Earnings Sentiment

Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.

Please consider a small donation if you think this website provides you with relevant information  


Sentiment Distribution


Earnings Call Transcript Word Cloud


Bullish Statements during Earnings call

So that's exciting for us
And the third thing is we have the financial stability to do what we promise and we have an excellent reputation in the marketplace as well
We believe that the flight to quality, experience and stability of our office portfolio for new tenants and the stickiness created by those attributes for our existing customers with leases expiring will drive solid performance through these turbulent times and drive NOI and occupancy growth long term
We believe that long-term focus guided by high-quality, irreplaceable and diverse portfolio of properties as well as the strength of our balance sheet, our top-notch management team, our very nimble and efficient operating platform and our ability to quickly and prudently adapt to meet evolving demands will allow us to remain well positioned to continue growing our earnings on an accretive basis and could contribute to our outperformance over the long term
Beyond that, it's just -- we keep -- we're able to push rents and we continue to achieve rent premiums because we've got really good properties with great amenities
In the meantime, we are encouraged by our operating fundamentals as we built upon our solid growth over our record FFO year in 2022
In fact, we have exceeded that in 2023 to achieve our highest FFO per share since our IPO, and that's over 13 years ago which makes me so proud of our company, the management team and all of our associates
To me, that speaks volumes about the resilience of American Assets Trust, yet we will see opportunity for organic growth over ensuing years, including through the lease-up of our new developments, the eventual rebound of Asian tourism to Oahu, pushing rents and prudently managing expenses that we will do our absolute best to capitalize on
But during these volatile and uncertain times, our #1 priority is maintaining a strong balance sheet with ample liquidity and an increasing dividend
In fact, I think we only have 1 tenant left on the roster this year that's over 10,000 square feet, which is one of our Old Navy's at Alamo Quarry, which is performing incredibly well
So we're feeling really good about the retail portfolio right now
So we feel good
In 2023, our operating fundamentals and financial results were quite healthy and among the best in our history, including the following achievements to name a few
No doubt, this is a testament to our best-in-class and well-managed retail properties that are absolutely dominant in the trade areas which reside in supply-constrained and densely populated markets with favorable demographics
Our highest ever total revenue and over 4% increase from 2022, our highest ever net operating income, or NOI, a 3% increase from 2022
Our highest ever average monthly base rent per square foot for both our office portfolio and retail portfolio, highest average monthly rent per unit for our multifamily portfolio and our highest ever ADR and RevPAR for our WBW Embassy Suites and our highest ever total dividends paid of over $101 million
We believe these achievements reflect in part the meaningful capital improvements that we've made to continue to enhance, improve and amenitize our properties to remain best-in-class which certainly know how well received those have been by our tenants, and it makes a significant difference in our ability to retain existing tenants, attract new tenants and push rents
We keep it in the first-class shape, has an excellent reputation
As Ernest mentioned, our highest ever FFO per share, a 3% increase from 2022 and an approximately 7% compounded annual growth rate in our FFO per share since our IPO in 2011
But otherwise, we feel really good about our retail properties well put
And San Diego and our Landmark at One Market in San Francisco maintain their strong utilization
We continue to see an improved leasing environment post-COVID as retail fundamentals and U.S
As you know, our multifamily communities reside among favorable demographics with fairly low unemployment rates, strong income growth and high ownership costs so we remain bullish long term on our multifamily fundamentals and wanted to note that notwithstanding some softening in the market, we realized same-store cash NOI growth of 5.5% in 2023 as compared to 2022
And we've had really good tour activity
Our comparable retail leasing spreads have maintained their favorable trajectory over the past year plus with a 7% increase on a cash basis and 13% increase on a straight-line basis for Q4 deals and a 6.5% increase on a cash basis and 15% increase on a straight-line basis for all of 2023
So Portland has really been surprisingly strong
The team mentioned that we're continuing to reposition properties, and we're offering great experiences for the residents, and they have great big floor fleets
So -- and San Diego is really strong
The first is Steve does an excellent job
First, -- but first, I want to say that the Board of Directors has approved a quarterly dividend of $0.335 per share for the quarter, an increase of 1.5% from our previous dividend which we believe is supported by our financial results and is an expression of the Board's confidence in our expected performance

Bearish Statements during earnings call

Unfortunately, Japan tourism in Oahu has been much slower than expected due primarily to weakness in the Japanese currency
Bureau of Labor Statistics showed that worker productivity sum to its lowest level in 75 years, most of which decline was attributed to employees working from home and the corresponding lack of development and engagement
Fourth quarter FFO decreased by approximately $0.02 to $0.57 per FFO share compared to the third quarter of 2023 primarily due to lower revenue at the Embassy Suites Waikiki Hotel, as expected due to the normal seasonality between the high season of Q3 and Q4
I think it's also important to note that though the office market is likely to remain challenged primarily because of the secular change to hybrid work and work from home, silver linings can be observed at a granular level with trophy product and premier markets continuing to perform, and that's exactly what we own
This is the first time that we have had negative same-store office cash NOI guidance and in our view, it is due to this unique point in time in which existing and prospective office tenants are taking a longer period of time to make decisions on leasing office space
And like last year, we're just trying to be a little more conservative, not knowing how things shake out, say, for example, with -- we mentioned we have a deal with Rite Aid, but we still put a little reserve around those guys not knowing if they successfully emerge or not, [indiscernible] has been having some challenges
It's just the market is a challenge
But we just erred on the side of caution to be honest with you, given the timing that I mentioned
And so as Abigail has mentioned, occupancy rates soften a little bit
First of all, it was a light quarter
Net effective rents for our multifamily leases at [Hassalo] are flat to slightly down year-over-year compared to the fourth quarter of 2022 as the multifamily market in the Pacific Northwest has remained sluggish with softening rents
At the end of the fourth quarter, our office portfolio was 86% leased, dropping 80 basis points, primarily due to 2 known move-outs in Portland
And by the way, that growth has been notwithstanding the difficult and generally unpredictable economic cycles, volatility and world events that we've been focusing and facing and likely will continue to face
They are number one, same-store cash NOI for all sectors combined, excluding reserves, which I will discuss in more detail in a few minutes, is expected to decrease less than 1% or approximately $0.01 of FFO per share in '24
Broken out by each sector and excluding reserves in each case, same-store office cash NOI is expected to decrease approximately 2.3% or $0.04 per FFO share
We've seen in the past week that UPS, Boeing and others are now insisting on 5 days in the office by their employees as they understandably lose patience with remote work
Ernest Rady In the meantime, the domestic market has filled the void to some extent, but not with the same revenue that would come if it were the Japanese
In Q4 in Portland at our [indiscernible], we saw a blended decrease of approximately 4% between new move-ins and renewals with concessions being offered on longer-term leases as we worked to push our lease percentage from 92% in Q3 to just under 96% at the end of Q4
So we took a somewhat conservative approach, and we will continue to update our numbers each quarter as we prefer to under-promise based on the uncertainty and longer decision-making we see and hopefully over-deliver on results as we have done in the past
We are anticipating decelerating rent growth in both San Diego and Portland markets, as Adam mentioned earlier, along with the increased operating expenses, particularly insurance, security and repairs and maintenance that we expect to incur in '24

Please consider a small donation if you think this website provides you with relevant information