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Alexander & Baldwin, Inc. (ALEX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered steady operations: diluted EPS $0.17, FFO/share $0.30, AFFO/share $0.19; CRE operating profit rose to $22.0M; same‑store NOI grew 2.4% and leased occupancy improved 60 bps q/q to 94.6%; blended leasing spreads were a strong 14.0% .
  • Initial 2025 guidance: FFO/share $1.13–$1.20, CRE & Corporate FFO/share $1.11–$1.16, same‑store NOI growth 2.4%–3.2%; management highlighted a 4.1% normalized increase at the midpoint for CRE & Corporate FFO and assumed ~$0.01 FFO from external acquisitions in 2H25 .
  • Balance sheet strengthened: liquidity $333.4M, revolver recast to Oct 2028 with $450M capacity, net debt/TTM Adjusted EBITDA 3.6x; 96%+ fixed‑rate debt; Q1 2025 dividend declared at $0.225/share .
  • Near‑term catalysts: retail occupancy jump driven by rapid backfill at Waianae Mall (+230 bps q/q), pre‑leased Maui Business Park II build‑to‑suit slated late 2025, and an active acquisition/development funnel in Hawai‘i across retail and industrial .

What Went Well and What Went Wrong

What Went Well

  • Leasing momentum and pricing power: blended comparable leasing spreads of 14.0% in Q4 (retail 15.2%; industrial 6.6%), with management noting a significant anchor renewal at Manoa Marketplace (CVS/Longs) boosting spreads .
  • Occupancy improved: total leased occupancy rose to 94.6% (+60 bps q/q), driven by a 230 bps q/q increase in retail from backfilling Waianae Mall with a capital‑efficient community use tenant .
  • Cost discipline and balance sheet actions: G&A fell $4.2M (-12.4%) for 2024; revolver maturity extended to 2028; Pearl Highlands mortgage paid and fixed via swap; net debt/TTM Adj. EBITDA improved to 3.6x .

What Went Wrong

  • Industrial and office softness: industrial leased occupancy fell q/q (-220 bps) and office remains structurally weaker; management expects the impact of planned move‑outs to flow into 2025 while pursuing backfills .
  • Bad debt watch and tenant bankruptcy: Liberated Brands entered bankruptcy; exposure is modest (~$450K ABR, ~7K sf) but underscores ongoing credit monitoring .
  • Sequential normalization: AFFO/share fell to $0.19 from $0.32 in Q3 amid episodic items; management pre‑signaled Q4 deceleration tied to prior‑year nonrecurring benefits and vacancies .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Operating Revenue ($USD Millions)$52.84 $51.05 $61.94 $62.45
Diluted EPS ($)($0.05) $0.13 $0.26 $0.17
FFO per Diluted Share ($)$0.27 $0.28 $0.39 $0.30
Adjusted FFO per Diluted Share ($)$0.17 $0.23 $0.32 $0.19
Consolidated Adjusted EBITDA ($USD Millions)$30.58 $26.71 $34.06 $28.37
Segment DetailQ4 2023Q2 2024Q3 2024Q4 2024
CRE Operating Revenue ($USD Millions)$48.34 $49.21 $49.38 $49.89
CRE Operating Profit ($USD Millions)$17.02 $22.61 $22.83 $21.99
Land Ops Operating Revenue ($USD Millions)$4.51 $1.84 $12.56 $12.56
Land Ops Operating Profit ($USD Millions)$6.35 $0.17 $7.88 $2.94
KPIsQ4 2023Q2 2024Q3 2024Q4 2024
Same‑Store NOI Growth (%)4.3% 0.9% 4.1% 2.4%
Same‑Store NOI ex. prior‑year reserve collections (%)6.8% 1.7% 4.7% 2.9%
Total Leased Occupancy (%)94.7% 93.9% 94.0% 94.6%
Retail Leased Occupancy (%)94.3% 92.8% 92.9% 95.2%
Industrial Leased Occupancy (%)96.8% 97.1% 97.4% 95.2%
Blended Comparable Leasing Spreads (%)7.8% 7.3% 15.3% 14.0%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FFO per Diluted Share ($)FY 2025N/A$1.13–$1.20 New
CRE & Corporate FFO/share ($)FY 2025N/A$1.11–$1.16 New
Net Income/share ($)FY 2025N/A$0.64–$0.71 New
Same‑Store NOI Growth (%)FY 2025N/A2.4%–3.2% New
FFO per Diluted Share ($)FY 2024$1.17–$1.26 (Q2 guide) $1.27–$1.35 (raised in Q3) Raised
Adjusted FFO/share ($)FY 2024$0.99–$1.08 (Q2 guide) $1.05–$1.12 (raised in Q3) Raised
Dividend/share ($)Q4 2024 PaymentDeclared $0.2225 (Q3) Paid $0.2250 on Jan 8, 2025 Raised (vs Q3)
Dividend/share ($)Q1 2025N/ADeclared $0.2250, payable Apr 7, 2025 Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
External growth pipeline (acquisitions/development)Permitting for 29,550 sf Maui build‑to‑suit; ATM program; all debt fixed Closed 81,500 sf industrial at 5.4% cap; more top‑of‑funnel deal flow Encouraged on 2025 opportunities; carrying $0.01 FFO for unspecified growth Improving deal flow
Leasing spreads/anchor renewalsBlended spreads 7.3% 15.3% driven by Queens’ Marketplace anchor 14.0%; notable CVS/Longs anchor renewal at Manoa Marketplace Strong and sustained
Occupancy dynamicsTotal leased occupancy 93.9%; industrial strong Total 94.0%; noted Q4 industrial/office vacancies coming Total 94.6%; retail +230 bps q/q from Waianae backfill; industrial down Retail improving; industrial mixed
Tenant credit/bad debtCollections stable; watch list limited Expect Q4 vacancies; episodic land JV; accretive recycling Liberated Brands bankruptcy; low exposure; prospects for backfills Monitored; limited impact
Cost structure simplification2024 G&A guided lower to $29–$30.5M Streamlining; automate and reduce overhead G&A down 12.4% YoY; 2025 to be flat to $0.01/share better Continuing improvement
Capital/Balance sheetIssued $60M note; all debt fixed; liquidity $472.5M Revolver recast post‑quarter; Pearl Highlands payoff via revolver + swap Revolver extended to 2028; borrowing capacity $450M; net debt/Adj. EBITDA 3.6x Term extended; leverage stable
Macro Hawai‘i backdropGDP/Unemployment/visitors context Same Focus on portfolio‑specific execution, less macro detail Neutral

Management Commentary

  • “Our portfolio ended the year on a high note with better than expected results. Occupancy is healthy, leasing volumes continue to trend well and comparable leasing spreads are strong.” — Lance Parker, CEO .
  • “We closed out 2024 strong with fourth quarter FFO of $0.30 per share... driven primarily by stronger operating results within our commercial real estate portfolio.” — Clayton Chun, CFO .
  • “We expect same‑store NOI growth of 2.4% to 3.2%; FFO between $1.13 and $1.20 per share; and CRE and corporate‑related FFO of $1.11 to $1.16 per share... our guidance reflects a 4.1% increase at the midpoint when normalizing 2024.” — Clayton Chun, CFO .
  • “The industrial market here in Hawaii remains very strong... we’re seeing similar opportunities within Maui Business Park for potential build‑to‑suits, potentially even some speculative development.” — Lance Parker, CEO .

Q&A Highlights

  • External growth and guidance: Management carries ~$0.01/share FFO for unspecified growth in 2H25, reflecting confidence in deal execution; CRE & Corporate FFO midpoint implies ~4.1% normalized increase .
  • Tenant bankruptcy/credit: Liberated Brands remains open operating liquidation; expected space return mid‑year with prospects already in the pipeline (Queens’ Marketplace) .
  • Retail occupancy jump: Waianae Mall anchor backfill drove +230 bps q/q retail occupancy; short‑term lease provides future optionality with minimal capital outlay .
  • Guidance swing factors: Low end risks include delayed tenant occupancy or unplanned vacancies/bad debt; high end is the inverse (earlier possession and stronger collections) .
  • Cost trajectory: After 12.4% G&A reduction in 2024, 2025 G&A expected to be flat to ~$0.01/share lower; continued simplification focus across the company .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for EPS/Revenue/EBITDA were unavailable at time of analysis due to data access limits; therefore, we cannot provide vs‑consensus comparisons for Q4 2024 or forward quarters [GetEstimates error].
  • Given management’s 2025 guidance and normalized assumptions, sell‑side models may revisit CRE & Corporate FFO run‑rate and timing of occupancy backfills; however, explicit consensus adjustments are not provided here .

Key Takeaways for Investors

  • Pricing power intact: 14% blended spreads and notable anchor renewals support rent growth in 2025, particularly in retail; expect continued strength as leases turn economic over coming quarters .
  • Retail recovery leading: Rapid backfill at Waianae Mall and portfolio mix (grocery/drug‑anchored) underpin occupancy and same‑store growth; watch industrial re‑leasing to stabilize .
  • Guidance quality: 2025 FFO/share $1.13–$1.20 embeds conservative assumptions on vacancies and only ~$0.01 acquisitions; upside if backfills/tenant health exceed baseline .
  • Balance sheet flexibility: $333M liquidity and 2028 revolver maturity provide dry powder for opportunistic acquisitions and development in high‑barrier Hawai‘i markets .
  • Land Ops optionality: episodic contributions persist with monetization of noncore acreage; strategy tilts toward retaining Maui Business Park lots for long‑term industrial development .
  • Watch items: industrial occupancy recovery timing, tenant bankruptcy resolution, and cadence of new leasing turning economic (industrial quicker; retail can be 3–12 months) .
  • Trading implications: Near‑term sentiment should be supported by visible occupancy/lease‑up wins and robust spreads; stock likely reacts to updates on backfill timing, acquisition announcements, and any beat/raise on CRE & Corporate FFO trajectory .
Notes:
- All financial and operational figures cited above are sourced from company disclosures (Form 8‑K press release, supplemental, and earnings call) with per‑cell citations.
- Consensus estimates were unavailable from S&P Global at the time of analysis; therefore, vs‑consensus comparisons are not included.