Summary of Alexander & Baldwin (ALEX) 2025 Conference Call Company Overview - **Company Name**: Alexander & Baldwin (ALEX) - **Type**: Diversified Hawaiian Real Estate Investment Trust (REIT) - **History**: Established 155 years ago, converted to a REIT in 2017 - **Focus**: Exclusively operates in Hawaii, leveraging unique market conditions and high barriers to entry [2][4] Portfolio Composition - **Net Operating Income (NOI) Breakdown**: - Retail: Approximately 66% (primarily grocery-anchored) [4][6] - Industrial: About 18% [5][6] - Ground Leases: Roughly 17% [5][6] - Office: Approximately 3-4% (considered non-strategic) [5][9] Growth Opportunities - **Retail Sector**: Strong fundamentals with potential for tenant demand growth; many large retailers lack a presence in Hawaii, presenting long-term opportunities [6][7] - **Industrial Sector**: Extremely tight market with a vacancy rate of 1.2% on Oahu; logistical challenges create opportunities for growth [7][8] - **Existing Portfolio**: High occupancy rates (95.4% overall, 95.2% in retail) with potential for further increases [11] Recent Transactions and Developments - **Maui Business Park**: Secured a 75-year ground lease with a self-storage developer; ongoing construction of a 30,000 square foot industrial building [13][15] - **Oahu Developments**: Building a 21,000 square foot facility pre-leased to Lowe's, capitalizing on retail-driven industrial demand [16][17] Financial Metrics - **Debt Metrics**: Net debt to adjusted EBITDA ratio of 3.6 times; total liquidity over $300 million [26] - **Dividend Policy**: Targets a payout of 100% of re-taxable income; consistent dividend payer since REIT conversion [27][28] Economic Context - **Tourism Impact**: Tourism accounts for about 20% of Hawaii's GDP; visitor counts up 3.2% year-to-date compared to 2024, though still below pre-COVID levels [30][31] - **Government Spending**: Also represents about 20% of GDP; stable federal funding due to Hawaii's strategic military importance [32][33] Challenges and Barriers - **Zoning and Development**: High barriers to entry for new developments; lengthy entitlement processes can take years [39][40] - **Construction Costs**: Elevated due to reliance on imported materials; management's local expertise helps navigate these challenges [41] Investment Thesis - **Differentiated Strategy**: Focused on Hawaii with a diverse asset class portfolio; historically strong performance with a CAGR in same-store NOI growth [42][43] - **Valuation Opportunity**: Current stock price does not reflect the underlying real estate value and growth potential [44] Conclusion - **Overall Positioning**: Alexander & Baldwin presents a unique investment opportunity in a specialized market with strong fundamentals and growth potential, despite challenges in development and construction [42][44]

Core Insights - Alexander & Baldwin, Inc. (A&B) is participating in Nareit's REITweek: 2025 Investor Conference in New York, where the management will present an overview of the company's business and operations [1][2] - The presentation is scheduled for June 3, 2025, from 9:30 a.m. to 10:00 a.m. Eastern Time, and will be accessible via a webcast [2] - A&B is the only publicly-traded real estate investment trust focused exclusively on Hawai'i commercial real estate, owning approximately 4.0 million square feet of commercial space in the state [3] Company Overview - A&B is the largest owner of grocery-anchored neighborhood shopping centers in Hawai'i, managing 21 retail centers, 14 industrial assets, and four office properties, along with 146 acres of ground lease assets [3] - The company has a 155-year history and has played a significant role in the development of various industries in Hawai'i, including agriculture, transportation, tourism, construction, and commercial real estate [3]

Financial Performance - Operating revenue for the first quarter of 2025 decreased by 12.2%, or $7.5 million, to $53.7 million compared to the same period in 2024, primarily due to lower revenues from the Land Operations segment's land sales[100] - Cost of operations decreased by 10.4%, or $3.1 million, to $27.1 million, mainly due to lower cost of sales associated with land sales in the Land Operations segment[101] - Net income for the first quarter of 2025 was $21.4 million, an increase of 7.3% or $1.5 million compared to $20.0 million in 2024[99] - Funds From Operations (FFO) decreased by 9.8%, or $2.9 million, to $26.3 million for the first quarter of 2025 compared to $29.2 million in 2024[99] - Adjusted FFO decreased by 12.7%, or $3.2 million, to $22.3 million for the first quarter of 2025 compared to $25.5 million in 2024[99] - Same-store net operating income (NOI) increased to $32.4 million in Q1 2025 from $31.1 million in Q1 2024, a growth of 4.2%[140] Real Estate Operations - Gain on commercial real estate transactions was $4.1 million, attributed to a ground lease agreement for a 4.7-acre land parcel in Maui Business Park[102] - Commercial Real Estate operating revenue increased by 4.4%, or $2.2 million, to $51.0 million for the first quarter of 2025 compared to the same period in 2024[107] - Commercial Real Estate operating profit rose by 6.6%, or $1.4 million, to $23.4 million for the first quarter of 2025 compared to the prior year[107] - Land Operations segment reported total operating revenue of $2.7 million for Q1 2025, down from $12.3 million in Q1 2024, with operating profit decreasing from $7.9 million to $4.9 million[122][123] Leasing Activity - The Company signed 10 new leases and 32 renewal leases covering a total of 236,800 square feet of GLA, with new leases averaging $16.34 per square foot and renewal leases averaging $27.58 per square foot[109] - The average base rent for 6 comparable new leases increased by 34.6% over expiring leases, while 27 comparable renewal leases saw a 6.4% increase[109] - As of March 31, 2025, the Leased Occupancy rate was 95.4%, up from 94.0% in the previous year, representing a 140 basis point increase[114] - Economic Occupancy improved to 93.9% as of March 31, 2025, compared to 92.3% a year earlier, marking a 160 basis point increase[116] - The retail sector's Leased Occupancy increased to 95.2% from 93.2%, while the industrial sector rose to 97.3% from 96.8%, and the office sector decreased to 79.5% from 83.9%[115] Cash Flow and Capital Expenditures - Operating cash flows from continuing operations for Q1 2025 were $25.9 million, an increase of $9.4 million compared to $16.5 million in Q1 2024, representing a growth of 56.8%[148] - Total capital expenditures for real estate in Q1 2025 amounted to $4,053,000, an increase of 9.3% compared to $3,706,000 in Q1 2024[154] - Cash used in investing activities for continuing operations was $0.8 million in Q1 2025, down from $3.7 million in Q1 2024[152] - Cash used in financing activities for continuing operations was $41.3 million in Q1 2025, up from $25.2 million in Q1 2024, primarily due to cash dividend payments of $16.5 million and debt repayments of $16.6 million[154] Debt and Financial Position - As of March 31, 2025, the company had $440.2 million in fixed-rate debt and $13.0 million in variable-rate debt, with a total weighted average interest rate of 4.62%[143] - The company had $16.9 million in cash on hand as of March 31, 2025, and $307.0 million of available capacity under its revolving credit facility[150] - The Company intends to maintain compliance with financial covenants to ensure continued access to its credit facilities[142] Stock and Market Considerations - The Company has authorized a stock repurchase program of up to $100.0 million, with no shares repurchased during Q1 2025[155] - The company entered into an at-the-market equity distribution agreement allowing for the sale of common stock up to $200.0 million, with no shares sold as of March 31, 2025[151] - The Company faces potential negative impacts from general economic conditions, including inflationary pressures and market volatility, which could affect operating results[158] - The impact of an elevated federal funds rate has contributed to credit tightening and volatility in various industries, including banking and housing[158] - Management's estimates in financial statements are subject to uncertainty, and actual results may differ materially from these estimates[159] - There have been no material changes in market risk disclosures since December 31, 2024[162]

Premier Commercial Real Estate Company First Quarter 2025 Earnings Presentation April 24, 2025 Safe Harbor Statement Statements in this presentation that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limi ...

Core Insights - Alexander & Baldwin Holdings, Inc. reported revenue of $53.74 million for the quarter ended March 2025, reflecting a year-over-year decline of 12.2% [1] - The earnings per share (EPS) for the same period was $0.36, an increase from $0.28 a year ago, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $51.7 million by 3.94%, while the EPS surpassed the consensus estimate of $0.28 by 28.57% [1] Financial Performance Metrics - The company's operating revenue from Commercial Real Estate was $51.04 million, exceeding the two-analyst average estimate of $50.20 million, with a year-over-year increase of 4.4% [4] - In contrast, the operating revenue from Land Operations was reported at $2.70 million, significantly lower than the average estimate of $1.50 million, showing a year-over-year decline of 78.1% [4] - The diluted earnings per share were reported at $0.29, compared to the average estimate of $0.15 from three analysts, indicating stronger-than-expected earnings performance [4] Stock Performance - Over the past month, shares of Alexander & Baldwin Holdings have returned -3.9%, which is better than the Zacks S&P 500 composite's decline of -5.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported a same-store NOI growth of 4.2% for the quarter, with the commercial real estate (CRE) portfolio generating $33.2 million of NOI, representing a 4.6% increase from Q1 of last year [10][18] - Total FFO was $0.36 per share for Q1 2025, consisting of $0.06 from land operations and $0.30 from CRE and corporate [19] - G&A expenses were approximately $7 million, a decrease of 3.4% compared to the same period last year [21] - The company raised its total FFO per share guidance to a range of $1.17 to $1.23, reflecting better-than-expected results in land operations [23] Business Line Data and Key Metrics Changes - The company executed 42 leases in its improved property portfolio, representing approximately 237,000 square feet of GLA and $5.6 million of ABR [13] - Leased occupancy was 95.4%, up 80 basis points sequentially and 40 basis points year-over-year [14] - The company sold 90 acres of primarily agricultural land, contributing approximately 6 cents to land operations earnings for the quarter [13] Market Data and Key Metrics Changes - The company backfilled approximately 75% of a 50,000 square feet industrial vacancy by signing a lease at Kakaako Commerce Center [24] - Economic occupancy at quarter-end was 93.9%, up 100 basis points from the previous quarter and 160 basis points from the same period last year [14] Company Strategy and Development Direction - The company is focusing on improving its CRE portfolio performance, internal and external growth, and streamlining its business and cost structure [10] - A notable transaction involved transferring a five-acre lot at Maui Business Park into the ground lease portfolio, which is expected to contribute nearly a penny in FFO for 2025 [12] - The company is committed to a Hawaii-focused asset class diverse strategy, with self-storage being a new area of investment [12][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic uncertainty but emphasized strong first-quarter results and the ability to manage through challenges [27] - There have been no significant concerns from tenants regarding their operations, and leasing activity remains robust [40][51] - The company is taking proactive measures to mitigate potential impacts from tariffs on construction costs by pre-purchasing materials [42][70] Other Important Information - The company maintains a strong balance sheet with total liquidity of over $300 million and a net debt to adjusted EBITDA ratio of 3.6 times [22] - The Board declared a second-quarter 2025 dividend of $0.225 per share, payable on July 9 [23] Q&A Session Summary Question: Can you provide details on the self-storage transaction and the equity investment opportunity? - The self-storage transaction involved converting non-income-producing land into long-term rental income through a 75-year ground lease, contributing nearly a penny of FFO for 2025 [34][35] Question: What are the concerns from tenants regarding macroeconomic uncertainty? - While there is some uncertainty around tariffs, there have been no real-time concerns from tenants, and leasing activity remains positive [40][51] Question: Is the construction completion delay related to tariffs? - The delay in construction completion is due to the natural course of construction and not directly related to tariffs [44] Question: How significant is the impact of tariffs on building materials? - An 8% increase in steel prices was noted, and the company is taking steps to pre-purchase materials to mitigate costs [69][70] Question: Are there any anticipated drags on FFO as the year progresses? - There are no known anticipated drags due to move-outs or other factors at this time [78] Question: Is there potential for additional legacy issues impacting future earnings? - While there is always a possibility of legacy issues arising, the company does not anticipate anything out of the ordinary in the near term [86]

Financial Performance - Alexander & Baldwin Holdings, Inc. reported quarterly funds from operations (FFO) of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, and showing an increase from $0.35 per share a year ago, resulting in an FFO surprise of 28.57% [1] - The company posted revenues of $53.74 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.94%, although this represents a decline from year-ago revenues of $61.2 million [2] Market Performance - Alexander & Baldwin Holdings shares have declined approximately 6.2% since the beginning of the year, while the S&P 500 has decreased by 8.6% [3] - The company has consistently outperformed consensus FFO estimates over the last four quarters [2] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.29 on revenues of $52.5 million, and for the current fiscal year, it is $1.16 on revenues of $210.7 million [7] - The estimate revisions trend for Alexander & Baldwin Holdings is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Other industry, to which Alexander & Baldwin Holdings belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - The company reported a same store NOI growth of 4.2% for the quarter, with total NOI from the commercial real estate portfolio at $33.2 million, a 4.6% increase from Q1 of the previous year [9][14] - Total FFO was $0.36 per share for Q1 2025, which includes $0.06 from land operations and $0.30 from CRE and corporate [14][15] - G&A expenses decreased by $200,000 or 3.4% compared to the same period last year, totaling approximately $7 million [15] Business Line Data and Key Metrics Changes - The company executed 42 leases representing approximately 237,000 square feet of GLA and $5.6 million of ABR [11] - Leased occupancy was 95.4%, up 80 basis points sequentially and 140 basis points year-over-year [12] - Economic occupancy at quarter end was 93.9%, reflecting a 100 basis point increase from the previous quarter and a 160 basis point increase from the same period last year [12] Market Data and Key Metrics Changes - The company transferred a five-acre lot at Maui Business Park into its ground lease portfolio, signing a 75-year lease with a self-storage developer [10] - The ground lease transaction is expected to contribute nearly $0.01 in FFO for 2025 [10][27] Company Strategy and Development Direction - The company is focused on improving its CRE portfolio performance, pursuing internal and external growth, and streamlining its business and cost structure [9] - The management emphasized a commitment to a Hawaii-focused asset class diverse strategy, with the self-storage investment representing a strategic move into a new asset class [10][27] - The company is actively looking for additional growth opportunities despite macroeconomic uncertainties [17][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic uncertainty but noted that tenant metrics remain positive, with no significant concerns reported from tenants [20][29] - The company is taking proactive measures to mitigate potential impacts from tariffs on construction costs by pre-purchasing materials [30][55] - Management expressed confidence in navigating challenges due to their experience and historical resilience [20] Other Important Information - The company raised its total FFO guidance to a range of $1.17 to $1.23 per share, while maintaining guidance for same store NOI growth of 2.4% to 3.2% [17] - The company paid a first-quarter dividend of $0.025 per share and declared a second-quarter dividend of the same amount [16] Q&A Session Summary Question: Can you provide details on the self-storage transaction and the equity investment opportunity? - The self-storage deal involved converting non-income producing land into long-term rental income through a 75-year ground lease, with an opportunity to invest about 20% of the equity capital stack [24][27] Question: What are the current concerns from tenants regarding macroeconomic conditions? - Management reported no significant concerns from tenants, with leasing activity remaining robust despite some soft data discussions [29][38] Question: How does the company view its guidance in light of strong Q1 performance? - The company maintained a cautious approach in its guidance due to macroeconomic uncertainties, despite a strong Q1 performance [39][42] Question: Are there any anticipated fluctuations in occupancy or FFO due to move-outs? - Management indicated no known issues that would impact occupancy or FFO significantly for the remainder of the year [59] Question: Is there potential for additional legacy issues impacting future earnings? - While there is always a possibility of legacy issues arising, management does not anticipate any extraordinary impacts in the near term [65][66]

Financial Data and Key Metrics Changes - The company reported a same store NOI growth of 4.2% for the quarter, with total NOI from the commercial real estate portfolio at $33.2 million, representing a 4.6% increase from Q1 of the previous year [9][14] - Total FFO was $0.36 per share for Q1 2025, consisting of $0.06 from land operations and $0.30 from CRE and corporate, reflecting an 11.1% increase when normalized for previous adjustments [14][15] - The company raised its total FFO guidance to a range of $1.17 to $1.23 per share, while maintaining guidance for same store NOI growth of 2.4% to 3.2% [18] Business Line Data and Key Metrics Changes - The company executed 42 leases in its improved property portfolio, representing approximately 237,000 square feet of GLA and $5.6 million of ABR [11] - Leased occupancy was reported at 95.4%, up 80 basis points sequentially and 140 basis points year-over-year [12] - The company sold 90 acres of primarily agricultural zoned land, contributing approximately $0.06 million to land operations earnings for the quarter [10] Market Data and Key Metrics Changes - The company noted a significant lease at Kakaako Commerce Center, increasing leased occupancy to 95.6% at quarter end compared to 83.2% last quarter [10] - Economic occupancy at quarter end was 93.9%, up 100 basis points from the previous quarter and 160 basis points from the same period last year [12] Company Strategy and Development Direction - The company is focused on improving its CRE portfolio performance, internal and external growth, and streamlining its business and cost structure [9] - The recent ground lease transaction at Maui Business Park is seen as a strategic move to convert non-income producing land into long-term rental income, with plans for a self-storage facility [10][27] - The company aims to maintain a Hawaii-focused asset class diverse strategy while exploring opportunities in self-storage as a natural adjacency [10][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic uncertainty but emphasized strong first-quarter results and the ability to manage through challenges [21] - There have been no significant concerns from tenants regarding their operations, and leasing activity remains robust despite some discussions around tariffs [29][37] - The company is taking proactive measures to mitigate potential impacts from rising construction costs due to tariffs by pre-purchasing materials [30][55] Other Important Information - The company maintains a strong balance sheet with total liquidity of over $300 million and a net debt to adjusted EBITDA ratio of 3.6 times [16] - The first quarter dividend of $0.025 per share was paid on April 7, with a second quarter dividend declared [17] Q&A Session Summary Question: Can you provide details on the self-storage transaction and the equity investment opportunity? - The self-storage transaction involved a 75-year ground lease, converting non-income producing land into long-term rental income, with an immediate financial benefit of about a penny of FFO for 2025 [24][26] Question: What are the current concerns from tenants regarding macroeconomic conditions? - Management reported no real-time concerns from tenants, with positive metrics in tenant interest and sales [29][30] Question: How does the company view its guidance in light of strong Q1 performance? - The company maintained guidance for certain metrics due to macroeconomic uncertainties, despite a strong first quarter performance [39][41] Question: Are there any anticipated fluctuations in occupancy or FFO due to move-outs? - Management indicated no known issues that would impact occupancy or FFO significantly for the remainder of the year [59] Question: Is there potential for additional growth opportunities beyond the Maui Business Park deal? - The company is actively looking for additional growth opportunities and remains optimistic about placing capital later in the year [70]

Financial Performance - Net income available to A&B common shareholders for Q1 2025 was $21.4 million, or $0.29 per diluted share, compared to $19.9 million, or $0.28 per diluted share in Q1 2024[2][6]. - Net income for the three months ended March 31, 2025, was $21,433,000, an increase of 7.2% compared to $19,982,000 in 2024[27]. - The company reported a net income of $61.988 million for the trailing twelve months ending March 31, 2025[46]. Funds From Operations (FFO) - Funds From Operations (FFO) for Q1 2025 was $26.3 million, or $0.36 per diluted share, down from $29.2 million, or $0.40 per diluted share in Q1 2024[7][6]. - Funds From Operations (FFO) for the three months ended March 31, 2025, was $26,346,000, down from $29,205,000 in 2024, indicating a decrease of 9.9%[37]. - Funds from operations (FFO) per diluted share for Q1 2025 was $0.36, with full-year guidance between $1.13 and $1.23[39]. Revenue and Operating Income - Total segment operating revenue for Q1 2025 was $53.7 million, down from $61.2 million in Q1 2024[22]. - Commercial Real Estate (CRE) operating profit increased to $23.4 million in Q1 2025 from $22.0 million in Q1 2024, with CRE Same-Store Net Operating Income (NOI) growth of 4.2%[4][9]. - Same-Store NOI for the three months ended March 31, 2025, was $32,389,000, reflecting a 4.2% increase from $31,090,000 in 2024[32]. Cash Flow and Liquidity - Operating cash flows from continuing operations increased to $25,882,000, up from $16,464,000, representing a 57.5% increase year-over-year[27]. - Total liquidity as of March 31, 2025, was $323.9 million, consisting of $16.9 million in cash and $307.0 million available on the revolving line of credit[16]. - Total cash, cash equivalents, and restricted cash at the end of the period was $17,552,000, down from $15,919,000 at the end of the same period in 2024[27]. Debt and Capital Expenditures - Total debt as of March 31, 2025, was $452.843 million, a decrease from $474.837 million as of December 31, 2024[42]. - Net debt as of March 31, 2025, was $436.315 million, down from $441.748 million at the end of 2024[42]. - The Company incurred capital expenditures of $4,169,000 for property, plant, and equipment during the three months ended March 31, 2025, compared to $3,746,000 in 2024[27]. Dividends and Guidance - The company declared a second quarter 2025 dividend of $0.2250 per share, payable on July 9, 2025[16]. - The company revised its 2025 guidance, projecting FFO per diluted share to be between $1.17 and $1.23, compared to the initial guidance of $1.13 to $1.20[18]. - Net income available to A&B common shareholders per diluted share for Q1 2025 was $0.29, with full-year guidance ranging from $0.64 to $0.74[39]. Impairment and Future Outlook - The company identified non-cash impairment as a non-recurring item affecting its financial performance[45]. - The company anticipates future growth opportunities and strategies, although specific projections are subject to market conditions and other risks[47].