Alexander & Baldwin, Inc. Reports First Quarter 2023 Results

HONOLULU, May 4, 2023

Chris Benjamin, A&B chief executive officer, stated: "Our commercial real estate ("CRE") portfolio performed well in the first quarter of 2023, continuing last year's momentum. CRE operating profit grew by 1.0% over the same quarter in 2022 to $20.9 million, and Same-Store Net Operating Income ("Same-Store NOI") increased by 2.2% to $30.4 million. Total leased occupancy was strong at 93.9%, and we continue to see robust leasing demand for our high-quality retail and industrial properties, with leasing spreads for the quarter at 7.4%."

"Our growth efforts continue. Earlier this week, we closed on the off-market acquisition of a 33,000 square foot industrial property on O'ahu for $9.5 million and are tracking a steady pipeline of potential opportunities. While the interest rate environment has slowed the deal market, we remain disciplined and expect that our deep local roots and ample liquidity will serve as competitive advantages, allowing us to move quickly as opportunities arise across our target markets and preferred asset classes. We also advanced our redevelopment efforts at Manoa Marketplace and remain on track for completion in the third quarter of 2023. We continue to review value-add opportunities within our portfolio."

"As I prepare to retire on June 30, I want to thank the entire A&B family. The Company's pivot to a Hawai'i-focused commercial real estate business is nearly complete and I have the utmost confidence that Lance will lead our outstanding team in demonstrating the strength of the A&B platform and creating value for shareholders in 2023 and beyond. It has been a privilege to lead A&B as chief executive officer during this important period of transformation for the Company."

• Net income (loss) attributable to A&B common shareholders and diluted earnings (loss) per share available to A&B shareholders for the first quarter of 2023 were $5.3 million and $0.07 per share, respectively, compared to $10.5 million and $0.14 per share in the same quarter of 2022. Income from continuing operations and continuing operations available to A&B shareholders per diluted share were $9.5 million and $0.13 per share, respectively, compared to $9.6 million and $0.13 per share in the same quarter of 2022.
• Nareit-defined Funds From Operations ("FFO") and FFO per-diluted share for the first quarter of 2023 were $18.6 million and $0.26 per share, respectively, compared to $18.8 million and $0.26 per share in the same quarter of 2022.
• Core FFO and Core FFO per-diluted share for the first quarter of 2023 were $21.2 million and $0.29 per share, respectively, compared to $20.8 million and $0.29 per share in the same quarter of 2022.

• CRE revenue increased by $1.6 million, or 3.5%, to $47.9 million, as compared to $46.3 million in the same quarter of 2022, primarily due to higher base rents.
• CRE operating profit increased by $0.2 million, or 1.0%, to $20.9 million as compared to $20.7 million in the same quarter of 2022.
• CRE net operating income ("NOI") increased by $0.6 million, or 2.2%, to $30.4 million, as compared to $29.8 million in the same quarter of 2022.
• CRE Same-Store NOI increased 2.2% compared to the prior year first quarter.
• Excluding collections of previously reserved amounts of $0.7 million in the first quarter of 2023 and $2.0 million in the same quarter of 2022, CRE Same-Store NOI increased 7.1% compared to the prior year first quarter.
• During the first quarter of 2023, the Company executed a total of 49 leases, covering approximately 139,300 square feet of gross leasable area ("GLA").
• Comparable leasing spreads were 7.4% portfolio-wide for the first quarter of 2023, 10.2% for industrial spaces and 6.0% for retail spaces.
• Significant leases executed during the first quarter of 2023 included:
• Eleven leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 24,000 square feet of GLA.
• Three leases at Laulani Village totaling approximately 32,000 square feet of GLA.
• Both overall leased and Same-Store leased occupancy were 93.9% as of March 31, 2023, a decrease of 60 basis points compared to March 31, 2022.
• Both leased and Same-Store leased occupancy in the retail portfolio were 93.6% as of March 31, 2023, an increase of 50 basis points compared to March 31, 2022, primarily due to strong leasing activity in Kailua and Laulani Village.
• Leased occupancy in the industrial portfolio was 95.2% as of March 31, 2023, a decrease of 280 basis points compared to March 31, 2022, primarily due to the expected move out of one tenant at Kaka`ako Commerce Center. Same-Store leased occupancy in the industrial portfolio was 95.1% as of March 31, 2023, a decrease of 290 basis points compared to March 31, 2022.

• The Manoa Marketplace redevelopment project is progressing and remains on budget and on schedule for completion in the third quarter of 2023. Efforts to enhance the visitor experience at this well-located neighborhood center are expected to realize between 8.0% and 8.5% stabilized yield on total estimated project costs ranging between $8.0 million - $8.8 million.
• On May 3, 2023, the Company completed the acquisition of a 33,000-square-foot industrial property located on the island of O'ahu for $9.5 million, representing a going-in cap rate of 5.6%. The acquisition is expected to be accretive to long-term value.

• Land Operations operating loss was $0.1 million for the quarter ended March 31, 2023, as compared to an operating profit of $1.7 million for the quarter ended March 31, 2022. The year-over-year decline in operating profit was primarily attributable to the sale of five Maui Business Park II lots in the first quarter of 2022 compared to no lot sales in the first quarter of 2023, offset by the gain on disposal of the Company's legacy trucking and storage business in the Land Operations Segment.
• Land Operations Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") was $(0.1) million for the first quarter of 2023, as compared to $4.6 million in the first quarter of 2022.

• As of March 31, 2023, the Company had an equity market capitalization of $1.4 billion and $479.2 million in total debt, for a total market capitalization of approximately $1.9 billion. The Company's debt-to-total market capitalization was 25.9% as of March 31, 2023. The Company's debt has a weighted-average maturity of 3.2 years, with a weighted-average interest rate of 4.4%. Ninety-two percent of the Company's debt was at fixed rates at quarter end.
• As of March 31, 2023, the Company had total liquidity of $472.6 million, consisting of cash on hand of $10.7 million and $461.9 million available on its revolving line of credit.
• The Company reported Consolidated Adjusted EBITDA of $156.0 million for the twelve-month period ended March 31, 2023, compared to $138.6 million for the same period ended March 31, 2022. Net Debt to Trailing Twelve Months ("TTM") Consolidated Adjusted EBITDA was 3.0 times as of March 31, 2023, compared to 3.5 times for the same period last year.

• The Company paid a first quarter 2023 dividend of $0.22 per share on April 4, 2023.
• The Company's Board declared a second quarter 2023 dividend of $0.22 per share, payable on July 5, 2023, to shareholders of record as of the close of business on June 16, 2023.

Alexander & Baldwin, Inc. (NYSE: ALEX) (A&B) is the only publicly-traded real estate investment trust to focus exclusively on Hawai'i commercial real estate and is the state's largest owner of grocery-anchored, neighborhood shopping centers. A&B owns, operates and manages approximately 3.9 million square feet of commercial space in Hawai'i, including 22 retail centers, 13 industrial assets and four office properties, as well as 142.0 acres of ground leases. A&B is expanding and strengthening its Hawai'i CRE portfolio and achieving its strategic focus on commercial real estate by monetizing its remaining non-core assets. Over its 153-year history, A&B has evolved with the state's economy and played a leadership role in the development of the agricultural, transportation, tourism, construction, residential and commercial real estate industries. Learn more about A&B at www.alexanderbaldwin.com.