AAT

American Assets Trust is a diversified, San Diego-based REIT (31 office, retail, multifamily and mixed-use properties, plus a 369-room hotel) whose headline screen metrics are misleading and must be read through a REIT lens. The XBRL 'revenue' tag of $39.9M and the resulting P/S of 38.2 and 668% gross margin are artifacts — the contract-revenue tag captures only a sliver. The MD&A's true top line is total property revenue of $436.2M, down 5% YoY, with rental revenue of $410.5M, down 3%. Likewise, the stated 27x P/E on $0.92 EPS overstates expense: adding back $127.3M of D&A and stripping the $44.5M one-time gain on sale of real estate (Del Monte Center) yields roughly $154M of FFO, or about 10x price-to-FFO on a $1.52B market cap — a reasonable, not stretched, valuation for a quality diversified REIT.

The mix tells a two-speed story. Retail is healthy (97.7% leased, same-store rental +$0.8M at Carmel Mountain Plaza and Alamo Quarry), mixed-use occupancy jumped to 96.2% from 90.5%, and multifamily grew on the Genesee Park acquisition (+$3.6M). The drag is office — the largest segment at ~$197M of $410M rental revenue — where occupancy slipped to 83.1% from 85.0% on lower occupancy at Coastal Collection at Torrey Reserve and First & Main. With ~48% of rents tied to office in a soft leasing environment, the revenue trajectory is downward until La Jolla Commons III (placed into service April 2025) and other lease-up offset it.