American Assets Trust, Inc. (AAT) Earnings

Management highlights

### Macro and Market Context - The broader economy is mixed but resilient: growth is solid, unemployment remains low, hiring has moderated, and inflation has eased but remains above target - Commercial real estate transaction activity has become more constructive, with retail and multifamily assets commanding strong pricing, and office transaction activity picking up to improve valuation visibility - Public REITs have outperformed broader equities year-to-date on investor recognition of durable cash flows, limited new supply, and high replacement costs - Flight to quality continues in the office sector: national trophy leasing is above pre-pandemic levels, availability has fallen for 8 consecutive quarters, and new construction is at generational lows - Retail is one of the tightest commercial real estate sectors with national availability near historic lows, limited new construction, and growing asking rents - Multifamily markets in San Diego and Portland have elevated vacancy from recent delivery waves, but new development has slowed materially to improve the supply-demand balance over time - Hawaii tourism is mixed: Oahu visitor arrivals are lower YoY with continued rate pressure, but summer booking is ahead of last year aided by the RIMPAC military exercise ### Portfolio Operational Updates - Office: 14 spec suite leases totaling 76,000 square feet have been signed year-to-date, shortening downtime and boosting occupancy; 200,000 square feet of signed but not-yet-commenced leases represent over $10 million in annualized base rent, with an additional 73,000 square feet in documentation and 150,000 square feet out for proposals - La Jolla Commons Tower 3 is 49% leased, with proposals covering another 33% of the building and strong interest from large prospective tenants - 1 Beach Street (San Francisco) is 35% leased, with remaining first and second floor space under spec suite construction expected to complete in the next few months; tour activity is strong and multiple prospects have shortlisted second floor vacancies - Retail: The portfolio serves affluent, supply-constrained trade areas; tenant health is strong with a short watch list, and the fundamental backdrop remains favorable - Multifamily: 2026 is a stabilization year, with near-term priorities focused on boosting occupancy, improving resident retention, controlling expenses, and offering measured concessions; Pacific Ridge occupancy dipped seasonally for student turnover and is expected to rebound above 90% in the fall - Waikiki Beachwalk: Retail strength and bad debt collections offset hotel rate pressure; management remains focused on rate integrity and cost control for this irreplaceable asset ### Balance Sheet and Capital Allocation - Ended Q2 with $610 million in total liquidity ($110 million cash, $500 million available on the revolving credit facility); the credit facility was successfully recast and upsized in April 2026, extending maturities to April 2030 with no debt maturities before March 2027 - Net debt to EBITDA is 6.7x (quarterly annualized) / 6.9x (trailing 12-month), with a long-term target of 5.5x or below; interest coverage and fixed charge coverage ratios are both 3.0x - Capital is currently prioritized for leasing-related investments in newer and repositioned office assets; external growth opportunities are evaluated selectively with no pressure to force transactions - The board declared a quarterly dividend of $0.34 per share, payable September 17 to shareholders of record September 3; dividend coverage is expected to improve as signed office leases commence - The 2025 sustainability report *Committed to What Matters* has been published on the company website

Guidance

- Management reaffirms the full year 2026 FFO per diluted share guidance range of $1.96 to $2.10, with a midpoint of $2.03 - Current expectations point to achieving the midpoint of the guidance range, with potential to move into the upper half of the range if operating variables develop favorably - Favorable upside risks to guidance include: continued collection of rent from retail tenants previously reserved for bad debt, earlier-than-expected office lease commencements, better-than-expected multifamily occupancy and rent growth, and improved tourism demand lifting Embassy Suites Waikiki performance - Full year guidance excludes the impact of unannounced future acquisitions, dispositions, capital markets activity, or debt refinancings - Incremental FFO timing from already signed office leases: $0.03 per share has been recognized through H1 2026, an additional $0.02 per share will be recognized in the second half of 2026, and the remaining $0.09 per share will be recognized in 2027 - Once three key under-lease-up office assets (La Jolla Commons Tower 3, One Beach Street, Suburban Bellevue) are stabilized, they are expected to deliver $0.29 per share in incremental FFO, $0.14 of which comes from already signed leases

Segment performance

Overall portfolio same-store cash NOI increased 0.3% year-over-year in Q2 2026; excluding a one-time office tenant receivable reserve, it increased 1.3%. Office: same-store NOI increased 0.4% YoY (2.4% excluding the one-time reserve), driven by higher base rent from recently commenced leases at La Jolla Commons Tower 3, partially offset by scheduled tenant expirations. The portfolio ended the quarter 84.4% leased, with 110,000 square feet of new leases signed achieving 9% comparable cash spreads and 10% straight-line spreads. Retail: same-store NOI declined 0.4% YoY. A 14% underlying NOI increase from bad debt collections was offset by lower average daily rate and higher operating expenses at the Embassy Suites Waikiki hotel component. The retail portfolio ended the quarter 98% leased, with 139,000 square feet of new leases signed achieving 3% comparable cash spreads and 20% straight-line spreads. Multifamily: Excluding the RV segment, the portfolio ended the quarter over 94% leased. In San Diego, communities hit 96% occupancy, with 5% renewal rent growth, -2% new lease rent growth, and 3% blended growth. In Portland, Haslow on 8th hit 88% occupancy, with 2% renewal rent growth, 1% new lease rent growth, and 2% blended growth. Hotel (Waikiki Beachwalk Embassy Suites): NOI came to $2.5 million in Q2 2026, down from $2.9 million in Q2 2025. Occupancy increased to 90.5% from 86% YoY, and RevPAR increased 0.9% to $308, while ADR decreased slightly. All three core segments (office, retail, multifamily) achieved record average base rents in the quarter.

Risks & headwinds

- Macroeconomic volatility and geopolitical uncertainty create uneven operating conditions for commercial real estate - Office leasing activity timing is uneven, and large deals can slip into subsequent quarters; management will not chase occupancy targets at the expense of favorable rental rates, lease terms, or tenant credit quality - Portland's office market remains challenged, and San Diego's overall office absorption remains soft despite strong performance in the company's core submarkets - Consumer spending is pressured by higher prices, leading to more selective shopping behavior that can impact retail tenant performance - Multifamily vacancy remains elevated in core markets from recent new construction waves, pressuring near-term rent growth - Hawaii tourism faces ongoing rate competition and lower year-over-year visitor arrivals, pressuring hotel performance - Capital recycling (asset sales) faces structural barriers: low cost bases for existing assets create meaningful tax consequences, requiring tax-efficient transaction structuring to benefit shareholders - Future actual results may differ materially from forward-looking statements due to inherent risks and uncertainties, as detailed in the company's SEC filings

Analyst Q&A

• Q: The company previously guided office occupancy to the mid-80s by end-2026 following 300-400 bps of net growth; has that outlook changed? What occupancy is baked into current full-year guidance? /

  A: The target range for year-end occupancy has not changed, but the outcome is now binary, depending on the timing of large prospective leases currently under proposal. If large deals close this year, occupancy will hit the target range; if they slip to 2027, the company will finish slightly below target. Management will not force subpar leases to hit the occupancy target, as higher-quality deals next year create more long-term value. The uncertainty stems from a recently planned Genentech space return and several large pending tenant decisions.

• Q: Can you share details on the recently reserved office tenant receivable, including near-term expectations for the space? /

  A: The $1.1-$1.2 million reserve covers accrued cash and straight-line rent from a troubled 2025 watch-list tenant, and no revenue from this tenant was included in 2026 guidance. The space has already been fully backfilled by a new signed tenant, with a May 1 commencement date, 84-month term, 7 months of free rent, 3% annual rent bumps, and a $63 starting rent. The reserve is only a one-time accounting adjustment with no material forward operating impact.

• Q: With transaction activity picking up, is the company pursuing capital recycling (asset sales) currently? /

  A: Management evaluates all assets to see if capital can be better deployed elsewhere on a risk-adjusted basis, but two conditions must be met for a transaction: pricing must be compelling, and there must be visibility for a replacement asset that maintains or improves overall portfolio quality. Second, transactions must be structured to offset meaningful tax consequences from the company's low cost bases in existing assets. Management is actively evaluating opportunities but will not force any transactions, and nothing is ready to announce at this time.

• Q: The $0.14 per share of incremental FFO from already signed leases: how will that timing break out between 2026 and 2027? /

  A: Of the $0.14 total from signed leases, $0.03 has already been recognized in the first half of 2026. An additional $0.02 will be recognized in the second half of 2026, bringing the 2026 total to $0.05. The remaining $0.09 will be recognized in 2027 as already leased space is occupied and rent commences.