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Alexander & Baldwin Holdings Inc (NYSE:ALEX) released its third quarter 2025 financial results on October 30, showing the Hawaii-focused real estate investment trust exceeded earnings expectations while slightly missing revenue forecasts. The company’s stock rose 1.58% in aftermarket trading following the announcement, closing at $16.42.
Quarterly Performance Highlights
The company reported net income available to common shareholders of $14.3 million, or $0.20 per diluted share, exceeding analyst expectations of $0.17 per share by 17.65%. However, this represents a decline from $19.0 million, or $0.26 per share, in the same quarter last year.
Commercial Real Estate (CRE) operating profit reached $22.7 million for the quarter, while Funds From Operations (FFO) totaled $21.4 million, or $0.29 per diluted share. FFO specifically related to CRE and Corporate operations improved to $21.7 million, or $0.30 per diluted share, up from $0.28 in the prior year period.
"We feel confident about our portfolio, and we’ve positioned ourselves to close out the 2025 year strong," said Clayton Chun, CFO, according to the earnings call transcript.
As shown in the following overview of quarterly results:
The company’s CRE segment generated operating revenue of $50.2 million, slightly below analyst expectations of $50.69 million but up from $49.4 million in Q3 2024. Same-Store Net Operating Income (NOI) increased by 0.6% year-over-year, though this growth rate was lower than the 4.1% reported in the comparable period of 2024.
A key strength in the quarter was the company’s high occupancy rates across its portfolio. Total leased occupancy stood at 95.6% as of September 30, 2025, representing a 160 basis point improvement from 94.0% a year earlier. The retail portfolio showed particularly strong improvement, with occupancy rising to 95.5% from 92.9% in the prior year.
The following slide details the CRE performance metrics:
Leasing Activity and Portfolio Management
During the third quarter, Alexander & Baldwin executed 49 leases for improved properties, covering 163,800 square feet of gross leasable area and representing $3.3 million in annualized base rent. Comparable leasing spreads across the improved property portfolio averaged 4.4%, including 2.4% for retail spaces and a stronger 6.0% for industrial properties.
The company also highlighted a significant lease renewal with an anchor tenant in Kailua Town that was completed after quarter-end, which achieved an 11% lease renewal spread, demonstrating continued pricing power in key locations.
CEO Lance Parker noted during the earnings call, "This is the third consecutive quarter we’ve raised guidance, reflecting our continued confidence in the full-year outlook."
Strategic Development Initiatives
Alexander & Baldwin continues to advance its industrial development strategy, with vertical construction underway on two new buildings at Komohana Industrial Park, which will add 121,000 square feet of gross leasable area to the company’s portfolio. Additionally, construction is progressing on schedule for a 29,550-square-foot warehouse and distribution center at Maui Business Park.
The company also capitalized on value creation opportunities, recognizing a $2.6 million selling profit when a tenant exercised its option to purchase three subdivided units at Kakaʻako Commerce Center.
These strategic initiatives align with the company’s focus on expanding its industrial footprint in Hawaii, where such properties remain in high demand.
Improved Full-Year Guidance
Based on strong performance through the first three quarters, Alexander & Baldwin raised its full-year 2025 guidance across multiple metrics. The company now expects net income available to common shareholders of $0.95 to $1.00 per diluted share, up from previous guidance of $0.91 to $0.96.
Similarly, FFO guidance was increased to $1.36 to $1.41 per diluted share, while FFO related to CRE and Corporate was raised to $1.13 to $1.17 per diluted share. The company maintained its projection for full-year Same-Store NOI growth of 3.4% to 3.8%.
The updated guidance is summarized in the following slide:
Financial Position and Capital Allocation
As of September 30, 2025, Alexander & Baldwin maintained a solid financial position with total liquidity of $284.3 million, consisting of $17.3 million in cash and $267.0 million available on its revolving credit line. The company’s leverage remains manageable, with Net Debt to Trailing Twelve Months Consolidated Adjusted EBITDA at 3.5 times.
The following reconciliation provides insight into the company’s calculation of key financial metrics:
The company paid a quarterly dividend of $0.2250 per share on October 7, 2025, maintaining its commitment to shareholder returns. The board of directors plans to declare the fourth quarter 2025 dividend in December.
Outlook and Challenges
While Alexander & Baldwin’s performance exceeded earnings expectations, the slight revenue miss and slower Same-Store NOI growth compared to the prior year suggest some challenges in the operating environment. During the earnings call, analysts inquired about potential renewal of a 36-acre industrial ground lease, capital allocation strategies, and the unique floor sale structure at Kaka’ako Commerce Center.
The company’s portfolio of 4.0 million square feet of commercial space in Hawaii—including 21 retail centers, 14 industrial assets, and four office properties, plus 146 acres of ground lease assets—continues to provide a strong foundation for operations. However, management noted that increased interest from mainland capital could intensify competition in the Hawaii market.
As illustrated in the reconciliation of net income to FFO:
Alexander & Baldwin’s strategic positioning in the Hawaiian real estate market, combined with its focus on industrial development and strong occupancy rates, appears to be resonating with investors despite some mixed financial results. The stock’s positive reaction to the earnings release suggests confidence in management’s ability to execute on its strategic initiatives and deliver on its improved full-year guidance.
Full presentation:
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