ALEX - Earnings call 1 2023 | Alexander & Baldwin, Inc.

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Operator

Good afternoon, and welcome to the Alexander & Baldwin First Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Steve Swett of Investor Relations. Please go ahead.

Stephen Swett

Thank you. Aloha, and welcome to our call to discuss Alexander & Baldwin's First Quarter 2023 Earnings. Officer, our our are Officer, President and Chief for Officer, Chief Lance today our Benjamin; Chris and Financial me earnings A&B's call Executive Parker; With Chun. Clayton Chief Operating decided has presentation forgo The company to this a quarter.

to call, supplemental information QX our our During our at on website XXXX refer please investors.alaxanderbaldwin.com. available

relevant of facts a Private please within the the statements made by of note and and commence, this forward-looking Securities of we uncertainties future cause statements or forward-looking These possible Reform assumed statements were but in include, future to that of involve those call performance. the speak results statements actual only competitive differ of are the are positions. Such XXXX that as business risks and Before results that statements the opportunities contemplated not forward-looking of date are to, are number materially growth Litigation Act regarding statements. not limited guarantees statements that operations, historical could meaning from to not forward-looking strategies,

statements those by number events uncertainties, differ factors from and other of or in actual of could statements. the to a are cause subject assumptions that certain results materially risks, the and Forward-looking forward-looking implied expressed to timing

SEC. update in undertake factors. We these operations, update the on call not alternatives these to to, our where operations, the will in reconciliations Construction risk & any business turn and non-GAAP but with Chris be then XX-Q include, regarding today's the forward-looking of most your company's other Management up during quarter recent of our information will then to as are remarks, of call. company's company's do financial market factors turn obligation evaluation the an Form to this These will other for call over He upon Clayton related condition first supplement. Chris refer the by referring me not the to prevailing up liquidity use questions. With statement our financial the call related that, Lance Form the will discussed it its evaluated included XXXX today. and and in results for important light business, to we open non-GAAP Please measures to factors limited be and other factors XX-K, the discuss filings over company's conditions and should of measures REIT well company and Materials financial status as statements. closing will matters. our open for it real to let will some on return estate Chris. The and

Christopher Benjamin

good and our Steve, listeners. Thanks, to afternoon

Our results to a first the A&B's business. commercial start year real reflect great estate quarter for

lease Our provide and year. again quarter real details our produced will X.X%. high-quality NOI retail, first saw few Commercial by assets on estate industrial Clayton and X.X% continuing highlights. we grew Lance me and same-store strong last our increased but trends performance, year-over-year let revenue the ground a results, more provide

with for quarter, move and leasing as leased year of the ended prior of occupancy XXX,XXX spreads We feet the out. XX quarter blended XX.X%, industrial achieved signed expected from X.X%. leases the result we During an slightly of down over a square quarter

solid up at occupancy portfolio team. our retail XX points the efforts ending diversified and reflect quarter our was of the year, prior portfolio strength of basis Our These over the quality XX.X%. the results and

March X.X% added from to XX economy. in hotel strong benefited fuel XX,XXX March XXXX. exceeding and tourism year-to-date same growth projects and the with through Hawaii of Nonfarm wages Both the past XXXX, unemployment this prior was XXXX at of sectors and nearly over the increased local spend and a in Our X.X%. the helping end an year. construction compared as period almost X%. performance increase also months, jobs March construction residential tourism the are

As we've the but support overall dependent less tourism said tourist economy. activity, and our is does community-based state's on generally portfolio before,

and We sorry, asset continue external growth. to closed week, industrial to elevate continue XX,XXX off-market on Turning other we we the square to acquisition evaluate of -- growth this earlier a opportunities. foot

in discussed but will us higher we've remain are deep and accretive sheet the value changes in believe As and markets disciplined long-term past, widened have financial market bid-ask knowledge that to the opportunities source balance rates help interest creation. relationships, spreads, and we strength our

project development quarter. entire continue to redevelopment. our track to the of completed we We the complete addition first at remain to In grow refresh Manoa third through phase on the and external in and opportunities, organically Marketplace

will year We update provide value-add expect time. our continues, I got additional start to opportunities the rainy specific more grace expect unable that and leading but we're projects very and tons due first in exceeded to off a portfolio within and announce commencement tenant The project that base more demand increased investment to have in over quarter, the slow to future. process quarter. experience, today. to see the our delays to We paved should to center a but our April of note Grace improve entire visitor the marketing rents

So momentum good got now. we've

Now I'll to turn Lance. the over call Lance?

Lance Parker

and you, aloha, Thank Chris, everyone.

points last difference and This revenue was NOI $XXX,XXX strength the to XXX due Commerce. expected Same-store reflects of compared occupancy move-out first XXX quarter occupancy $X.X continued and points of year XX XX same-store about end was year-over-year the quarter in an were industrial X.X% up points This Overall, NOI first the down and end basis leased at points portfolio XX.X%, was X.X% XX.X% earlier. Same-store Same-store same months at lease Kakaako XX perform million. by growth. XXX the was occupancy was of the occupancy basis economic economic base was Annualized portfolio points XX.X%. from quarter. same-store primarily from basis to economic $X XXX up X.X%. to period to decrease from up but signed tenants approximately XXXX, or occupancy XX.X%. well basis same-store tenant up Our prior first our in retail million a to Same-store year. rent points up basis points up rent. quarter leased down of not quarter to basis million in quarter NOI at XX recovery at increase reserve of And XX.X%, was end driven quarter was was SMO, higher earlier. the was $X.X represents there industrial to of XX to base opened, ago leased XX.X%. to months retail compared In basis quarter occupancy XXXX. CRE leases attributable occupancy

Aikahi achieved during feet. Kailua, in spreads square X%. with quarter at XX leases This retail XX,XXX approximately approximately of and feet activity leases at X spreads approximately XXX,XXX XX,XXX Park to industrial X.X%, the for first totaling leases Center, blended feet related spreads We totaling executed Shopping included XX for square leases for leases and Lalani and square properties including at XX.X% Village,

we increases. majority located. bottling size square The Oahu where are going strong of deals mentioned, growth, of with prospects for industrial are a of acquisition off-market growing We at X.X%. structured $X.X the feet XX-foot a submarket and that asset pleased just outlook. lease active activity, solid is our the With support includes continued X% storage operator that the annual other height have on in clear building the a robust located Chris an in loading rate on was dock-high as of on a industrial local leasing of and closed a sale to of cap in industrial a The we warehouse pipeline and million and pace Kapolei, leaseback located assets water as with to XX,XXX transaction XX-year is and regard

Our internal continues growth property, redevelopment, have meantime, our well-located Manoa to where financial opportunities, call complementary focus for area. the this can control Marketplace Significant of is on refresh Clayton? center track timing team portfolio. the renovation pursuing are In third remain neighborhood turn the in grocery-anchored and We to including quarter. I'll Manoa progressing that development now the details. over complete investment the continued only Clayton at we to better on acquisition opportunities in this yields. investment we current and

Clayton Chun

Thanks, Starting our Lance, consolidated with and metrics. aloha, everyone.

first the to diluted For continuing we shareholders or quarter, available from income operations share. reported per $X.XX

FFO. FFO to core and Turning

was million $X.XX share. quarter million First was or Core FFO or diluted $XX.X per per $X.XX FFO share. diluted $XX.X

the approximately first $X.XX $XXX,XXX of earlier, As these of quarter That of diluted million or of XXXX. amounts per mentioned Las the for XXXX or compares metrics first $X.XX share. share $X benefited each in of quarter reserved per from previously collections to diluted

XXXX, comparisons the to details quarter and of see release results, first package. For supplemental our on information earnings please including additional our

now to Let Real segment. Estate turn Commercial me our

tenants our same-store from to first period portfolio quarter, strength by $XX.X the over increased or ago million. X.X% rent. quarter the of reflects CRE X.X% the compared CRE million the base revenues prior by year. to driven quarter year $XXX,XXX increase last to increased $X.X or year a This For higher million NOI $XX.X same and

mentioned of to I first of earlier, the as from million As reserve the compared reversals XXXX. $X benefited $XXX,XXX quarter XXXX first approximately of quarter in

compared of of quarter of Adjusted adjusted Operations of in the XXXX. NOI previously have same-store million of positive amounts, our was reserved XXXX $X.X collections EBITDA the Excluding would quarter the in to essentially EBITDA first X.X%. segment first impact growth Land been flat in

business of by in by The the Park sales the to our last reduction Business in a primarily as compared driven Trucking first the at on offset quarter and XXXX. Maui partially legacy reduction sale Storage lot was year. of gain

$X.X in quarter the first million the quarter of first of XXXX, G&A XXXX. were $X.X compared million For expenses to

management incurred G&A the loss as a in of for As noted first year quarter. previously, operations remains due Race to the Pacific, discontinued With entity. costs. work $X.X we Grace the complete expect be to we elevated to the regard slightly million we to disposition in XXXX full transition-related

metrics. our to Turning and sheet balance liquidity

At excluding Xx facility. trailing operations March and $XXX.X we cash and made million was in total XX, net to of of million, available of land million, Xx approximately XXXX, revolving line $XX.X At M&C. XX-months was or end, outstanding had consolidated quarter liquidity in on $XXX.X EBITDA $XXX.X our debt when credit million total adjusted up debt

a X, $X.XX end. at a dividend our July payable and to capitalization quarter Board of second on of X. debt total first market Our recently dividend that share on stood We April per per is at quarter declared share XX.X% quarter $X.XX paid

$X.XX are of growth diluted with same-store and that results the to core per within pleased the share, February within NOI of FFO range the $X.XX provided maintaining are guidance in our same-store We range turn reserve to growth, call the I'll of X% to closing X.X%. With excluding his for Chris remarks. for range of the and over reversals X% year prior NOI that, X% we within

Christopher Benjamin

Clayton. Thanks,

real The solid again growth, first portfolio strong which estate our outstanding commercial a our with credit is demonstrated quality quarter team. to of occupancy the and

deep ahead, success and balance will ties look I growth are A&B's as sheet believe Hawaii company. and strengths real I a commercial As focus, that our strong estate business fuel

I and Lance the and on CEO to promotion XX, on June in on his a NAREIT final and to on and road of parents at is earnings future forward retiring this listened I'm want again May X. I'm in of they're and I know, my and to in well-deserved the look New you very every June As July A&B XXth at his York leadership, listening you seeing pending one personal many congratulate for to excited with I them, call. believe today. note, Lansing-Clayton. have my On ICSC of and under

questions. want my support for and I birthday we'll your their call to open thank that, tomorrow, the So mom. With say for them happy to

Operator

[Operator from Goldfarb with Instructions] come Our Piper first Sandler. Alexander question will

Alexander Goldfarb

they just earnings their on so do fund. for they And First, some Farwell we questions start call, Lance one could congrats Chris, and and know ask tough son time. like if your to over want taking Chris' parents congrats next

a let So me have I here. questions few -- just

but in update change the it, there First, guidance any in Clayton, missed in guidance? any release. was Maybe I see didn't I

Clayton Chun

No, we that provided our are maintaining in we February. guidance

bottom no had I so And but script, in line the mentioned change. that is

Okay.

in bigger the all it Certainly, investor number population seems certainly, pandemic. or saw the weeks of was. out when shift ago Second that And we last question month, week, to is after a there picture. for were guess we I a Hawaii be

have there home, changing product their like if a the to think in and relative concepts at came to on been or shift retailers more thinking West given or it arrivals, the the mix, which and up habits have they seems population up accelerating bring You West has fair just made it's how of who more and staying. And will. Coast, have lives. that probably who about least people ended the lived Hawaii had whole certainly, Coasters that and how presence Has open you a of are conducive lot number have been new plans some then that the in island shopping different maybe changed stores their than people to come Hawaii environment about island a their

Lance Parker

visitors our continues arrivals I population had entirely you to over is said, We Alex, that being of period. an the at into sure influx I'm certainly translated look retail But have when that that, state pandemic it's be West not Lance. will the Coast interest high. say actual that increases. in visitor

something myself past, with of able something as to growth with of couple prospective centers a part that retailers the most Head tenants. and As we islands recently And Leasing, Brand, interest, retailers will we performance having the our Clayton, coming continue weeks. demonstrate many don't story say and with of the will that we the of we've I X many ICSC Sonic. and to with of in here. It been tenants to And coupled is there, of the strategy, major when well shop presence sharing at country in a you top-performing like meaningful it's of discussed of coming our the we've terms our continue promote really pursue see islands. on to to able in Jordan discussions concept shopping physical here, course, Chris, the and Ulta, new as being anyone all have forward Chick-fil-A, look good that having be to as for in are that of the fact up one-stop look

Alexander Goldfarb

to acceleration who of still up the about you not either or sped whatever, or basically, guys in came market presentations time the do pace it's But they you to first an time not those at same pace normal go the your -- you're when had since conversations Like to you're retailers words, seeing line? the frame Lance, the expanding haven't all of pandemic other retail. and there -- people still and

Lance Parker

Yes.

in would that interest. I they've of or sort conversations a accelerated those robust. think the that's I Alex. fair remain of increased I that say say comment, wouldn't amount

Alexander Goldfarb

And grace Chris, then be may be takes? goal your is this whatever to that by into the get the your Or so intent going is Lance a sense. paving that to final this with Okay. Just it Is year, question, bleed out, will trying guys exit don't you business. year-end leave next it year? to you but

Lance Parker

I whatever -- don't of that Well, the business certainly, year. our say be to I this goal would out is know any And it takes.

look support we we to some the to year I able can. to our have going that and continue get this I would it And confident that we're even will year. half remain think know, as over transition certainly I the year. CEO, this the that think cleanest I to efforts retire will I we And to as you to best goal be and I continue be done of after simplification that will. second get that of expect the it done

Alexander Goldfarb

that of gives how it's Can you can just sense Or that just a depth you us bidders? us going. give of of a anything the sense

Lance Parker

engaged we're a we like say particular process. and limited exclusivity what We're because We can No. that with the honor actively have we bidder to Okay. of in

you Sounds good. much. very That's helpful. thank Listen

Operator

come next Securities. our And will Mitch from with Germain question JMP

Mitch Germain

So in know move right now. of about out. I'm that know tenant you I'd the some to replace more to industrial love seeing said curious I that you're about market it's the the activity planned.

Lance Parker

Lance. it's Mitch,

square of had natural just had probably Kakaako a will new foot full some amount parking, industrial a represents last XX,XXX fair have modify multistory Center, a we'll a was improvements say, well to that a our facility. location yes, it And as at industrial interest. floor which effectively the given its it But expiration at urban end So is tenant. we've tenant And Commerce that as of have does specialized I that for year.

the more So we very which whole -- reflection just single general, market confident be feel for as a to a that really vacancy we'll of that to the about. as remain in backfill the in able of positive portfolio portfolio sort we and that's still opposed a

Mitch Germain

will to able it you you of economics higher do, at think way neutral. be to work will do relet of because Lance, a need the -- you'll work or that its rate kind

Lance Parker

Probably the the hopefully, better But on Yes. insight to can call that, early next in share. make little a some that quarter Mitch. have we we'll

Mitch Germain

deal curious you than Obviously, I'm your across one about Great. more class. pipeline. acquired asset

underwriting asset quarter. obviously, in so this you of types it Is bought of seeing? an the you're right And that Or deals more you're that is what diversified terms reflective of now? highly

Lance Parker

with but the and assets little it's that I'd a we of diversified, ground consistent hold, types retail, so leases. say industrial

purchased it's in industrial this a is conditions sale think that of I was market that this of current sort reflective we building leaseback.

team a a our to redeploy this was then financial in market. real capital company team have I'd fact into to our capital unlock here, liquidity, so them off the that to able reinforce and And us. markets relationships, source around have estate investments And the And local good we're given opportunity it good for was the conversations that for just certainly was and the our this that able business. presence, further them and we the just opportunity for opportunity able

really see, deeper make are continue focus that's that say, sourcing sense, So we where pipeline. deals we starting on a to I'd to and

Mitch Germain

Great. out to the coming worry goal about next assets? nothing you've of year, but got you due, that on need plays process of a of for for sheet couple do think Obviously, the How in the balance you Last that to to one debt this particular, year, unsecure mortgages. to me. you? continue tranches Is the

Clayton Chun

those right -- this do we X year. next that is mortgages maturing are that you're have Yes. Mitch, Clayton.

to said, forward to -- be we respect interest That would in fourth a to have swaps interest -- just in the entered all being unsecured into quarter, starting enabled rate being question, these overall, and lock rate our of X so that address with us to mortgages we have blended at your equal, things And professions debt. X.XX%.

to so later starting process commence intention refinance this refinancing year. the And is or our

So and some the to our we've we get ability some had done. good that of banks, discussions are confident with in

Mitch Germain

knowing a Chris, your Great. luck endeavors. been best pleasure you. on of It's And future

Christopher Benjamin

Thanks a lot, Mitch. Thank the you for questions.

Operator

like concludes remarks. any over this back to for And I'd Steve our closing the turn to question-and-answer session. Swett conference

Stephen Swett

thank you, you us today. joining operator, and Thank for all

call If or have at please us free and great follow-up at questions, you e-mail XXX-XXXX a to (XXX) feel investorrelations@abhi.com. Aloha, any have us day.

Operator

today's attending for you presentation. Thank

lines. your disconnect now may You

Alexander & Baldwin (ALEX) 4 May 232023 Q1 Earnings call transcript