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01/11 17:21
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a solid financial performance with a 4.6% increase in Same Store NOI and a raised FFO guidance. Despite cautious guidance due to macroeconomic uncertainties, the company maintains strong liquidity and a stable debt position. The strategic self-storage transaction and opportunities for equity investment further bolster prospects. Dividends remain steady, and tenant concerns have not materially impacted leasing activity. The market cap suggests a moderate reaction, leading to a positive outlook for the stock price over the next two weeks.
Same Store NOI $33,200,000, representing a 4.6% increase from Q1 of last year due primarily to higher portfolio occupancy.
CRE and Corporate FFO per share $0.30, reflecting an 11.1% increase when normalized for the $0.02 of swap and financing related adjustments embedded in Q1 2024 FFO.
Total FFO per share $0.36, consisting of $0.06 of FFO per share from land operations and $0.30 from CRE and corporate.
G&A Expenses Approximately $7,000,000, a decrease of $200,000 or 3.4% compared to the same period last year, largely reflecting timing differences.
Total Liquidity Over $300,000,000, maintaining a strong balance sheet.
Net Debt to Adjusted EBITDA Ratio 3.6 times, indicating a stable financial position.
Weighted Average Interest Rate on Debt 4.65%, with approximately 97% of debt at fixed rates.
Dividend per share $0.025, paid on April 7, with a second quarter dividend declared at the same rate.
Land Operations Earnings Approximately $0.06 for the quarter, including $2,200,000 of margin from the sale of agricultural zone land.
JV Income Approximately $3,000,000, primarily due to a favorable resolution of certain contingencies at a legacy joint venture.
Self Storage Investment: Signed a 75-year ground lease with a self-storage developer, marking the company's first investment in self-storage, contributing nearly $0.01 in 2025.
CRE Portfolio Performance: Same store NOI grew by 4.2% for the quarter, with leased occupancy at 95.6%.
Leasing Activity: Executed 42 leases representing approximately 237,000 square feet of GLA and $5,600,000 of ABR.
Industrial Vacancy: Backfilled approximately 75% of 50,000 square feet of industrial vacancy.
Operational Efficiency: G&A costs decreased by $200,000 or 3.4% compared to the same period last year.
Land Operations Earnings: Sold 90 acres of agricultural land contributing approximately $0.06 for the quarter.
Guidance Adjustment: Raised total FFO per share guidance to $1.17 to $1.23, while maintaining guidance for same store NOI and CRE related FFO.
Streamlining Business: Focused on expeditious lease negotiations and pre-purchasing tariff-impacted construction materials.
Macroeconomic Uncertainty: Management acknowledged the current macroeconomic backdrop, indicating a focus on controllable factors amid uncertainty. They noted that while leasing activity remains robust, there are concerns regarding tariffs impacting construction costs.
Tariff Impact on Construction: There is a noted increase in construction costs due to tariffs, particularly an 8% increase in steel prices. The company is pre-purchasing materials to mitigate these costs.
Tenant Concerns: While there is soft data indicating tenant concerns regarding future leasing plans and operational costs, hard data shows no significant real-time impacts on leasing activity.
Contingencies in Leases: A tenant has contingencies in their lease, which could affect occupancy if not resolved. However, management is confident in resolving these issues.
Market Activity: The Hawaii retail industrial transactional market has seen limited closed transactions, but the investment team is actively pursuing opportunities.
Legacy Issues: There is a possibility of legacy issues impacting future earnings, but no specific events are anticipated in the near term.
Guidance Caution: Despite strong first-quarter results, the company maintained cautious guidance due to macroeconomic uncertainties and potential fluctuations in occupancy.
CRE Portfolio Performance: Same store NOI grew by 4.2% for the quarter, with a large lease at Kakaako Commerce Center increasing leased occupancy to 95.6%.
Growth Initiatives: Transferred a five-acre lot at Maui Business Park into the ground lease portfolio and signed a 75-year lease with a self-storage developer, contributing nearly $0.01 in 2025.
Streamlining Operations: Sold 90 acres of agricultural land, contributing approximately $0.06 to land operations earnings for the quarter.
Total FFO Guidance: Raised to a range of $1.17 to $1.23 per share, reflecting better-than-expected land operations results.
Same Store NOI Growth Guidance: Maintained at 2.4% to 3.2%.
CRE and Corporate FFO Guidance: Maintained at $1.11 to $1.16 per share.
G&A Expectations: Expected to range from flat to a penny lower compared to 2024.
First Quarter Dividend: $0.025 per share paid on April 7, 2025.
Second Quarter Dividend: $0.025 per share declared, payable on July 9, 2025.
Total FFO Guidance: Raised to a range of $1.17 to $1.23 per share for 2025.
FFO per Share for Q1 2025: $0.36 per share, consisting of $0.30 from CRE and corporate and $0.06 from land operations.
FFO from Land Operations: $0.06 per share for Q1 2025.
Equity Investment Opportunity: Opportunity to invest approximately 20% of the equity capital stack in the self-storage development.
Expected Contribution from Ground Lease: Approximately $0.01 in FFO for 2025 from the ground lease at Maui Business Park.
The earnings call shows strong financial health with $300 million liquidity, a raised 2025 guidance, and over 95% of debt at fixed rates. The Q&A section reveals management's confidence in future earnings impact and strategic asset recycling. Although some uncertainties exist, such as the unidentified $24 million asset, the company's proactive acquisition strategy and consideration of share buybacks are positive indicators. Given the market cap of $1.2 billion, these factors suggest a positive stock price movement of 2% to 8%.
The earnings call reveals a balanced view with no major positive or negative catalysts. Financial performance is stable, with some growth in NOI and FFO guidance. However, concerns about lower leasing spreads, absence of significant growth opportunities, and unclear management responses on key issues temper enthusiasm. The market remains competitive, and while there are no immediate risks, the lack of specifics on future deals and potential deceleration in NOI growth suggest a cautious outlook. Given the company's mid-cap status, the stock price is likely to remain stable in the short term.
The earnings call reveals strong financial performance, with EPS and NOI growth, a raised FFO guidance, and solid liquidity. Despite macroeconomic uncertainties, tenant metrics are positive, and strategic transactions are enhancing long-term income. The Q&A indicates robust leasing activity and proactive supply chain management. The market cap suggests a moderate reaction, leading to a positive stock price movement of 2% to 8% over the next two weeks.
The earnings call reveals a solid financial performance with a 4.6% increase in Same Store NOI and a raised FFO guidance. Despite cautious guidance due to macroeconomic uncertainties, the company maintains strong liquidity and a stable debt position. The strategic self-storage transaction and opportunities for equity investment further bolster prospects. Dividends remain steady, and tenant concerns have not materially impacted leasing activity. The market cap suggests a moderate reaction, leading to a positive outlook for the stock price over the next two weeks.
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