American Assets Trust Projects Steady Growth Amid Office Sector Headwinds

American Assets US0240131047

Shares of American Assets Trust (AAT) advanced 3.26% to $18.08 following the release of its detailed annual report, as investors responded to the real estate investment trust's stable operational metrics and constructive guidance. The company's ability to navigate persistent structural challenges within the office market remains a focal point for analysis.

• Q4 FFO per share: $0.47
• Full-Year 2025 FFO per share: $2.00
• Quarterly Revenue: $110.09 million
• 2026 FFO Guidance: Expected range of $1.96 to $2.10 per share
• NOI Growth Target: Same-store net operating income projected to increase over 2%

Looking ahead, American Assets Trust has provided its financial outlook for 2026. The company is targeting a midpoint FFO of $2.03 per share. Furthermore, management anticipates that same-store net operating income (NOI) will grow by more than 2%. This forecast underscores a belief in the organic rental growth potential of its existing property portfolio. More specific details regarding the trajectory of office sector vacancies are anticipated with the next quarterly results in May.

A Return to Normalized Operations

The REIT reported funds from operations (FFO) of $0.47 per share for the fourth quarter of 2025, bringing the full-year total to $2.00. This figure comes in below the prior year's result, a variance primarily attributed to the absence of one-time gains. In 2024, the company's financials were temporarily boosted by non-recurring items including significant legal settlements, fees from early lease terminations, and the sale of the Del Monte Center. The current year's performance therefore reflects a return to a more normalized operational baseline.

Portfolio Performance Reveals Sector Divergence

Operational stability across the portfolio is evident, though it highlights the familiar industry divide between asset classes. The retail segment demonstrates robust health with a 97.7% occupancy rate, while multifamily properties are also strong at 93.7%. In contrast, the office sector continues to face pressure, with occupancy at 83.1%.

Despite this broader challenge, the company's management successfully achieved rental rate increases on new office leases. Comparable cash rents in the office portfolio rose by an average of 6.6%. Geographically, American Assets Trust maintains a significant concentration in Southern California, a region that generates nearly half of its total revenue.