5.02(c) of Form 8-K are included in the Company’s proxy statement on Schedule 14A for the 2024 annual meeting of stockholders filed with the Securities and Exchange Commission on April 5, 2024 under the heading “Executive Officers,” and such biography is incorporated herein by reference. In connection with Mr. Wyll’s appointment as President and Chief Executive Officer, the Company and Mr. Wyll anticipate entering into an amended and restated employment agreement.
Item 7.01 Regulation FD Disclosure.
As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter ending June 30, 2024 and made available on its website certain supplemental information relating thereto.
The information being furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
The following exhibits are filed herewith:
| | | | | | | | |
Exhibit Number | | Exhibit Description |
| 99.1** | | |
| 99.2** | | |
| 104 | | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
_____________________
** Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | | | | | | | | |
| American Assets Trust, Inc. |
| By: | /s/ Robert F. Barton |
| Robert F. Barton Executive Vice President, CFO |
| July 30, 2024 | | |
Document
American Assets Trust, Inc. Reports Second Quarter 2024 Financial Results
Net income available to common stockholders of $11.9 million and $31.2 million for the three and six months ended June 30, 2024, respectively, or $0.20 and $0.52 per diluted share, respectively.
Funds from Operations ("FFO") per diluted share increased 2% and 6% year-over-year for the three and six months ended June 30, 2024, respectively, or $0.60 and $1.32 per diluted share, respectively.
Increased 2024 FFO per diluted share guidance to a range of $2.48 to $2.54 with a midpoint of $2.51, a 9.6% increase over prior guidance.
CEO Succession Planning - Ernest Rady to transition to Executive Chairman and Adam Wyll to transition to Chief Executive Officer, effective January 1, 2025.
SAN DIEGO, California - 7/30/2024 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its second quarter ended June 30, 2024.
Second Quarter Highlights
•Net income available to common stockholders of $11.9 million and $31.2 million for the three and six months ended June 30, 2024, respectively, or $0.20 and $0.52 per diluted share, respectively.
•FFO increased 2% and 6% year-over-year to $0.60 and $1.32 per diluted share for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.
•Same-store cash Net Operating Income ("NOI") increased 2.1% and 1.8% year-over-year for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. However, excluding a write-off of $0.5 million in the first quarter for non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment, same-store cash NOI increased 2.2% year-over-year for the six months ended June 30, 2024 compared to the same period in 2023.
•Increased 2024 FFO per diluted share guidance to a range of $2.48 to $2.54 with a midpoint of $2.51, a 9.6% increase over the prior 2024 guidance midpoint of $2.29.
•Leased approximately 53,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 15% and 5%, respectively, during the second quarter.
•Leased approximately 64,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 34% and 6%, respectively, during the second quarter.
Financial Results
| | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited, amounts in thousands, except per share data) | Three Months Ended June 30 | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Net income attributable to American Assets Trust, Inc. stockholders | $ | 11,904 | | | $ | 11,983 | | | $ | 31,164 | | | $ | 28,119 | |
| Basic and diluted income attributable to common stockholders per share | $ | 0.20 | | | $ | 0.20 | | | $ | 0.52 | | | $ | 0.47 | |
| FFO attributable to common stock and common units | $ | 46,113 | | | $ | 45,034 | | | $ | 100,761 | | | $ | 95,414 | |
| FFO per diluted share and unit | $ | 0.60 | | | $ | 0.59 | | | $ | 1.32 | | | $ | 1.25 | |
Net income attributable to common stockholders increased $3.0 million for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to (i) a $10 million settlement payment received during the first quarter relating to building specifications for one of the existing buildings at our office project in University Town Center (San Diego), (ii) a $1.4 million net increase in our multifamily segment primarily due to an overall increase in average monthly base rent and an increase in occupancy and (iii) a $0.6 million net increase in our retail segment due to new tenant leases signed, scheduled rent increases and an increase in cost recoveries. These increases were offset by (i) a $6.3 million net settlement payment received on January 3, 2023 related to certain building systems at our Hassalo on Eighth property, (ii) a $1.0 million net decrease in our office segment due to lower occupancy and reduced annualized base rents within our Lloyd Portfolio, (iii) $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment and (iv) higher net interest expense of approximately $0.4 million primarily due to the $225 million Amended and Restated Term Loan Agreement, partially offset by an increase in capitalized interest related to our development projects.
FFO increased $1.1 million for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to an increase in our multifamily segment due to higher occupancy and average monthly base rent and an increase in other income due to interest and investment income attributed to higher yield on our average cash balance during the period. These increases were offset by a decrease in our office segment due to lower occupancy and base rents within our Lloyd Portfolio.
FFO is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release.
Leasing
The portfolio leased status as of the end of the indicated quarter was as follows:
| | | | | | | | | | | |
| June 30, 2024 | March 31, 2024 | June 30, 2023 |
| Total Portfolio | | | |
| Office | 86.6% | 86.4% | 87.4% |
| Retail | 94.5% | 94.4% | 94.6% |
| Multifamily | 90.0% | 92.8% | 85.9% |
| Mixed-Use: | | | |
| Retail | 95.7% | 95.4% | 94.6% |
| Hotel | 88.1% | 89.8% | 83.2% |
| | | |
| Same-Store Portfolio | | |
Office (1) | 88.8% | 88.6% | 89.6% |
| Retail | 94.5% | 94.4% | 94.6% |
| Multifamily | 90.0% | 92.8% | 85.9% |
| Mixed-Use: | | | |
| Retail | 95.7% | 95.4% | 94.6% |
| Hotel | 88.1% | 89.8% | 83.2% |
(1) Same-store office leased percentages exclude One Beach Street due to significant redevelopment activity and land held for development.
During the second quarter of 2024, the company signed 37 leases for approximately 164,700 square feet of office and retail space, as well as 395 multifamily apartment leases. Renewals accounted for 83% of the comparable office leases, 94% of the comparable retail leases, and 61% of the residential leases.
Office and Retail
The annualized base rent per leased square foot as of the end of the indicated quarter was as follows: | | | | | | | | | | | | | | | | | |
| | 3rd Quarter 2023 | 4th Quarter 2023 | 1st Quarter 2024 | 2nd Quarter 2024 |
| Office | Weighted Average Portfolio | $55.54 | $56.27 | $55.72 | $55.48 |
| Retail | Weighted Average Portfolio | $26.34 | $26.44 | $26.65 | $26.85 |
On a comparable basis (i.e., leases for which there was a former tenant) our office and retail leasing spreads as of the end of the indicated quarter are shown below: | | | | | | | | | | | | | | | | | |
| | 3rd Quarter 2023 | 4th Quarter 2023 | 1st Quarter 2024 | 2nd Quarter 2024 |
| Office | Cash Basis % Change Over Prior Rent | 7.0% | 22.4% | 7.9% | 5.2% |
| Straight-Line Basis % Change Over Prior Rent | 13.5% | 30.1% | 10.9% | 14.5% |
| | | | | |
| Retail | Cash Basis % Change Over Prior Rent | 8.2% | 6.8% | 1.9% | 5.8% |
| Straight-Line Basis % Change Over Prior Rent | 18.7% | 12.8% | 22.3% | 34.4% |
On a comparable basis (i.e., leases for which there was a former tenant) during the second quarter of 2024 and trailing four quarters ended June 30, 2024, our office and retail leasing spreads are shown below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Leases Signed | Comparable Leased Sq. Ft. | Average Cash Basis % Change Over Prior Rent | Average Cash Contractual Rent Per Sq. Ft. | Prior Average Cash Contractual Rent Per Sq. Ft. | Straight-Line Basis % Change Over Prior Rent |
| Office | Q2 2024 | 12 | 53,000 | | 5.2% | | $46.77 | $44.46 | | 14.5% | |
| Last 4 Quarters | 38 | 219,000 | | 8.4% | | $55.98 | $51.66 | | 14.2% | |
| | | | | | | | | | | |
| Retail | Q2 2024 | 16 | 64,000 | | 5.8% | | $46.81 | $44.25 | | 34.4% | |
| Last 4 Quarters | 85 | 408,000 | | 5.6% | | $36.22 | $34.12 | | 21.4% | |
Multifamily
The average monthly base rent per leased unit as of the end of the indicated quarter was as follows:
| | | | | | | | | | | | | | |
| 3rd Quarter 2023 | 4th Quarter 2023 | 1st Quarter 2024 | 2nd Quarter 2024 |
| Average Monthly Base Rent per Leased Unit | $ | 2,667 | | $ | 2,619 | | $ | 2,685 | | $ | 2,711 | |
Same-Store Cash Net Operating Income
For the three and six months ended June 30, 2024, same-store cash NOI increased 2.1% and 1.8%, respectively, compared to the three and six months ended June 30, 2023. The same-store cash NOI by segment was as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | Six Months Ended | | | |
| June 30, | | | | | June 30, | | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
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| Cash Basis: | | | | | | | | | | | | | |
| Office | $ | 35,730 | | | $ | 35,778 | | | (0.1) | | % | | $ | 69,244 | | | $ | 69,294 | | | (0.1) | | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | | 36,365 | | | 35,806 | | | 1.6 | | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | | 18,753 | | | 17,493 | | | 7.2 | | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | | 12,066 | | | 11,365 | | | 6.2 | | |
Same-store Cash NOI (1) | $ | 69,654 | | | $ | 68,194 | | | 2.1 | | % | | $ | 136,428 | | | $ | 133,958 | | | 1.8 | | % |
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(1) Same-store office portfolio excludes One Beach Street due to significant redevelopment activity and land held for development.
Same-Store Cash Net Operating Income - Excluding Construction in Progress Write-off
During the first quarter of 2024, the company wrote off $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment. Excluding such non-recurring costs, same-store cash NOI increased 2.2% for the six months ended June 30, 2024, and same-store cash NOI by segment was as follows (in thousands):
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| Three Months Ended | | | | | Six Months Ended | | | |
| June 30, | | | | | June 30, | | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
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| Cash Basis | | | | | | | | | | | | | |
| Office | $ | 35,730 | | | $ | 35,778 | | | (0.1) | | % | | $ | 69,244 | | | $ | 69,294 | | | (0.1) | | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | | 36,888 | | | 35,806 | | | 3.0 | | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | | 18,753 | | | 17,493 | | | 7.2 | | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | | 12,066 | | | 11,365 | | | 6.2 | | |
| Same-store Cash NOI - Excluding Construction in Progress Write-off | $ | 69,654 | | | $ | 68,194 | | | 2.1 | | % | | $ | 136,951 | | | $ | 133,958 | | | 2.2 | | % |
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Office same-store cash NOI slightly decreased for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, primarily due to lower occupancy and annualized base rents at Lloyd Portfolio.
Same-store cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of same-store cash NOI to net income is attached to this press release.
Balance Sheet and Liquidity
At June 30, 2024, the company had gross real estate assets of $3.8 billion and liquidity of $514.9 million, comprised of cash and cash equivalents of $114.9 million and $400.0 million of availability on its line of credit. At June 30, 2024, the company had only 1 out of 31 assets encumbered by a mortgage.
On July 18, 2024, we borrowed $100 million on our unsecured revolving line of credit to repay the entirety of our 3.78% Senior Guaranteed Notes, Series F, upon their maturity on July 19, 2024.
Dividends
The company declared dividends on its shares of common stock of $0.335 per share for the second quarter of 2024. The dividends were paid on June 20, 2024.
In addition, the company has declared a dividend on its common stock of $0.335 per share for the third quarter of 2024. The dividend will be paid in cash on September 19, 2024 to stockholders of record on September 5, 2024.
Guidance
The company increased its 2024 FFO per diluted share guidance to a range of $2.48 to $2.54 per share, an increase of 9.6% at midpoint from the prior 2024 FFO per diluted share guidance range of $2.24 to $2.34 per share. The increased guidance is partially attributable to an $11 million lease termination fee received from a tenant that will be recognized by the company in the third quarter of 2024.
Management will discuss the company's revised guidance in more detail during tomorrow's earnings call. Except as discussed during the call, the company's revised guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financing or repayments. The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates.
CEO Succession
On July 25, 2024, Ernest S. Rady, the company’s Chairman and CEO, gave notice of his intention to transition from CEO to Executive Chairman, effective as of January 1, 2025.
In connection with Mr. Rady’s transition, the company’s board of directors has appointed Adam Wyll, the company’s President and COO, to the role of President and CEO effective on January 1, 2025. Mr. Wyll joined the company’s predecessor in 2004 and has held multiple positions on the company’s executive management team, including President and COO since 2021 and Executive Vice President and COO from 2019 to 2021. Mr. Wyll has over twenty years of experience in commercial real estate, acquisitions and dispositions, structured finance, leasing, and corporate and securities matters.
“I am pleased to announce the appointment of Adam as the new CEO in January 2025. Adam has demonstrated exceptional leadership, a strong commitment to our mission and a deep understanding of our industry, at all levels of our organization. I am confident Adam will continue to build on our solid foundation and guide the company towards a bright future. In my role as Executive Chairman, I look forward to continue leading our board meetings and strategy. I am in good health and have no plans to retire for the foreseeable future,” said Ernest Rady.
Conference Call
The company will hold a conference call to discuss the results for the second quarter of 2024 on Wednesday, July 31, 2024 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-833-816-1162 and ask to join the American Assets Trust, Inc. conference call. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.
Supplemental Information
Supplemental financial information regarding the company's second quarter 2024 results may be found on the "Financial Reporting" tab of the “Investors” page of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.
Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data) | | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| | | | |
| Assets | (unaudited) | | |
| Real estate, at cost | | | | | |
| Operating real estate | $ | 3,524,459 | | | $ | 3,502,251 | |
| Construction in progress | | 244,995 | | | | 239,030 | |
| Held for development | | 487 | | | | 487 | |
| | 3,769,941 | | | | 3,741,768 | |
| Accumulated depreciation | | (1,087,473) | | | | (1,036,453) | |
| Real estate, net | | 2,682,468 | | | | 2,705,315 | |
| Cash and cash equivalents | | 114,880 | | | | 82,888 | |
| | | | | |
| Accounts receivable, net | | 7,557 | | | | 7,624 | |
| Deferred rent receivables, net | | 90,103 | | | | 89,210 | |
| Other assets, net | | 97,924 | | | | 99,644 | |
| | | | | |
| Total assets | $ | 2,992,932 | | | $ | 2,984,681 | |
| Liabilities and equity | | | | | |
| Liabilities: | | | | | |
| Secured notes payable, net | $ | 74,714 | | | $ | 74,669 | |
| Unsecured notes payable, net | | 1,616,259 | | | | 1,614,958 | |
| | | | | |
| Accounts payable and accrued expenses | | 70,222 | | | | 61,312 | |
| Security deposits payable | | 8,951 | | | | 8,880 | |
| Other liabilities and deferred credits, net | | 77,130 | | | | 71,187 | |
| | | | | |
| Total liabilities | | 1,847,276 | | | | 1,831,006 | |
| Commitments and contingencies | | | | | |
| Equity: | | | | | |
| American Assets Trust, Inc. stockholders' equity | | | | | |
| Common stock, $0.01 par value, 490,000,000 shares authorized, 60,901,583 and 60,895,786 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | | 609 | | | | 609 | |
| Additional paid-in capital | | 1,472,569 | | | | 1,469,206 | |
| Accumulated dividends in excess of net income | | (289,486) | | | | (280,239) | |
| Accumulated other comprehensive income | | 8,557 | | | | 8,282 | |
| Total American Assets Trust, Inc. stockholders' equity | | 1,192,249 | | | | 1,197,858 | |
| Noncontrolling interests | | (46,593) | | | | (44,183) | |
| Total equity | | 1,145,656 | | | | 1,153,675 | |
| Total liabilities and equity | $ | 2,992,932 | | | $ | 2,984,681 | |
American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data) | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Revenue: | | | | | | | |
| Rental income | $ | 105,094 | | | $ | 103,901 | | | $ | 210,115 | | | $ | 206,611 | |
| Other property income | 5,796 | | | 5,820 | | | 11,470 | | | 10,864 | |
| Total revenue | 110,890 | | | 109,721 | | | 221,585 | | | 217,475 | |
| Expenses: | | | | | | | |
| Rental expenses | 29,505 | | | 28,711 | | | 59,346 | | | 56,216 | |
| Real estate taxes | 10,843 | | | 11,086 | | | 22,089 | | | 22,718 | |
| General and administrative | 8,737 | | | 8,609 | | | 17,579 | | | 17,608 | |
| Depreciation and amortization | 31,011 | | | 29,823 | | | 61,228 | | | 59,724 | |
| Total operating expenses | 80,096 | | | 78,229 | | | 160,242 | | | 156,266 | |
| Operating income | 30,794 | | | 31,492 | | | 61,343 | | | 61,209 | |
| Interest expense, net | (16,289) | | | (16,368) | | | (32,544) | | | (32,097) | |
| | | | | | | |
| | | | | | | |
| Other income, net | 789 | | | 273 | | | 11,118 | | | 6,951 | |
| Net income | 15,294 | | | 15,397 | | | 39,917 | | | 36,063 | |
| Net income attributable to restricted shares | (195) | | | (190) | | | (391) | | | (379) | |
Net income attributable to unitholders in the Operating Partnership | (3,195) | | | (3,224) | | | (8,362) | | | (7,565) | |
Net income attributable to American Assets Trust, Inc. stockholders | $ | 11,904 | | | $ | 11,983 | | | $ | 31,164 | | | $ | 28,119 | |
| | | | | | | |
| Net income per share | | | | | | | |
Basic income attributable to common stockholders per share | $ | 0.20 | | | $ | 0.20 | | | $ | 0.52 | | | $ | 0.47 | |
Weighted average shares of common stock outstanding - basic | 60,312,878 | | | 60,146,210 | | | 60,311,399 | | | 60,145,414 | |
| | | | | | | |
Diluted income attributable to common stockholders per share | $ | 0.20 | | | $ | 0.20 | | | $ | 0.52 | | | $ | 0.47 | |
Weighted average shares of common stock outstanding - diluted | 76,494,415 | | | 76,327,747 | | | 76,492,936 | | | 76,326,951 | |
| | | | | | | |
| Dividends declared per common share | $ | 0.335 | | | $ | 0.330 | | | $ | 0.670 | | | $ | 0.660 | |
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Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited): | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, 2024 | | June 30, 2024 |
| Funds From Operations (FFO) | | | | | |
| Net income | $ | 15,294 | | | $ | 39,917 | |
| Depreciation and amortization of real estate assets | | 31,011 | | | | 61,228 | |
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| FFO, as defined by NAREIT | $ | 46,305 | | | $ | 101,145 | |
| Less: Nonforfeitable dividends on restricted stock awards | | (192) | | | | (384) | |
| FFO attributable to common stock and units | $ | 46,113 | | | $ | 100,761 | |
| FFO per diluted share/unit | $ | 0.60 | | | $ | 1.32 | |
| Weighted average number of common shares and units, diluted | | 76,495,008 | | | | 76,493,569 | |
Reconciliation of Same-Store Cash NOI to Net Income
The company's reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited): | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Same-store cash NOI - Excluding construction in progress write-off | $ | 69,654 | | | $ | 68,194 | | | $ | 136,951 | | | $ | 133,958 | |
Construction in progress write-off (1) | — | | | — | | | (523) | | | — | |
Same-store cash NOI (2) | 69,654 | | | 68,194 | | | 136,428 | | | $ | 133,958 | |
| Non-same-store cash NOI | (397) | | | (258) | | | (692) | | | (495) | |
Tenant improvement reimbursements (3) | 183 | | | 197 | | | 318 | | | 338 | |
| Cash NOI | $ | 69,440 | | | $ | 68,133 | | | $ | 136,054 | | | $ | 133,801 | |
Non-cash revenue and other operating expenses (4) | 1,102 | | | 1,791 | | | 4,096 | | | 4,740 | |
| General and administrative | (8,737) | | | (8,609) | | | (17,579) | | | (17,608) | |
| Depreciation and amortization | (31,011) | | | (29,823) | | | (61,228) | | | (59,724) | |
| Interest expense, net | (16,289) | | | (16,368) | | | (32,544) | | | (32,097) | |
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| Other income, net | 789 | | | 273 | | | 11,118 | | | 6,951 | |
| Net income | $ | 15,294 | | | $ | 15,397 | | | $ | 39,917 | | | $ | 36,063 | |
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| Number of properties included in same-store analysis | 30 | | 30 | | 30 | | 29 |
(1) During the first quarter of 2024, the company wrote off $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment.
(2) Same-store office portfolio excludes One Beach Street due to significant redevelopment activity and land held for development.
(3) Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
(4) Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances, the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, and straight-line rent expense for our lease of the Annex at The Landmark at One Market.
Reported results are preliminary and not final until the filing of the company's Form 10-Q with the Securities and Exchange Commission and, therefore, remain subject to adjustment.
Use of Non-GAAP Information
Funds from Operations
The company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company's operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company's properties, all of which have real economic effects and could materially impact the company's results from operations, the utility of FFO as a measure of the company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including the company's ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
Cash Net Operating Income
The company uses NOI internally to evaluate and compare the operating performance of the company's properties. The company believes cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP.
Cash NOI is a non-GAAP financial measure of performance. The company defines cash NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company's cash NOI may not be comparable to the cash NOIs of other REITs.
About American Assets Trust, Inc.
American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyber attacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus (such as the outbreak of COVID-19 and its variants) and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; on-going and/or potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
Source: American Assets Trust, Inc.
Investor and Media Contact:
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607
Document
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| SECOND QUARTER 2024 |
| Supplemental Information |
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| Investor and Media Contact |
| American Assets Trust, Inc. |
| Robert F. Barton |
| Executive Vice President and Chief Financial Officer |
| 858-350-2607 |
American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | Office | | Retail | | Multifamily | Mixed-Use |
| Market | | Square Feet | | Square Feet | | Units | Square Feet | | Suites |
| San Diego | | 1,590,552 | | | 1,322,200 | | | 1,453 | | (1) | — | | | — | |
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| Bellevue | | 1,032,683 | | | — | | | — | | | — | | | — | |
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| Portland | | 912,592 | | | 44,236 | | | 657 | | | — | | | — | |
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| Monterey | | — | | | 673,155 | | | — | | | — | | | — | |
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| San Antonio | | — | | | 588,148 | | | — | | | — | | | — | |
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| San Francisco | | 522,696 | | | 35,159 | | | — | | | — | | | — | |
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| Oahu | | — | | | 429,718 | | | — | | | 93,925 | | | 369 | |
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| Total | | 4,058,523 | | | 3,092,616 | | | 2,110 | | | 93,925 | | | 369 | |
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| | | | Square Feet | | % | | NOI % (2) |
| Note: Circled areas represent all markets in which American Assets Trust, Inc. currently owns and operates its real estate properties. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties. | | Office | | 4.1 | | million | | 57% | | 52% |
| Retail (3) | | 3.1 | | million | | 43% | | 26% |
| Data is as of June 30, 2024. | | Totals | | 7.2 | | million | | | | |
| (1) Includes 120 RV spaces. | | | | | | | | | |
(2) Percentage of Net Operating Income (NOI) calculated for the three months ended June 30, 2024. NOI is a non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance. Reconciliations of NOI to net income are included in the Glossary of Terms. | | | | | | | | | |
| (3) Does not include mixed-use retail. | | | | | | | | | |
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| Second Quarter 2024 Supplemental Information | Page |
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| SECOND QUARTER 2024 SUPPLEMENTAL INFORMATION | |
| 1. | FINANCIAL HIGHLIGHTS | |
| Consolidated Balance Sheets | |
| Consolidated Statements of Operations | |
| Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution | |
| Corporate Guidance | |
| Same-Store Net Operating Income (NOI) | |
| Same-Store Cash NOI Comparison excluding Redevelopment | |
| Same-Store Cash NOI Comparison with Redevelopment | |
| Cash NOI By Region | |
| Cash NOI Breakdown | |
| Property Revenue and Operating Expenses | |
| Segment Capital Expenditures | |
| Summary of Outstanding Debt | |
| Market Capitalization | |
| Summary of Development Opportunities | |
| 2. | PORTFOLIO DATA | |
| Property Report | |
| Office Leasing Summary | |
| Retail Leasing Summary | |
| Multifamily Leasing Summary | |
| Mixed-Use Leasing Summary | |
| Lease Expirations | |
| Portfolio Leased Statistics | |
| Top Tenants - Office | |
| Top Tenants - Retail | |
| 3. | APPENDIX | |
| Glossary of Terms | |
This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; decreased rental rates or increased vacancy rates; our failure to generate sufficient cash flows to service our outstanding indebtedness; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing; our inability to develop or redevelop our properties due to market conditions; investment returns from our developed properties may be less than anticipated; general economic conditions; financial market fluctuations; risks that affect the general office, retail, multifamily and mixed-use environment; the competitive environment in which we operate; system failures or security incidents through cyber attacks; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus (such as the outbreak of COVID-19 and its variants) and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; risks related to joint venture arrangements; on-going and/or potential litigation; difficulties in completing dispositions; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for American Assets Trust, Inc. to continue to qualify as a REIT, for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.
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| Second Quarter 2024 Supplemental Information | Page |
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FINANCIAL HIGHLIGHTS
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| Second Quarter 2024 Supplemental Information | Page |
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| CONSOLIDATED BALANCE SHEETS | |
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| (Amounts in thousands, except shares and per share data) | June 30, 2024 | | December 31, 2023 |
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| ASSETS | (unaudited) | | |
| Real estate, at cost | | | |
| Operating real estate | $ | 3,524,459 | | | $ | 3,502,251 | |
| Construction in progress | 244,995 | | | 239,030 | |
| Held for development | 487 | | | 487 | |
| 3,769,941 | | | 3,741,768 | |
| Accumulated depreciation | (1,087,473) | | | (1,036,453) | |
| Net real estate | 2,682,468 | | | 2,705,315 | |
| Cash and cash equivalents | 114,880 | | | 82,888 | |
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| Accounts receivable, net | 7,557 | | | 7,624 | |
| Deferred rent receivable, net | 90,103 | | | 89,210 | |
| Other assets, net | 97,924 | | | 99,644 | |
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| TOTAL ASSETS | $ | 2,992,932 | | | $ | 2,984,681 | |
| LIABILITIES AND EQUITY | | | |
| LIABILITIES: | | | |
| Secured notes payable, net | $ | 74,714 | | | $ | 74,669 | |
| Unsecured notes payable, net | 1,616,259 | | | 1,614,958 | |
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| Accounts payable and accrued expenses | 70,222 | | | 61,312 | |
| Security deposits payable | 8,951 | | | 8,880 | |
| Other liabilities and deferred credits, net | 77,130 | | | 71,187 | |
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| Total liabilities | 1,847,276 | | | 1,831,006 | |
| Commitments and contingencies | | | |
| EQUITY: | | | |
| American Assets Trust, Inc. stockholders' equity | | | |
| Common stock, $0.01 par value, 490,000,000 shares authorized, 60,901,583 and 60,895,786 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 609 | | | 609 | |
| Additional paid in capital | 1,472,569 | | | 1,469,206 | |
| Accumulated dividends in excess of net income | (289,486) | | | (280,239) | |
| Accumulated other comprehensive income | 8,557 | | | 8,282 | |
| Total American Assets Trust, Inc. stockholders' equity | 1,192,249 | | | 1,197,858 | |
| Noncontrolling interests | (46,593) | | | (44,183) | |
| Total equity | 1,145,656 | | | 1,153,675 | |
| TOTAL LIABILITIES AND EQUITY | $ | 2,992,932 | | | $ | 2,984,681 | |
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| Second Quarter 2024 Supplemental Information | Page |
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| CONSOLIDATED STATEMENTS OF OPERATIONS | |
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| (Unaudited, amounts in thousands, except shares and per share data) | Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| REVENUE: | | | | | | | |
| Rental income | $ | 105,094 | | | $ | 103,901 | | | $ | 210,115 | | | $ | 206,611 | |
| Other property income | 5,796 | | | 5,820 | | | 11,470 | | | 10,864 | |
| Total revenue | 110,890 | | | 109,721 | | | 221,585 | | | 217,475 | |
| EXPENSES: | | | | | | | |
| Rental expenses | 29,505 | | | 28,711 | | | 59,346 | | | 56,216 | |
| Real estate taxes | 10,843 | | | 11,086 | | | 22,089 | | | 22,718 | |
| General and administrative | 8,737 | | | 8,609 | | | 17,579 | | | 17,608 | |
| Depreciation and amortization | 31,011 | | | 29,823 | | | 61,228 | | | 59,724 | |
| Total operating expenses | 80,096 | | | 78,229 | | | 160,242 | | | 156,266 | |
| OPERATING INCOME | 30,794 | | | 31,492 | | | 61,343 | | | 61,209 | |
| Interest expense, net | (16,289) | | | (16,368) | | | (32,544) | | | (32,097) | |
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| Other income, net | 789 | | | 273 | | | 11,118 | | | 6,951 | |
| NET INCOME | 15,294 | | | 15,397 | | | 39,917 | | | 36,063 | |
| Net income attributable to restricted shares | (195) | | | (190) | | | (391) | | | (379) | |
| Net income attributable to unitholders in the Operating Partnership | (3,195) | | | (3,224) | | | (8,362) | | | (7,565) | |
| NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS | $ | 11,904 | | | $ | 11,983 | | | $ | 31,164 | | | $ | 28,119 | |
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| EARNINGS PER COMMON SHARE | | | | | | | |
| Basic income from operations attributable to common stockholders per share | $ | 0.20 | | | $ | 0.20 | | | $ | 0.52 | | | $ | 0.47 | |
| Weighted average shares of common stock outstanding - basic | 60,312,878 | | | 60,146,210 | | | 60,311,399 | | | 60,145,414 | |
| Diluted income from continuing operations attributable to common stockholders per share | $ | 0.20 | | | $ | 0.20 | | | $ | 0.52 | | | $ | 0.47 | |
| Weighted average shares of common stock outstanding - diluted | 76,494,415 | | | 76,327,747 | | | 76,492,936 | | | 76,326,951 | |
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| FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION | |
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| (Unaudited, amounts in thousands, except shares and per share data) | Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
Funds from Operations (FFO) (1) | | | | | | | |
| Net income | $ | 15,294 | | | $ | 15,397 | | | $ | 39,917 | | | $ | 36,063 | |
| Depreciation and amortization of real estate assets | 31,011 | | | 29,823 | | | 61,228 | | | 59,724 | |
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| FFO, as defined by NAREIT | 46,305 | | | 45,220 | | | 101,145 | | | 95,787 | |
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| Less: Nonforfeitable dividends on restricted stock awards | (192) | | | (186) | | | (384) | | | (373) | |
| FFO attributable to common stock and common units | $ | 46,113 | | | $ | 45,034 | | | $ | 100,761 | | | $ | 95,414 | |
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| FFO per diluted share/unit | $ | 0.60 | | | $ | 0.59 | | | $ | 1.32 | | | $ | 1.25 | |
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Weighted average number of common shares and common units, diluted (2) | 76,495,008 | | | 76,328,181 | | | 76,493,569 | | | 76,328,678 | |
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Funds Available for Distribution (FAD) (1) | $ | 34,812 | | | $ | 30,926 | | | $ | 78,967 | | | $ | 68,158 | |
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| Dividends | | | | | | | |
| Dividends declared and paid | $ | 25,823 | | | $ | 25,379 | | | $ | 51,644 | | | $ | 50,756 | |
| Dividends declared and paid per share/unit | $ | 0.335 | | | $ | 0.330 | | | $ | 0.670 | | | $ | 0.660 | |
FFO and FAD are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance.
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| FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED) | |
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| (Unaudited, amounts in thousands, except shares and per share data) | Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
Funds Available for Distribution (FAD) (1) | | | | | | | |
| FFO | $ | 46,305 | | | $ | 45,220 | | | $ | 101,145 | | | $ | 95,787 | |
| Adjustments: | | | | | | | |
| Tenant improvements, leasing commissions and maintenance capital expenditures | (12,780) | | | (15,260) | | | (22,731) | | | (28,378) | |
Net effect of straight-line rents (3) | (364) | | | (1,065) | | | (2,663) | | | (3,284) | |
Amortization of net above (below) market rents (4) | (688) | | | (794) | | | (1,431) | | | (1,578) | |
Net effect of other lease assets (5) | (50) | | | 67 | | | (2) | | | 121 | |
| Amortization of debt issuance costs and debt fair value adjustment | 835 | | | 834 | | | 1,670 | | | 1,718 | |
| Non-cash compensation expense | 1,746 | | | 2,110 | | | 3,363 | | | 4,145 | |
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| Nonforfeitable dividends on restricted stock awards | (192) | | | (186) | | | (384) | | | (373) | |
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| FAD | $ | 34,812 | | | $ | 30,926 | | | $ | 78,967 | | | $ | 68,158 | |
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| Summary of Capital Expenditures | | | | | | | |
| Tenant improvements and leasing commissions | $ | 7,030 | | | $ | 7,623 | | | $ | 12,414 | | | $ | 13,627 | |
| Maintenance capital expenditures | 5,750 | | | 7,637 | | | 10,317 | | | 14,751 | |
| $ | 12,780 | | | $ | 15,260 | | | $ | 22,731 | | | $ | 28,378 | |
Notes:
(1) See Glossary of Terms.
(2) For the three and six months ended June 30, 2024 and 2023, the weighted average common shares and common units used to compute FFO per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO per diluted share/unit include additional shares/units which were excluded from the computation of diluted EPS, as they were anti-dilutive for the periods presented.
(3) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(4) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(5) Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
FFO and FAD are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance.
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| Second Quarter 2024 Supplemental Information | Page |
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| (Amounts in thousands, except share and per share data) | | | | | | | |
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| Prior 2024 Guidance Range (1)(2) | | Revised 2024 Guidance Range (2) |
| Funds from Operations (FFO): | | | | | | | |
| Net income | $ | 57,667 | | | $ | 65,320 | | | $ | 73,385 | | | $ | 77,976 | |
| Depreciation and amortization of real estate assets | 114,520 | | | 114,520 | | | 117,147 | | | 117,147 | |
| FFO, as defined by NAREIT | 172,187 | | | 179,840 | | | 190,532 | | | 195,123 | |
| Less: Nonforfeitable dividends on restricted stock awards | (770) | | | (770) | | | (768) | | | (768) | |
| FFO attributable to common stock and units | $ | 171,417 | | | $ | 179,070 | | | $ | 189,764 | | | $ | 194,355 | |
| Weighted average number of common shares and units, diluted | 76,525,480 | | | 76,525,480 | | | 76,517,580 | | | 76,517,580 | |
| FFO per diluted share, updated | $ | 2.24 | | | $ | 2.34 | | | $ | 2.48 | | | $ | 2.54 | |
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Notes:
(1) The Prior 2024 Guidance Range as reported in the company's First Quarter 2024 Supplemental Information.
(2) Management will discuss the company's revised guidance in more detail during tomorrow's earnings call. Except as discussed during the call, the company's revised guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, debt financing or repayments.
FFO is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance.
The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates.
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| Second Quarter 2024 Supplemental Information | Page |
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| SAME-STORE NET OPERATING INCOME (NOI) | |
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| (Unaudited, amounts in thousands) | Three Months Ended June 30, 2024 (1) |
| Office | | Retail | | Multifamily | | Mixed-Use | | Total |
| Real estate rental revenue | | | | | | | | | |
| Same-store | $ | 51,304 | | | $ | 26,475 | | | $ | 16,391 | | | $ | 16,714 | | | $ | 110,884 | |
| Non-same store | 6 | | | — | | | — | | | — | | | 6 | |
| Total | 51,310 | | | 26,475 | | | 16,391 | | | 16,714 | | | 110,890 | |
| Real estate expenses | | | | | | | | | |
| Same-store | 14,542 | | | 7,820 | | | 6,825 | | | 10,758 | | | 39,945 | |
| Non-same store | 403 | | | — | | | — | | | — | | | 403 | |
| Total | 14,945 | | | 7,820 | | | 6,825 | | | 10,758 | | | 40,348 | |
| Net Operating Income (NOI) | | | | | | | | | |
| Same-store | 36,762 | | | 18,655 | | | 9,566 | | | 5,956 | | | 70,939 | |
| Non-same store | (397) | | | — | | | — | | | — | | | (397) | |
| Total | $ | 36,365 | | | $ | 18,655 | | | $ | 9,566 | | | $ | 5,956 | | | $ | 70,542 | |
| Same-store NOI | $ | 36,762 | | | $ | 18,655 | | | $ | 9,566 | | | $ | 5,956 | | | $ | 70,939 | |
Net effect of straight-line rents (2) | (308) | | | 226 | | | (326) | | | 44 | | | (364) | |
Amortization of net above (below) market rents (3) | (479) | | | (209) | | | — | | | — | | | (688) | |
Net effect of other lease assets (4) | (63) | | | 13 | | | — | | | — | | | (50) | |
Tenant improvement reimbursements (5) | (182) | | | (1) | | | — | | | — | | | (183) | |
Same-store cash NOI (5) | $ | 35,730 | | | $ | 18,684 | | | $ | 9,240 | | | $ | 6,000 | | | $ | 69,654 | |
Notes:
(1) Same-store and non-same store classifications are determined based on properties held on June 30, 2024 and 2023. See Glossary of Terms.
(2) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4) Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
(5) Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
NOI and same-store cash NOI are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| SAME-STORE NET OPERATING INCOME (NOI) (CONTINUED) | |
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| (Unaudited, amounts in thousands) | Six Months Ended June 30, 2024 (1) |
| Office | | Retail | | Multifamily | | Mixed-Use | | Total |
| Real estate rental revenue | | | | | | | | | |
| Same-store | $ | 102,979 | | | $ | 52,501 | | | $ | 32,690 | | | $ | 33,402 | | | $ | 221,572 | |
| Non-same store | 13 | | | — | | | — | | | — | | | 13 | |
| Total | 102,992 | | | 52,501 | | | 32,690 | | | 33,402 | | | 221,585 | |
| Real estate expenses | | | | | | | | | |
| Same-store | 29,232 | | | 16,121 | | | 13,806 | | | 21,571 | | | 80,730 | |
| Non-same store | 705 | | | — | | | — | | | — | | | 705 | |
| Total | 29,937 | | | 16,121 | | | 13,806 | | | 21,571 | | | 81,435 | |
| Net Operating Income (NOI) | | | | | | | | | |
| Same-store | 73,747 | | | 36,380 | | | 18,884 | | | 11,831 | | | 140,842 | |
| Non-same store | (692) | | | — | | | — | | | — | | | (692) | |
| Total | $ | 73,055 | | | $ | 36,380 | | | $ | 18,884 | | | $ | 11,831 | | | $ | 140,150 | |
| Same-store NOI | $ | 73,747 | | | $ | 36,380 | | | $ | 18,884 | | | $ | 11,831 | | | $ | 140,842 | |
Net effect of straight-line rents (2) | (3,197) | | | 430 | | | (131) | | | 235 | | | (2,663) | |
Amortization of net above (below) market rents (3) | (962) | | | (469) | | | — | | | — | | | (1,431) | |
Net effect of other lease assets (4) | (28) | | | 26 | | | — | | | — | | | (2) | |
Tenant improvement reimbursements (5) | (316) | | | (2) | | | — | | | — | | | (318) | |
Same-store cash NOI (5) | $ | 69,244 | | | $ | 36,365 | | | $ | 18,753 | | | $ | 12,066 | | | $ | 136,428 | |
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Same-store cash NOI - Excluding Construction in Progress Write-off (6) | $ | 69,244 | | | $ | 36,888 | | | $ | 18,753 | | | $ | 12,066 | | | $ | 136,951 | |
Notes:
(1) Same-store and non-same store classifications are determined based on properties held on June 30, 2024 and 2023. See Glossary of Terms.
(2) Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3) Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4) Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
(5) Tenant improvement reimbursements are excluded from Same-store Cash NOI to provide a more accurate measure of operating performance.
(6) During the first quarter of 2024, the company wrote off $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment.
NOI and same-store cash NOI are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| SAME-STORE CASH NOI COMPARISON EXCLUDING REDEVELOPMENT | |
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| (Unaudited, amounts in thousands) | Three Months Ended | | | | Six Months Ended | | |
| June 30, | | | | June 30, | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
| Cash Basis: | | | | | | | | | | | |
| Office | $ | 35,730 | | | $ | 35,778 | | | (0.1) | % | | $ | 69,244 | | | $ | 69,294 | | | (0.1) | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | 36,365 | | | 35,806 | | | 1.6 | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | 18,753 | | | 17,493 | | | 7.2 | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | 12,066 | | | 11,365 | | | 6.2 | |
Same-store Cash NOI (1) | $ | 69,654 | | | $ | 68,194 | | | 2.1 | % | | $ | 136,428 | | | $ | 133,958 | | | 1.8 | % |
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In the first quarter of 2024, the company wrote off $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment. Excluding such non-recurring costs, same-store cash NOI by segment was as follows:
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| (Unaudited, amounts in thousands) | Three Months Ended | | | | Six Months Ended | | |
| June 30, | | | | June 30, | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
| Cash Basis: | | | | | | | | | | | |
| Office | $ | 35,730 | | | $ | 35,778 | | | (0.1) | % | | $ | 69,244 | | | $ | 69,294 | | | (0.1) | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | 36,888 | | | 35,806 | | | 3.0 | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | 18,753 | | | 17,493 | | | 7.2 | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | 12,066 | | | 11,365 | | | 6.2 | |
| Same-store Cash NOI - Excluding Construction in Progress Write-off | $ | 69,654 | | | $ | 68,194 | | | 2.1 | % | | $ | 136,951 | | | $ | 133,958 | | | 2.2 | % |
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Notes:
(1) See Glossary of Terms.
Same-store cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI to net income is included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| SAME-STORE CASH NOI COMPARISON WITH REDEVELOPMENT | |
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| (Unaudited, amounts in thousands) | Three Months Ended | | | | Six Months Ended | | |
| June 30, | | | | June 30, | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
| Cash Basis: | | | | | | | | | | | |
| Office | $ | 35,603 | | | $ | 35,656 | | | (0.1) | % | | $ | 69,018 | | | $ | 69,058 | | | (0.1) | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | 36,365 | | | 35,806 | | | 1.6 | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | 18,753 | | | 17,493 | | | 7.2 | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | 12,066 | | | 11,365 | | | 6.2 | |
Same-store Cash NOI with Redevelopment (1) | $ | 69,527 | | | $ | 68,072 | | | 2.1 | % | | $ | 136,202 | | | $ | 133,722 | | | 1.9 | % |
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In the first quarter of 2024, the company wrote off $0.5 million in non-recurring costs incurred in prior periods relating to construction in progress for then-prospective construction within our retail segment. Excluding such non-recurring costs, same-store cash NOI with redevelopment by segment was as follows:
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| (Unaudited, amounts in thousands) | Three Months Ended | | | | Six Months Ended | | |
| June 30, | | | | June 30, | | |
| 2024 | | 2023 | | Change | | 2024 | | 2023 | | Change |
| Cash Basis: | | | | | | | | | | | |
| Office | $ | 35,603 | | | $ | 35,656 | | | (0.1) | % | | $ | 69,018 | | | $ | 69,058 | | | (0.1) | % |
| Retail | 18,684 | | | 18,108 | | | 3.2 | | | 36,888 | | | 35,806 | | | 3.0 | |
| Multifamily | 9,240 | | | 8,438 | | | 9.5 | | | 18,753 | | | 17,493 | | | 7.2 | |
| Mixed-Use | 6,000 | | | 5,870 | | | 2.2 | | | 12,066 | | | 11,365 | | | 6.2 | |
| Same-store Cash NOI with Redevelopment - Excluding Construction in Progress Write-off | $ | 69,527 | | | $ | 68,072 | | | 2.1 | % | | $ | 136,725 | | | $ | 133,722 | | | 2.2 | % |
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Notes:
(1) See Glossary of Terms.
Same-store cash NOI with redevelopment is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI with redevelopment to net income is included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| (Unaudited, amounts in thousands) | Three Months Ended June 30, 2024 |
| Office | | Retail | | Multifamily | | Mixed-Use | | Total |
| Cash Basis: | | | | | | | | | |
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| Southern California | $ | 15,286 | | | $ | 8,995 | | | $ | 7,719 | | | $ | — | | | $ | 32,000 | |
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| Northern California | 7,212 | | | 2,771 | | | — | | | — | | | 9,983 | |
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| Hawaii | — | | | 3,142 | | | — | | | 6,000 | | | 9,142 | |
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| Oregon | 5,322 | | | 113 | | | 1,521 | | | — | | | 6,956 | |
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| Texas | — | | | 3,664 | | | — | | | — | | | 3,664 | |
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| Washington | 7,695 | | | — | | | — | | | — | | | 7,695 | |
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| Total Cash NOI | $ | 35,515 | | | $ | 18,685 | | | $ | 9,240 | | | $ | 6,000 | | | $ | 69,440 | |
Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| Three Months Ended June 30, 2024 |
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| Cash NOI Breakdown | | |
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| Portfolio Diversification by Geographic Region | | Portfolio Diversification by Segment |
Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.
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| Second Quarter 2024 Supplemental Information | Page |
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| PROPERTY REVENUE AND OPERATING EXPENSES | |
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| (Unaudited, amounts in thousands) | | Three Months Ended June 30, 2024 |
| | | | Additional | | | | Property | | | | |
| | | | Property | | Billed Expense | | Operating | | Rental | | Cash |
| Property | | Base Rent (1) | | Income (2) | | Reimbursements (3) | | Expenses (4) | | Adjustments (5) | | NOI (6) |
| Office Portfolio | | | | | | | | | | | | |
| La Jolla Commons | | $ | 9,048 | | | $ | 341 | | | $ | 1,996 | | | $ | (2,627) | | | $ | (264) | | | $ | 8,494 | |
Torrey Reserve Campus (7) | | 6,396 | | | 249 | | | 371 | | | (1,852) | | | (385) | | | 4,779 | |
| Torrey Point | | 1,467 | | | 110 | | | 10 | | | (386) | | | (328) | | | 873 | |
| Solana Crossing | | 1,985 | | | 13 | | | 115 | | | (631) | | | (182) | | | 1,300 | |
| The Landmark at One Market | | 10,264 | | | 75 | | | 337 | | | (3,338) | | | — | | | 7,338 | |
| One Beach Street | | — | | | — | | | — | | | (126) | | | — | | | (126) | |
| First & Main | | 2,772 | | | 223 | | | 666 | | | (1,093) | | | 101 | | | 2,669 | |
Lloyd Portfolio (7) | | 3,775 | | | 344 | | | 151 | | | (1,500) | | | (7) | | | 2,763 | |
| City Center Bellevue | | 6,350 | | | 522 | | | 140 | | | (1,686) | | | (180) | | | 5,146 | |
| Eastgate Office Park | | 1,183 | | | 22 | | | 502 | | | (666) | | | — | | | 1,041 | |
| Corporate Campus East III | | 1,135 | | | 58 | | | 502 | | | (517) | | | (147) | | | 1,031 | |
| Bel-Spring 520 | | 511 | | | 11 | | | 227 | | | (261) | | | (11) | | | 477 | |
| Subtotal Office Portfolio | | $ | 44,886 | | | $ | 1,968 | | | $ | 5,017 | | | $ | (14,683) | | | $ | (1,403) | | | $ | 35,785 | |
| Retail Portfolio | | | | | | | | | | | | |
| Carmel Country Plaza | | $ | 994 | | | $ | 27 | | | $ | 242 | | | $ | (281) | | | $ | (34) | | | $ | 948 | |
| Carmel Mountain Plaza | | 3,587 | | | 43 | | | 947 | | | (959) | | | (19) | | | 3,599 | |
| South Bay Marketplace | | 615 | | | 35 | | | 228 | | | (234) | | | — | | | 644 | |
| Gateway Marketplace | | 612 | | | 30 | | | 170 | | | (204) | | | (12) | | | 596 | |
| Lomas Santa Fe Plaza | | 1,667 | | | 16 | | | 312 | | | (483) | | | 1 | | | 1,513 | |
| Solana Beach Towne Centre | | 1,720 | | | 19 | | | 566 | | | (610) | | | — | | | 1,695 | |
| Del Monte Center | | 2,470 | | | 344 | | | 923 | | | (1,246) | | | — | | | 2,491 | |
| Geary Marketplace | | 282 | | | — | | | 133 | | | (135) | | | — | | | 280 | |
| The Shops at Kalakaua | | 263 | | | 15 | | | 49 | | | (93) | | | — | | | 234 | |
| Waikele Center | | 3,235 | | | 410 | | | 884 | | | (1,619) | | | (2) | | | 2,908 | |
| Alamo Quarry Market | | 3,765 | | | 244 | | | 1,381 | | | (1,729) | | | 3 | | | 3,664 | |
| Hassalo on Eighth - Retail | | 260 | | | 26 | | | 52 | | | (225) | | | — | | | 113 | |
| Subtotal Retail Portfolio | | $ | 19,470 | | | $ | 1,209 | | | $ | 5,887 | | | $ | (7,818) | | | $ | (63) | | | $ | 18,685 | |
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| PROPERTY REVENUE AND OPERATING EXPENSES (CONTINUED) | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited, amounts in thousands) | | Three Months Ended June 30, 2024 |
| | | | Additional | | | | Property | | | | |
| | | | Property | | Billed Expense | | Operating | | Rental | | Cash |
| Property | | Base Rent (1) | | Income (2) | | Reimbursements (3) | | Expenses (4) | | Adjustments (5) | | NOI (6) |
| Multifamily Portfolio | | | | | | | | | | | | |
| Loma Palisades | | $ | 4,361 | | | $ | 234 | | | $ | — | | | $ | (1,695) | | | $ | (29) | | | $ | 2,871 | |
| Imperial Beach Gardens | | 1,203 | | | 70 | | | — | | | (495) | | | (3) | | | 775 | |
| Mariner's Point | | 581 | | | 37 | | | — | | | (244) | | | — | | | 374 | |
| Santa Fe Park RV Resort | | 505 | | | 43 | | | — | | | (286) | | | — | | | 262 | |
| Pacific Ridge Apartments | | 5,976 | | | 283 | | | — | | | (2,291) | | | (531) | | | 3,437 | |
| Hassalo on Eighth - Multifamily | | 2,945 | | | 418 | | | — | | | (1,816) | | | (26) | | | 1,521 | |
| Subtotal Multifamily Portfolio | | $ | 15,571 | | | $ | 1,085 | | | $ | — | | | $ | (6,827) | | | $ | (589) | | | $ | 9,240 | |
| Mixed-Use Portfolio | | | | | | | | | | | | |
| Waikiki Beach Walk - Retail | | $ | 2,333 | | | $ | 1,191 | | | $ | 858 | | | $ | (1,750) | | | $ | (23) | | | $ | 2,609 | |
| Waikiki Beach Walk - Embassy Suites™ | | 10,637 | | | 1,763 | | | — | | | (9,009) | | | — | | | 3,391 | |
| Subtotal Mixed-Use Portfolio | | $ | 12,970 | | | $ | 2,954 | | | $ | 858 | | | $ | (10,759) | | | $ | (23) | | | $ | 6,000 | |
| Subtotal Development Properties | | $ | — | | | $ | 6 | | | $ | — | | | $ | (276) | | | $ | — | | | $ | (270) | |
| Total | | $ | 92,897 | | | $ | 7,222 | | | $ | 11,762 | | | $ | (40,363) | | | $ | (2,078) | | | $ | 69,440 | |
Cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of total cash NOI to net income is included in the Glossary of Terms.
Notes:
(1) Base rent for our office and retail portfolio and the retail portion of our mixed-use portfolio represents base rent for the three months ended June 30, 2024 (before deferrals, abatements, and tenant improvement reimbursements) and excludes the impact of straight-line rent and above (below) market rent adjustments. Total abatements for our office portfolio were approximately $1.6 million for the three months ended June 30, 2024. Total abatements for our retail portfolio were $0.1 million for the three months ended June 30, 2024. The abatements for our mixed-use portfolio were minimal for the three months ended June 30, 2024. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Multifamily portfolio base rent represents base rent (including parking, before abatements) less vacancy allowance and employee rent credits and includes additional rents (additional rents include insufficient notice penalties, month-to-month charges and pet rent). There were $0.6 million of abatements for our multifamily portfolio for the three months ended June 30, 2024. For Waikiki Beach Walk - Embassy SuitesTM, base rent is equal to the actual room revenue for the three months ended June 30, 2024. Total tenant improvement reimbursements for our office portfolio, retail portfolio and the retail portion of our mixed-use portfolio were approximately $0.2 million in the aggregate for the three months ended June 30, 2024. A reconciliation of base rent to rental income is shown below:
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| Base Rent | $ | 92,897 | |
| Billed Expense Reimbursement | 11,762 | |
| Percentage Rent | 793 | |
| Straight-line rent components | 364 | |
| Other Rental Income* | (722) | |
| Rental Income | $ | 105,094 | |
•Other rental income includes rent abatement, rent deferral, above market rent, below market rent, lease incentives, tenant improvement reimbursement, storage rent and other miscellaneous rental income.
(2) Represents additional property-related income for the three months ended June 30, 2024, which includes: (i) percentage rent, (ii) other rent (such as storage rent, license fees and association fees) and (iii) other property income (such as late fees, default fees, lease termination fees, parking revenue, the reimbursement of general excise taxes, laundry income and food and beverage sales).
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