American Assets Trust Q1 Earnings Call HighlightsApr 30, 2026
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Key Points
Management completed an upsized unsecured credit facility, increasing revolver capacity to $500M (total $600M unsecured capacity) and extending maturities to April 1, 2030, leaving roughly $518M of liquidity and no debt maturities until 2027 while net debt/EBITDA stood at 6.9x (target 5.5x). Office leasing showed momentum with about 237,000 sq ft executed and the office portfolio 84.5% leased, but Genentech’s planned 67,000‑sq‑ft vacate in Q4 shifts management to the lower end of its year‑end 85–88% leasing target. The board maintained the quarterly dividend at $0.34 despite a Q1 payout ratio near 111% due to leasing-related capital and Spec Suite spending, and the company reaffirmed 2026 FFO guidance of $1.96–$2.10 per share while expecting the payout ratio to moderate over the year. Interested in American Assets Trust, Inc.? Here are five stocks we like better.
American Assets Trust (NYSE:AAT) reported first-quarter 2026 funds from operations (FFO) of $0.51 per diluted share and net income attributable to common stockholders of $0.08 per share, as management pointed to steady performance across its diversified portfolio and increased leasing momentum in office.
President and CEO Adam Wyll said the company “started 2026 in line with our expectations,” highlighting encouraging office leasing activity, high retail occupancy, and “steady results” at Waikiki Beach Walk amid what he described as a “still mixed tourism backdrop.”
Balance sheet: expanded credit facility and no maturities until 2027
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Wyll said the company completed a recast and upsize of its unsecured credit facility on April 1, increasing the revolving line of credit from $400 million to $500 million and extending the maturity of both the revolver and a $100 million term loan to April 1, 2030. “Altogether, this facility provides us with $600 million of total unsecured borrowing capacity,” Wyll said, adding that the expanded facility provides “enhanced financial flexibility and runway” with “no debt maturities until 2027.”
EVP and CFO Robert Barton said the company ended the quarter with approximately $518 million of liquidity, including $118 million of cash and $400 million available under the revolving credit facility (prior to the April 1 upsizing). Barton reported net debt to EBITDA of 6.9x on a trailing 12-month basis, noting the company’s long-term target remains 5.5x or below. Interest and fixed charge coverage were both 3.0x, he said.
Office leasing activity continues, with Genentech vacate shifting the outlook
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Wyll said demand remains concentrated “at the top of the market” in well-located, amenitized buildings with strong ownership, and argued the company’s coastal office portfolio is aligned with what tenants are seeking today. He also said artificial intelligence is driving investment and business formation across technology and related ecosystems, and that “the net effect in our markets has been constructive,” while emphasizing that office users are placing a higher bar on location and amenities.
American Assets Trust ended the quarter 84.5% leased in its office portfolio and 86% leased in its same-store office portfolio. Same-store office cash NOI was “essentially flat” year-over-year, Wyll said, modestly ahead of internal expectations and reflecting previously discussed move-outs.
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During the quarter, the company executed about 237,000 square feet of office leases with comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6%, Wyll said. He added that of 14 non-comparable office leases in the quarter (disclosed separately in the supplemental materials), 12 were new tenants and nine were associated with the company’s Spec Suite program.
Looking ahead, Wyll said the company entered the second quarter with roughly:
244,000 square feet of previously signed office leases not yet commenced 122,000 square feet in lease documentation A proposal pipeline of more than 200,000 square feet
At La Jolla Commons Tower III, Wyll said the building was 49% leased with proposals out on another 30% of the building. He said the UTC submarket has limited large-block availability outside of Tower III and “no meaningful new supply on the horizon,” which management believes positions the property to capture larger requirements.
In response to analyst questions, management provided additional color on Tower III’s pipeline, saying it was in proposals with “two full floor users and two multi-floor users,” and that competition is “very narrow.” Management also said there was only “one suite left” on the fourth-floor Spec Suite program and that a fifth-floor spec suite was “pre-leased” despite not being completed until September.
At One Beach Street, Wyll said the building was 36% leased. He noted one larger opportunity referenced previously did not move forward, and said the leasing strategy had shifted toward building a broader pipeline of smaller and mid-sized tenants while advancing Spec Suite build-outs with permits in hand and work underway.
Wyll reiterated a prior goal of ending the year at 85% to 88% leased across the office portfolio, but said the company learned that Genentech at Lloyd District (about 67,000 square feet) “reversed course” on a short-term renewal and will vacate in the fourth quarter. As a result, he said the company is now targeting the lower end of that year-end leasing range.
Barton added that, beyond Genentech, there are three known move-outs that are already “in lease documentation at City Center Bellevue,” totaling 28,000 square feet. He also said he was tracking 173,000 square feet across 17 deals, including relocations tied to tenant expansions that involve tenants “giving space back.”
Retail occupancy stays high; temporary vacancies pressured NOI
Wyll said retail remained “a source of consistent, reliable performance,” with the retail portfolio ending the quarter 98% leased. The company executed about 39,000 square feet of retail leasing, and Wyll said average base rents reached a new portfolio record of $30 per square foot.
Same-store cash NOI in retail was modestly below the prior-year period, which Wyll attributed primarily to temporary vacancy impacts from two former Party City spaces and a former Discount Tire space. He said the Discount Tire space and one of the two Party City spaces have already been re-leased, with cash rents expected to commence later this year. Wyll also noted that less than 3% of retail square footage expires this year.
Barton quantified the retail decline, saying retail NOI fell 0.7% year-over-year due to known vacancies at Gateway Marketplace and Solana Beach Town Center, “both of which have now been addressed through executed leasing.”
Multifamily up year-over-year; Waikiki mixed-use pressured by hotel results
Wyll said same-store cash NOI in multifamily increased 3% year-over-year, which he described as a solid result given competitive supply in San Diego and Portland. Excluding the RV park, the multifamily portfolio ended the quarter 96% leased. In San Diego, apartment communities ended the quarter 98% leased, and Wyll said net effective rents in San Diego (excluding the newest acquisition, Genesee Park) were up just over 1% compared to the prior-year period.
In Portland, Wyll said Hassalo on Eighth ended the quarter 93% leased, up 4% from a year ago, while net effective rents were essentially flat. He characterized 2026 as “more of a stabilization year for multifamily than a recovery year,” with a focus on occupancy, pricing optimization, and controlling expenses.
At Waikiki Beach Walk, Wyll said the retail component performed well year-over-year but was partially offset by softness on the hotel side, resulting in mixed-use cash NOI down modestly from the prior-year period.
Barton said mixed-use NOI declined 2.7% year-over-year. He attributed the result to a 2% increase in the retail component offset by lower average daily rate (ADR) and higher operating expenses at Embassy Suites Waikiki. He reported first-quarter hotel occupancy improved to 92% from 85% a year earlier, while RevPAR increased 2% to $305 and ADR declined 6% to $332. NOI was approximately $2.4 million compared to $2.6 million last year, he said.
On the Q&A, Barton said the hotel continues to outperform its competitive set, citing occupancy of 91% versus 79% for the comp set, while adding that “everybody’s feeling the impact.” He also cited two “Kona” rainstorms in March that brought “significant flooding,” along with the continuing impact of the Japanese yen on travel patterns. Wyll added that Japanese tourism has been slower to recover, saying it used to be closer to 40% of Waikiki tourism and is now about 20%.
Dividend maintained despite elevated payout ratio; 2026 guidance reaffirmed
Wyll said the board approved a quarterly dividend of $0.34 per share, payable June 18 to shareholders of record as of June 4. He acknowledged the payout ratio remained elevated, attributing it largely to leasing-related capital tied to signed leases and the Spec Suite program.
Barton said the first-quarter dividend payout ratio was about 111%, driven primarily by the timing of tenant improvements, leasing commissions, Spec Suite spending, and recurring capital needs. As signed leases commence and convert to cash rent, Barton said management expects the payout ratio to moderate, with the remaining three quarters trending in the low-to-mid 90% range and the full year likely in the upper 90% range. He noted that since the company’s IPO in 2011, the payout ratio has generally been about 65% to 85%.
The company reaffirmed full-year 2026 FFO guidance of $1.96 to $2.10 per share (midpoint $2.03). Barton said the outlook assumes continued stability across the portfolio supported by leasing activity, contractual rent growth, and cost discipline, and he outlined factors that could support results trending toward the upper end of the range, including continued rent payments from retail tenants currently reserved for bad debt, earlier-than-expected office lease commencements, multifamily outperformance on occupancy and/or rent growth, and improved tourism demand benefiting Embassy Suites Waikiki.
About American Assets Trust (NYSE:AAT)
American Assets Trust, Inc is a publicly traded real estate investment trust (REIT) that acquires, develops and manages a diversified portfolio of commercial properties across multiple asset classes. The company's holdings include retail centers, office buildings, multifamily communities and select hotel and resort properties. American Assets Trust pursues an integrated strategy combining proactive redevelopment, leasing initiatives and sustainable design to enhance asset value and drive long-term growth.
Founded in 1998 and headquartered in San Diego, California, American Assets Trust has built a presence in key markets along the West Coast and select western U.S.
The article "American Assets Trust Q1 Earnings Call Highlights" was originally published by MarketBeat.
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American Assets (AAT) Q1 2026 Earnings TranscriptApr 29, 2026
Image source: The Motley Fool.
Date
Wednesday, April 29, 2026 at 11 a.m. ET
Call participants
President and Chief Executive Officer — Adam Wyll Executive Vice President, Chief Financial Officer, and Treasurer — Robert F. Barton
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Full Conference Call Transcript
Adam Wyll: Good morning, everyone, and thank you for joining us today. At American Assets Trust, Inc., we continue to approach this market with the same mindset that has guided us across cycles: patient, disciplined, and with a long-term focus. That mindset, combined with the quality of our assets and our platform, guides how we allocate capital, manage risk, and run our business. We started 2026 in line with our expectations, generating $0.51 of FFO per diluted share and continuing to make progress against the priorities we laid out last quarter. Across the portfolio, we saw encouraging activity, most notably in office leasing, while our retail assets remained highly leased and consistent.
Our multifamily teams operated well in a competitive supply environment, and Waikiki Beach Walk delivered steady results against a still mixed tourism backdrop. Before turning to the portfolio, I want to highlight a significant balance sheet accomplishment. On April 1, we successfully completed the recast and upsize of our unsecured credit facility. We increased our revolving line of credit from $400 million to $500 million and extended the maturity of the revolver and our $100 million term loan to April 1, 2030. Altogether, this facility provides us with $600 million of total unsecured borrowing capacity. This outcome reflects the quality of our portfolio, the strength of our banking relationships, and the confidence our lender group has in our credit.
Importantly, it gives us enhanced financial flexibility and runway as we execute our leasing and operating objectives, now with no debt maturities until 2027. That added capacity is particularly valuable in the current market. While the macro backdrop remains uneven, our tenants are generally well capitalized, and the markets where we operate continue to benefit from diversified economies, strong demographics, and meaningful barriers to new supply. Those structural advantages matter, particularly during periods when the broader landscape is less predictable. One topic that has generated considerable discussion in our office segment is artificial intelligence. AI is driving investment, business formation, and growth across technology, infrastructure, and innovation-oriented companies, along with the professional and advisory ecosystem that supports them.
Story Continues
While its impact on office demand will vary by industry, we believe the net effect in our markets has been constructive. At the same time, the bar for office space keeps rising. When companies make office commitments today, they are focused on location, amenities, flexibility, ownership quality, and the ability to attract talent—attributes that define our coastal office portfolio. On our own platform, we are investing in technology to improve how we operate, from work order management and preventative maintenance analytics to tenant communication tools, while also building the data foundation for future AI capabilities. We are early in this effort, but we believe they can become a differentiator as we improve the tenant experience and our operating margins.
In office, the momentum we flagged last quarter carried forward. Demand concentrates at the top of the market and in well-located, well-amenitized buildings with strong ownership. That is where we compete. Our office portfolio ended the quarter 84.5% leased, and our same-store office portfolio ended the quarter 86% leased. Same-store office cash NOI came in essentially flat year-over-year, modestly ahead of our internal expectations, reflecting the known move-outs we previously discussed. During the quarter, we executed approximately 237,000 square feet of office leases, with comparable cash leasing spreads of 4.8% and straight-line leasing spreads of 10.6%, which are now separately disclosed in our supplemental.
Meanwhile, of our 14 non-comparable leases in Q1, 12 were new tenants, nine of which were in our spec suite program, underscoring the role that program is playing in converting demand into executed leases. We entered the second quarter on solid footing, including approximately 144,000 square feet of previously signed leases not yet commenced, another 122,000 square feet in lease documentation, and a proposal pipeline of over 200,000 square feet. At La Jolla Commons Tower 3, the building is currently 49% leased, with proposals out on another 30% of the building.
The UTC submarket has limited large block availabilities outside of Tower 3, and with no meaningful new supply on the horizon, we believe we are in a strong position to capture large tenant requirements in the submarket, including several active requirements we are tracking today. At 1 Beach Street, the building is currently 36% leased. While one larger opportunity we referenced last quarter did not move forward, our leasing focus has shifted toward building a broader pipeline of smaller and mid-sized tenants. We already have permits in hand and work underway to advance our spec suite build-out, positioning us to capture tenants seeking high-quality, move-in ready space. Prospect activity has improved, and the execution across the portfolio has been strong.
We remain confident that the trajectory of our office portfolio, including our progress towards stabilizing Tower 3 and 1 Beach, will translate into increased cash flow as these leases convert to revenue. Last quarter, we mentioned our goal of ending the year between 85%–90% leased across our office portfolio. Since then, we learned that Genentech at Lloyd District, approximately 67,000 square feet, reversed course on a short-term renewal and will be vacating in Q4. The space itself is turnkey and modern, and we believe it will show well in the market. However, the vacancy was not in our assumptions last quarter, and as a result, we are now targeting the lower end of that range.
We have some work to do, but reaching that level would still represent a meaningful step forward. Retail remains a source of consistent, reliable performance. Our retail portfolio ended the quarter 98% leased, and we executed approximately 39,000 square feet of leasing during the period, with average base rents reaching a new portfolio record of $30 per square foot. Same-store cash NOI was modestly below the prior-year period, primarily due to the temporary impact of vacancies from two former Party City spaces and a former Discount Tire space. The Discount Tire space and one of the two Party City spaces are already re-leased, with cash rents expected to commence later this year. Tenant health across the retail portfolio is strong.
Leasing demand is solid, and our centers benefit from affluent, supply-constrained trade areas with limited new competition. Less than 3% of our retail square footage expires this year, and we are actively engaged on upcoming rollover. While we are closely monitoring the consumer in an uncertain economic climate, we believe the demographics surrounding our retail assets support a resilient spending base and a steady cash flow profile. In multifamily, same-store cash NOI increased 3% year-over-year, a solid result given the competitive supply landscape in San Diego and Portland. Excluding the RV park, our multifamily portfolio ended the quarter 96% leased.
In San Diego, our apartment communities ended the quarter 98% leased, and excluding our newest acquisition, Genesee Park, net effective rents in San Diego were up just over 1% compared to the prior-year period. In Portland, Hassalo on Eighth ended the quarter at 93% leased, up an additional 4% from a year ago. Net effective rents were essentially flat, which we view as a reasonable outcome in the current Portland market. The recovery remains gradual, and our focus right now is on protecting occupancy while positioning for better growth as supply moderates. As we have noted, 2026 is more of a stabilization year for multifamily than a recovery year.
We are focused on optimizing pricing, maintaining occupancy, and tightly managing controllable expenses. At Waikiki Beach Walk, our retail component continued to perform well year-over-year, partially offsetting softness on the hotel side, with overall mixed-use cash NOI down modestly versus the prior-year period. We believe in the long-term value of this irreplaceable fee simple asset and are focused on driving performance across both the hotel and retail components. Finally, I am pleased to share that our Board has approved a quarterly dividend of $0.34 per share, payable on June 18 to shareholders of record as of June 4.
While our payout ratio remained elevated in the quarter, much of that reflects leasing-related capital tied to signed leases and our spec suite program, both of which are intended to drive occupancy and future NOI growth. We continue to have conviction in the long-term cash flow profile of the portfolio and are comfortable maintaining the current dividend at this point in time. Robert F. Barton will provide more detail on the payout ratio and its expected moderation in just a moment. In closing, we are pleased with how we have begun 2026. We are converting leasing activity into future revenue, strengthening our balance sheet, and executing against the plan we laid out entering 2026.
Our priorities for the year are unchanged: advance office leasing, protect the steady cash flow from our retail and multifamily platforms, and remain disciplined in how we allocate capital. At our core, we own irreplaceable coastal real estate, we operate through a vertically integrated platform, and we manage this business with a long-term perspective. We are in a good position, and our focus is on converting that position into earnings growth. With that, I will turn the call over to Robert F. Barton, who will walk through the financials in more detail.
Robert F. Barton: Thanks, Adam, and good morning, everyone. Last night, we reported first quarter 2026 FFO per share of $0.51 and net income attributable to common stockholders of $0.08 per share. FFO increased $0.04 per share compared to 2025, driven primarily by lower G&A expense, incremental rental at Plymouth, Pacific Ridge Apartments, and 14 Acres, as well as lower operating expenses at La Jolla Commons. As we expected, same-store cash NOI across all sectors was flat year-over-year in Q1. Breaking that down by segment as compared to Q1 2025, office same-store NOI was essentially flat, primarily due to the expiration of CLEAResult at First & Main in April 2025. The space has been partially backfilled.
Retail NOI declined 0.7%, driven by the known vacancies Adam mentioned at Gateway Marketplace and Solana Beach Town Center, both of which have now been addressed through executed leasing. Multifamily NOI increased 3%, driven by higher rental income and improved occupancy, particularly at Pacific Ridge and Hassalo on Eighth. Mixed-use NOI declined 2.7%, as a year-over-year increase of 2% in the retail component was offset by lower ADR and higher operating expenses at Embassy Suites Waikiki, where in Q1 occupancy improved to 92% from 85%. RevPAR increased 2% to $305, ADR softened by 6% to $332, and NOI was approximately $2.4 million versus $2.6 million last year. Turning to liquidity and leverage.
We ended the quarter with approximately $518 million of liquidity, including $118 million of cash and $400 million available on our revolving credit facility. As Adam mentioned, we closed the recast and upsized the credit facility on April 1, extending both the $500 million revolver and $100 million term loan to April 2030. Net debt to EBITDA was 6.9x on a trailing twelve-month basis. Our long-term target remains 5.5x or below. Interest and fixed charge coverage were both 3.0x. Turning to the dividend. Our first quarter dividend payout ratio was approximately 111%, driven primarily by the timing of leasing-related capital expenditures including tenant improvements, leasing commissions, and our spec suite program along with normal recurring capital needs.
Importantly, a meaningful portion of this capital is tied to leases that have already been signed or spaces that we are proactively preparing to meet current tenant demand. As those leases commence and convert to cash rent, we expect the payout ratio to moderate. For the remaining three quarters of the year, we currently expect the payout ratio to trend in the low to mid-90% range, with the full-year payout ratio likely landing in the upper-90% range. Since our IPO in 2011, our payout ratio has generally been approximately 65% to 85%. We continue to view that as an appropriate long-term range for the business.
In the interim, given our liquidity position, our visibility into signed lease commencements, and our confidence in the long-term cash flow profile of the portfolio, management and the Board are comfortable maintaining the current dividend. As always, we will continue to evaluate the dividend each quarter in the context of operating performance, leasing progress, capital requirements, and broader market conditions. Turning to 2026 guidance. We are reaffirming our full-year FFO guidance range of $1.96 to $2.10 per share with a midpoint of $2.03. This reflects continued stability across our diversified portfolio, supported by leasing activity, contractual rent growth, and disciplined cost management.
Based on our current outlook, we believe we are well positioned to achieve our full-year objectives, with potential to trend toward the upper end of the range if several factors align: number one, retail tenants currently reserved for bad debt continue to pay their rent; number two, office lease commencements occur ahead of expectations; number three, multifamily outperforms expectations on occupancy and/or rent growth; and number four, tourism demand improves, supporting performance at Embassy Suites Waikiki. As a reminder, our guidance excludes the impact of future acquisitions, dispositions, capital markets activity, or debt refinancings not yet announced. We remain committed to transparency and will continue to provide clear insight into both the results and assumptions.
Additionally, all non-GAAP metrics discussed today are reconciled in our earnings materials. I will now turn the call back over to the operator for Q&A.
Operator: Thank you. We will now open the call for questions. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Todd Thomas from KeyBanc. Please go ahead.
Analyst: Hi, good morning. This is Sean Glass on for Todd. You previously discussed some known move-outs in the office portfolio. I think there was an expectation that there could be 300 to 400 basis points of occupancy from expected vacates. Have any tenant decisions shifted or changed since year-end, and can you remind us what is embedded in guidance for the office portfolio’s year-end lease rate?
Robert F. Barton: Well, as Adam said, the one new one is Genentech, which will occur in Q4 of this year. On the positive side, we have three known move-outs that are in lease documentation at City Center Bellevue specifically. So that is 28,000 feet of move-outs that are already in lease documentation. So that is the latest.
Analyst: And one thing of note that I am tracking is 173,000 feet right now.
Adam Wyll: Seventeen deals. Eight of those, or about 60,000 feet, are relocations due to expansion. So we are expanding tenants, they are giving space back. Those are good-news givebacks of tenants that have already expanded. Once the TIs are done, we are getting their spaces back. So it is not all bad news. And, Sean, we mentioned in the script that we are targeting mid-80% full portfolio occupancy or lease percentage by the end of the year, which is achievable if momentum continues as it is right now. But we are going to give you a range—we have a little bit of flexibility to figure out how it shakes out.
Analyst: Thank you. That is great color. Wanted to ask about La Jolla specifically. Some very good traction there on leasing. Can you talk about the pipeline a little? Were there any additional leases around for signature or anything in documentation? Maybe some color on where you might expect La Jolla to be at year-end? Thank you.
Adam Wyll: So it is the premier offering in not only UTC, but Del Mar as well in terms of available spaces, and I am speaking of Tower 3 specifically. We are in proposals with two full-floor users and two multi-floor users, and we do not have that many floors to lease, so it is a good situation. We are in space planning with every one of them. The competition is very narrow, so we expect to make one or more of those, and that would account for the remainder of the full floors. On the spec suite program, we only have one suite left on the 4th floor.
We have already pre-leased a 5th floor spec suite, and those are not going to be completed until September. So the traction is good. And the traction is with well-capitalized professional service firms—tenants that you want in this sort of building. So we are pleased with that.
Analyst: If I could slip one more in. On 1 Beach, there is some good traction there too. Could you talk a little about the AI demand or otherwise, and where you think that might be at year-end? And maybe you could touch on the one large opportunity I had in pencil, if that changes the equation at all.
Adam Wyll: For that large deal, we gave ourselves a 30-day window in which to vet it. There were some complexities to it due to the use, dealing with exiting, dealing with the traffic and such, and it ended up not panning out. We spent 45 days on it. But we pivoted very quickly back to the spec suite program, which is underway, and Jerry and his team will complete that construction around September. We pre-leased that 3rd floor before we had started construction on that floor, so we expect to have similar results. I cannot give you the exact timing, but we are optimistic.
Analyst: Thank you.
Operator: The next question comes from Haendel St. Juste from Mizuho. Please go ahead.
Ravi Vijay Vaidya: Good morning, guys. This is Ravi Vaidya on the line for Haendel. Hope you all are doing well. I wanted to ask a bit about the signed and not occupied pipeline in both office and retail. Can you give some numbers as to how and when you think leases will begin cash flowing for those two verticals, and maybe some detail about the timing over the next couple of years for both office and retail? Thank you.
Adam Wyll: Hey, Ravi. It is Adam. As I mentioned in my script, we have about a quarter million square feet on the office portfolio signed, not commenced, and I think about $0.07 is reflected in 2026 guidance. But about 100,000 square feet in that signed-but-not-commenced bucket will not hit meaningfully until next year. So looking at about $0.07 per share or so—call it $5-plus million—that will hit this year. I do not have the retail numbers in front of me.
Robert F. Barton: I do not think there is much on that front, though.
Ravi Vijay Vaidya: Got it. That is super helpful. I wanted to ask about the hotel in Hawaii. I noticed the occupancy came up quite a bit as you discussed in your script, but mostly offset by rate. What can we see regarding demand for tourism, foot traffic, and how that asset is positioned from both seeing demand from Japanese and American tourists right now?
Robert F. Barton: Yeah, Ravi, this is Bob here. It is still slow right now, but what is interesting in terms of the rates—we still outperform our competitive set, which consists of just under 10 hotels, including beachfront properties. For example, our occupancy was 91%, but our comp set was 79%. Our ADR was $300-plus, and theirs was under $300. RevPAR—we are $300-plus, and our comp set is significantly under $300. So everybody is feeling the impact, though from the statistics that I am seeing, we are the number one hotel in Waikiki. Two things happened during March.
One is that there were two huge Kona rainstorms, one on March 10 and another on March 24—significant flooding, dumping over [inaudible] gallons of rain—overall, so everybody in town felt that impact. Secondly, the Japanese yen—while the more wealthy clientele from Japan continue to come—has weakened; they have to work through that issue. So there are a lot of little things that are impacting that. Also, you have operating expenses going up. But all in all, it is the number one performing Embassy Suites in the world. It continues to be.
Adam Wyll: Hey, Ravi, just to layer on that. As you know, Waikiki is very sensitive to tourism, especially international demand, and as Robert F. Barton was mentioning, the Japanese are not there as much as they used to be. It used to be closer to 40% of tourism in Waikiki; now it is about 20%. So it is slow incremental progress. Recovery has been slower than anticipated, and affordability pressures are really weighing on the results. Still, it remains a high-barrier-to-entry, globally relevant market, and we view the asset as well positioned for the long term.
Ravi Vijay Vaidya: Thank you. Appreciate the color, guys.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Adam Wyll for closing remarks.
Adam Wyll: Yes. Thanks, everybody, for calling and joining us today or listening on recording later. We appreciate your interest, and we will be as transparent as possible going forward. Take care.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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American Assets (AAT) Q1 2026 Earnings Transcript was originally published by The Motley Fool
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