American Assets Trust Inc Reports Modest Growth in FFO and Net Income for Q4 and Full Year 2023
Net Income: $10.5 million for Q4 and $50.4 million for the full year, marking increases from the previous year.
Funds from Operations (FFO): Increased by 2% for Q4 and 3% for the full year, reaching $0.57 and $2.40 per diluted share respectively.
Same-Store Cash NOI: Grew by 2.6% for Q4 and 4.5% for the full year compared to 2022.
Leasing Activity: Office and retail spaces saw significant rent increases on a cash-basis contractual rent during Q4.
2024 Guidance: FFO per diluted share estimated to be between $2.19 and $2.33, with a midpoint of $2.26.
Liquidity: As of year-end, liquidity stood at $482.9 million, with a low leverage as only one out of 31 assets was encumbered by a mortgage.
Dividends: Declared dividends of $0.33 per share for Q4 2023 and announced $0.335 per share for Q1 2024.
On February 6, 2024, American Assets Trust Inc (NYSE:AAT) released its 8-K filing, detailing its financial results for the fourth quarter and year ended December 31, 2023. The self-administered real estate investment trust, which specializes in retail, office, residential, and mixed-use properties across select U.S. markets, reported an increase in net income available to common stockholders and a modest rise in Funds from Operations (FFO) per diluted share.
American Assets Trust Inc's performance reflects its strategic focus on high-barrier-to-entry markets with properties primarily located in South California, Northern California, Oregon, Washington, and Hawaii. The company operates through four segments: retail, office, mixed-use, and multifamily, with the retail and office segments being the largest contributors to revenue.
Financial Performance and Leasing Highlights
The company's net income available to common stockholders for Q4 stood at $10.5 million, or $0.17 per diluted share, and $50.4 million, or $0.84 per diluted share, for the full year. This represents an increase from the previous year, driven by a net settlement payment, higher annualized base rents in the office segment, new tenant leases in the retail segment, and increased tourism at Waikiki Beach Walk - Embassy Suites.
FFO, a key performance metric for REITs, increased by 2% for the quarter and 3% for the year, reaching $0.57 and $2.40 per diluted share, respectively. This growth is attributed to higher annualized base rents and increased tourism, offset by higher interest expenses and general and administrative costs.
Leasing activity remained robust, with significant rent increases achieved in both office and retail spaces. The company leased approximately 23,000 square feet of office space and 108,000 square feet of retail space during the quarter, with cash-basis contractual rent increases of 22% and 7%, respectively.
Balance Sheet Strength and Dividend Payouts
As of December 31, 2023, American Assets Trust Inc had gross real estate assets of $3.7 billion and liquidity of $482.9 million. The company's balance sheet remains strong with only one out of 31 assets encumbered by a mortgage. Dividends of $0.33 per share were paid for the fourth quarter of 2023, and a dividend of $0.335 per share has been declared for the first quarter of 2024.
2024 Outlook and Guidance
Looking ahead, American Assets Trust Inc has introduced its 2024 annual guidance, projecting an FFO per diluted share in the range of $2.19 to $2.33, with a midpoint of $2.26. This guidance reflects management's confidence in the company's ability to maintain its operational performance and capitalize on market conditions.
The company's results demonstrate its resilience and ability to navigate the complexities of the real estate market, positioning it well for continued growth in 2024. For a more detailed analysis of American Assets Trust Inc's financial results, including reconciliations of net income to FFO and same-store cash NOI, investors and interested parties can refer to the full earnings release and supplemental information available on the company's website.
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Explore the complete 8-K earnings release (here) from American Assets Trust Inc for further details.
This article first appeared on GuruFocus.
