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CEO Spotlight: American Assets Trust Emphasizes Internal Development

12/13/2013 | By Mitch Irzinski

John Chamberlain, president and CEO of American Assets Trust, Inc. (NYSE: AAT), joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

American Assets is emphasizing internal development over acquisitions as its growth strategy. Chamberlain gave an update on his development pipeline.

“We’re finding that the returns for development projects are far in excess of acquisition returns,” he said. “So, we’re putting an emphasis on internal development both in Portland, at the Hassalo project, and San Diego—we have three projects underway down there as well. At Hassalo in Portland, we’re very excited about that project. We’re well underway now. We’re on track and on budget. We are at the point of pouring footings for the project, which means we’ve actually excavated over 325,000 cubic yards of material. So, if you can imagine a four-city-block project, 50 feet deep, that’s about what it looks like right now. We believe that project will ultimately become one of the crown jewels, if not the crown jewel, of our portfolio.”

Chamberlain shared his insights regarding the property sectors that he thinks will outperform in 2014.

“In the markets that we are concentrated in, the three categories that we’re in are all outperforming across the board,” he said.  “I expect all three will perform very well, and really not seeing a tapering in any one of those. I can’t say that for real estate in general, but in the markets we’re in, we’re expecting a very solid year.”

Since going public, American Assets has focused on core markets. Chamberlain was asked if he is looking to diversify from a geographical standpoint.

“Absolutely not,” he said. “We believe our philosophy and strategy of sticking to probably what I think anyone would consider the most difficult markets to invest in or to develop in is going to pay off. It continues to pay off, and I think it’s a long-term strategy that we are going to stick with. There are some other markets that we continue to look at, but it’s still a West Coast strategy.”