American Assets Trust, Inc.

I would now like to turn the call over to Meliana Leverton, Associate General Counsel of American Assets Trust. Please go ahead.

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

Good morning, and thank you for joining us today. I want to begin by expressing my appreciation for your continued engagement and support. We're operating in an increasingly complex and unpredictable environment, and your trust in our team and strategy means a great deal. We remain grounded in our long-term approach, one centered on thoughtful capital allocation, operational discipline, and an enduring commitment to shareholder value. While market volatility and macroeconomic uncertainty continue to shape the landscape, we view this period as one that also presents meaningful opportunity. Our portfolio, with its geographic concentration and high growth supply-constrained coastal markets, and its mix of office, retail, and multifamily assets, is built to weather cycles and emerge stronger through them. But let's acknowledge the current reality. The world is absorbing the new administration's policies. Inflation remains sticky. Interest rates are volatile. Geopolitical uncertainty continues to affect sentiment. and the investment community is seeking clarity on the direction of the economy. In these moments, a steady hand and a long-term perspective are critical. We've taken deliberate steps to ensure we're positioned for resilience and growth, steps that include enhancing our assets, actively managing risk, and maintaining a balance sheet that allows us to be nimble in both offense and defense. Particularly as construction costs remain elevated and likely to continue to increase meaningfully, causing replacement costs to soar, We believe the relative value of our high-quality coastal assets will continue to appreciate, and this long-term positioning is central to how we allocate capital and manage risk. What sets American Assets Trust apart is not just the quality of our real estate, but also our ability to make measured, forward-looking decisions. Our team continues to pursue organic growth through leasing, value-add improvements, and development, while actively recycling capital into assets with stronger long-term upsides. and we're doing so with continued focus on reducing our leverage and maintaining strong liquidity, a combination we believe is essential in today's environment. During Q1, our performance was in line with our initial guidance with FFO per diluted share of 52 cents and same-store cash NOI up 3% over the same period last year. This performance reflects the continued strength of our operating portfolio and validates the proactive measures we've taken over the past year to improve asset quality and align our capital structure for long-term stability. Bob will go into more details in a few minutes. Turning to segment updates, with respect to our office portfolio, we're cautiously optimistic about the ongoing shift in office dynamics, albeit economic uncertainty remains a headwind, particularly with job and wage growth being crucial drivers for the office sector. Nevertheless, as companies continue to evolve their in-office strategies, we're seeing increased touring and proposal activity for our high-quality space. In fact, the return to office momentum has continued at steady improvement, according to analyst reports, with average days in the office for Fortune 100 companies improving incrementally to 3.7 days in Q1 compared to 3.4 days in Q4. Our office portfolio ended Q1 at 85.5% leased or 87.6% leased, excluding one beach, and another quarter where we've hit our all-time high for average base rents across our office portfolio. Office leasing activity totaled approximately 140,000 square feet, with spreads on comparable spaces increasing 8% on a cash basis and 15% on a straight-line basis. evidence that rents for modern, well-located, best-in-class space will garner an outsized share of demand. Among the quarter's office highlights, we signed a 16,000-square-foot lease for the top-floor penthouse of La Jolla Commons III with rents in line with our development pro forma and a 29,000-square-foot lease at Timber Ridge in suburban Bellevue, bringing Timber Ridge to 97% leased. We've entered Q2 with momentum, including 27,000 square feet of executed leases and another 88,000 square feet in documentation. Additionally, we are seeing an uptick in touring and prospect interest, not just at La Jolla Commons 3, but also from multiple potential users at One Beach Street in San Francisco. While still early, this activity is an encouraging step toward potential lease discussions. In any case, our office strategy remains focused on optimizing occupancy, enhancing the tenant experience, including their employees' well-being and productivity, and also capturing upside through incremental increases in office utilization rates. We continue to believe that the Class A office market is well positioned for a multi-year recovery, particularly in high barrier coastal markets where demand is returning. As employers seek to attract and retain talent, the role of the office continues to evolve as a tool for collaboration, culture, and productivity. Turning to retail, our portfolio has continued to perform well. Representing approximately 26% of our NOI, this segment has demonstrated notable durability. The portfolio ended the quarter 97% leased, and similar to our office portfolio, our retail portfolio reached an all-time high average base rent in Q1. We executed over 158,000 square feet of new and renewal leases in Q1, with spreads on comparable spaces excluding Del Monte Center, which we sold in Q1, increasing by 13% on a cash basis and 21% on a straight-line basis. Collections remain strong, and the retail tenants on our reserve list have all paid in full through Q1. Meanwhile, though there may be some cracks in consumer spending in light of the ever-changing macro environment and the likely higher price of goods, we continue to believe the demographics surrounding our retail assets allow for a more resilient consumer spending base, relatively speaking, supported by healthy employment levels and continued strength in the housing markets. To the extent consumer spending impacts our percentage rents, I just wanted to point out that our budgeted percentage rents comprise less than 1% of our total retail revenue. Meanwhile, our multifamily portfolio also continues to perform, supported by favorable fundamentals and our focus on supply-constrained coastal submarkets. In San Diego, our communities ended the quarter approximately 95% leased with a blended rent increase of 2% and minimal concessions. Same-store cash NOI for our San Diego multifamily increased 3.5% year-over-year, with net effective rents in Q1 coming in almost 2% above Q1 2024 levels. In San Diego, affordability constraints continue to limit homeownership, supporting sustained rental demand and expectations of continued rent growth over the years to come. In Portland, Haslo on 8th ended Q1 at approximately 90% leased, with blended rent growth of 3% and net effective rents about flat year over year. As previously mentioned, while the Portland market is still digesting recent supply, we are hopeful for a pickup in activity this spring and for vacancy to decline later in 2025, setting the stage for stronger long-term rent growth. Lastly, on portfolio updates, our mixed-use portfolio, Waikiki Beachwalk, recorded an 11% decrease in NOI compared to the same quarter last year, primarily attributable to our embassy suites, with average paid occupancy of 85%, about 6% lower than budget, and rev par about 11% lower than budget, due to a decrease in domestic tourism and rate competition in Waikiki. Nevertheless, in Q1, our hotel performed at the top of its comp set in Waikiki in terms of occupancy, REVPAR, and ADR. Naturally, near-term economic uncertainty may impact leasing activity across our portfolio. We're closely monitoring whether businesses will reassess their plans this year and how retailers will respond, either pausing or moving forward with strategic initiatives, given the current environment of low vacancy and limited new supply in our markets. Now turning to strategic initiatives, we have recently recycled capital in a manner consistent with our long-term strategy. In February, we closed on the sale of Del Monte Center in Monterey. As previously mentioned, this transaction aligns with our long-term strategy to concentrate capital in core markets where we benefit from operational scale and long-term growth prospects. And just days later, we closed on the acquisition of Genesee Parks Apartments, a nearly 200-unit multifamily community in San Diego. This property offers a rare opportunity to unlock substantial value through both operational improvements and long-term redevelopment potential. With rents well below market, we've already begun to realize upside with vacant units leasing at or above our projected pro forma rents, generally a 40% increase on vacant units from average in-place rents, and renewals capped at an approximate 8.5% increase per California law. all of which reinforces our underwriting, and the property is currently at 97% leased. The property's location and fundamentals make it an ideal fit for our platform. Finally, I'm pleased to share that the Board has approved a quarterly dividend of $0.34 per share for Q2. This reflects our confidence in the company's outlook and reinforces our commitment to delivering long-term returns to our shareholders. The dividend will be paid on June 19th to shareholders of record as of June 5th. In closing, I want to reiterate that while these are complex times, our strategy is clear, our portfolio is well-positioned, and our team remains focused and forward-thinking. We'll continue to operate with discipline, flexibility, and a deep commitment to delivering sustainable value. With that, I'll turn it over to Bob to walk through our financial results and guidance in more detail.