Alexander & Baldwin (ALEX 1.99%), a major commercial real estate owner focused on Hawaii, announced its second quarter 2025 earnings on July 24, 2025. The most notable outcome was a significant GAAP earnings per share beat, with $0.35 reported versus an expected $0.33. GAAP operating revenue was slightly below expectations at $50.7 million, missing forecasts by $0.5 million. The company raised its full-year guidance for earnings and other key financial metrics. The quarter showed strong demand in leasing, robust occupancy, and continued internal growth, even as management noted continued attention to cost controls.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.35 | $0.33 | $0.13 | 169.2% |
| Revenue (GAAP) | $51.7 million | $51.24 million | $49.2 million | 5.1% |
| FFO per Diluted Share (Non-GAAP) | $0.48 | $0.28 | 71.4% | |
| CRE Operating Revenue | $50.7 million | $49.2 million | 3.1% | |
| CRE Same-Store NOI Growth (Non-GAAP) | 5.3% | 0.9% | 4.4 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Alexander & Baldwin and Key Business Drivers
Alexander & Baldwin is a Hawaii-based real estate investment trust (REIT) that owns and manages a portfolio of commercial properties across retail, industrial, and office segments. Its properties are fully concentrated in Hawaii, with assets including 21 retail centers, 14 industrial properties as of December 31, 2024, four office buildings, and significant ground lease holdings. Altogether, the company manages approximately four million square feet of commercial real estate as of December 31, 2024.
The company's success is tightly linked to its local market expertise and the unique conditions in Hawaii. Barriers to entry for commercial property are high, driven by geographic isolation, regulatory complexity, and limited entitled land. This enables the company to maintain high occupancy. Alexander & Baldwin also prioritizes sustainability, with investments in energy-saving projects and water conservation. Financial discipline, including moderate leverage and fixed-rate debt, supports stability and flexibility.
Second Quarter Highlights and Segment Performance
Profitability rose sharply year-over-year. Earnings per share rose to $0.35, up from $0.13 in Q2 2024, with Funds from operations (FFO), a REIT cash flow metric, also increased 71% to $0.48 per diluted share (non-GAAP).
CRE operating revenue was $50.7 million, up 3.1% from the previous year (GAAP). Same-store net operating income (NOI), which gauges the change in earnings from properties held over both periods, grew 5.3%, a strong showing compared to the 0.9% rise in Q2 2024. High occupancy buoyed these results: total portfolio leased occupancy reached 95.8%, a 190 basis point increase from June 30, 2024 to June 30, 2025 Retail segment occupancy improved the most, rising 260 basis points to 95.4%, while industrial occupancy hit 98.2%.
Leasing activity was active during the period. The company signed 52 improved-property leases covering about 183,800 square feet and secured $6.1 million in new annualized rent. Leasing spreads, which indicate the difference in rent between old and new or renewed leases, were up 6.8% overall.—retail leases saw a 7.4% increase and industrial leasing spreads were 4.7%.
However, despite higher revenue and non-GAAP NOI, management signaled continued attention to cost controls.
Land Operations contributed a notable profit boost, with operating profit rising to $13.9 million from just $0.17 million in the prior year period. This increase was mainly due to one-time items, such as resolution of legacy joint venture obligations and gains from land sales. Management described these as nonrecurring events and cautioned they are unlikely to repeat in coming quarters.
The company advanced its internal growth projects during the period. Pre-construction of two new buildings began at Komohana Industrial Park, totaling 105,000 square feet, with one already pre-leased to Lowe's, a national retailer. At Maui Business Park, work continued on a warehouse project expected to be ready in the first quarter of 2026. These developments highlight sustained leasing demand and the company's ability to sign national tenants into the Hawaii market. The investment team remains active and monitoring new opportunities.
On the balance sheet, Alexander & Baldwin ended the quarter with $307.6 million in total liquidity, including $8.6 million in cash and $299.0 million available on its revolving credit line as of June 30, 2025. Net debt to trailing twelve months adjusted EBITDA, a measure of leverage, was 3.3x as of June 30, 2025—improved from 3.6x as of March 31, 2025. The debt situation remains manageable, with no significant maturities near-term and a high proportion of fixed-rate borrowings. The Board declared a regular quarterly dividend of $0.225 per share, matching the prior quarter. This continues a stable pattern with no change to the payout.
Looking Forward
Management raised its full-year 2025 guidance in several key areas. EPS guidance was moved up to $0.91–$0.96 per share from a previous range of $0.68–$0.74. Full-year guidance for funds from operations (FFO, a non-GAAP measure) was increased to $1.35–$1.40 per diluted share, up from $1.17–$1.23. Analysts also learned that same-store NOI growth expectations (non-GAAP) improved to 3.4%–3.8% for FY2025, reflecting optimism about ongoing leasing and rent growth. The guidance for FFO per share related specifically to CRE and corporate functions, however, was mostly unchanged at $1.12–$1.16 (non-GAAP) for the full year, highlighting continued caution about the pace and recurrence of land segment profits.
No major tenant move-outs or occupancy risks are known for the coming months. Overall, the company’s financial flexibility, high portfolio occupancy, and steady rent demand support the outlook. Observers should watch for trends in property-level costs, pace of leasing spreads, and any larger economic pressures that might affect Hawaii’s commercial real estate market. The quarterly dividend was maintained at $0.225 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
