Key Highlights

● Q2 FFO was US$39.3 million, or US$0.51 per diluted share, versus US$0.52.

● Same-store cash NOI was US$66.5 million, up 0.3% for the quarter.

● Liquidity was US$609.7 million after an amended US$600 million credit facility.

● Full-year 2026 FFO guidance of US$1.96 to US$2.10 per diluted share was affirmed.

American Assets Trust, Inc. (NYSE:AAT) is a real estate investment trust whose common stock trades on the New York Stock Exchange under the ticker AAT. The company noted that the figures are preliminary until its Form 10-Q is filed.

Earnings and funds from operations

Net income for the quarter was US$6.8 million, compared with US$7.1 million in the second quarter of 2025. Income attributable to common stockholders was US$5.2 million, or US$0.09 per diluted share. Funds from operations (FFO), the real estate sector's standard cash-earnings proxy, were US$39.3 million, or US$0.51 per diluted share, against US$0.52 a year earlier. For the six months, FFO was US$1.02 per diluted share, compared with US$1.04.

Six-month net income fell to US$13.5 million from US$61.2 million. The company attributes the drop mainly to a gain on the sale of Del Monte Center recorded in 2025, so the comparison is flattered in the prior period by a one-off item.

Property performance

Same-store cash net operating income (NOI) was US$66.5 million for the quarter, up 0.3%. Excluding a one-time reserve against receivables from an office tenant at Coastal Collection at Torrey Reserve, the company says growth would have been 1.3%. By segment, office NOI rose 0.4%, retail fell 0.4%, multifamily rose 0.9% and the mixed-use property rose 0.7%.

Occupancy at 30 June 2026 was 84.4% for office, 97.9% for retail and 88.4% for multifamily. Multifamily occupancy compares with 94.7% at March 2026 and 88.8% in June 2025. Mixed-use retail was 92.2% occupied and the hotel was 91.2% occupied.

Leasing and rents

The company signed 34 office and retail leases covering about 248,700 square feet, plus 575 multifamily leases. On a comparable basis, office straight-line rents rose 10.2% and cash rents 9.1%, while retail straight-line rents rose 20.2% and cash rents 3.0%. Management reported record average rental rates across office, retail and multifamily.

Balance sheet and dividend

On 1 April 2026 the company amended and restated its credit facility into a US$600 million package, comprising a US$500 million revolver and a US$100 million term loan, both maturing on 1 April 2030. Only the term loan was drawn at quarter end. Liquidity was US$609.7 million, made up of US$109.7 million in cash and US$500.0 million of revolver availability. Just one of its 31 assets carries a mortgage, and gross real estate assets stand at US$3.8 billion.

The board declared a third-quarter dividend of US$0.34 per share, payable on 17 September 2026 to holders of record on 3 September 2026.

FFO Midpoint Implies a Steady Second Half Amid Office and Multifamily Sensitivities

Management affirmed full-year 2026 FFO guidance of US$1.96 to US$2.10 per diluted share, a midpoint of US$2.03. That is management's own outlook, and it excludes future acquisitions, dispositions and financing transactions. Given six-month FFO of US$1.02, reaching the midpoint implies roughly US$1.01 across the second half, a calculation from the reported figures rather than company guidance.

The main sensitivities are office demand and multifamily occupancy, along with tenant credit, as illustrated by the Torrey Reserve reserve.