American Assets Trust, Inc. (NYSE:AAT) Q3 2023 Earnings Call Transcript

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Robert Barton: I guess we’ll start with office. As I mentioned in our remarks, I think we turned the corner. So, I would expect to climb above 90% in 2024. But as important, if not more important, the rent spreads are good and then they vary from quarter-to-quarter. But we’ve got some really positive things happening. So, our NOI is actually up for the three quarters this year versus last year. So, I’m encouraged by the performance in terms of rent spreads. I can’t control rightsizing of companies. It’s just, we’re not losing tenants to competitors. If we’re losing it, we’re losing it to work from home and rightsizing. But again, we’re down to set just 7% rolling in 2024 and maybe the median space is small at 3,600 feet. We’re in play on 30% of that rollover and our rents are good. So, I think we’ll cross back over to the 90-plus percent range in 2024 and we’ll go from there.

Steve Center: On multifamily, we’re using this opportunity to really reposition and upgrade several of our properties in San Diego. Of course, the Pacific Ridge is dependent on USD and Portland is a very special situation. So, I don’t know exactly what the numbers are going to be, but they’ll be all they can be because we’re improving the properties that we own. Abigail, do you want to add anything to that?

Abigail Rex: Sure. In San Diego right now, we are operating at about 93% occupied and our lease percentage right now is just right under 94%. So, when we look at it in terms of our competitors, there is approximately about a 7% availability to rent. So, when we look at our portfolio, we’re right on par with the lease percentages, the availability to rents and our occupancy is where I believe it should be right now. Adam and Ernest have mentioned quality. Our communities are in great locations. We have great team members who operate the properties really well. Our pricing is right where they should be in terms of where we compare to the county averages. And we are trying to offer positive experience in customer service, in addition to great product. And I think we’re faring well in comparison to our competitors in the market.

Steve Center: Adam, as we mentioned, Hatillo, Portland has been slow, Pacific Northwest in particular absorption has eroded. There’s been an oversupply. So, occupancy is down there and that’s kind of dragging the overall numbers. But we’re hopeful that we’ll get those back up to be more in line with where we think it should be.

Operator: Thank you. And this concludes our question-and-answer session. I’d like to turn the conference back over to Ernest Rady for any closing remarks.

Ernest Rady : I’d just like to say thank you all for your interest. These are very turbulent times and the fact that you still care is very important to us. I think that when all this is said and done. We will have differentiated ourselves from the pack. The quality of the portfolio, the excellence of the management with all due and modesty, we’ll say to the market that this is an above-average group with above-average performance and we’ll be grateful for your continued interest. So, thank you, and have a good day. Thanks, everybody.

Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.

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