Alexander & Baldwin, Inc. Q1 FY2025 earnings call

• CRE Portfolio Performance: Same-store NOI grew 4.2%, leased occupancy improved to 95.4%, economic occupancy to 93.9%, boosted by a large lease at Kakaako Commerce Center.
• Growth Initiatives: Transferred a five-acre lot to ground lease portfolio, signed a seventy-five-year lease with a self-storage developer, contributing to FFO and potential equity investment in the self-storage facility.
• Cost Streamlining: Sold 90 acres of agricultural land, and G&A for Q1 2025 was $7 million, a decrease of $200,000 or 3.4% from Q1 2024, largely reflecting timing differences.

CRE Portfolio: Same-store NOI grew by 4.2% for the quarter. Executed 42 leases in the improved property portfolio, representing approximately 237,000 square feet of GLA and $5.6 million of ABR. Blended leasing spreads remained strong at 10.2% on a comparable basis. Leased occupancy was 95.4%, up 80 basis points sequentially and 40 basis points compared to Q1 2024. Economic occupancy at quarter-end was 93.9%, up 100 basis points from last quarter and 160 basis points from Q1 2024. Land Operations: Sold 90 acres of primarily agricultural zone land, contributing to land operations earnings of approximately 6¢ for the quarter. Transferred a five-acre lot at Maui Business Park out of land operations into the ground lease portfolio and signed a seventy-five-year lease to a prominent self-storage developer, contributing nearly a penny in 2025 FFO. Revenue contribution: CRE portfolio is a key component, with land operations contributing through asset sales and the ground lease transaction.

• Total FFO: Raised to a range of $1.17 to $1.23 per share, reflecting better-than-expected land operations results.
• Same-store NOI: Maintained guidance of 2.4% to 3.2% growth.
• CRE and corporate FFO: Maintained guidance of $1.11 to $1.16 per share, acknowledging macroeconomic uncertainty.
• Dividend: Paid $0.225 per share in Q1, and declared $0.225 per share for Q2 payable on July 9.

• Macroeconomic Uncertainty: Includes prevailing market conditions, REIT status, evaluation of non-core assets, and risks discussed in recent SEC filings.
• Tariffs Impact: Potential impact on construction materials costs and execution timelines.

Q: Color on self-storage transaction and equity investment opportunity A: Lance Parker explained the seventy-five-year ground lease at Maui Business Park, contributing nearly a penny in 2025 FFO, and potential equity investment in the self-storage facility in a joint venture structure.

Q: Macroeconomic uncertainty and tenant concerns A: Lance Parker stated no real-time concerns from tenants, but some execution timelines extended; monitoring real-time metrics like tenant sales and foot traffic.

Q: Tariffs impact on construction materials and build-to-suit timeline A: Lance Parker mentioned pre-purchasing tariff-impacted materials, and build-to-suit completion moved to Q1 2026 due to construction timeline, not tariff-related.

Q: Guidance and FFO components A: Clayton Chun clarified the $3 million JV income was a one-time event, and Rob Stevenson's questions were addressed regarding FFO components and contingencies in leases.