Alexander & Baldwin (ALEX) Nareit REIT Week: 2024 Investor Conference summary

Company Overview and Market Positioning

• Only publicly traded REIT headquartered and focused entirely in Hawaii, with an enterprise value of $1.7 billion and a portfolio of 39 properties totaling 3.9 million sq. ft. and a 94% leased occupancy rate as of March 31, 2024.

• Portfolio generates two-thirds of NOI from open-air grocery-anchored retail, with the remainder split between industrial and ground leases.

• Largest owner of retail real estate in Hawaii, with about 20% market share.

• Outperformed Nareit retail peers in same-store NOI and FFO growth since becoming a REIT in 2017.

• Operates in a highly supply-constrained market due to strict zoning, resulting in high barriers to entry and strong pricing power.

Financial Performance and Guidance

• Reported Q1 2024 net income of $20.0M and FFO of $29.2M, with a forward dividend yield of 5.4% and annualized dividend of $0.89 per share.

• Revised 2024 guidance projects CRE same-store NOI growth of 1.1% to 2.1% and FFO per diluted share of $1.05 to $1.16.

• Over $469.7M in liquidity and a net debt to TTM consolidated adjusted EBITDA of 3.8x support disciplined capital deployment and ongoing share repurchases.

• Net debt to adjusted EBITDA improved from 4.2x at 2023 year-end to 3.8x in Q1, enhancing liquidity for growth.

• Exceeded initial 2024 expectations with over 300 acres of non-core land sold in Q1.

Market Dynamics and Demand Drivers

• Hawaii’s limited urban land and reliance on imports create unique demand and supply trends, with low retail GLA per capita and the lowest industrial vacancy rate in the U.S.

• Honolulu leads secondary markets in household income and population density, supporting robust demand for retail and industrial assets.

• Retail portfolio has a 93.2% leased occupancy and $36.37 ABR PSF; industrial portfolio has 96.8% occupancy and $16.40 ABR PSF.

• Ground lease assets provide stable, long-term income with periodic rent resets and a weighted average lease term of 19.1 years.

• E-commerce logistics are challenged by long shipping times; Amazon is building a distribution center to reduce delivery to 3-5 days.