Alexander & Baldwin Inc., the state’s second-largest retail property owner, reported Thursday that its total leased occupancy remained strong at 94.6% in the third quarter and that it is revising upward its outlook for the full year.
The Honolulu-based real estate investment trust, which has been looking to sell Grace Pacific, the state’s largest asphalt paving contractor, to a “more natural owner,” said that process is progressing.
A&B said its net income available to common shareholders last quarter was flat at $6.3 million, or 9 cents a share, compared with a year earlier.
“Our commercial real estate business posted outstanding results in the third quarter, continuing to build on the momentum experienced since early last year,” A&B President and CEO Chris Benjamin said in a statement. “Hawai‘i’s economy continued to strengthen, supported by robust tourism.
”With our business simplification process nearly complete, and the Grace Pacific marketing process well underway, we are excited to shift our focus to growth. We believe our deep market relationships and a balance sheet with significant dry powder position us to uncover and capitalize on development and acquisition opportunities.”
A&B has owned Grace Pacific since Oct. 1, 2013, when it purchased the company for $235 million to aid A&B in infrastructure development and replacement work.
As of Sept. 30, A&B had total liquidity of $506.2 million, consisting of $7.3 million in cash and $498.9 million available on its revolving line of credit.
Benjamin said A&B continues to pursue investments that meet its quality and return targets and that are complementary to its geographically focused portfolio.
“We seek to grow our platform and drive value for our shareholders into 2023 and beyond,” Benjamin said.
Funds from operations, which measures cash flow from a REIT’s operations and is used to gauge operating performance, was $15.3 million, or 21 cents a share, last quarter, compared with $15.5 million, or 21 cents a share, in the year-earlier period.
Total operating revenue rose 15.3% to $97.2 million.
A&B said that during the third quarter it executed 50 leases, covering approximately 104,900 square feet of gross leasable area, or GLA. Three leases at Kaneohe Bay Shopping Center totaled approximately 38,100 square feet of GLA. Seventeen leases related to properties in Kailua, including Aikahi Park Shopping Center, totaled about 24,100 square feet of GLA. Five leases at Kakaako Commerce Center totaled approximately 8,300 square feet of GLA.
The company also said that work has begun on renovating Manoa Marketplace by incorporating sustainable design and building elements, including LED lighting, water- efficient fixtures and electric vehicle parking stalls, among other features.
In addition, A&B said construction of a 1.3-megawatt rooftop solar installation at Pearl Highlands Center has been completed and that the system is now delivering power.
Most of Kailua’s commercial core and 22 shopping centers around the state make up much of A&B’s retail real estate holdings.
Individual properties include Kaneohe Bay Shopping Center, Aikahi Park Shopping Center, Pearl Highlands Center, Manoa Marketplace, Waianae Mall, Kunia Shopping Center, Waipio Shopping Center, Laulani Village, Kahului Shopping Center, Pu‘unene Shopping Center and Queens’ MarketPlace.
In all, A&B owns nearly 4 million square feet of retail, industrial and office space statewide.
Among its revised guidance, A&B said it was revising upward the lower end of its core funds from operations to a range of $1.07 to $1.11 a share from its previous guidance of $1.05 to $1.11 a share. It also said its commercial real estate same-store net operating income, or rental and other income for properties held at least one year, was being revised upward to a range of 4.5% to 6.5% from its previous guidance of 4% to 6%.
The company paid a third-quarter dividend of 22 cents a share Oct. 5, an increase of 2 cents from the second quarter. It said the board of directors plans to declare a fourth-quarter dividend in December, with payment in January.
A&B’s stock fell 12 cents to $18.87 before the earnings were announced.
Third-Quarter net
$6.3 million
Year-earlier net
$6.3 million
