Alexander & Baldwin, Inc. Reports First Quarter 2018 Results

HONOLULU, May 8, 2018

"Our core segment—Commercial Real Estate—continued its strong financial and operating performance in the first quarter with 8.4% growth in operating profit, 2.8% growth in same-store net operating income¹ and 10.2% re-leasing spreads. Strategically, we completed the successful migration of our mainland commercial real estate portfolio to Hawai`i with the acquisition of three premier Hawai`i neighborhood and community retail centers and the sale of our last six mainland properties. We also advanced our commercial development pipeline by turning over the first tenant spaces at our Lau Hala Shops project in Kailua and breaking ground on Ho`okele Shopping Center in March. The excellent financial, operational and strategic performance in Commercial Real Estate provided a positive start to 2018, and we expect to hit our earlier guidance for full-year same-store NOI growth," said Chris Benjamin, A&B president and chief executive officer.

"The Land Operations segment's financial results for the quarter were challenged by construction- and remediation-related costs within a builder joint venture. On the positive side, we sold a Kahala property, and several units at Kamalani, Keala o Wailea, Ka Milo and Kukui`ula, which resulted in sales proceeds and cash distributions from our partners of $28 million. Meanwhile, Grace Pacific had a particularly challenging quarter, even as it advanced important operating initiatives that should produce improving results as the year progresses."

Corporate Highlights

• Net income available to A&B shareholders for the first quarter of 2018 was $47.3 million or $0.66 per diluted share. The Company closed the sale of its last six mainland portfolio assets in the quarter, thus completing its mainland to Hawai`i migration. All of the Company's commercial real estate assets are now located in Hawai`i.
• In connection with its conversion to a REIT, the Company distributed $783.0 million (approximately $15.92 per share) to its shareholders (the "Special Distribution") on January 23, 2018, consisting of $156.6 million in cash and $626.4 million in shares.  As of March 31, 2018, the Company had 72.0 million shares outstanding.

Commercial Real Estate ("CRE") Highlights

• CRE operating profit was $15.5 million in the first quarter of 2018, as compared to $14.3 million in the prior year first quarter, an increase of 8.4%.
• Same-store cash NOI¹ increased 2.8% in the first quarter of 2018, as compared to the prior year first quarter. All same-store assets are located in Hawai`i as of the end of the quarter.
• Signed 61 leases covering 306,000 square feet of gross leasable area ("GLA") in the first quarter. Leasing spreads for signed leases when compared to previously escalated rents on the same spaces were 10.2% higher for the first quarter of 2018. Leasing spreads on Hawai`i retail spaces were 7.5% higher for the first quarter of 2018.
• Occupancy decreased by 190 basis points to 91.8% as of March 31, 2018, as compared to March 31, 2017, primarily due to the previously anticipated termination of one large tenant at Komohana Industrial Park. Occupancy in the Hawai`i retail portfolio was 93.1% at the end of the quarter, a decrease of 10 basis points.
• Major strategic lease transactions this year-to-date included:
• A ground lease with Wendy's on a 24,000-square-foot, vacant parcel in Kailua.
• Seven new leases at the recently acquired Honokohau Industrial property at an aggregate leasing spread of 22.5%.
• Year-to-date highlights in redevelopment and development for hold included:
• Groundbreaking and commencement of construction at the 94,000-square-foot Ho`okele Shopping Center adjacent to Maui Business Park in Kahului.
• Began turning spaces over to tenants at the 50,500-square-foot Lau Hala Shops center, which was 88% pre-leased as of March 31, 2018, and is scheduled to open in late 2018.

CRE Acquisition and Disposition Highlights