SCHEDULE: Rady Group Boosts Stake in American Assets Trust

Ernest Rady and affiliated entities increased their beneficial ownership in American Assets Trust, Inc. to 37.1% and entered a new voting agreement.

Summary

• Reporting Persons (Ernest S. Rady, Ernest Rady Trust, American Assets, Inc.) increased their beneficial ownership in American Assets Trust, Inc.
• The Company's board of directors increased the ownership exemption for Reporting Persons to beneficially or constructively own up to 21.9% of outstanding shares.
• A Voting Support Agreement was executed on May 11, 2026, imposing voting restrictions on shares exceeding 19.9% of outstanding shares.
• Reporting Persons purchased 690,023 Shares for an aggregate consideration of $14,188,013 (excluding brokerage commissions) since April 15, 2025.
• Within the 60 days prior to May 27, 2026, 440,023 Shares were acquired in open-market transactions at weighted average prices ranging from $20.79 to $22.67 per share.
• Ernest S. Rady beneficially owns 28,303,096 shares, representing 37.1% of the class.
• Ernest Rady Trust beneficially owns 26,924,536 shares, representing 35.3% of the class.
• American Assets, Inc. beneficially owns 7,376,603 shares, representing 11.1% of the class.
• The Reporting Persons acquired these securities for investment purposes and may explore various strategic options, including extraordinary corporate transactions.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as moderately positive due to increased insider confidence and investment, balanced by the voting restrictions which could limit the immediate impact of the increased stake on corporate direction.

Positives

• Increased insider ownership by key figures, potentially signaling confidence in the company's future.
• The Board's approval of an increased ownership limit to 21.9% for the Reporting Persons.

Negatives

• The Voting Support Agreement imposes significant restrictions on the voting power of shares exceeding 19.9% beneficial ownership, limiting the Reporting Persons' influence on certain matters.

Risks

• The Reporting Persons may seek to cause the Company to consider or explore extraordinary corporate transactions, such as a merger, reorganization, take-private transaction, security offerings, stock repurchases, asset sales, changes to capitalization or dividend policy, or changes in management or Board composition.

Future Outlook

The Reporting Persons intend to review their investments on an ongoing basis and may acquire additional securities. They may also engage in discussions with management and the Board to explore extraordinary corporate transactions, including mergers, take-private transactions, security offerings, asset sales, or changes to the Company's capitalization, dividend policy, management, or Board composition.

Management Comments

• "The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and they intend to review their investments in the Company on a continuing basis."
• "Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons' review of numerous factors, including... an ongoing evaluation of the Company's business, financial condition, operations and prospects; price levels of the Company's securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments."

Industry Context

StockSavvy.ai notes that increased insider ownership, especially by a significant and long-standing figure like Ernest Rady, can often be interpreted as a vote of confidence in a company's long-term prospects within the REIT sector. However, the accompanying voting agreement, which restricts voting power above a certain threshold, suggests a delicate balance between maintaining influence and adhering to corporate governance structures, potentially to avoid triggering certain control provisions or to manage perceptions of a hostile takeover.

Comparison to Industry Standards

• The beneficial ownership of 37.1% by Ernest S. Rady is significantly higher than typical institutional investor stakes in publicly traded REITs, often indicating a founder's or long-term strategic investor's deep involvement. For example, while Vanguard or BlackRock might hold 5-15% in a large-cap REIT like Simon Property Group (SPG) or Prologis (PLD) for passive investment, a 37.1% stake suggests a more active, controlling interest, similar to family-controlled REITs or those with a dominant founder.
• The voting agreement, limiting voting power above 19.9% despite higher beneficial ownership, is a common mechanism in corporate governance to prevent a single entity from exercising disproportionate control without a formal change of control, often seen in situations where a large shareholder wants to increase their stake but avoid triggering poison pills or other anti-takeover defenses. This contrasts with companies where a single entity might hold a majority stake and thus full voting control, such as Brookfield Asset Management's control over its various listed affiliates.

Corporate Governance

Stakeholder Impact

• Shareholders: Increased insider ownership could be seen as a positive signal, but the voting restrictions on a large portion of the stake might temper expectations of immediate strategic shifts driven by the Reporting Persons. The potential for extraordinary corporate transactions could create uncertainty or opportunities.
• Board/Management: The voting agreement provides a framework for the large shareholder's influence, potentially reducing the risk of hostile actions while allowing for strategic discussions.

Next Steps

• Reporting Persons will continue to review their investments in the Company.
• Reporting Persons may acquire additional securities of the Company.
• Reporting Persons may engage in discussions with management, the Board, other securityholders, and other relevant parties.
• Reporting Persons may encourage the Company to consider extraordinary corporate transactions (e.g., merger, take-private, security offerings, asset sales, changes to capitalization/dividend policy, management/Board changes).
• Reporting Persons may retain consultants and advisors and enter into discussions with potential sources of capital and third parties.

Key Dates

Recommendation

The significant increase in beneficial ownership by Ernest Rady and his affiliated entities, coupled with the Board's approval of an increased ownership limit, signals strong insider confidence in American Assets Trust. This could be a positive long-term indicator. However, the simultaneous implementation of a voting agreement that restricts the voting power of shares exceeding 19.9% introduces a layer of complexity, limiting the immediate direct influence of this increased stake on corporate decisions. While the potential for future strategic actions is mentioned, they are not firm plans. Given the mixed signals of increased insider commitment alongside voting limitations, a "hold" recommendation is appropriate as investors await further clarity on the strategic direction and the actual impact of the new voting agreement.

Keywords

American Assets Trust, AAT, Schedule 13D, Beneficial Ownership, Insider Buying, Voting Agreement, Real Estate Investment Trust, REIT, Ernest Rady, Shareholder Activism, Corporate Governance