American Assets Trust, Inc. (AAT) reported its financial results for the second quarter and first half of 2026, revealing a modest increase in total revenue and a notable decline in net income compared to the same periods in 2025. For the three months ended June 30, 2026, total revenue reached $109.5 million, up 1% from $107.9 million in the prior year. Rental income contributed $103.1 million, a 2% increase from $101.1 million, while other property income decreased by 7% to $6.4 million. For the first half of 2026, total revenue was $220.1 million, a 2% rise from $216.5 million, with rental income increasing by $3.5 million.
Despite the revenue growth, AAT's net income for the second quarter fell to $6.8 million, down 5% from $7.1 million in the same quarter of 2025. The decline was more pronounced in the first half, where net income dropped 78% to $13.5 million from $61.2 million, largely due to a significant gain on the sale of real estate recorded in the previous year. The company reported earnings per share of $0.09 for both the second quarter and the first half, consistent with the prior year.
Operationally, AAT's portfolio remained stable, with 31 properties generating approximately 6.8 million rentable square feet. The percentage leased across segments improved, with office occupancy rising to 84.4% from 82.0% year-over-year. The retail segment also saw a slight increase in occupancy to 97.9%. However, the multifamily segment experienced a slight decline in occupancy to 87.7%. The company signed 14 office leases totaling 109,715 square feet during the quarter, achieving an average rental rate increase of 9.1% on a cash basis.
In terms of strategic developments, AAT has been actively managing its capital expenditures, which increased to $44.9 million in the first half of 2026, compared to $37.3 million in the same period of 2025. The company continues to pursue growth through its development pipeline, including projects at the Lloyd Portfolio and other multifamily opportunities. AAT's outlook remains focused on enhancing its portfolio through redevelopment and acquisitions, although it acknowledges potential market risks that could impact its operations and financial performance.
Looking ahead, AAT aims to leverage its position in high-barrier-to-entry markets in California, Washington, Oregon, and Hawaii to drive growth in earnings and funds from operations. The company plans to continue evaluating acquisition opportunities while managing its existing properties to optimize performance. However, it remains cautious about external market conditions that could affect its ability to achieve these goals.
About American Assets Trust, Inc.
American Assets Trust, Inc. is a vertically integrated real estate investment trust (REIT) owning, operating, acquiring, and developing office, retail, multifamily, and mixed-use properties. Its portfolio focuses on high-quality assets in high-barrier-to-entry markets across California, Washington, Oregon, Texas, and Hawaii. The company targets affluent neighborhoods and business centers, leveraging market expertise and long-standing relationships to enhance property value through strategic acquisitions, development, repositioning, and active management.
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