Alexander and Baldwin ALEX Earnings Transcript

Core Insights - The company reported strong sequential and year-over-year improvements across key performance indicators in Q2 2025, leading to an upward revision of full-year 2025 guidance [10][19][24] Financial Performance - Same-store NOI (non-GAAP) grew 5.3% in Q2 2025, primarily due to a 140 basis point increase in same-store occupancy [2][19] - NOI (non-GAAP) totaled $33.6 million in Q2 2025, reflecting a 6.3% year-over-year increase [3][24] - Total FFO (non-GAAP) was $0.48 per share in Q2 2025, up $0.20 year-over-year [4][25] - CRE and corporate-related FFO per share (non-GAAP) was $0.29 in Q2 2025, a 3.6% year-over-year increase [3][24] Occupancy and Leasing Activity - Leased occupancy was 95.8%, a sequential increase of 40 basis points and a 190 basis point gain year-over-year [5][22] - Economic occupancy was 94.8% at Q2 2025 quarter-end, up 90 basis points sequentially and 200 basis points year-over-year [5][22] - In Q2 2025, 52 leases were executed, representing approximately 184,000 square feet of GLA and $6.1 million in ABR, with blended leasing spreads at 6.8% [6][22] Development and Growth Prospects - Projects under construction are expected to deliver over 150,000 square feet of GLA and $3.8 million in annual NOI upon stabilization in 2026 and 2027 [7][21] - The SNO pipeline totaled $5.8 million as of Q2 2025, including $3.1 million for two industrial build-to-suit projects [6][23] Guidance and Future Outlook - Updated guidance for same-store NOI growth (non-GAAP) is expected at 3.4%-3.8% for 2025, an increase of 80 basis points at the midpoint compared to prior guidance [9][27] - Total FFO (non-GAAP) guidance for 2025 was increased by $0.18 per share at the midpoint to $1.35-$1.40 [9][27] Market Conditions - The Hawaii commercial real estate transaction market is described as "starting to open up," with more acquisition opportunities emerging across asset classes [11][41] - Foot traffic and tenant sales have increased, reinforcing strong local market fundamentals [11][61]