Alexander & Baldwin Acquires Industrial Property in Pearl City

Rhea-AI Summary

Alexander & Baldwin (NYSE: ALEX) has acquired an industrial property in Pearl City, O'ahu for $29.7 million. The 81,500-square-foot food distribution facility is fully leased to Hansen Distribution Group, a subsidiary of C&S Wholesale Grocers. The property's central location provides easy access to key transportation hubs.

Lance Parker, A&B's president & CEO, stated that this acquisition aligns with the company's strategy to expand its commercial real estate portfolio in Hawai'i, focusing on retail, industrial, and ground lease assets. The investment is expected to be immediately accretive to Funds From Operations (FFO) and allows A&B to reinvest proceeds from asset sales into higher-yielding investments.

Positive

• Acquisition of an 81,500-square-foot industrial property for $29.7 million
• Property is fully leased under a long-term agreement
• Strategic location with easy access to key transportation hubs
• Aligns with A&B's portfolio expansion strategy in Hawai'i
• Expected to be immediately accretive to Funds From Operations (FFO)

Negative

• None.

Insights

Real Estate Investment Analyst

Alexander & Baldwin's acquisition of the Pearl City industrial property for $29.7 million is a strategic move that strengthens their position in Hawai'i's commercial real estate market. The 81,500-square-foot facility, fully leased to a subsidiary of C&S Wholesale Grocers, provides a stable, long-term income stream. This off-market deal capitalizes on the tight industrial market in O'ahu, potentially offering higher yields compared to other asset classes. The property's central location and connection to key transportation hubs enhance its value proposition. Importantly, management expects this acquisition to be immediately accretive to Funds From Operations (FFO), a key metric for REITs. This move aligns with A&B's strategy to focus on retail, industrial and ground lease assets in Hawai'i, potentially improving the company's overall portfolio quality and financial performance.

Supply Chain Specialist

The acquisition of this food distribution facility in Pearl City is significant from a supply chain perspective. Its strategic location near major transportation hubs like Daniel K. Inouye International Airport and Honolulu Harbor is important for efficient logistics operations. The facility's tenant, Hansen Distribution Group, being a subsidiary of C&S Wholesale Grocers, suggests a strong and stable occupancy. This is particularly important in Hawai'i, where efficient food distribution is critical due to its geographical isolation. The long-term lease with an established food service provider indicates a steady demand for such facilities, which could provide A&B with consistent revenue streams. This acquisition not only strengthens A&B's portfolio but also plays a vital role in supporting the local food supply chain infrastructure, potentially leading to increased investor confidence in the company's long-term prospects.

Expands Industrial Footprint in Central Oahu

HONOLULU, Sept. 23, 2024 /PRNewswire/ -- Alexander & Baldwin, Inc. (NYSE: ALEX) ("A&B" or the "Company"), a Hawai'i-based owner, operator, and developer of high-quality commercial real estate, announced it has completed an off-market acquisition of an industrial property in Pearl City, O'ahu for $29.7 million.

The 81,500-square-foot food distribution facility is fully leased to Hansen Distribution Group, a broadline food service subsidiary of C&S Wholesale Grocers, an industry leader in supply chain solutions and wholesale grocery supply in the United States. Its central location on O'ahu provides ease of access to the Daniel K. Inouye International Airport, Honolulu Harbor and Honolulu's urban core.

"We're excited to add the Pearl City distribution facility as the newest asset to our portfolio. This acquisition aligns with Alexander & Baldwin's strategy to expand our commercial real estate portfolio in Hawai'i, focusing on retail, industrial, and ground lease assets," said Lance Parker, A&B president & CEO. "The asset is fully occupied under a long-term lease to an established food service provider that serves our local community, and it strengthens our position in O'ahu's tight industrial market and allows us to reinvest proceeds from the sales of assets into higher-yielding investments that enhance our portfolio and deliver long-term value. We expect this investment to be immediately accretive to Funds From Operations (FFO)."

ABOUT ALEXANDER & BALDWIN
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 4.0 million square feet of commercial space in Hawai'i, including 22 retail centers, 14 industrial assets, and four office properties, as well as 142.0 acres of ground lease assets. Over its 154-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.

FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities and competitive positions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the Company's REIT status and the Company's business, the evaluation of alternatives by the Company related to its non-core assets and business, and the risk factors discussed in the Company's most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. The information in this release should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.

Media Contact: 
Andrea Galvin
agalvin@abhi.com

Investor Contact:
Jordan Hino
jhino@abhi.com

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SOURCE Alexander & Baldwin, Inc.

FAQ

What property did Alexander & Baldwin (ALEX) acquire in Pearl City?

Alexander & Baldwin acquired an 81,500-square-foot food distribution facility in Pearl City, O'ahu for $29.7 million.

Who is the tenant of the newly acquired ALEX property in Pearl City?

The property is fully leased to Hansen Distribution Group, a subsidiary of C&S Wholesale Grocers.

How does the Pearl City acquisition align with Alexander & Baldwin's (ALEX) strategy?

The acquisition aligns with ALEX's strategy to expand its commercial real estate portfolio in Hawai'i, focusing on retail, industrial, and ground lease assets.

What is the expected financial impact of the Pearl City acquisition for Alexander & Baldwin (ALEX)?

The investment is expected to be immediately accretive to Funds From Operations (FFO) for ALEX.