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What changed in Alexander & Baldwin, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Alexander & Baldwin, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+242 added−200 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in Alexander & Baldwin, Inc.'s 2025 10-K

242 paragraphs added · 200 removed · 159 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

26 edited+7 added−2 removed45 unchanged
Biggest changeAs of December 31, 2024, the Company has converted the common area lighting to LED at 31 properties, and installed EV charging stations at 14 properties. • As of December 31, 2024, the Company has completed the installation of three PV systems totaling 1.8-megawatts at various Oahu properties, including a 1.3-megawatt rooftop system in 2022 at Pearl Highlands Center, the Company's 3 largest retail asset by GLA, and a 0.5-megawatt rooftop system in 2023 at Kaka‘ako Commerce Center, the Company's second largest industrial asset by GLA.
Biggest changeUnder this partnership, approximately 22% of the Company's portfolio (based on GLA) has undergone performance updates to lighting, heating, and cooling systems, driving energy reductions. 3 • The Company continues to implement sustainable energy and conservation features at its properties, including installing energy efficient LED lighting, rooftop photovoltaic (“PV”) systems and electric vehicle (“EV”) charging stations, as well as incorporating the use of cool roofs, water efficient fixtures and reclaimed water, pedestrian friendly open spaces, ride and bike share transportation options, and native Hawaiian and environmentally friendly landscaping, among other initiatives. • As of December 31, 2025, the Company has completed the installation of five PV systems totaling 2.5-megawatts, including a 1.3-megawatt rooftop system in 2022 at Pearl Highlands Center, the Company's largest retail asset by GLA, and a 0.5-megawatt rooftop system in 2023 at Kaka‘ako Commerce Center, the Company's second largest industrial asset by GLA, and three PV systems totaling 0.7-megawatts at various Oahu retail properties in 2024 and 2025.
Increase Income and Optimize Returns through Internal Growth - The Company strives to be the landlord of choice by providing desirable locations, quality properties, community amenities, and effective leasing and management of our 1 commercial properties; as well as create value through property development and redevelopment in order to increase recurring income streams and optimize returns. • Development and Redevelopment - The Company employs strong investment, development, and asset management teams to capitalize on embedded internal investment opportunities through the repositioning and redevelopment of existing assets, as well as ground-up development of new commercial properties at an appropriate risk-adjusted return on capital. • Leasing - With the Company’s in-house leasing capabilities and tenant demand in submarkets in which A&B operates, the Company is positioned to achieve internal growth through increased rental rates on the renewal of expiring leases or the leasing of space to new tenants at higher rental rates while limiting vacancy and down-time.
Increase Income and Optimize Returns through Internal Growth - The Company strives to be the landlord of choice by providing desirable locations, quality properties, community amenities, and effective leasing and management of commercial properties; as well as create value through property development and redevelopment in order to increase recurring income streams and optimize returns. • Development and Redevelopment - The Company employs strong investment, development, and asset management teams to capitalize on embedded internal investment opportunities through the repositioning and redevelopment of existing assets, as well as ground-up development of new commercial properties at an appropriate risk-adjusted return on capital. • Leasing - With the Company’s in-house leasing capabilities and tenant demand in submarkets in which A&B operates, the Company is positioned to achieve internal growth through increased rental rates on the renewal of expiring leases or the leasing of space to new tenants at higher rental rates while limiting vacancy and down-time.
Additionally, the Company is subject to various other regulations such as Occupational Safety and Health Administration regulations, Environmental Protection Agency regulations, and state and county permitting requirements. 2 The Company is also subject to a number of tax laws and regulations that could materially impact its financial condition and results of operations.
Additionally, the Company is subject to various other regulations such as Occupational Safety and Health Administration regulations, Environmental Protection Agency regulations, and state and county permitting requirements. The Company is also subject to a number of tax laws and regulations that could materially impact its financial condition and results of operations.
The Company is focused on building an inclusive culture through a variety of initiatives. This commitment starts at the top, with Board members having a wide range of experiences, skills and backgrounds. Corporate Governance and Compliance The Company prioritizes sound principles of corporate governance.
The Company is focused on building an inclusive culture through a variety of initiatives. This commitment starts at the top, with Board members having a wide range of experiences, skills and backgrounds. Corporate Governance and Compliance 5 The Company prioritizes sound principles of corporate governance.
Discontinued Operations In November 2023, the Company completed the sale of its interests in Grace Pacific LLC, a materials and construction company, Company-owned quarry land on Maui, and Grace Pacific’s 50% interest in a paving company (collectively, the “Grace Disposal Group”).
Discontinued Operations In November 2023, the Company completed the sale of its interests in Grace Pacific LLC, a materials and construction company, Company-owned quarry land on Maui, and Grace Pacific’s 50% interest in a paving company (collectively, the 2 “Grace Disposal Group”).
The Company’s website address is www.alexanderbaldwin.com. The information found on the Company's 5 website, including the Company's CRR, is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document filed with the SEC.
The Company’s website address is www.alexanderbaldwin.com. The information found on the Company's website, including the Company's CRR, is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document filed with the SEC.
Additionally, the Company is able to drive incremental growth and enhance portfolio returns through attracting high-quality tenants and managing the merchandising mix of our tenant base. • Property Management - The Company oversees all aspects of asset and property management including execution of effective marketing and leasing strategies to attract quality tenants and increase occupancy and the effective and efficient management of property operations focused on reducing operating expenses and maximizing property cash flows over the long term, thereby enhancing the value of our properties.
Additionally, the Company is able to drive incremental growth and enhance portfolio returns through attracting high-quality tenants and managing the merchandising mix of the tenant base. • Property Management - The Company oversees all aspects of asset and property management including execution of effective marketing and leasing strategies to attract quality tenants, and increase occupancy and the effective and efficient management of property operations focused on reducing operating expenses and maximizing property cash flows over the long term, thereby enhancing the value of the Company’s properties.
Results of the survey are reviewed 4 carefully by senior leadership and have resulted in specific actions, including increased recognition programs and the development of the Company’s vision, mission, and values statements.
Results of the survey are reviewed carefully by senior leadership and have resulted in specific actions, including increased recognition programs and the development of the Company’s vision, mission, and values statements.
Balance Sheet Management and Financing Strategy Positioned for External Growth - The Company intends to grow its commercial real estate portfolio by pursuing accretive acquisitions in our preferred asset classes and other commercial property investment opportunities when they are strategically consistent with the value creation objectives of the Company and we believe they have attractive risk-adjusted returns relative to the Company’s cost of capital, while maintaining a moderate leverage profile and flexible balance sheet.
Balance Sheet Management and Financing Strategy Positioned for External Growth - The Company intends to grow its commercial real estate portfolio by pursuing accretive acquisitions in its preferred asset classes and other commercial property investment opportunities when they are strategically consistent with the value creation objectives of the Company and have attractive risk-adjusted returns relative to the Company’s cost of capital, while maintaining a moderate leverage profile and flexible balance sheet.
Sustainability While recent years have seen intense focus on sustainability topics, these principles have been an integral part of the Company's corporate culture and values since its founding over 150 years ago. The Company's deep Hawai‘i roots offer the obligation and privilege to exceed the baseline of corporate responsibility.
Sustainability While recent years have seen intense focus on sustainability topics, these principles have been an integral part of the Company's corporate culture and values since its founding over 155 years ago. The Company's deep Hawai‘i roots offer the obligation and privilege to exceed the baseline of corporate responsibility.
The Company strives to attract, develop, and retain employees with a wide range of backgrounds and perspectives, and supporting them in their pursuit to advance their careers, provide for their families, enjoy their work, and give back to the community.
The Company strives to attract, develop, and retain employees with a wide range of backgrounds and perspectives, and support them in their pursuit to advance their careers, provide for their families, enjoy their work, and give back to the community.
Refer to Note 20 – Sale of Business and Note 21 – Held for Sale and Discontinued Operations included within the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K for additional information regarding the Grace Disposal Group, including the assets and liabilities divested and income from discontinued operations.
Refer to Note 20 – Sale of Business and Note 21 – Held for Sale and Discontinued Operations included within the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K for additional information regarding the Grace Disposal Group, including income from discontinued operations.
Pearl Highlands Center accounted for approximately 11.1%, 11.6%, and 10.9% of total Commercial Real Estate segment revenues for the three years ended December 31, 2024, 2023, and 2022, respectively. Kailua Retail accounted for approximately 10.5%, 10.4%, and 10.7% of total Commercial Real Estate segment revenues for the three years ended December 31, 2024, 2023, and 2022, respectively.
Pearl Highlands Center accounted for approximately 10.9%, 11.1%, and 11.6% of total Commercial Real Estate segment revenues for the three years ended December 31, 2025, 2024, and 2023, respectively. Kailua Retail accounted for approximately 11.1%, 10.5%, and 10.4% of total Commercial Real Estate segment revenues for the three years ended December 31, 2025, 2024, and 2023, respectively.
The Company's commercial real estate portfolio consists of 21 retail centers, 14 industrial assets, and four office properties, representing approximately four million square feet of gross leasable area ("GLA"), as well as 142 acres of commercial land in Hawai‘i, of which substantially all is leased pursuant to urban ground leases.
The Company's commercial real estate portfolio consists of 22 retail centers, 14 industrial assets, and four office properties, representing approximately four million square feet of gross leasable area ("GLA"), as well as 145 acres of commercial land in Hawai‘i, of which substantially all is leased pursuant to urban ground leases.
The state also benefits from a tourism industry that holds a unique brand that appeals to tourists from varying geographies (e.g., U.S. East Coast, U.S. West Coast, Canada, Asia, Europe). • Market Knowledge and Deep Local Roots - A&B’s management team is physically in the islands which provides direct insight into the needs of the communities we serve.
The state also benefits from a tourism industry that holds a unique brand that appeals to tourists from varying geographies (e.g., U.S. East Coast, U.S. West Coast, Canada, Asia, Europe). 1 • Market Knowledge and Deep Local Roots - A&B’s management team is physically in the islands which provides direct insight into the needs of the communities the Company serves.
In 2023 and 2024, the Company held a collaboration and learning day, an all-day event for employees that provided an opportunity to revitalize A&B’s corporate culture, foster connections with colleagues, and enhance professional development.
Since 2023, the Company has held an annual collaboration and learning day, an all-day event for employees that provided an opportunity to revitalize A&B’s corporate culture, foster connections with colleagues, and enhance professional development.
As of December 31, 2024, the improved portfolio leased occupancy was at 94.6%, which is leased to a mix of national, regional, and local retailers and businesses.
As of December 31, 2025, the improved portfolio leased occupancy was at 95.6%, which is leased to a mix of national, regional, and local retailers and businesses.
The Company also conducts a confidential, annual employee survey to better understand employee perspectives on topics including employee experience, workplace culture, employee engagement and the direction and leadership of the Company. In 2024, the Company had a 75% participation rate.
The Company also conducts a confidential, annual employee survey to better understand employee perspectives on topics including employee experience, workplace culture, employee engagement and the direction and leadership of the Company. In 2025, the Company had an 81% participation rate.
The Company does the following to support these efforts: • Offers a competitive compensation and benefits program; • Maintains a hybrid onsite/remote work environment with flexible scheduling and incentives for onsite work; • Utilizes leading industry software and other technology to facilitate communication, document management, collaboration, and other business processes; • Brings the A&B family together and fosters an inclusive environment by hosting in-person and virtual engagement activities through an employee-led social council, and well-being tools and resources through an employee-led wellness program; • Invests in learning and development opportunities to support the personal and professional development of employees.
The Company does the following to support these efforts: • Offers a competitive compensation and benefits program; • Maintains a hybrid onsite/remote work environment with flexible scheduling and incentives for onsite work; • Utilizes leading industry software and other technology to facilitate communication, document management, collaboration, and other business processes; • Brings the A&B family together and fosters an inclusive environment by hosting in-person and virtual engagement activities through an employee-led social council, and well-being tools and resources through an employee-led wellness program; • Invests in learning and development opportunities to support the personal and professional development of employees. 4 Recruitment, Development, and Retention The Company had 91 employees (including 3 part-time employees) as of December 31, 2025, compared to 99 employees (including 3 part-time employees) in the prior year.
Our employees have an average tenure of approximately 8.5 years and, for the year ended December 31, 2024, overall voluntary turnover was 8.1% which is lower than the average of 11% for REITs participating in the 2024 National Association of Real Estate Investment Trusts (“Nareit”) Compensation and Benefits Survey.
Our employees have an average tenure of approximately 10 years and, for the year ended December 31, 2025, overall voluntary turnover was 10.7% which is lower than the average of 12% for REITs participating in the 2025 National Association of Real Estate Investment Trusts (“Nareit”) Compensation and Benefits Survey.
The Company’s leases include terms that encourage sustainable practices to align its sustainability priorities with tenant activity, The Company highlights the following environmental sustainability achievements: • Implemented a CRE benchmarking program that compiles energy and water data in ENERGY STAR Portfolio Manager. This enables the Company to better track and understand energy and water consumption throughout the CRE portfolio.
The Company’s leases include terms that encourage sustainable practices in order to align tenant activity with the Company’s sustainability priorities. The Company highlights the following environmental sustainability achievements: • Implemented a CRE benchmarking program that compiles energy and water data in ENERGY STAR Portfolio Manager.
The Company recognizes that employees drive its success and are one of its most valuable resources. To expand its reach for talent, the Company utilizes a variety of resources to recruit employees that embody A&B's core values of integrity, collaboration, respect, decisiveness, adaptability, and accountability.
To expand its reach for talent, the Company utilizes a variety of resources to recruit employees that embody A&B's core values of integrity, collaboration, respect, decisiveness, adaptability, and accountability.
Revenue Concentration As of December 31, 2024, the Company's three largest tenants by annualized base rent (“ABR”) were Safeway, Sam's Club, and Longs Drugs, and no single tenant accounted for more than 10% of total commercial real estate revenue in any of the three years ended December 31, 2024, 2023, and 2022.
Revenue Concentration As of December 31, 2025, the Company's three largest tenants by annualized base rent (“ABR”) were Albertsons Companies (Safeway), Windward City Shopping Center, and City and County of Honolulu, with no single tenant accounting for more than 10% of total commercial real estate revenue in any of the three years ended December 31, 2025, 2024, and 2023.
Further, the Company supports its employees' investments in their communities through its matching gifts program (which matches its employees' personal gifts with Company contributions to eligible community non-profit organizations); through its volunteer initiatives (which offers employees paid time off for employee community service, as well as cash grants to such eligible organizations); and through corporate sponsorship of charities supported by our employees.
The Company also facilitates employee engagement in their communities through its matching gifts program, which supplements employees' contributions with Company donations to eligible community non-profit organizations; through volunteer initiatives that provide employees paid time off for community service and cash grants to qualifying organizations; and through corporate sponsorship of charities supported by its employees.
The Company has a long history of giving back to the communities it serves and that its employees are a part of and it believes that this commitment helps in its efforts to attract and retain talent.
The Company has a long-standing commitment to giving back to the communities it serves and where its employees live, and it believes this dedication supports its ability to attract and retain talent.
Recruitment, Development, and Retention The Company had 99 employees (including 3 part-time employees) as of December 31, 2024, compared to 104 employees (including 3 part-time employees) in the prior year. The Company has maintained a hybrid onsite/remote work environment and 93.9% of our employees are based in Hawai'i.
The Company has maintained a hybrid onsite/remote work environment and 94.5% of our employees are based in Hawai'i. The Company recognizes that employees drive its success and are one of its most valuable resources.
Removed
Under this partnership, approximately 22% of the Company's portfolio (based on GLA) has undergone performance updates to lighting, heating, and cooling systems, driving energy reductions. • In 2022, the Company conducted comprehensive American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE) Level 2 audits on eight properties, representing 1.1 million square feet of GLA, or nearly 30% of its portfolio based on GLA.
Added
Agreement and Plan of Merger On December 8, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Tropic Purchaser LLC, a Delaware limited liability company ("Parent"), and Tropic Merger Sub LLC, a Hawaii limited liability company and wholly owned subsidiary of Parent ("Merger Sub").
Removed
These audits provided data identifying feasible short-, mid-, and long-term energy conservation and efficiency opportunities. • The Company continues to implement sustainable energy and conservation features at its properties, to include installing energy efficient LED lighting, rooftop photovoltaic (“PV”) systems and electric vehicle (“EV”) charging stations, as well as incorporating the use of cool roofs, water efficient fixtures and reclaimed water, pedestrian friendly open spaces, ride and bike share transportation options, and native Hawaiian and environmentally friendly landscaping, among other initiatives.
Added
Parent is a joint venture formed by MW Group and funds affiliated with Blackstone Real Estate and DivcoWest.
Added
The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, the Company will merge with and into Merger Sub (the "Merger") and the separate existence of the Company will cease and Merger Sub will survive as a wholly owned subsidiary of Parent.
Added
The Merger is expected to close in the first quarter of 2026, subject to customary closing conditions, including approval of the Company's shareholders.
Added
For additional information regarding the Merger and the terms of the Merger Agreement, see (i) Part I, Item 1A, “Risk Factors,” Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and Note 1 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, (ii) the Current Report on Form 8-K that the Company filed with the SEC on December 8, 2025, and (iii) the definitive proxy statement on Schedule 14A that the Company filed with the SEC on January, 23, 2026 (as it may be amended or supplemented from time to time).
Added
This enables the Company to better track and understand energy and water consumption throughout the CRE portfolio.
Added
Additionally, the Company has three PV systems under construction on Oahu and Hawai‘i Island that are scheduled for completion in early 2026 and are expected to increase capacity by 0.5-megawatts.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+33 added−7 removed188 unchanged
Biggest changeSummary of risks related to our Investments in Real Estate • There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and make distributions to our shareholders. • Commercial real estate investments are relatively illiquid. • Increases in real estate ownership costs and operating expenses, including property taxes, insurance, and common area maintenance costs, would adversely affect our operating results. • The bankruptcy or loss of key tenants in our commercial real estate portfolio may adversely affect our cash flows and profitability. • A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations. • We may be unable to renew leases, lease vacant space, or re-lease space as leases expire, thereby increasing or prolonging vacancies, which would adversely affect our financial condition, results of operations and cash flows. • Our retail centers may depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. • Certain of our leases at our retail centers contain “co-tenancy” or “go-dark” provisions, which, if triggered, may allow tenants to pay reduced rent, cease operations, or terminate their leases, which could adversely affect our performance or the value of the applicable retail property. • A decline in real estate values could result in impairment of the carrying values of our long-lived assets and have a material and adverse effect on our operating results. • Instability in the financial industry could negatively impact our ability to sell our real estate holdings. • We are subject to risks associated with real estate construction and development. • Real estate development projects are subject to warranty and construction defect claims, in the ordinary course of business, that can be significant. • We face competition for the acquisition, development, and management and leasing of real estate properties, which may impede our ability to grow our operations or may increase the cost of these activities. • We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth. 6 Summary of risks related to our Financing • We may need to incur additional indebtedness, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our stockholders. • We may face potential difficulties in obtaining operating and development capital. • We may raise additional capital in the future on terms that are more stringent to us, which could provide holders of new issuances rights, preferences and privileges that are senior to those currently held by our common shareholders, or that could result in dilution of common stock ownership. • Failure to comply with certain restrictive financial covenants contained in our credit facilities could impose restrictions on our business segments, capital availability or the ability to pursue other activities. • Covenants in our loan agreements may restrict our operations and adversely affect our financial condition and ability to make distributions to our stockholders. • Increasing interest rates would increase our overall interest expense. • Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect our financial condition, cash flows, and results of operations.
Biggest changeSummary of risks related to our Investments in Real Estate • There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and make distributions to our shareholders. • Commercial real estate investments are relatively illiquid. • Increases in real estate ownership costs and operating expenses, including property taxes, insurance, and common area maintenance costs, would adversely affect our operating results. • The bankruptcy or loss of key tenants in our commercial real estate portfolio may adversely affect our cash flows and profitability. • A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations. • We may be unable to renew leases, lease vacant space, or re-lease space as leases expire, thereby increasing or prolonging vacancies, which would adversely affect our financial condition, results of operations and cash flows. • Our retail centers may depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. • Certain of our leases at our retail centers contain “co-tenancy” or “go-dark” provisions, which, if triggered, may allow tenants to pay reduced rent, cease operations, or terminate their leases, which could adversely affect our performance or the value of the applicable retail property. • A decline in real estate values could result in impairment of the carrying values of our long-lived assets and have a material and adverse effect on our operating results. • Instability in the financial industry could negatively impact our ability to sell our real estate holdings. • We are subject to risks associated with real estate construction and development. • Real estate development projects are subject to warranty and construction defect claims, in the ordinary course of business, that can be significant. • We face competition for the acquisition, development, and management and leasing of real estate properties, which may impede our ability to grow our operations or may increase the cost of these activities. • We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth.
Declines in real estate values from weakness in the real estate sector, especially in Hawai‘i, difficulty in obtaining or renewing financing, a prolonged economic slowdown or recession, as well as competition and advances in technology, adverse changes in the regulatory environment, or other factors leading to reduction in expected profitability, or changes in our investment and redevelopment strategy, among other factors, 10 may affect the fair value of these real estate assets.
Declines in real estate values from weakness in the real estate sector, especially in Hawai‘i, difficulty in obtaining or renewing financing, a prolonged economic slowdown or recession, as well as competition and advances in technology, adverse changes in the regulatory environment, or other factors leading to reduction in expected profitability, or changes in our investment and redevelopment strategy, among other factors, may affect the fair value of these real estate assets.
If there is a downturn in the economy or weakening of economic drivers in Hawai‘i, which include tourism, government, military and consumer spending, public and private construction starts and spending, personal income growth, and employment, our operations and our revenue and cash available for distribution, including cash available to pay distributions to our shareholders, could be materially adversely affected.
If there is a downturn in the economy or weakening of economic drivers in Hawai‘i, which include tourism, government, military and consumer spending, public and private construction starts and spending, personal income 10 growth, and employment, our operations and our revenue and cash available for distribution, including cash available to pay distributions to our shareholders, could be materially adversely affected.
A security breach or other significant disruption involving our systems could result in improper uses of our systems and interruptions in our operations, which in turn could have a material adverse effect on our income, cash flow, results of operations, financial condition, liquidity, the ability to service debt obligations, the market price of our common stock and our 13 ability to pay dividends and other distributions to shareholders.
A security breach or other significant disruption involving our systems could result in improper uses of our systems and interruptions in our operations, which in turn could have a material adverse effect on our income, cash flow, results of operations, financial condition, liquidity, the ability to service debt obligations, the market price of our common stock and our ability to pay dividends and other distributions to shareholders.
If the undiscounted cash flows of our commercial properties, or redevelopment projects, were to decline below the carrying value of those assets, we would be required to recognize a non-cash impairment loss if the fair value of those assets were below their carrying value, I nstability in the financial industry could negatively impact our ability to sell our real estate holdings.
If the undiscounted cash flows of our commercial properties, or redevelopment projects, were to decline below the carrying value of those assets, we would be required to recognize a non-cash impairment loss if the fair value of those assets were below their carrying value, 13 I nstability in the financial industry could negatively impact our ability to sell our real estate holdings.
As a result, we may be unable to realize our strategy through dispositions, we may be unable to do so on advantageous terms, or we may 8 not be able to execute the strategy in a timely manner, which could adversely affect our financial condition, operating results and/or cash flows and may result in additional non-cash impairment charges.
As a result, we may be unable to realize our strategy through dispositions, we may be unable to do so on advantageous terms, or we may not be able to execute the strategy in a timely manner, which could adversely affect our financial condition, operating results and/or cash flows and may result in additional non-cash impairment charges.
We may be unable to acquire properties that we have identified as potential acquisition opportunities due to various factors, including but not limited to, the inability to (i) negotiate terms agreeable to the parties involved, (ii) satisfy conditions to closing, or (iii) finance the acquisition on favorable terms, or at all.
We may be unable to acquire properties that we have 14 identified as potential acquisition opportunities due to various factors, including but not limited to, the inability to (i) negotiate terms agreeable to the parties involved, (ii) satisfy conditions to closing, or (iii) finance the acquisition on favorable terms, or at all.
There are numerous other developers, buyers, managers and owners of commercial and residential real estate and undeveloped land that compete or may compete with us for management and leasing revenues, land for development, properties for acquisition and disposition, and for tenants and purchasers of properties, including other REITs, private institutional investors, and other owner-operators of commercial real estate.
There are numerous other developers, buyers, managers and owners of commercial real estate and undeveloped land that compete or may compete with us for management and leasing revenues, land for development, properties for acquisition and disposition, and for tenants and purchasers of properties, including other REITs, private institutional investors, and other owner-operators of commercial real estate.
If one or more of these tenants declares bankruptcy or voluntarily vacates from the leased premise and we are unable to re-lease such space (or to re-lease it on comparable or more 9 favorable terms), we may be adversely impacted.
If one or more of these tenants declares bankruptcy or voluntarily vacates from the leased premise and we are unable to re-lease such space (or to re-lease it on comparable or more favorable terms), we may be adversely impacted.
As the Company’s reliance on technology has increased, so have the risks posed to the Company’s information systems, both internal and those provided by the Company and third-party service providers.
As 16 the Company’s reliance on technology has increased, so have the risks posed to the Company’s information systems, both internal and those provided by the Company and third-party service providers.
It is possible that current or future requirements imposed on landowners and dam owners/operators may require that we satisfy additional administrative and regulatory requirements and thereby increase the holding costs to us and/or decrease the operational utility of the subject facilities. 18 Changes to federal, state or local law or regulations, including environmental laws and regulations, may adversely affect our business.
It is possible that current or future requirements imposed on landowners and dam owners/operators may require that we satisfy additional administrative and regulatory requirements and thereby increase the holding costs to us and/or decrease the operational utility of the subject facilities. 21 Changes to federal, state or local law or regulations, including environmental laws and regulations, may adversely affect our business.
In addition, we may borrow as necessary to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders (computed without regard to the dividends-paid deduction and excluding net capital gain).
In addition, we may borrow as necessary to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our shareholders (computed without regard to the dividends-paid deduction and excluding net capital gain).
Risks Related to Our Financing We may need to incur additional indebtedness, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our stockholders. We have obtained, and may continue to obtain, lines of credit, and other long-term financing that may be secured by our real estate assets.
Risks Related to Our Financing We may need to incur additional indebtedness, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our shareholders. We have obtained, and may continue to obtain, lines of credit, and other long-term financing that may be secured by our real estate assets.
You are urged to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. 15 Complying with the REIT requirements may cause us to sell assets or forgo otherwise attractive investment opportunities.
You are urged to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. 18 Complying with the REIT requirements may cause us to sell assets or forgo otherwise attractive investment opportunities.
Consequently, our distribution levels may fluctuate. 17 Certain of our business activities may be subject to corporate-level income tax and other taxes, which would reduce our cash flows, and would cause potential deferred and contingent tax liabilities. Our TRS assets and operations are subject to U.S. federal income taxes at regular corporate rates.
Consequently, our distribution levels may fluctuate. 20 Certain of our business activities may be subject to corporate-level income tax and other taxes, which would reduce our cash flows, and would cause potential deferred and contingent tax liabilities. Our TRS assets and operations are subject to U.S. federal income taxes at regular corporate rates.
These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives, which may adversely affect our financial condition and ability to make distributions to our stockholders. Increasing interest rates would increase our overall interest expense.
These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives, which may adversely affect our financial condition and ability to make distributions to our shareholders. Increasing interest rates would increase our overall interest expense.
We further may be limited in our ability to make distributions to our shareholders in event of default. Covenants in our loan agreements may restrict our operations and adversely affect our financial condition and ability to make distributions to our stockholders.
We further may be limited in our ability to make distributions to our shareholders in event of default. 15 Covenants in our loan agreements may restrict our operations and adversely affect our financial condition and ability to make distributions to our shareholders.
Risks Related to Our Business and Operations Our business is geographically concentrated in Hawai ‘ i and is dependent upon regional and local economic conditions, which may cause us to be more susceptible to adverse developments than if we owned a more geographically diverse portfolio.
Risks Related to Our Business and Operations Our business is geographically concentrated in Hawai ‘ i and is dependent upon regional and local economic conditions, which may cause us to be more susceptible to adverse developments than if we owned a more geographically diverse portfolio. Our business, including our portfolio of properties and operations, is located exclusively in Hawai‘i.
Such risks, including, but not limited to, the following summarized risks, should be carefully considered before making an investment in our common stock: Summary of risks related to our Business and Operations • Our business is geographically concentrated in Hawai‘i and is dependent upon regional and local economic conditions, which may cause us to be more susceptible to adverse developments than if we owned a more geographically diverse portfolio. • Significant inflation and related volatility could adversely affect our business and financial results. • An increase in fuel prices and energy costs may adversely affect our operating environment and costs. • Our remaining non-strategic assets that we intend to sell are relatively illiquid, and it may not be possible to dispose of such assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operating results, cash flows and may result in additional non-cash impairment charges.
Summary of risks related to our Business and Operations • Our business is geographically concentrated in Hawai‘i and is dependent upon regional and local economic conditions, which may cause us to be more susceptible to adverse developments than if we owned a more geographically diverse portfolio. • Significant inflation and related volatility could adversely affect our business and financial results. • An increase in fuel prices and energy costs may adversely affect our operating environment and costs. • Our remaining non-strategic assets that we intend to sell are relatively illiquid, and it may not be possible to dispose of such assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operating results, cash flows and may result in additional non-cash impairment charges.
However, for taxable years that begin before January 1, 2026, shareholders that are individuals, trusts or estates are generally entitled to a deduction equal to 20% of the aggregate amount of ordinary income dividends received from a REIT, subject to certain limitations. 16 The REIT ownership limitations and transfer restrictions contained in our articles of incorporation may restrict or prevent certain transfers of our common stock, could have unintended antitakeover effects and may not be successful in preserving our qualification for taxation as a REIT.
Shareholders that are individuals, trusts or estates are generally entitled to a deduction equal to 20% of the aggregate amount of ordinary income dividends received from a REIT, subject to certain limitations. 19 The REIT ownership limitations and transfer restrictions contained in our articles of incorporation may restrict or prevent certain transfers of our common stock, could have unintended antitakeover effects and may not be successful in preserving our qualification for taxation as a REIT.
Our credit facilities and term debt contain certain restrictive financial covenants. If we breach any of the covenants and such breach is not cured in a timely manner or waived by the lenders, and such event results in default, our access to credit may be limited or terminated and the lenders could declare any outstanding amounts immediately due and payable.
If we breach any of the covenants and such breach is not cured in a timely manner or waived by the lenders, and such event results in default, our access to credit may be limited or terminated and the lenders could declare any outstanding amounts immediately due and payable.
As a result, we are particularly susceptible to adverse economic or other conditions and developments (such as periods of economic slowdown or recession, business layoffs or downsizing, industry slowdowns, trade disputes, such as the imposition of new of increased sanctions or tariffs, changes in the local or global tourism industry, relocations of businesses, increases in real estate and other taxes and the cost of complying with governmental regulations or increased regulation, including as a result of executive orders), as well as to natural disasters that occur in this market (such as hurricanes, wildfires, tropical storms, volcanic eruptions, and other events).
We may be particularly susceptible to adverse economic or other conditions and developments impacting Hawai‘i (such as periods of state-wide economic slowdown, businesses downsizing or exiting the Hawai‘i market, industry slowdowns, trade disputes, such as the imposition of new of increased sanctions or tariffs, changes in the local or global tourism industry, reductions or other changes in government spending or strategic defense priorities, relocations of businesses, increases in real estate and other taxes and the cost of complying with governmental regulations or increased regulation, including as a result of executive orders), as well as to natural disasters that occur in this market (such as hurricanes, wildfires, tropical storms, volcanic eruptions, and other events).
Summary of Regulatory and Legal Risks • Governmental entities have adopted or may adopt regulatory requirements that may restrict our development activity. • Governmental entities have adopted or may adopt regulatory requirements related to dams, reservoirs, and other water infrastructure that may adversely affect our operations. • Changes to federal, state or local law or regulations, including environmental laws and regulations, may adversely affect our business. • We are subject to, and may in the future be subject to, disputes, legal or other proceedings, or government inquiries or investigations, that could have an adverse effect on us. 7 • Unsuccessful efforts to secure a long-term lease for delivery of irrigation water related to a 2018 agricultural land sale could materially affect our result of operations, financial condition, and cash flows.
Summary of Regulatory and Legal Risks • Governmental entities have adopted or may adopt regulatory requirements that may restrict our development activity. • Governmental entities have adopted or may adopt regulatory requirements related to dams, reservoirs, and other water infrastructure that may adversely affect our operations. • Changes to federal, state or local law or regulations, including environmental laws and regulations, may adversely affect our business. • We are subject to, and may in the future be subject to, disputes, legal or other proceedings, or government inquiries or investigations, that could have an adverse effect on us.
Our business strategy involves the acquisition of retail, industrial, and other properties. These activities require us to identify suitable acquisition candidates or investment opportunities that meet our criteria. We evaluate the market of available properties and may attempt to acquire properties when strategic opportunities exist.
We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth. Our business strategy involves the acquisition of retail, industrial, and other properties. These activities require us to identify suitable acquisition candidates or investment opportunities that meet our criteria.
Additionally, we may be further adversely impacted by an impairment or “write-down” of intangible assets, such as lease-in-place value, favorable lease asset, or a deferred asset related to straight-line lease rent, associated with a tenant bankruptcy or vacancy.
Additionally, we may be further adversely impacted by an impairment or “write-down” of intangible assets, such as lease-in-place value, favorable lease asset, or a deferred asset related to straight-line lease rent, associated with a tenant bankruptcy or vacancy. 12 A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations.
Intense competition may increase the market price we would have to pay to acquire properties or could lead to increased supply of space, which could then increase vacancies, the need for increased tenant incentives, decreased rents, sales prices or sales volume, or lack of development opportunities. 11 We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth.
Larger REITs may enjoy competitive advantages that result from a lower cost of capital. Intense competition may increase the market price we would have to pay to acquire properties or could lead to increased supply of space, which could then increase vacancies, the need for increased tenant incentives, decreased rents, sales prices or sales volume, or lack of development opportunities.
If we issue additional common equity, either through public or private offerings or rights offerings, existing common shareholders' percentage ownership in us would decline if they do not participate on a ratable basis. 12 Failure to comply with certain restrictive financial covenants contained in our credit facilities could impose restrictions on our business segments, capital availability or the ability to pursue other activities.
If we issue additional common equity, either through public or private offerings or rights offerings, existing common shareholders' percentage ownership in us would decline if they do not participate on a ratable basis.
Risks Related to Our Investments in Real Estate There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and make distributions to our shareholders. Real property investments are subject to multiple risks.
As a result, we may record additional non-cash impairment charges and/or realize significantly less than the value at which we have previously recorded such assets. 11 Risks Related to Our Investments in Real Estate There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and make distributions to our shareholders.
These disputes could harm our business by distracting our management from the operation of our business. If these disputes develop into proceedings, these proceedings could result in significant expenditures or losses by us.
These disputes could harm our business by distracting our management from the operation of our business. If these disputes develop into proceedings, these proceedings could result in significant expenditures or losses by us. Further, as a real estate developer, we may face warranty and construction defect claims, as described under “Risks Related to Our Investments in Real Estate.” ITEM 1B.
Further, as our business is concentrated in Hawai‘i, an attack on Hawai‘i as a result of war or terrorism may severely or irreparably harm the Company. 14 Such events beyond our control could adversely affect trade and global and local economies and may lead to actions limiting trade and population movement and the movement of goods through the supply chain, as well as other impacts to business and consumer demand, which may adversely affect the Company’s business, operating results and financial condition.
Such events beyond our control could adversely affect trade and global and local economies and may lead to actions limiting trade and population movement and the movement of goods through the supply chain, as well as other impacts to business and consumer demand, which may adversely affect the Company’s business, operating results and financial condition. 17 Risks Related to Our REIT Status Because qualification as a REIT involves highly technical and complex provisions of the Code, there can be no assurance that we will remain qualified as a REIT for U.S. federal income tax purposes.
Risks Related to Our REIT Status Because qualification as a REIT involves highly technical and complex provisions of the Code, there can be no assurance that we will remain qualified as a REIT for U.S. federal income tax purposes. We have determined that we operated in compliance with the REIT requirements commencing with the taxable year ended December 31, 2017.
We have determined that we operated in compliance with the REIT requirements commencing with the taxable year ended December 31, 2017.
Removed
Our business, including our portfolio of properties and operations, is located exclusively in Hawai‘i, which exposes us to greater economic risks than if we owned a more geographically diverse portfolio.
Added
Such risks, including, but not limited to, the following summarized risks, should be carefully considered before making an investment in our common stock: Summary of risks related to the Merger • The Merger is subject to approval of our shareholders as well as the satisfaction of other closing conditions, some or all of which may not be satisfied (or waived, if applicable) within the expected timeframe, if at all. • We may not complete the Merger within the timeframe anticipated or at all, which could have an adverse effect on our business, financial results and/or operations. 6 • We will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships, including but not limited to relationships with existing and prospective employees, tenants, and other third-party business partners. • In certain instances, the Merger Agreement requires us to pay a termination fee to Parent, which could affect the decisions of a third party considering making an alternative acquisition proposal. • Pending litigation related to the Merger could result in substantial costs and may delay or prevent the Merger from being completed. • If the Merger is completed, our shareholders will forgo potential future appreciation in the Company's value.
Removed
As a result, we may record additional non-cash impairment charges and/or realize significantly less than the value at which we have previously recorded such assets.
Added
Summary of risks related to our Financing • We may need to incur additional indebtedness, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our shareholders. • We may face potential difficulties in obtaining operating and development capital. • We may raise additional capital in the future on terms that are more stringent to us, which could provide holders of new issuances rights, preferences and privileges that are senior to those currently held by our common shareholders, or that could result in dilution of common stock ownership. • Failure to comply with certain restrictive financial covenants contained in our credit facilities could impose restrictions on our business segments, capital availability or the ability to pursue other activities. 7 • Covenants in our loan agreements may restrict our operations and adversely affect our financial condition and ability to make distributions to our shareholders. • Increasing interest rates would increase our overall interest expense. • Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect our financial condition, cash flows, and results of operations.
Removed
A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations.
Added
Risks Related to the Merger The Merger is subject to approval of our shareholders as well as the satisfaction of other closing conditions, some or all of which may not be satisfied (or waived, if applicable) within the expected timeframe, if at all.
Removed
Larger REITs may enjoy competitive advantages that result from a lower cost of capital.
Added
Completion of the Merger is subject to a number of closing conditions, including, among others, (i) approval of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of the Company's common stock entitled to vote on the Merger Agreement, (ii) the absence of a law or order restraining, enjoining, rendering illegal or otherwise prohibiting the consummation of the Merger and (iii) the absence of a Company Material Adverse Effect (as defined in the 8 Merger Agreement).
Removed
Further, as a real estate developer, we may face warranty and construction defect claims, as described under “Risks Related to Our Investments in Real Estate.” Unsuccessful efforts to secure a long-term lease for delivery of irrigation water related to a 2018 agricultural land sale could materially affect our result of operations, financial condition, and cash flows.
Added
We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions, and timing of such consents and approvals or the timing of the completion of the Merger.
Removed
It is crucial to have access to sufficient, reliable and affordable sources of water in order to conduct sustainable agricultural activity. Water availability is critical to the successful implementation of farming plans on those lands purchased from us by Mahi Pono Holdings LLC ("Mahi Pono") in conjunction with our sale of certain agricultural landholdings on Maui.
Added
Many of the conditions to completion of the Merger are not within our control and we cannot predict when or if these conditions will be satisfied (or waived, if applicable). Additionally, under circumstances specified in the Merger Agreement, we or Parent may terminate the Merger Agreement.
Removed
As described in our public filings associated with that sale, as well as Note 11 – Revenue and Contract Balances of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, if Mahi Pono is unable to secure sufficient water to support the agricultural plans for which it purchased the lands, this could trigger certain financial obligations. 19 ITEM 1B.
Added
Any adverse consequence of the pending Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.
Added
Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger, including, with respect to the Company, covenants to conduct its business in the ordinary course and to not engage in certain kinds of material transactions prior to closing.
Added
In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, in connection with a change in the recommendation of our Board of Directors to enter into an agreement for a Superior Proposal (as defined in the Merger Agreement).
Added
As a result, we cannot assure you that the Merger will be completed, even if our shareholders approve the Merger Agreement, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected timeframe.
Added
We may not complete the Merger within the timeframe anticipated or at all, which could have an adverse effect on our business, financial results and/or operations. The Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control.
Added
If the Merger is not completed for any reason, including as a result of our shareholders failing to approve the Merger Agreement, our shareholders will not receive any payment for their shares of our common stock in connection with the Merger.
Added
Instead, we will remain a public company, our common stock will continue to be listed and traded on the New York Stock Exchange (the "NYSE") and registered under the Exchange Act, and we will be required to continue to file periodic reports with the SEC.
Added
Moreover, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following: • we may experience negative reactions from the financial markets, including negative impacts on stock price, and it is uncertain when, if ever, the price of the shares would return to the price at which the shares currently trade; • we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees and those with whom we do business; • we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisory, regulatory, printing and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger; • we may be required to pay a cash termination fee to Parent of $50.5 million, as required under the Merger Agreement under certain circumstances; • while the Merger Agreement is in effect, we are subject to restrictions on our business activities, including, among other things, restrictions on our ability to engage in certain kinds of material transactions, including, subject to certain exceptions, acquiring other properties or disposing of currently owned properties, making capital expenditures, incurring indebtedness, and declaring and paying regular quarterly cash dividends on common stock, which could prevent us from pursuing strategic business opportunities, taking actions with respect to the business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may as a result materially adversely affect our business, results of operations, and financial condition; • matters relating to the Merger require substantial commitments of time and resources by management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to the Company; and • our exclusive remedy against the counterparties to the Merger Agreement with respect to any breach of the Merger Agreement is to seek payment by Parent of the parent termination fee in the amount of $155.3 million, which may not be adequate to cover our damages.
Added
If the Merger is not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results, and stock price, particularly to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed.
Added
We will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships, including but not limited to relationships with existing and prospective employees, tenants, and other third-party business partners. 9 The Company’s efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, the business, which may materially adversely affect results of operation and the business.
Added
Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following the Merger.
Added
As mentioned above, a substantial amount of our management’s and employees’ attention is being directed toward the completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to the future could adversely affect our business and our relationships with tenants and potential tenants.
Added
For example, tenants and other third parties may defer decisions concerning working with us, or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our revenue, earnings, and financial condition, as well as the market price of our common stock.
Added
The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement. In certain instances, the Merger Agreement requires us to pay a termination fee to Parent, which could affect the decisions of a third party considering making an alternative acquisition proposal.
Added
Under the terms of the Merger Agreement, the Company may be required to pay a termination fee to Parent of $50.5 million if the Merger Agreement is terminated under specific circumstances set forth in the Merger Agreement.
Added
This payment could affect the structure, pricing, and terms proposed by a third party considering an acquisition of the Company and could discourage a third party from making a competing acquisition proposal or inquiry, including a proposal that would be more favorable to our shareholders than the Merger.
Added
For these and other reasons, termination of the Merger Agreement could materially and adversely affect business operations and financial results, which in turn would materially and adversely affect the price of our common stock. Pending litigation related to the Merger could result in substantial costs and may delay or prevent the Merger from being completed.
Added
Lawsuits are often brought against public companies that have entered into merger agreements. Purported shareholders of the Company have filed, and may file in the future, lawsuits against the Company and/or our Board of Directors in connection with the Merger.
Added
Even if the lawsuits are without merit, defending against these claims can result in substantial costs to us and divert management time and resources. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Merger, then that injunction may delay or prevent the Merger from being completed.
Added
If the Merger is completed, our shareholders will forgo potential future appreciation in the Company's value. If the Merger is consummated, the Company will no longer exist as an independent public company and our existing shareholders will not participate in any potential future appreciation in the value of the Company’s common stock.
Added
Such potential future appreciation depends on the Company’s future performance, and that the Company’s business plan is based, in part, on projections for a number of variables that are difficult to project and subject to a high level of uncertainty and volatility, including real estate values, interest rates, ongoing operating costs and necessary capital expenditures.
Added
Additionally, the receipt of the cash consideration in the Merger would (i) be taxable to our U.S. shareholders for U.S. federal income tax purposes and (ii) generally not be taxable to our non-U.S. shareholders for U.S. federal income tax purposes unless they have certain connections to the U.S.
Added
While we believe this geographic focus provides a foundation for strong financial and operational performance, future growth, and resilience during economic down cycles, we may be more exposed to certain economic risks than if we owned a more geographically diverse portfolio.
Added
Real property investments are subject to multiple risks.
Added
We evaluate the market of available properties and may attempt to acquire properties when strategic opportunities exist.
Added
Failure to comply with certain restrictive financial covenants contained in our credit facilities could impose restrictions on our business segments, capital availability or the ability to pursue other activities. Our credit facilities and term debt contain certain restrictive financial covenants.
Added
Further, as our business is concentrated in Hawai‘i, an attack on Hawai‘i as a result of war or terrorism may severely or irreparably harm the Company.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−1 removed7 unchanged
Biggest changeRefer to the risk factor captioned, “Security breaches through cyber attacks or intrusions, or other significant disruptions of the Company's IT networks, communications, and related systems could impair our ability to operate, adversely affect our financial condition, and damage our reputation,” in Part I, Item IA.
Biggest changeRefer to the risk factor captioned, “ Security breaches through cyber attacks or intrusions, or other significant disruptions of the Company's information technology ("IT") networks, communications, and related systems could impair our ability to operate, adversely affect our financial condition, and damage our reputation. ,” in Part I, Item IA.
The Company engages a national security firm to improve its cybersecurity posture and keep current with evolving cybersecurity risks. The Company’s cybersecurity program is examined on a regular basis, and new procedures and tools are adopted on an ongoing basis to address the changing cybersecurity landscape.
The Company engages a national security firm to improve its cybersecurity posture and keep current with evolving cybersecurity risks. The Company’s cybersecurity program is examined on a regular basis, and new procedures and tools are 22 adopted on an ongoing basis to address the changing cybersecurity landscape.
The Company's current CTO has more than twenty-five years of experience in IT across diverse industries, and he has designed and led the approach for the modernization of the Company's technology platforms and security posture since 2017. As many security threats involve social engineering, the Company has a multifaceted security training program for its employees.
The Company's current CTO has more than twenty-five years of experience in IT across diverse industries, and he has designed and led the approach for the modernization of the Company's technology platforms and security posture since 2017. As many security threats involve social engineering, the Company maintains a security awareness and training program for all employees.
“Risk Factors” for additional description of cybersecurity risks and potential related impacts on the Company. 20
“Risk Factors” for additional description of cybersecurity risks and potential related impacts on the Company. 23
Removed
Mandatory cybersecurity training classes are administered semi-annually, and a security awareness assessment is given annually. Tests of employees’ ability to thwart attacks are run successively throughout the year, and remedial refresher courses are required when employees fail the tests. Compliance reporting on these programs is included in the annual review process.
Added
The program provides continuous, adaptive security simulations and education, including brief quarterly training modules focused on emerging and relevant threats. The Company monitors participation and progress to help ensure ongoing preparedness and awareness across the organization.

Item 2. Properties

Properties — owned and leased real estate

10 edited+1 added−2 removed5 unchanged
Biggest changeFor properties in the portfolio, the Company presents annualized base rent ("ABR") for each of its improved properties on a total and per-square-foot ("PSF") basis; ABR is calculated by multiplying the current month's contractual base rent by twelve. 21 As of December 31, 2024, the Company's commercial real estate improved property assets were as follows (dollars in thousands, except PSF data): Property Island Year Built/ Renovated Current GLA (SF) Leased/Economic Occupancy ABR ABR PSF Retail: 1 Pearl Highlands Center Oahu 1992-1994 412,200 99.8% 99.7% $ 11,381 $ 27.68 2 Kailua Retail Oahu 1947-2014 326,200 96.3% 94.6% 12,789 41.87 3 Laulani Village Oahu 2012 175,300 98.2% 97.5% 7,217 42.21 4 Waianae Mall Oahu 1975 170,800 95.0% 80.9% 3,612 26.50 5 Manoa Marketplace Oahu 1977, 2023 142,500 96.7% 94.7% 5,117 38.14 6 Queens' MarketPlace Hawai‘i Island 2007 133,600 89.1% 81.0% 4,819 52.77 7 Kaneohe Bay Shopping Center (Leasehold) Oahu 1971 125,500 99.5% 98.0% 3,336 27.13 8 Hokulei Village Kauai 2015 119,000 100.0% 97.2% 4,354 37.95 9 Pu‘unene Shopping Center Maui 2017 118,000 78.4% 77.4% 4,811 52.69 10 Waipio Shopping Center Oahu 1986, 2004 113,800 96.3% 96.3% 3,650 33.37 11 Aikahi Park Shopping Center Oahu 1971, 2022 97,300 90.4% 90.4% 3,521 40.82 12 Lanihau Marketplace Hawai‘i Island 1987 88,400 94.3% 94.3% 1,604 19.25 13 The Shops at Kukui`ula Kauai 2009 86,000 96.7% 90.7% 4,100 53.27 14 Ho‘okele Shopping Center Maui 2019 71,400 96.1% 96.1% 2,906 42.37 15 Kunia Shopping Center Oahu 2004 60,600 89.3% 89.3% 2,293 42.38 16 Kahului Shopping Center Maui 1951 49,100 84.1% 84.1% 783 18.98 17 Lau Hala Shops Oahu 2018 46,300 98.3% 98.3% 2,661 58.53 18 Napili Plaza Maui 1991 45,600 100.0% 100.0% 1,464 32.99 19 Gateway Mililani Mauka Oahu 2008, 2013 34,900 91.7% 88.8% 1,985 64.08 20 Port Allen Marina Center Kauai 2002 23,600 76.3% 72.5% 563 34.89 21 The Collection Oahu 2017 5,900 100.0% 100.0% 358 60.68 Subtotal – Retail 2,446,000 95.2% 92.8% $ 83,324 $ 37.18 Industrial: 1 Komohana Industrial Park Oahu 1990 238,300 93.1% 93.2% $ 3,450 $ 15.54 2 Kaka`ako Commerce Center Oahu 1969 197,900 83.2% 82.1% 2,413 14.95 3 Waipio Industrial Oahu 1988-1989 158,400 98.0% 98.0% 2,910 18.75 4 Opule Industrial Oahu 2005-2006, 2018 151,500 100.0% 100.0% 2,706 17.86 5 P&L Warehouse Maui 1970 104,100 94.2% 94.2% 1,633 16.64 6 Kapolei Enterprise Center Oahu 2019 93,100 100.0% 100.0% 1,696 18.23 7 Honokohau Industrial Hawai‘i Island 2004-2006, 2008 86,700 100.0% 100.0% 1,433 16.52 8 Waihona Industrial 1 Oahu 1981-1988, 2001-2008 81,500 100.0% 100.0% 1,588 19.49 9 Kailua Industrial / Other Oahu 1951-1974 68,700 97.4% 95.8% 1,258 19.13 10 Port Allen Center Kauai 1983, 1993 64,600 100.0% 100.0% 863 13.37 11 Harbor Industrial Maui 1930 51,100 90.6% 90.6% 664 14.35 12 Kaomi Loop Industrial 1 Oahu 2005 33,200 100.0% 100.0% 543 16.34 13 Kahai Street Industrial Oahu 1973 27,900 100.0% 100.0% 407 14.60 14 Maui Lani Industrial Maui 2010 8,400 100.0% 100.0% 160 19.05 Subtotal – Industrial 1,365,400 95.2% 95.0% $ 21,724 $ 16.77 Office: 1 Kahului Office Building Maui 1974 59,100 68.7% 56.3% $ 1,070 $ 32.12 2 Gateway at Mililani Mauka South Oahu 1992, 2006 37,100 100.0% 100.0% 1,869 50.32 3 Kahului Office Center Maui 1991 35,800 88.5% 88.5% 1,046 32.95 4 Lono Center 1 Maui 1973 13,700 49.6% 49.6% 190 33.32 Subtotal – Office 145,700 79.8% 74.7% $ 4,175 $ 38.69 Total – Improved Portfolio 3,957,100 94.6% 92.9% $ 109,223 $ 29.97 1 Property is currently not included in the same-store ("Same-Store") pool.
Biggest changeFor properties in the portfolio, the Company presents annualized base rent ("ABR") for each of its improved properties on a total and per-square-foot ("PSF") basis; ABR is calculated by multiplying the current month's contractual base rent by twelve. 24 As of December 31, 2025, the Company's commercial real estate improved property assets were as follows (dollars in thousands, except PSF data): Property Island Year Built/ Renovated Current GLA (SF) Leased/Economic Occupancy ABR ABR PSF Retail: 1 Pearl Highlands Center Oahu 1992-1994 412,200 99.8% 99.7% $ 11,571 $ 28.14 2 Kailua Retail Oahu 1947-2014 338,200 97.0% 96.0% 13,897 43.12 3 Laulani Village Oahu 2012 175,300 97.8% 97.8% 7,356 42.92 4 Waianae Mall Oahu 1975 170,800 96.2% 96.2% 4,078 25.02 5 Manoa Marketplace Oahu 1977, 2023 142,500 95.4% 92.1% 5,091 39.29 6 Queens' MarketPlace Hawai‘i Island 2007 133,700 86.3% 79.3% 5,091 57.05 7 Kaneohe Bay Shopping Center (Leasehold) Oahu 1971 125,500 99.5% 99.5% 3,549 28.42 8 Hokulei Village Kauai 2015 119,000 100.0% 100.0% 4,830 40.59 9 Pu‘unene Shopping Center Maui 2017 118,000 78.4% 78.4% 4,941 53.41 10 Waipio Shopping Center Oahu 1986, 2004 113,800 98.6% 98.6% 3,914 34.98 11 Aikahi Park Shopping Center Oahu 1971, 2022 97,300 92.2% 89.1% 3,522 41.48 12 Lanihau Marketplace Hawai‘i Island 1987 88,400 95.5% 94.3% 1,649 19.79 13 The Shops at Kukui`ula Kauai 2009 86,000 96.7% 92.3% 4,161 54.92 14 Ho‘okele Shopping Center Maui 2019 71,400 98.7% 96.1% 2,908 42.40 15 Kunia Shopping Center Oahu 2004 60,600 86.5% 84.8% 2,187 43.65 16 Kahului Shopping Center 1 Maui 1951 49,100 84.1% 84.1% 800 19.39 17 Lau Hala Shops Oahu 2018 46,300 100.0% 100.0% 2,756 59.57 18 Napili Plaza Maui 1991 45,600 100.0% 89.9% 1,460 36.71 19 Gateway Mililani Mauka Oahu 2008, 2013 34,900 96.8% 91.7% 2,098 65.61 20 Port Allen Marina Center Kauai 2002 23,600 76.3% 76.3% 650 36.08 21 The Collection Oahu 2017 5,900 100.0% 100.0% 369 62.54 22 22 Hana Highway 1 Maui 1999 4,500 100.0% 100.0% 151 33.50 Subtotal – Retail 2,462,600 95.4% 94.0% $ 87,029 $ 38.08 Industrial: 1 Komohana Industrial Park Oahu 1990 222,000 100.0% 100.0% $ 3,614 $ 16.28 2 Kaka`ako Commerce Center Oahu 1969 201,100 96.9% 96.9% 2,720 14.09 3 Waipio Industrial Oahu 1988-1989 158,400 99.4% 99.4% 3,043 19.33 4 Opule Industrial Oahu 2005-2006, 2018 151,500 100.0% 100.0% 2,787 18.40 5 P&L Warehouse Maui 1970 104,100 100.0% 100.0% 1,788 17.17 6 Kapolei Enterprise Center Oahu 2019 93,100 100.0% 100.0% 1,799 19.33 7 Honokohau Industrial Hawai‘i Island 2004-2006, 2008 86,700 96.0% 96.0% 1,421 17.08 8 Waihona Industrial 1 Oahu 1981,1988,2001,2008 81,500 100.0% 100.0% 1,620 19.88 9 Kailua Industrial / Other Oahu 1951-1974 68,900 97.8% 95.2% 1,281 19.54 10 Port Allen Center Kauai 1983, 1993 64,600 97.8% 97.8% 870 13.77 11 Harbor Industrial 1 Maui 1930 51,100 62.0% 62.0% 482 15.19 12 Kaomi Loop Industrial Oahu 2005 33,200 100.0% 100.0% 559 16.82 13 Kahai Street Industrial Oahu 1973 27,900 100.0% 100.0% 435 15.60 14 Maui Lani Industrial Maui 2010 8,400 100.0% 100.0% 165 19.64 Subtotal – Industrial 1,352,500 97.6% 97.4% $ 22,584 $ 17.16 Office: 1 Kahului Office Building 1 Maui 1974 59,000 70.7% 69.2% $ 1,264 $ 31.00 2 Gateway at Mililani Mauka South Oahu 1992, 2006 37,100 100.0% 100.0% 1,925 51.82 3 Kahului Office Center Maui 1991 35,800 94.1% 92.2% 1,103 33.43 4 Lono Center 1 Maui 1973 13,700 37.2% 37.2% 129 32.23 Subtotal – Office 145,600 80.8% 79.7% $ 4,421 $ 38.47 Total – Improved Portfolio 3,960,700 95.6% 94.7% $ 114,034 $ 30.69 1 Property is currently not included in the same-store ("Same-Store") pool.
The Same-Store pool excludes properties under development, and properties acquired or sold during either of the comparable reporting periods. The Same-Store pool may also exclude properties that are fully or partially taken out of service for the purpose of redevelopment or repositioning.
The Same-Store pool excludes properties under development, and properties acquired or sold during either of the comparable reporting periods. The Same-Store pool may also exclude properties that are fully or partially taken out of service for the purpose of redevelopment or repositioning.
Properties are moved into the Same-Store pool after one full calendar year of stabilized operation. 22 Ground leases The Company's portfolio of commercial ground leases at December 31, 2024, was as follows (dollars in thousands): Property Name Location (City, Island) Acres Property Type Exp.
Properties are moved into the Same-Store pool after one full calendar year of stabilized operation. 25 Ground leases The Company's portfolio of commercial ground leases at December 31, 2025, was as follows (dollars in thousands): Property Name Location (City, Island) Acres Property Type Exp.
Management judgment is involved in the classification of properties for exclusion from the same-store pool when they are no longer considered stabilized due to redevelopment or other factors. Properties are moved into the Same-Store pool after one full calendar year of stabilized operation.
Management judgment is involved in the classification of properties for exclusion from the Same-Store pool when they are no longer considered stabilized due to redevelopment or other factors. Properties are moved into the Same-Store pool after one full calendar year of stabilized operation. 2 Lease is currently month-to-month.
The occupancy for the improved properties portfolio (i.e., the percentage of square footage leased and commenced to gross leasable space at the end of the period reported, "Leased Occupancy") was 94.6% as of December 31, 2024, and 94.7% as of December 31, 2023.
The occupancy for the improved properties portfolio (i.e., the percentage of square footage leased and commenced to gross leasable space at the end of the period reported, "Leased Occupancy") was 95.6% as of December 31, 2025, and 94.6% as of December 31, 2024.
MBP II represents the second phase of the Company's Maui Business Park project in Kahului, Maui, and is zoned for light industrial, retail, and office use.
Maui Business Park represents the second phase of the Company's Maui Business Park project in Kahului, Maui, Hawai‘i and is zoned for light industrial, retail, and office use.
The following table presents a summary of GLA square footage ("SF") by the improved property asset class and location as of December 31, 2024: Oahu Maui Kauai Hawai‘i Island Total Retail 1,711,300 284,100 228,600 222,000 2,446,000 Industrial 1,050,500 163,600 64,600 86,700 1,365,400 Office 37,100 108,600 — — 145,700 Total 2,798,900 556,300 293,200 308,700 3,957,100 The Company also owns 142 acres of land in Hawai‘i, primarily on Oahu and Maui, of which substantially all is leased pursuant to urban ground leases as of December 31, 2024.
The following table presents a summary of GLA square footage ("SF") by the improved property asset class and location as of December 31, 2025: Oahu Maui Kauai Hawai‘i Island Total Retail 1,723,300 288,600 228,600 222,100 2,462,600 Industrial 1,037,600 163,600 64,600 86,700 1,352,500 Office 37,100 108,500 — — 145,600 Total 2,798,000 560,700 293,200 308,800 3,960,700 The Company also owns 145 acres of land in Hawai‘i, primarily on Oahu and Maui, of which substantially all is leased pursuant to urban ground leases as of December 31, 2025.
Year Current ABR 1 Windward City Shopping Center Kaneohe, Oahu 15.4 Retail 2035 $ 3,886 2 Owner/Operator Kapolei, Oahu 36.4 Industrial 2025 3,420 3 Owner/Operator Honolulu, Oahu 9.0 Retail 2045 2,075 4 Kaimuki Shopping Center Honolulu, Oahu 2.8 Retail 2040 2,039 5 S&F Industrial Kahului, Maui 52.0 Industrial 2059 1,433 6 Owner/Operator Kaneohe, Oahu 3.7 Retail 2048 1,059 7 Pali Palms Plaza Kailua, Oahu 3.3 Office 2037 992 8 Windward Town and Country Plaza I Kailua, Oahu 3.4 Retail 2062 963 9 Windward Town and Country Plaza II Kailua, Oahu 2.2 Retail 2062 621 10 Kailua Post Office Kailua, Oahu 1.2 Retail 2034 555 11 Owner/Operator Kailua, Oahu 1.9 Retail 2034 470 12 Owner/Operator Honolulu, Oahu 0.5 Retail 2028 394 13 Owner/Operator Honolulu, Oahu 0.5 Retail 2028 370 14 Seven-Eleven Kailua Center Kailua, Oahu 0.9 Retail 2033 336 15 Owner/Operator Kahului, Maui 0.8 Retail 2026 280 16 Owner/Operator Honolulu, Oahu 0.7 Industrial 2027 259 17 Owner/Operator Kahului, Maui 0.8 Industrial 2025 249 18 Owner/Operator Kahului, Maui 0.4 Retail 2027 190 19 Owner/Operator Kailua, Oahu 0.4 Retail 2025 189 20 Owner/Operator Kahului, Maui 0.9 Retail 2025 151 Remainder 1 Various 4.8 Various Various 938 Total - Ground Leases 142.0 $ 20,869 1 A portion of these properties are currently not included in the Same-Store pool.
Year Current ABR 1 Windward City Shopping Center Kaneohe, Oahu 15.4 Retail 2035 $ 3,886 2 Owner/Operator Kapolei, Oahu 36.4 Industrial 2025 3,540 3 Owner/Operator Honolulu, Oahu 9.0 Retail 2045 2,283 4 Kaimuki Shopping Center Honolulu, Oahu 2.8 Retail 2040 2,039 5 S&F Industrial Kahului, Maui 52.0 Industrial 2059 1,433 6 Owner/Operator Kaneohe, Oahu 3.7 Retail 2048 1,059 7 Pali Palms Plaza Kailua, Oahu 3.3 Office 2037 992 8 Windward Town and Country Plaza I Kailua, Oahu 3.4 Retail 2062 963 9 Windward Town and Country Plaza II Kailua, Oahu 2.2 Retail 2062 621 10 Owner/Operator Kailua, Oahu 1.9 Retail 2034 470 11 Owner/Operator Honolulu, Oahu 0.5 Retail 2028 404 12 Owner/Operator Honolulu, Oahu 0.5 Retail 2028 381 13 Seven-Eleven Kailua Center Kailua, Oahu 0.9 Retail 2033 344 14 Owner/Operator Kahului, Maui 0.8 Retail 2026 289 15 Owner/Operator Honolulu, Oahu 0.7 Industrial 2030 275 16 Owner/Operator Kahului, Maui 0.8 Industrial MTM 2 249 17 Owner/Operator Kahului, Maui 0.4 Retail 2027 195 18 Owner/Operator Kailua, Oahu 0.4 Retail 2030 194 19 Owner/Operator Kahului, Maui 0.9 Retail 2030 155 20 Wendy's Kailua, Oahu 0.5 Retail 2046 142 Remainder 1 Various 8.5 Various Various 674 Total - Ground Leases 145.0 $ 20,588 1 A portion of these properties are currently not included in the Same-Store pool.
A summary of the Company's MBP II project as of December 31, 2024, is as follows: (in millions) Project Location Product Type Remaining Sellable Acres 1 Acres Under Contract 2 Estimated Total Project Cost Total Project Costs Incurred to Date Maui Business Park II Kahului, Maui Light industrial lots 28.7 12.5 $ 91 $ 65 1 Remaining sellable acres may change due to updates in overall development plan that results in modification of planned roads and easements. 2 Includes 12.5 acres under contract with a delayed closing pending subdivision completion.
A summary of the project as of December 31, 2025, is as follows: (in millions) Project Location Product Type Remaining Sellable Acres 1 Acres Under Contract 2 Estimated Total Project Cost Total Project Costs Incurred to Date Maui Business Park Kahului, Maui Light industrial lots 24.0 12.5 $ 92.1 $ 65.5 1 Remaining sellable acres may change due to updates in overall development plan that results in modification of planned roads and easements.
Real Estate Investments At December 31, 2024, the Company's real estate investments related to its Land Operations segment were as follows: (amounts in thousands, except acres data) Acres Carrying Value Real estate investments Core real estate investments Maui Business Park II 1 44 $ 15,190 Non-core real estate investments 3,221 32,354 Investments in real estate joint ventures and partnerships N/A 5,907 Total real estate investments, net 3,265 $ 53,451 1 Includes 2.8 acres of existing and planned roads and easements not available for sale, and 12.5 acres under contract. 23 Core Real Estate Development-for-sale Projects As of December 31, 2024, the Company's Land Operations segment has one remaining active, core real estate development-for-sale project, Maui Business Park (Phase II) ("MBP II").
Real Estate Investments At December 31, 2025, the Company's real estate investments related to its Land Operations segment were as follows (amounts in thousands): Carrying Value ASSETS Real estate investments Real estate property $ 1,278 Accumulated depreciation (158) Real estate property, net 1,120 Real estate developments 41,566 Investments in real estate joint ventures and partnerships 5,907 Real estate investments, net $ 48,593 26 Core Real Estate Development Projects As of December 31, 2025, the Company's Land Operations segment has one remaining active, core real estate development-for-sale project, Maui Business Park (Phase II) ("Maui Business Park").
Removed
Sale of Legacy Businesses In connection with the Company's simplification efforts, during the quarter ended June 30, 2022, the Company completed the disposal of approximately 18,900 acres of primarily conservation and agricultural land on the island of Kauai and 100% of the Company's ownership interest in McBryde Resources, Inc., the operator of hydroelectric power facilities on Kauai, to an unrelated third party.
Added
The remaining sellable acres provide potential to add up to 520,000 sq. ft. of industrial GLA to the improved portfolio if developed. 2 Includes 12.5 acres under contract with a delayed closing pending subdivision completion.
Removed
Additionally, during the quarter ended March 31, 2023, the Company completed the sale of its ownership interest in a legacy trucking and storage business on Maui.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under the "Legal proceedings and other contingencies" section in Note 10 – Commitments and Contingencies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 24 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under the "Legal proceedings and other contingencies" section in Note 10 – Commitments and Contingencies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere were no unregistered equity securities sold by the Company during 2024 or 2023. 25 The graph below compares the cumulative total return on the Company’s common stock with that of the Standard & Poor's 500 Stock Index (“S&P 500”) and two industry peer group indices, FTSE Nareit All Equity REITs and FTSE Nareit Equity Shopping Centers, from December 31, 2019, through December 31, 2024.
Biggest changeThere were no unregistered equity securities sold by the Company during 2025 or 2024. 28 The graph below compares the cumulative total return on the Company’s common stock with that of the Standard & Poor's 500 Stock Index (“S&P 500”) and two industry peer group indices, FTSE Nareit All Equity REITs and FTSE Nareit Equity Shopping Centers, from December 31, 2020, through December 31, 2025.
The Company's Board of Directors, in its sole discretion, will determine on a quarterly basis the amount of cash to be distributed to the Company's shareholders based on a number of factors including, but not limited to, the Company's results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions, that may impose limitations on cash payments and plans for future acquisitions and divestitures.
The Company's Board of Directors, in its sole discretion, determines on a quarterly basis the amount of cash to be distributed to the Company's shareholders based on a number of factors including, but not limited to, the Company's results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions, that may impose limitations on cash payments and plans for future acquisitions and divestitures.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The common stock of Alexander & Baldwin, Inc. ("A&B" or the "Company") is listed on the New York Stock Exchange under the ticker symbol "ALEX". As of February 13, 2025, there were approximately 1,840 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The common stock of Alexander & Baldwin, Inc. ("A&B" or the "Company") is listed on the New York Stock Exchange under the ticker symbol "ALEX". As of February 13, 2026, there were approximately 1,636 shareholders of record.
Issuer Purchases and Sales of Equity Securities In October 2023, the Company's Board of Directors authorized the Company to repurchase up to $100.0 million of its common stock beginning on January 1, 2024, and ending on December 31, 2025. During the quarter ended December 31, 2024, the Company did not repurchase any shares of its common stock.
Issuer Purchases and Sales of Equity Securities In October 2023, the Company's Board of Directors authorized the Company to repurchase up to $100.0 million of its common stock beginning on January 1, 2024, and ending on December 31, 2025. During the quarter ended December 31, 2025, the Company purchased 120,041 shares of its common stock.
Added
Notwithstanding, during the term of the Merger Agreement, the Company may not pay dividends, except as reasonably necessary to avoid incurring entity-level income or excise taxes or to maintain its tax status as a real estate investment trust, and any such dividends would result in an offsetting decrease to the per-share merger consideration paid to our shareholders under the Merger Agreement at the closing of the Merger.
Added
In October 2025, the Company's Board of Directors authorized the Company to repurchase up to $100.0 million of its common stock beginning on January 1, 2026, and ending on December 31, 2027. The following summarizes the Company's purchases of equity securities and use of proceeds for the fourth quarter of fiscal year 2025.
Added
Issuer Purchases of Equity Securities Execution Date Total Number of Shares Purchased Average Price Paid per Share¹ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1-31, 2025 — $ — 5,830 $ 99,908 November 1-30, 2025 120,041 $ 15.72 125,871 $ 98,021 December 1-31, 2025 — $ — 125,871 $ 98,021 1 The average price paid per share includes $0.03 commission fee per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFavorable (Unfavorable) Change (amounts in thousands, except percentage data and per share data) 2024 2023 $ % Operating revenue $ 236,641 $ 208,843 $ 27,798 13.3 % Cost of operations (128,995) (106,532) (22,463) (21.1) % Selling, general and administrative (29,822) (34,028) 4,206 12.4 % Impairment of assets (256) (4,768) 4,512 94.6 % Gain (loss) from disposals, net 2,199 1,114 1,085 97.4 % Operating income (loss) 79,767 64,629 15,138 23.4 % Income (loss) related to joint ventures 4,556 1,872 2,684 143.4 % Interest and other income (expense), net 3,023 (2,693) 5,716 NM Interest expense (23,169) (22,963) (206) (0.9) % Income tax benefit (expense) (174) (35) (139) 4X Income (loss) from continuing operations 64,003 40,810 23,193 56.8 % Income (loss) from discontinued operations (net of income taxes) (3,466) (7,847) 4,381 55.8 % Net income (loss) 60,537 32,963 27,574 83.7 % (Income) loss attributable to discontinued noncontrolling interest — (3,151) 3,151 100.0 % Net income (loss) attributable to A&B $ 60,537 $ 29,812 $ 30,725 103.1 % Earnings per share: Basic earnings (loss) per share - continuing operations $ 0.88 $ 0.56 $ 0.32 57.1 % Basic earnings (loss) per share - discontinued operations (0.05) (0.15) 0.10 66.7 % Basic earnings (loss) per share of common stock: $ 0.83 $ 0.41 $ 0.42 102.4 % Diluted earnings (loss) per share - continuing operations $ 0.88 $ 0.56 $ 0.32 57.1 % Diluted earnings (loss) per share - discontinued operations (0.05) (0.15) 0.10 66.7 % Diluted earnings (loss) per share of common stock: $ 0.83 $ 0.41 $ 0.42 102.4 % Continuing operations available to A&B common shareholders $ 63,980 $ 40,704 $ 23,276 57.2 % Discontinued operations available to A&B common shareholders (3,466) (10,998) 7,532 68.5 % Net income (loss) available to A&B common shareholders $ 60,514 $ 29,706 $ 30,808 103.7 % Funds From Operations ("FFO") 1 $ 100,006 $ 79,377 $ 20,629 26.0 % Adjusted FFO 1 $ 80,064 $ 63,602 $ 16,462 25.9 % FFO per diluted share $ 1.37 $ 1.09 $ 0.28 25.7 % Weighted average diluted shares outstanding (FFO) 2 72,752 72,776 1 For definitions of capitalized terms and a discussion of management's use of non-GAAP financial measures and the required reconciliations of non-GAAP measures to GAAP measures, refer to page 35 . 2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO/Adjusted FFO.
Biggest changeFavorable (Unfavorable) Change (amounts in thousands, except percentage data and per share data) 2025 2024 $ % Operating revenue $ 206,673 $ 236,641 $ (29,968) (12.7) % Cost of operations (110,566) (128,995) 18,429 14.3 % Selling, general, and administrative (28,126) (29,822) 1,696 5.7 % Merger transaction costs (7,101) — (7,101) 0 NM Impairment of assets — (256) 256 0 100.0 % Gain (loss) on commercial real estate transactions 7,454 51 7,403 145X Gain (loss) on disposal of assets and settlements, net 11,685 2,148 9,537 4X Operating income (loss) 80,019 79,767 252 0.3 % Income (loss) related to joint ventures and partnerships 8,288 4,556 3,732 81.9 % Impairment of equity method investment (406) — (406) NM Interest and other income (expense), net 416 3,023 (2,607) (86.2) % Interest expense (23,801) (23,169) (632) (2.7) % Income tax benefit (expense) 69 (174) 243 NM Income (loss) from continuing operations 64,585 64,003 582 0.9 % Income (loss) from discontinued operations (net of income taxes) 89 (3,466) 3,555 NM Net income (loss) 64,674 60,537 4,137 6.8 % Earnings per share: Basic earnings (loss) per share - continuing operations $ 0.89 $ 0.88 $ 0.01 1.1 % Basic earnings (loss) per share - discontinued operations — (0.05) 0.05 100.0 % Basic earnings (loss) per share of common stock: $ 0.89 $ 0.83 $ 0.06 7.2 % Diluted earnings (loss) per share - continuing operations $ 0.89 $ 0.88 $ 0.01 1.1 % Diluted earnings (loss) per share - discontinued operations — (0.05) 0.05 100.0 % Diluted earnings (loss) per share of common stock: $ 0.89 $ 0.83 $ 0.06 7.2 % Continuing operations available to A&B common shareholders $ 64,585 $ 63,980 $ 605 0.9 % Discontinued operations available to A&B common shareholders 89 (3,466) 3,555 NM Net income (loss) available to A&B common shareholders $ 64,674 $ 60,514 $ 4,160 6.9 % Funds From Operations ("FFO") 1 $ 95,251 $ 100,006 $ (4,755) (4.8) % Adjusted FFO 1 $ 75,129 $ 80,064 $ (4,935) (6.2) % FFO per diluted share $ 1.30 $ 1.37 $ (0.07) (5.1) % Weighted average diluted shares outstanding (FFO) 2 73,047 72,752 1 For definitions of capitalized terms and a discussion of management's use of non-GAAP financial measures and the required reconciliations of non-GAAP measures to GAAP measures, refer to page 39 . 2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO.
MD&A is organized as follows: • Business Overview: This section provides a general description of the Company's business, as well as recent developments that management believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends. • Consolidated Results of Operations: This section provides an analysis of the Company's consolidated results of operations. • Analysis of Operating Revenue and Profit by Segment: This section provides an analysis of the Company's results of operations by business segment. • Liquidity and Capital Resources: This section provides a discussion of the Company's liquidity, financial condition and an analysis of its cash flows, including a discussion of the Company's ability to fund its future commitments and ongoing operating activities in the short-term (i.e., over the next twelve months from the most recent fiscal period end) and in the long-term (i.e., beyond the next twelve months) through internal and external sources of capital.
MD&A is organized as follows: • Business Overview: This section provides a general description of the Company's business, as well as recent developments that management believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends. • Consolidated Results of Operations: This section provides an analysis of the Company's consolidated results of operations. • Analysis of Operating Revenue and Profit by Segment: This section provides an analysis of the Company's results of operations by business segment. • Liquidity and Capital Resources: This section provides a discussion of the Company's liquidity, financial condition and an analysis of its cash flows, including a discussion of the Company's ability to fund its future commitments and ongoing operating activities in the short-term (i.e., over the next twelve months from the most recent fiscal period end) 30 and in the long-term (i.e., beyond the next twelve months) through internal and external sources of capital.
Management also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including, 41 but not limited to, the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals.
Management also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including, but not limited to, the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals.
The Same-Store pool may also exclude properties that are fully or partially taken out of service for the purpose of redevelopment or repositioning. Management judgment is involved in the classification of properties for exclusion from the 36 same-store pool when they are no longer considered stabilized due to redevelopment or other factors.
The Same-Store pool may also exclude properties that are fully or partially taken out of service for the purpose of redevelopment or repositioning. Management judgment is involved in the classification of properties for exclusion from the Same-Store pool when they are no longer considered stabilized due to redevelopment or other factors.
Amounts in the MD&A section are rounded to the nearest thousand. Accordingly, a recalculation of totals and percentages, if based on the reported data, may be slightly different. 27 Business Overview Reportable segments The Company operates two segments: Commercial Real Estate and Land Operations.
Amounts in the MD&A section are rounded to the nearest thousand. Accordingly, a recalculation of totals and percentages, if based on the reported data, may be slightly different. Business Overview Reportable segments The Company operates two segments: Commercial Real Estate and Land Operations.
Management believes that FFO serves as a supplemental measure to net income calculated in accordance with GAAP for comparing its performance and operations to those of other REITs because it excludes items included in net income that do not relate to or are not indicative of the Company’s operating and financial performance, such as depreciation and amortization related to real estate, which assumes that the value of real estate assets diminishes predictably over time instead of fluctuating with market conditions, and items that can make periodic or peer analysis more difficult, such as gains and losses from the sale of CRE properties, impairment losses related to CRE properties, and income (loss) from discontinued operations.
FFO serves as a supplemental measure to net income calculated in accordance with GAAP and management believes is useful for comparing the Company’s performance and operations to those of other REITs because it excludes items included in net income that do not relate to or are not indicative of its operating and financial performance, such as depreciation and amortization related to real estate, which assumes that the value of real estate assets diminishes predictably over time instead of fluctuating with market conditions, and items that can make periodic or peer analysis more difficult, such as gains and losses from the sale of CRE properties, impairment losses related to CRE properties, and income (loss) from discontinued operations.
When compared across periods, NOI can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-contract-based revenue (e.g., straight-line lease adjustments required under GAAP and amortization of lease incentives and favorable/unfavorable lease assets/liabilities); by non-cash expense recognition items (e.g., the impact of depreciation related to capitalized costs for improved properties and building/tenant space improvements, amortization of leasing commissions, or impairments); or by other income, expenses, gains, or losses that do not directly relate to the Company's ownership and operations of the properties (e.g., indirect selling, general, administrative and other expenses, as well as lease termination income and interest and other income (expense), net).
When compared across periods, NOI can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-contract-based revenue (e.g., straight-line lease adjustments required under GAAP and amortization of lease incentives and favorable/unfavorable lease assets/liabilities); by non-cash expense recognition items (e.g., the impact of depreciation related to capitalized costs for improved properties and building/tenant space improvements, amortization of leasing commissions, or impairments); by non-cash income related to sales-type leases; or by other income, expenses, gains, or losses that do not directly relate to the Company's ownership and operations of the properties (e.g., indirect selling, general, administrative and other expenses, as well as lease termination income and interest and other income (expense), net).
Through its core competencies and with its experience and relationships in Hawai‘i, the Company seeks to create special places that enhance the lives of Hawai‘i residents and to provide venues and opportunities that enable its tenants to thrive.
Through its core competencies and with its experience and relationships in Hawai‘i, the Company seeks to create places that enhance the lives of Hawai‘i residents and to provide venues and opportunities that enable its tenants to thrive.
This section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023; and provides additional material information about the Company's business, recent developments and financial condition; its results of operations at a consolidated and segment level; its liquidity and capital resources including an evaluation of the amounts and certainty of cash flows from operations and from outside sources; and how certain accounting principles, policies, and estimates affect its financial statements.
This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024; and provides additional material information about the Company's business, recent developments and financial condition; its results of operations at a consolidated and segment level; its liquidity and capital resources including an evaluation of the amounts and certainty of cash flows from operations and from outside sources; and how certain accounting principles, policies, and estimates affect its financial statements.
Based on its current outlook, the Company believes that funds generated from cash provided by operating activities; available cash and cash equivalent balances; and borrowing capacity under its credit facility will be sufficient to meet the needs of the Company's business requirements and plans both in the short-term (i.e., the next twelve months from December 31, 2024) and long-term (i.e., beyond the next twelve months).
Based on its current outlook, the Company believes that funds generated from cash provided by operating activities; available cash and cash equivalent balances; and borrowing capacity under its credit facility will be sufficient to meet the needs of the Company's business requirements and plans both in the short-term (i.e., the next twelve months from December 31, 2025) and long-term (i.e., beyond the next twelve months).
New Accounting Pronouncements See Note 2 – Significant Accounting Policies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, for a full description of the impact of recently issued accounting standards, which is incorporated herein by reference, including the expected dates of adoption and estimated effects on the Company's results of operations and financial condition. 42
New Accounting Pronouncements See Note 2 – Significant Accounting Policies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, for a full description of the impact of recently issued accounting standards, which is incorporated herein by reference, including the expected dates of adoption and estimated effects on the Company's results of operations and financial condition. 46
The impact of an elevated federal funds rate for a prolonged period, has resulted in a tightening of credit and contributed to volatility in the banking, technology, and housing industries.
The impact of an elevated federal funds rate for a prolonged period resulted in a tightening of credit and contributed to volatility in the banking, technology, and housing industries.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
Further, the timing of property or parcel sales can significantly affect operating results in a given period. 33 Operating profit reported in each period for the Land Operations segment does not necessarily follow a percentage of sales trend because the cost basis of property sold can differ significantly between transactions.
Further, the timing of property or parcel sales can significantly affect operating results in a given period. 37 Operating profit reported in each period for the Land Operations segment does not necessarily follow a percentage of sales trend because the cost basis of property sold can differ significantly between transactions.
As of December 31, 2024, the Company has not sold any shares under the at-the-market offering program, nor has any obligation to sell the shares under the at-the-market offering program. Other uses (or sources) of liquidity The Company may use (or, in some periods, generate) cash through various investing activities or financing activities.
As of December 31, 2025, the Company has not sold any shares under the at-the-market offering program, nor has any obligation to sell the shares under the at-the-market offering program. Other uses (or sources) of liquidity The Company may use (or, in some periods, generate) cash through various investing activities or financing activities.
A description of other commitments, contingencies and off-balance sheet arrangements as of December 31, 2024, is included in Note 10 – Commitments and Contingencies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, and is herein incorporated by reference.
A description of other commitments, contingencies and off-balance sheet arrangements as of December 31, 2025, is included in Note 10 – Commitments and Contingencies of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this report, and is herein incorporated by reference.
The causes of material changes in the consolidated statements of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, are described below or in the Analysis of Operating Revenue and Profit by Segment sections below.
The causes of material changes in the consolidated statements of operations for the year ended December 31, 2025, as compared to the year ended December 31, 2024, are described below or in the Analysis of Operating Revenue and Profit by Segment sections below.
The Company was in compliance with its financial covenants for all outstanding balances as of December 31, 2024, and intends to operate in compliance with these covenants or seek to obtain waivers or modifications to these financial covenants to enable the Company to maintain compliance in the future.
The Company was in compliance with its financial covenants for all outstanding balances as of December 31, 2025, and intends to operate in compliance with these covenants or seek to obtain waivers or modifications to these financial covenants to enable the Company to maintain compliance in the future.
In addition, FFO and Adjusted FFO do not represent and should not be considered alternatives to cash generated from operating activities determined in accordance with GAAP, nor should they be used as measures of the Company’s liquidity, or cash available to fund the Company’s needs or pay distributions.
In addition, FFO, FFO related to CRE and Corporate, and Adjusted FFO do not represent and should not be considered alternatives to cash generated from operating activities determined in accordance with GAAP, nor should they be used as measures of the Company’s liquidity, or cash available to fund the Company’s needs or pay distributions.
FFO and Adjusted FFO do not represent alternatives to net income calculated in accordance with GAAP and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP.
FFO, FFO related to CRE and Corporate, and Adjusted FFO do not represent alternatives to net income calculated in accordance with GAAP and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP.
FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”) and is calculated as follows: net income (loss) available to A&B common shareholders (calculated in accordance with GAAP), excluding (1) depreciation and amortization related to real estate, (2) gains and losses from the sale of certain real estate assets, (3) gains and losses from change in control, (4) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and (5) income (loss) from discontinued operations related to legacy business operations.
FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”) and is calculated as follows: net income (loss) available to A&B common shareholders (calculated in accordance with GAAP), excluding (1) depreciation and amortization related to real estate, (2) gains and losses from the sale of certain real estate assets and selling profit or loss recognized on sales-type leases, (3) gains and losses from change in control, (4) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and (5) income (loss) from discontinued operations related to legacy business operations.
Known contractual obligations A description of material contractual commitments as of December 31, 2024, is included in Note 8 – Notes Payable and Other Debt, Note 9 – Derivative Instruments, Note 13 – Leases - The Company as a Lessee, and Note 15 – Employee Benefit Plans of the Notes to Consolidated Financial Statements and Part II, Item 8 of this report, and is herein incorporated by reference.
Known contractual obligations A description of material contractual commitments as of December 31, 2025, is included in Note 8 – Notes Payable and Other Debt, Note 9 – Derivative Instruments, Note 11 – Revenue and Contract Balances, Note 13 – Leases - The Company as a Lessee, and Note 15 – Employee Benefit Plans of the Notes to Consolidated Financial Statements and Part II, Item 8 of this report, and is herein incorporated by reference.
The Company regularly evaluates investment opportunities, including development-for-hold projects, commercial real estate acquisitions, joint venture investments, share repurchases, business acquisitions, and other strategic transactions to increase shareholder value. In 2025, the Company expects that its capital expenditures, not including potential commercial real estate property acquisitions, will be approximately $60.0 million - $70.0 million.
The Company regularly evaluates investment opportunities, including development-for-hold projects, commercial real estate acquisitions, joint venture investments, share repurchases, business acquisitions, and other strategic transactions to increase shareholder value. In 2026, the Company expects that its capital expenditures, not including potential commercial real estate property acquisitions, will be approximately $75.0 million - $85.0 million.
The Company's FFO and Adjusted FFO may not be comparable to such metrics reported by other REITs due to possible differences in the interpretation of the current Nareit definition used by such REITs.
The Company's FFO, FFO related to CRE and Corporate and Adjusted FFO may not be comparable to such metrics reported by other REITs due to possible differences in the 39 interpretation of the current Nareit definition used by such REITs.
With respect to the revolving credit facility, as of December 31, 2024, the Company had $150.0 million of borrowings outstanding, no letters of credit issued against, and $300.0 million of available capacity (with a term through October 17, 2028, with two six-month extension options).
With respect to the revolving credit facility, as of December 31, 2025, the Company had $8.0 million of borrowings outstanding, no letters of credit issued against, and $442.0 million of available capacity (with a term through October 17, 2028, and two six-month extension options).
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 remaining legacy assets, and those discussed in Part I, Item 1A of this Form 10-K under the heading "Risk Factors." The information in this Form 10-K should be evaluated in light of these important risk factors.
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, and those discussed in Part I, Item 1A of this Form 10-K under the heading "Risk Factors." The information in this Form 10-K should be evaluated in light of these important risk factors.
FFO and Adjusted FFO should be considered only as supplements to net income as a measure of the Company’s performance. The Company presents both non-GAAP measures and reconciles FFO to the most directly-comparable GAAP measure, Net Income (Loss) available to A&B common shareholders, and FFO to Adjusted FFO.
FFO, FFO related to CRE and Corporate, and Adjusted FFO should be considered only as supplements to net income as a measure of the Company’s performance. The Company reconciles FFO, FFO related to CRE and Corporate and Adjusted FFO to the most directly-comparable GAAP measure, Net Income (Loss) available to A&B common shareholders.
Cash used in investing activities from continuing operations was $31.1 million for the year ended December 31, 2024, as compared to cash used in investing activities from continuing operations of $27.6 million for the year ended December 31, 2023.
Cash used in investing activities from continuing operations was $45.5 million for the year ended December 31, 2025, as compared to cash used in investing activities from continuing operations of $31.1 million for the year ended December 31, 2024.
Cash used in financing activities for continuing operations was $62.0 million for the year ended December 31, 2024, a decrease from cash used in financing activities for continuing operations of $79.8 million for the year ended December 31, 2023.
Cash used in financing activities for continuing operations was $56.1 million for the year ended December 31, 2025, a decrease from cash used in financing activities for continuing operations of $62.0 million for the year ended December 31, 2024.
It is calculated by adjusting FFO to exclude share-based compensation, straight-line lease adjustments and other non-cash adjustments, such as amortization of market lease adjustments, debt premium or discount and deferred financing cost amortization, maintenance capital expenditures, leasing commissions, provision for current expected credit losses and other non-comparable and non-operating items, including certain gains, losses, income, and expenses related to the Company’s legacy business operations and assets.
Adjusted FFO is calculated by excluding from FFO certain items not related to ongoing property operations including share-based compensation, Merger transaction costs, straight-line lease adjustments and other non-cash adjustments, such as amortization of market lease adjustments, non-cash income related to sales-type leases, debt premium or discount and deferred financing cost amortization, maintenance capital expenditures, leasing commissions, provision for current expected credit losses and other non-comparable and non-operating items, including certain gains, losses, income, and expenses related to the Company’s legacy business operations and assets.
The acquisition was structured as a partial like-kind exchange in accordance with Code §1031. The year ended December 31, 2023, included capital expenditures for continuing operations of $31.2 million, which included the purchase of a Commercial Real Estate property for $9.5 million, partially offset by $3.4 million in cash proceeds from the disposal of assets.
The year ended December 31, 2024, included capital expenditures for continuing operations of $50.8 million, which included the purchase of a Commercial Real Estate property for $29.8 million, partially offset by $19.0 million in cash proceeds from the disposal of assets. The 2024 acquisition was structured as a partial like-kind exchange in accordance with Code §1031.
The Company's other primary sources of liquidity include its cash and cash equivalents of $33.4 million as of December 31, 2024, and the Company's revolving credit and term facilities, which provide liquidity and flexibility on a short-term (i.e., the next twelve months from December 31, 2024), as well as long-term basis.
The Company's other primary sources of liquidity include its cash and cash equivalents of $11.3 million as of December 31, 2025, and the Company's revolving credit facility, which provides liquidity and flexibility on a short-term (i.e., the next twelve months from December 31, 2025), as well as long-term basis.
Of the 60 new leases, 29 leases with a total GLA of 62,300 square feet were considered comparable (i.e., leases executed for units that have been vacated in the previous 12 months for comparable space and comparable lease terms) and, for these 29 leases, resulted in a 11.6% average base rent increase over comparable expiring leases.
Of the 64 new leases, 28 leases with a total GLA of 45,600 square feet were considered comparable (i.e., leases executed for units that have been vacated in the previous 12 months for comparable space and comparable lease terms) and, for these 28 leases, resulted in a 10.2% average base rent increase over comparable expiring leases.
In estimating the fair value of tangible and intangible assets acquired and liabilities assumed, management uses various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, analysis of recent comparable sales transactions, estimates of replacement costs net of depreciation, and other available market information.
Generally, the most significant portion of the allocation is to building and land, and requires the use of market-based estimates and assumptions. 45 In estimating the fair value of tangible and intangible assets acquired and liabilities assumed, management uses various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, analysis of recent comparable sales transactions, estimates of replacement costs net of depreciation, and other available market information.
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.
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.
Unfavorable local, regional, national, or global economic developments or uncertainties, including market volatility, supply chain and labor constraints, inflationary pressures, travel restrictions, war, natural disasters or effects of climate change, or a prolonged economic downturn could adversely affect our business.
Trends, events and uncertainties General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties, including market volatility, supply chain and labor constraints, inflationary pressures, travel restrictions, war, natural disasters or effects of climate change, or a prolonged economic downturn could adversely affect our business.
Leasing activity During the year ended December 31, 2024, the Company signed 60 new leases and 149 renewal leases for its improved properties across its three asset classes, covering 630,300 square feet of GLA. The 60 new leases consist of 131,500 square feet with an average annual base rent of $27.45 per-square-foot.
Leasing activity During the year ended December 31, 2025, the Company signed 64 new leases and 136 renewal leases for its improved properties across its three asset classes, covering 722,700 square feet of GLA. The 64 new leases consist of 249,300 square feet with an average annual base rent of $27.16 per-square-foot.
The Company signed three new ground lease renewals during the year ended December 31, 2024, of which one was considered comparable and resulted in a 28.8% base rent increase over the comparable expiring lease.
The Company signed three new ground lease renewals during the year ended December 31, 2025, of which two were considered comparable and resulted in a 3.4% base rent increase over the comparable expiring lease.
Gain (loss) on disposal of assets, net of $2.2 million for 2024 is related to the favorable resolution of contingent liabilities related to a prior year sale of a legacy business and a gain recognized on the sale of one commercial real estate property.
Gain (loss) on disposal of assets and settlements, net of $2.1 million for 2024 was related to the favorable resolution of contingent liabilities related to a prior year sale of a legacy business.
Reconciliations of CRE operating profit (loss) to NOI for the years ended December 31, 2024 and 2023, are as follows (in thousands): 2024 2023 CRE Operating Profit $ 89,411 $ 81,225 Depreciation and amortization 36,093 36,490 Straight-line lease adjustments (2,736) (5,067) Favorable (unfavorable) lease amortization (371) (1,077) Termination fees and other (347) (90) Interest and other (income) expense, net (184) 59 Impairment of assets 256 4,768 Selling, general and administrative 5,356 6,984 NOI $ 127,478 $ 123,292 Less: NOI from acquisitions, dispositions and other adjustments (1,119) (458) Same-store NOI $ 126,359 $ 122,834 37 Liquidity and Capital Resources Overview The Company's principal sources of liquidity to meet its business requirements and plans, both in the short-term (i.e., the next twelve months from December 31, 2024) and long-term (i.e., beyond the next twelve months), have generally been cash provided by operating activities; available cash and cash equivalents; and borrowing capacity under its credit facility.
Reconciliations of CRE operating profit (loss) to NOI for the years ended December 31, 2025 and 2024, are as follows (in thousands): 41 2025 2024 CRE Operating Profit $ 90,929 $ 89,411 Depreciation and amortization 38,133 36,093 Straight-line lease adjustments (757) (2,736) Favorable (unfavorable) lease amortization (355) (371) Sales-type lease adjustments (656) — Termination fees and other (654) (347) Interest and other (income) expense, net (95) (184) Impairment of assets — 256 Selling, general and administrative 5,984 5,356 NOI $ 132,529 $ 127,478 Less: NOI from acquisitions, dispositions and other adjustments (3,346) (2,771) Same-store NOI $ 129,183 $ 124,707 Liquidity and Capital Resources Overview The Company's principal sources of liquidity to meet its business requirements and plans, both in the short-term (i.e., the next twelve months from December 31, 2025) and long-term (i.e., beyond the next twelve months), have generally been cash provided by operating activities; available cash and cash equivalents; and borrowing capacity under its credit facility.
Land Operations operating profit of $10.8 million for the year ended December 31, 2023, is primarily composed of the margins resulting from land sales noted above, equity in earnings from joint ventures of $1.9 million primarily related to the Company's unconsolidated investment in a materials company, and the gain on disposal of the Company's ownership interest in a legacy trucking and storage business on Maui of $1.1 million. 34 Use of Non-GAAP Financial Measures The Company uses non-GAAP measures when evaluating operating performance because management believes that they provide additional insight into the Company's and segments' operating results, and/or the underlying business trends affecting performance on a consistent and comparable basis from period to period.
Land Operations operating profit of $18.9 million for the year ended December 31, 2024, is primarily composed of the margins resulting from land sales noted above, equity in earnings from joint ventures of $4.6 million primarily related to the Company's unconsolidated investment in a materials company, and the gain from disposals of assets of $2.1 million due to the favorable resolution of contingent liabilities related to the sale of a legacy business in a prior year, and charges related to legacy business environmental remediation activities. 38 Use of Non-GAAP Financial Measures The Company uses non-GAAP measures when evaluating operating performance because management believes that they provide additional insight into the Company's and segments' operating results, and/or the underlying business trends affecting performance on a consistent and comparable basis from period to period.
The Company's improved portfolio occupancy metrics as of December 31, 2024 and 2023, were as follows: As of Basis Point Change December 31, 2024 December 31, 2023 Leased Occupancy 94.6% 94.7% (10) Physical Occupancy 93.7% 94.1% (40) Economic Occupancy 92.9% 93.0% (10) 32 For further context, the Company's Leased Occupancy and Economic Occupancy metrics for its improved portfolio summarized by asset class – and the corresponding occupancy metrics for a category of properties that were owned and operated for the entirety of the prior calendar year and current period, to date ("Same-Store" as more fully described below) – as of December 31, 2024 and 2023, were as follows: Leased Occupancy As of December 31, 2024 December 31, 2023 Basis Point Change Retail 95.2% 94.3% 90 Industrial 95.2% 96.8% (160) Office 79.8% 84.2% (440) Total Leased Occupancy 94.6% 94.7% (10) Economic Occupancy As of December 31, 2024 December 31, 2023 Basis Point Change Retail 92.8% 92.1% 70 Industrial 95.0% 96.0% (100) Office 74.7% 82.8% (810) Total Economic Occupancy 92.9% 93.0% (10) Same-Store Leased Occupancy 1 As of December 31, 2024 December 31, 2023 Basis Point Change Retail 95.2% 95.6% (40) Industrial 94.8% 96.7% (190) Office 82.9% 87.8% (490) Total Same-Store Leased Occupancy 94.6% 95.7% (110) Same-Store Economic Occupancy 1 As of December 31, 2024 December 31, 2023 Basis Point Change Retail 92.8% 93.4% (60) Industrial 94.5% 95.9% (140) Office 77.3% 86.2% (890) Total Same-Store Economic Occupancy 92.8% 94.0% (120) 1 The Same-Store pool excludes properties under development, and properties acquired or sold during either of the comparable reporting periods.
The Company's improved portfolio occupancy metrics as of December 31, 2025 and 2024, were as follows: As of Basis Point Change December 31, 2025 December 31, 2024 Leased Occupancy 95.6% 94.6% 100 Physical Occupancy 95.2% 93.7% 150 Economic Occupancy 94.7% 92.9% 180 36 For further context, the Company's Leased Occupancy and Economic Occupancy metrics for its improved portfolio summarized by asset class – and the corresponding occupancy metrics for a category of properties that were owned and operated for the entirety of the prior calendar year and current period, to date ("Same-Store" as more fully described below) – as of December 31, 2025 and 2024, were as follows: Leased Occupancy As of December 31, 2025 December 31, 2024 Basis Point Change Retail 95.4% 95.2% 20 Industrial 97.6% 95.2% 240 Office 80.8% 79.8% 100 Total Leased Occupancy 95.6% 94.6% 100 Economic Occupancy As of December 31, 2025 December 31, 2024 Basis Point Change Retail 94.0% 92.8% 120 Industrial 97.4% 95.0% 240 Office 79.7% 74.7% 500 Total Economic Occupancy 94.7% 92.9% 180 Same-Store Leased Occupancy 1 As of December 31, 2025 December 31, 2024 Basis Point Change Retail 95.7% 95.4% 30 Industrial 98.9% 95.1% 380 Office 97.1% 94.4% 270 Total Same-Store Leased Occupancy 96.8% 95.3% 150 Same-Store Economic Occupancy 1 As of December 31, 2025 December 31, 2024 Basis Point Change Retail 94.2% 93.0% 120 Industrial 98.7% 94.8% 390 Office 96.2% 94.4% 180 Total Same-Store Economic Occupancy 95.8% 93.6% 220 1 The Same-Store pool excludes properties under development, and properties acquired or sold during either of the comparable reporting periods.
During the current year, the Company sold approximately 430 acres of legacy land holdings on Maui and Kauai, including an 81-acre residential-zoned parcel on Maui, as well as six development lots at Maui Business Park and two industrial-zoned development lots on Oahu, compared to 460 acres of legacy land holdings on Maui and Kauai and no development lots in the prior year. 29 Cost of operations for 2024 increased 21.1%, or $22.5 million, to $129.0 million, due primarily to the Land Operations segment's higher cost of sales associated with the current year land sales.
During the current year, the Company sold approximately 130 acres of legacy land holdings on Maui, and no development lots at Maui Business Park, compared to approximately 430 acres of legacy land holdings on Maui and Kauai, including an 81-acre residential-zoned parcel on Maui, as well as six development lots at Maui Business Park and two industrial-zoned development lots on Oahu in the prior year. 33 Cost of operations for 2025 decreased 14.3%, or $18.4 million, to $110.6 million, due primarily to the Land Operations segment's lower cost of sales associated with the reduced land sales activity in the current year.
Commercial Real Estate operating revenue increased 1.7% or $3.4 million, to $197.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. Operating profit increased 10.1%, or $8.2 million, to $89.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Commercial Real Estate operating revenue increased 2.8% or $5.5 million, to $202.9 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Operating profit increased 1.7%, or $1.5 million, to $90.9 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
The estimates of fair value consider matters such as contracts, the results of negotiations with prospective purchasers, broker quotes, or recent comparable sales. These estimates are subject to revision as market conditions, and our assessment of such conditions, change. During the year ended December 31, 2023, one CRE improved property met the criteria for classification as held for sale.
The estimates of fair value consider matters such as contracts, the results of negotiations with prospective purchasers, broker quotes, or recent comparable sales. These estimates are subject to revision as market conditions, and our assessment of such conditions, change.
Commercial Real Estate Financial results Results of operations for the years ended December 31, 2024 and 2023, were as follows: Favorable (Unfavorable) Change (amounts in thousands, except percentage data and acres; unaudited) 2024 2023 $ % Commercial Real Estate operating revenue $ 197,365 $ 193,971 $ 3,394 1.7 % Commercial Real Estate operating costs and expenses (102,535) (100,972) (1,563) (1.5) % Selling, general and administrative (5,372) (7,008) 1,636 23.3 % Intersegment operating revenue 1 25 61 (36) (59.0) % Impairment of assets (256) (4,768) 4,512 94.6 % Interest and other income (expense), net 184 (59) 243 NM Commercial Real Estate operating profit (loss) $ 89,411 $ 81,225 $ 8,186 10.1 % Net Operating Income ("NOI") 2 $ 127,478 $ 123,292 $ 4,186 3.4 % Same-Store Net Operating Income ("Same-Store NOI") 2 $ 126,359 $ 122,834 $ 3,525 2.9 % Gross Leasable Area ("GLA") in square feet ("SF") for improved properties at end of period 3,957 3,934 23 0.6 % Ground leases (acres at end of period) 142.0 142.0 — — % 1 Intersegment operating revenue for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations. 2 For a discussion of management's use of non-GAAP financial measures and the required reconciliations of non-GAAP measures to GAAP measures, refer to page 35 .
Commercial Real Estate Financial results Results of operations for the years ended December 31, 2025 and 2024, were as follows: Favorable (Unfavorable) Change (amounts in thousands, except percentage data and acres; unaudited) 2025 2024 $ % Commercial Real Estate operating revenue $ 202,861 $ 197,365 $ 5,496 2.8 % Commercial Real Estate operating costs and expenses (106,030) (102,535) (3,495) (3.4) % Selling, general and administrative (5,997) (5,372) (625) (11.6) % Intersegment operating revenue 1 — 25 (25) (100.0) % Impairment of assets — (256) 256 100.0 % Interest and other income (expense), net 95 184 (89) (48.4) % Commercial Real Estate operating profit (loss) $ 90,929 $ 89,411 $ 1,518 1.7 % Net Operating Income ("NOI") 2 $ 132,529 $ 127,478 $ 5,051 4.0 % Same-Store Net Operating Income ("Same-Store NOI") 2 $ 129,183 $ 124,707 $ 4,476 3.6 % Gross Leasable Area ("GLA") in square feet ("SF") for improved properties at end of period 3,961 3,957 4 0.1 % Ground leases (acres at end of period) 145.0 142.0 3.0 2.1 % 1 Intersegment operating revenue for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations. 2 For a discussion of management's use of non-GAAP financial measures and the required reconciliations of non-GAAP measures to GAAP measures, refer to page 39 .
Other capital resource matters The Company utilizes §1031 or §1033 of the Code to obtain tax-deferral treatment when qualifying real estate assets are sold or become subject to involuntary conversion and the resulting proceeds are reinvested in replacement properties within the required time period.
Partially offsetting these cash outflows were proceeds from issuance of notes payable and other debt of $198.0 million during the year ended December 31, 2025. 44 Other capital resource matters The Company utilizes §1031 or §1033 of the Code to obtain tax-deferral treatment when qualifying real estate assets are sold or become subject to involuntary conversion and the resulting proceeds are reinvested in replacement properties within the required time period.
Sources of liquidity As noted above, one of the Company's principal sources of liquidity has been operating cash flows from continuing operations, which were $102.1 million for the year ended December 31, 2024, primarily driven by cash generated from CRE operations and monetization of assets within the Land Operations segment.
Sources of liquidity As noted above, the Company's principal sources of liquidity are operating cash flows from continuing operations, which were $79.6 million for the year ended December 31, 2025, primarily driven by cash generated from CRE operations.
Leasing activity summarized by asset class for the year ended December 31, 2024, was as follows: Year Ended December 31, 2024 Leases GLA (SF) ABR 2,4 /SF Rent Spread 3 Retail 138 316,869 $42.82 13.5% Industrial 5 59 283,060 $16.59 7.4% Office 12 30,391 $27.31 2.5% Subtotal - Improved 209 630,320 $30.30 11.7% Ground 3 N/A 1 $0.6 28.8% 1 Not applicable for ground leases as such leases would not be comparable from a GLA (SF) perspective. 2 Annualized Base Rent ("ABR") as is relates to new and renewal leases is the first monthly contractual base rent multiplied by 12.
Leasing activity summarized by asset class for the year ended December 31, 2025, was as follows: Year Ended December 31, 2025 Leases GLA (SF) ABR 2,4 /SF Rent Spread 3 Retail 133 295,419 $40.69 7.6% Industrial 55 397,130 $17.98 7.1% Office 12 30,176 $48.90 2.1% Subtotal - Improved 200 722,725 $28.55 6.8% Ground 4,5 3 N/A 1 $637 3.4% 1 Not applicable for ground leases as such leases would not be comparable from a GLA (SF) perspective. 2 Annualized Base Rent ("ABR") as is relates to new and renewal leases is the first monthly contractual base rent multiplied by 12.
Reconciliations of net income (loss) available to A&B common shareholders to FFO and Adjusted FFO for the years ended December 31, 2024 and 2023, are as follows (in thousands): 35 2024 2023 Net Income (Loss) available to A&B common shareholders $ 60,514 $ 29,706 Depreciation and amortization of commercial real estate properties 36,077 36,490 Gain on the disposal of commercial real estate properties (51) — Impairment losses - commercial real estate properties — 2,183 (Income) loss from discontinued operations, net of income taxes 3,466 7,847 Income (loss) attributable to discontinued noncontrolling interest — 3,151 FFO 100,006 79,377 Add (deduct) Adjusted FFO defined adjustments Impairment losses - abandoned development costs 256 2,585 (Gain) loss on sale of legacy business 1 (2,125) (1,114) Non-cash changes to liabilities related to legacy operations 2 2,028 (3,965) Provision for (reversal of) current expected credit losses (628) — Legacy joint venture (income) loss 3 (4,556) (1,872) (Gain) loss on fair value adjustments related to interest rate swaps (3,675) 2,718 Non-recurring financing-related charges 2,350 — Amortization of share-based compensation 4,795 6,081 Maintenance capital expenditures 4 (15,103) (13,651) Leasing commissions paid (1,272) (1,380) Straight-line lease adjustments (2,736) (5,067) Amortization of net debt premiums or discounts and deferred financing costs 1,095 967 Favorable (unfavorable) lease amortization (371) (1,077) Adjusted FFO $ 80,064 $ 63,602 1 Amounts in 2024 are primarily due to the favorable resolution of contingent liabilities related to the prior year sale of a legacy business.
Reconciliations of net income (loss) available to A&B common shareholders to FFO, FFO related to CRE and Corporate, and Adjusted FFO for the years ended December 31, 2025 and 2024, are as follows (in thousands): 2025 2024 Net Income (Loss) available to A&B common shareholders $ 64,674 $ 60,514 Depreciation and amortization of commercial real estate properties 38,120 36,077 (Gain) loss on commercial real estate transactions 1 (7,454) (51) (Income) loss from discontinued operations, net of income taxes (89) 3,466 FFO 95,251 100,006 Add (deduct) Adjusted FFO defined adjustments Impairment losses - abandoned development costs — 256 (Gain) loss on sale of legacy business 2 — (2,125) Non-cash changes to liabilities related to legacy operations 3 (10,957) 2,028 Provision for (reversal of) current expected credit losses 45 (628) Impairment of equity method investment 406 — Legacy joint venture (income) loss 4 (8,466) (4,556) (Gain) loss on fair value adjustments related to interest rate swaps — (3,675) Non-recurring financing and Merger transaction-related charges 7,101 2,350 Amortization of share-based compensation 5,912 4,795 Maintenance capital expenditures 5 (12,716) (15,103) Leasing commissions paid (1,328) (1,272) Sales-type lease interest income adjustments (701) — Straight-line lease adjustments (757) (2,736) Amortization of net debt premiums or discounts and deferred financing costs 1,694 1,095 Favorable (unfavorable) lease amortization (355) (371) Adjusted FFO $ 75,129 $ 80,064 1 Includes selling profits from sales-type leases. 2 Amounts in 2024 are primarily due to the favorable resolution of contingent liabilities related to the prior year sale of a legacy business. 3 Amounts in 2025 are mainly related to the favorable resolution of rights and obligations from a land sale in a prior year, partially offset by transfer of the Company's interest in a joint venture of $2.7 million.
Cash used in financing activities is primarily composed of dividend payments and net proceeds from and payments of notes payable and other debt, which totaled $65.0 million and $107.0 million during the year ended December 31, 2024, respectively.
Cash used in financing activities is primarily composed of cash dividends paid, net payments on the Company line-of-credit agreement, and payments of notes payable and other debt which totaled $65.7 million, $142.0 million, and $40.5 million, respectively, during the year ended December 31, 2025.
The Company's cash flows from continuing operations provided by operating activities for the year ended December 31, 2024, reflects an increase of $26.6 million from the prior year amount of $75.5 million, due primarily to higher cash proceeds from unimproved and development land sales in 2024 as 38 compared to 2023.
The Company's cash flows from continuing operations provided by operating activities for the year ended December 31, 2025, reflects an decrease of $22.5 million from the prior year amount of $102.1 million, due primarily to lower cash proceeds of $19.1 million from unimproved and development land sales in 2025 as compared to 2024, compounded by a $10.0 million refund liability payment during the year ended December 31, 2025.
The Company expects that its short-term capital expenditures for contractual commitments related to development projects and building and tenant improvements (i.e., over the next twelve months from December 31, 2024) is estimated to be $41.5 million.
As of December 31, 2025, the remaining $45.3 million payable under the Termination Agreement is included in Refund liability in the consolidated balance sheets. The Company expects that its short-term capital expenditures for contractual commitments related to development projects and building and tenant improvements (i.e., over the next twelve months from December 31, 2025) is estimated to be $37.1 million.
For the year ended December 31, 2024, nearly all of the Company's capital expenditures for property, plant and equipment of $50.8 million related to the CRE segment.
The Company primarily uses cash in investing activities for capital expenditures related to its CRE segment. For the year ended December 31, 2025, nearly all of the Company's capital expenditures for property, plant and equipment of $52.2 million related to the CRE segment.
The 149 renewal leases consist of 498,800 square feet with an average annual base rent of $31.04 per square foot. Of the 149 renewal leases, 126 leases with a total GLA of 375,000 were considered comparable and resulted in a 11.7% average base rent increase over comparable expiring leases.
The 136 renewal leases consist of 473,400 square feet with an average annual base rent of $29.29 per square foot. Of the 136 renewal leases, 115 leases with a total GLA of 329,600 were considered comparable and resulted in a 6.3% average base rent increase over comparable expiring leases.
The Company expects that its long-term capital expenditures for contractual commitments related to development projects and building and tenant improvements (i.e., beyond the next twelve months from December 31, 2024) is not material. Refer to Other capital resource matters below for additional discussion of the Company's total anticipated capital expenditures for 2025.
The largest of such amounts pertain to contracts for two commercial real estate development and redevelopment projects for $26.6 million. The Company expects that its long-term capital expenditures for contractual commitments related to development projects and building and tenant improvements (i.e., beyond the next twelve months from December 31, 2025) is not material.
Base rent is presented without consideration of percentage rent that may, in some cases, be significant. 3 Rent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above). 4 Current ABR, in millions, is presented for ground leases. 5 During the three months ended December 31, 2024, the Company renewed a comparable industrial lease in which the leased premises includes warehouse and yard space.
Base rent is presented without consideration of percentage rent that may, in some cases, be significant. 3 Rent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above). 4 Current ABR, in thousands, is presented for ground leases. 5 During the year ended December 31, 2025, the Company entered into a non-comparable ground lease for a 4.7 acre land parcel located within Maui Business Park.
In addition, contractual interest payments for Notes payable and other debt in the short-term (i.e., over the next twelve months from December 31, 2024) and long-term (i.e., beyond the next twelve months) is estimated to be $22.5 million and $68.5 million, respectively (includes amounts based on contractual/fixed swap interest rates applied to future principal balances based on repayment schedules for secured and unsecured debt and also estimated interest on the revolving credit facility based on the outstanding balance and the rates in effect as of December 31, 2024).
In addition, contractual interest payments for Notes payable and other debt in the short-term (i.e., over the next twelve months from December 31, 2025) and long-term (i.e., beyond the next twelve months) is estimated to be $22.8 million and $69.8 million, respectively (includes amounts based on contractual/fixed swap interest rates applied to future principal balances based on repayment schedules for secured and unsecured debt and also estimated interest on the revolving credit facility based on the outstanding balance and the rates in effect as of December 31, 2025). 42 In June 2025, the Company and certain of its subsidiaries entered into a termination agreement with Mahi Pono Holdings, LLC ("Mahi Pono") and certain of its related entities ("the Termination Agreement") in which both parties mutually agreed to generally terminate the remaining rights and performance obligations related to a 2018 sale of approximately 41,000 acres of agricultural land on Maui.
Additionally, for the year ended December 31, 2024, the Company collected $3.9 million in financing receivables related to unimproved and development land sales that occurred in prior years. Total cash flows in future periods may be subject to variation from the Land Operations segment due to the varying activity in completing development and unimproved/other property sales.
Total cash flows in future periods may be subject to variation from the Land Operations segment due to, among other factors, the varying activity in completing development and unimproved/other property sales.
Financial results Results of operations for the years ended December 31, 2024 and 2023, were as follows: (amounts in thousands; unaudited) 2024 2023 Development sales revenue $ 18,328 $ — Unimproved/other property sales revenue 20,265 12,325 Other operating revenue 683 2,547 Total Land Operations operating revenue 39,276 14,872 Land Operations operating costs and expenses (26,460) (5,560) Selling, general and administrative (1,310) (1,792) Intersegment operating charges, net 1 (30) (25) Gain (loss) on disposal of assets, net 2,148 1,114 Earnings (loss) from joint ventures 4,556 1,872 Interest and other income (expense), net 742 349 Total Land Operations operating profit (loss) $ 18,922 $ 10,830 1 Intersegment operating charges for Land Operations is primarily from the Commercial Real Estate segment and are eliminated in the consolidated results of operations. 2024: Land Operations operating revenue of $39.3 million and operating costs and expenses of $26.5 million for the year ended December 31, 2024, are primarily related to the sale of 430 acres of unimproved and other land holdings on Maui and Kauai for $20.2 million, including an 81-acre residential-zoned parcel on Maui, as well as six development lots at Maui Business Park for $10.2 million and two industrial-zoned development lots on Oahu for $8.1 million.
Financial results Results of operations for the years ended December 31, 2025 and 2024, were as follows: (amounts in thousands; unaudited) 2025 2024 Development sales revenue $ — $ 18,328 Unimproved/other property sales revenue 3,362 20,265 Other operating revenue 1 450 683 Total Land Operations operating revenue 3,812 39,276 Land Operations operating costs and expenses 2 (4,536) (26,490) Selling, general, and administrative (1,056) (1,310) Gain (loss) on disposal of assets and settlements, net 11,748 2,148 Impairment of equity method investment (406) — Income (loss) related to joint ventures and partnerships 8,288 4,556 Interest and other income (expense), net (23) 742 Total Land Operations operating profit (loss) $ 17,827 $ 18,922 1 Other operating revenue primarily includes revenue related to licensing and leasing of legacy agricultural lands during the twelve months ended December 31, 2025 and 2024. 2 Includes intersegment operating charges for Land Operations that are from the Commercial Real Estate segment and are eliminated in the consolidated results of operations. 2025: Land Operations operating revenue of $3.8 million for the year ended December 31, 2025, is primarily related to the sale of unimproved and other land holdings on the island of Maui.
During the year ended December 31, 2024, the Company completed three transactions that gave rise to cash proceeds from sales or involuntary conversion activity that qualified under §1031 or §1033 of the Code and, over the same period, completed one acquisition utilizing eligible/available proceeds from tax-deferred sales or involuntary conversions. 40 As of December 31, 2024, the Company has no funds from tax-deferred sales that are available for use and have not been reinvested under §1031 of the Code.
The proceeds from involuntary conversions under §1033 of the Code are held by the Company until the funds are redeployed. As of December 31, 2025, the Company has no funds from tax-deferred sales or involuntary conversions that are available for use and have not been reinvested under §1031 or §1033 of the Code.
Adjusted FFO is a widely recognized measure of the property operations of REITs and may be more useful than FFO in evaluating the operating performance of the Company’s properties over the long term, as well as enabling investors and analysts to assess performance in comparison to other real estate companies.
Adjusted FFO serves as a supplemental measure to net income calculated in accordance with GAAP and management believes may be more useful than FFO in evaluating the operating performance of the Company’s properties over the long term because it excludes from FFO the effects of certain items that do not relate to or are not indicative of the Company’s ongoing property operations, and by enhancing comparability to other REITs by enabling investors and analysts to assess property operating performance in comparison to other real estate companies.
The Company further differentiates capital expenditures as follows (based on management's perspective on discretionary versus non-discretionary areas of spending for its CRE business): • Ongoing Maintenance Capital Expenditures: Costs necessary to maintain building value, the current income stream, and position in the market. • Discretionary Capital Expenditures: Property acquisition, development and redevelopment activity, and tenant improvements to generate income and cash flow growth. • Capitalized Indirect Costs: Certain costs related to the development and redevelopment of real estate properties, including: pre-construction costs; real estate taxes; insurance; construction costs; attributable interest expense; and salaries and related costs of personnel directly involved. 39 Capital expenditures for continuing operations are summarized as follows for the years ended: (in thousands, unaudited) 2024 2023 Capital expenditures for real estate Ongoing maintenance capital expenditures Building/area improvements $ 10,193 $ 10,482 Tenant space improvements 4,910 3,169 Total ongoing maintenance capital expenditures for real estate 15,103 13,651 Discretionary capital expenditures Property acquisitions 29,826 9,464 Development and redevelopment 1 2,518 5,840 Tenant space improvements - nonrecurring 449 84 Total discretionary capital expenditures for real estate 32,793 15,388 Capitalized indirect costs 2,784 2,050 Total capital expenditures for real estate 1 50,680 31,089 Corporate and other capital expenditures 97 61 Total Capital Expenditures 1 $ 50,777 $ 31,150 1 Excludes capital expenditures for real estate developments to be held and sold as real estate development inventory, which are classified in the consolidated statement of cash flows as operating activities and are excluded from the tables above.
Capital expenditures for continuing operations are summarized as follows for the years ended: (in thousands, unaudited) 2025 2024 Capital expenditures for real estate Ongoing maintenance capital expenditures Building/area improvements $ 9,633 $ 10,193 Tenant space improvements 3,083 4,910 Total ongoing maintenance capital expenditures for real estate 12,716 15,103 Discretionary capital expenditures Property acquisitions — 29,826 Development and redevelopment 1 14,413 2,518 Tenant space improvements - nonrecurring 2 21,541 449 Total discretionary capital expenditures for real estate 35,954 32,793 Capitalized indirect costs 3,359 2,784 Total capital expenditures for real estate 1 52,029 50,680 Corporate and other capital expenditures 201 97 Total Capital Expenditures 1 $ 52,230 $ 50,777 1 Excludes capital expenditures for real estate developments to be held and sold as real estate development inventory, which are classified in the consolidated statement of cash flows as operating activities and are excluded from the tables above. 2 Includes non-recurring major renovations and first-time space build outs.
Income (loss) attributable to discontinued noncontrolling interest of $3.2 million for the year ended December 31, 2023, was related to the Grace Disposal Group, which was sold in November 2023. 30 Analysis of Operating Revenue and Profit by Segment The following analysis should be read in conjunction with the consolidated financial statements and related notes thereto.
Loss from discontinued operations (net of income taxes) of $3.5 million for the year ended December 31, 2024, primarily relates to the resolution of cessation related liabilities associated with the Company's former sugar operations that did not reoccur in the current year. 34 Analysis of Operating Revenue and Profit by Segment The following analysis should be read in conjunction with the consolidated financial statements and related notes thereto.
Land Operations operating profit of $18.9 million during the year ended December 31, 2024, is composed of the margins resulting from land sales noted above, equity earnings from joint ventures of $4.6 million primarily related to the Company's unconsolidated investment in a materials company, a gain from disposals of assets of $2.1 million due to the favorable resolution of contingent liabilities related to the sale of a legacy business in a prior year, and charges related to legacy business environmental remediation activities. 2023: Land Operations operating revenue of $14.9 million and operating costs and expenses of $5.6 million for the year ended December 31, 2023, are primarily related to the sale of approximately 460 acres of unimproved and other land holdings on Maui and Kauai for $12.3 million.
Land Operations operating profit of $17.8 million during the year ended December 31, 2025, is primarily composed of the gain related to a contract modification and favorable resolution of remaining rights and obligations from a land sale in a prior year, equity earnings from joint ventures driven by earnings from the Company's unconsolidated investment in a materials company and a release of reserves held at a legacy real estate joint venture, and the margins resulting from unimproved land sales in the current year. 2024: Land Operations operating revenue of $39.3 million and related costs of sales of $26.5 million for the year ended December 31, 2024, are primarily related to the sale of approximately 430 acres of unimproved and other land holdings on Maui and Kauai for $20.3 million, including an 81-acre residential-zoned parcel on Maui, as well as six development lots at Maui Business Park for $10.2 million and two industrial-zoned development lots on Oahu for $8.1 million.
As a result, the Company measured the property held for sale at its fair value less costs to sell and accordingly recorded impairment of $2.2 million in 2023. Also during the years ended December 31, 2024 and 2023, the Company recorded an impairment charge of $0.3 million and $2.6 million, respectively, related to the abandonment of potential development projects.
Consequently, no fair value adjustment related to the assets held for sale was required. During the year ended December 31, 2024, the Company recorded an impairment charge of $0.3 million related to the abandonment of potential CRE development projects.
All expenses related to an acquisition are capitalized and allocated among the identified assets. Generally, the most significant portion of the allocation is to building and land, and requires the use of market-based estimates and assumptions.
All expenses related to an acquisition are capitalized and allocated among the identified assets.
During the year ended December 31, 2023, the Company completed sales of approximately 460 acres of legacy land holdings on Maui and Kauai for a total of $12.3 million. 28 Consolidated Results of Operations For an understanding of the significant factors that influenced our performance during fiscal 2024 and 2023, the following analysis of the consolidated financial condition and results of operations of the Company and its subsidiaries should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part II, Item 8 of this Annual Report on Form 10-K.
For additional information regarding the Merger and the terms of the Merger Agreement, see also the definitive proxy statement on Schedule 14A that the Company filed with the SEC on January 23, 2026 (as it may be amended or supplemented from time to time). 32 Consolidated Results of Operations For an understanding of the significant factors that influenced our performance during fiscal 2025 and 2024, the following analysis of the consolidated financial condition and results of operations of the Company and its subsidiaries should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part II, Item 8 of this Annual Report on Form 10-K.
Income (loss) related to joint ventures for the year ended December 31, 2024, increased 143.4%, or $2.7 million, to $4.6 million, due primarily to higher earnings from the Company's unconsolidated investment in a materials company.
Income (loss) related to joint ventures and partnerships of $8.3 million for the year ended December 31, 2025, is primarily composed of earnings from the Company's unconsolidated investment in a materials company and a release of reserves held at a legacy real estate joint venture.
The year ended December 31, 2024, included capital expenditures for continuing operations of $50.8 million, which included the purchase of a Commercial Real Estate property for $29.8 million, partially offset by $19.0 million in cash proceeds from the disposal of a Commercial Real Estate property and two development lots.
The year ended December 31, 2025, included capital expenditures for continuing operations of $52.2 million, which included non-recurring major renovations and charges for initial build-outs of previously unoccupied shell space of $21.5 million, partially 43 offset by $3.4 million in cash proceeds from the collection of a note related to the disposal of an improved Commercial Real Estate property in 2024.
Management believes that FFO more accurately provides an investor an indication of our ability to incur and service debt, make capital expenditures and fund other needs. The Company has been executing a simplification strategy to focus on the growth and expansion of its commercial real estate portfolio in Hawai‘i by monetizing its legacy assets and operations.
Management believes that FFO more accurately provides an investor an indication of the Company’s ability to incur and service debt, make capital expenditures and fund other needs. FFO related to CRE and Corporate is a supplemental non-GAAP measure that refines FFO to reflect the operating performance of the Company's commercial real estate business.
Financial results from this segment are principally derived from real estate development and unimproved land sales and joint venture activity. Simplification strategy As a REIT focused on Hawaii commercial real estate, the Company has pursued the monetization and disposition of legacy assets and landholdings in order to simplify its business and allocate its capital resources to commercial real estate.
Financial results from this segment are principally derived from real estate development and unimproved land sales and joint venture activity.
Selling, general and administrative costs for 2024 decreased 12.4%, or $4.2 million, to $29.8 million due primarily to lower personnel-related expenses and professional service fees.
Selling, general, and administrative costs for 2025 decreased 5.7%, or $1.7 million, to $28.1 million due primarily to lower software and technology costs, charitable giving, personnel-related expenses, insurance and professional service fees. Merger transaction costs of $7.1 million for the year ended December 31, 2025, relates to the Merger and consists primarily of legal consulting and financial advisory fees.
Cash proceeds from current year unimproved and development land sales increased by $14.4 million from $7.9 million for the year ended December 31, 2023, to $22.3 million for the year ended December 31, 2024.
The increase of $3.7 million from $4.6 million for the year ended December 31, 2024, is due primarily to the release of reserves.
Commercial Real Estate portfolio acquisitions, transfers, and dispositions During the year ended December 31, 2024, the Company's acquisitions and dispositions of commercial real estate properties were as follows (dollars in millions): Acquisitions Property Location Date (Month/Year) Purchase Price GLA (SF) Waihona Industrial Oahu 09/2024 $29.7 81,500 Dispositions Property Location Date (Month/Year) Sales Price GLA (SF) Waipouli Town Center Kauai 10/2024 $14.3 56,600 31 There were no transfers of CRE improved properties or ground lease interests in land during the year ended December 31, 2024.
Commercial Real Estate portfolio transactions During the year ended December 31, 2025, the Company's commercial real estate transactions were as follows (dollars in millions): Transactions Property Location Transaction Type Date (Month/Year) Purchase Price GLA (SF) Maui Business Park - 4.7-acre parcel subject to ground lease Maui Transfer-in 3/25 N/A 1 N/A 2 22 Hana Highway 3 Maui Repossession 12/25 N/A 3 4,500 1 Represents an intercompany transaction.
Removed
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.
Added
These forward-looking statements include, but are not limited to, statements that relate to future events or conditions, including without limitation, the statements in Part I, Item 1. “Business” and Item 1A. “Risk Factors,” Part II, Item 7.
Removed
In November 2023, the Company completed the sale of its interests in Grace Pacific LLC, a materials and construction company, Company-owned quarry land on Maui, and Grace Pacific's 50% interest in a paving company (collectively, the "Grace Disposal Group"), marking the last major step in the Company's simplification efforts that began in 2016.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 1 of the Notes to Consolidated Financial Statements included in this Form 10-K, regarding the pending merger (the “Merger”) of Alexander & Baldwin, Inc.
Removed
The financial results associated with the Grace Disposal Group are classified as discontinued operations in the consolidated statements of operations and cash flows for years ended December 31, 2023 and 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFair Value at Expected Remaining Obligation as of Beginning of Year December 31, 2025 2026 2027 2028 2029 Thereafter 2024 Liabilities Fixed-rate debt $ 455,184 $ 414,734 $ 345,459 $ 304,368 $ 128,062 $ 60,000 $ 448,400 Weighted average interest rate on remaining fixed-rate principal 4.63 % 4.60 % 4.70 % 4.70 % 4.75 % 6.09 % Variable-rate debt 1 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ — $ — $ 20,000 Weighted average interest rate on remaining variable principal 2 5.48 % 5.48 % 5.48 % 5.48 % — % — % Fair Value at Expected Remaining Notional as of Beginning of Year December 31, 2025 2026 2027 2028 2029 Thereafter 2024 Interest rate swap agreements 3 Variable to fixed remaining notional and fair value of swap asset (liability) $ 180,877 $ 178,989 $ 177,041 $ 175,023 $ 172,942 $ 130,000 $ 7,378 Average pay fixed rate 4.37 % 4.38 % 4.40 % 4.41 % 4.43 % 4.85 % Average receive rate 2 5.61 % 5.61 % 5.61 % 5.61 % 5.60 % 5.58 % 1 Estimated variable-rate principal is based on the amounts outstanding and the contractual maturity date of the revolving credit facility as of December 31, 2024.
Biggest changeFair Value at Expected Remaining Obligation as of Beginning of Year December 31, 2026 2027 2028 2029 2030 Thereafter 2025 Liabilities Fixed-rate debt $ 485,952 $ 416,616 $ 375,461 $ 329,087 $ 260,954 $ 60,000 $ 483,700 Weighted average interest rate on remaining fixed-rate principal 5.87 % 6.16 % 6.32 % 6.59 % 5.01 % 6.09 % Variable-rate debt 1 $ 8,000 $ 8,000 $ 8,000 $ — $ — $ — $ 8,000 Weighted average interest rate on remaining variable principal 2 4.71 % 4.71 % 4.71 % — % — % — % Fair Value at Expected Remaining Notional as of Beginning of Year December 31, 2026 2027 2028 2029 2030 Thereafter 2025 Interest rate swap agreements 3 Variable to fixed remaining notional and fair value of swap asset (liability) $ 248,989 $ 247,041 $ 245,023 $ 242,942 $ 200,000 $ 130,000 $ 1,504 Average pay fixed rate 4.44 % 4.45 % 4.46 % 4.47 % 4.75 % 4.85 % Average receive rate 2 4.91 % 4.91 % 4.91 % 4.91 % 4.87 % 4.87 % 1 Estimated variable-rate principal is based on the amounts outstanding and the contractual maturity date of the revolving credit facility as of December 31, 2025.
The table below summarizes the Company's estimated exposure to interest rate risk over each of the next five years and thereafter based on the expected remaining principal obligation as of the beginning of each period and the related interest rates based on the Company's debt obligations as of December 31, 2024 (dollars in thousands).
The table below summarizes the Company's estimated exposure to interest rate risk over each of the next five years and thereafter based on the expected remaining principal obligation as of the beginning of each period and the related interest rates based on the Company's debt obligations as of December 31, 2025 (dollars in thousands).
With respect to exposure to changes in interest rates, the Company will continue to actively monitor the economic situation and its impact on interest rates and may take further actions that it determines is in the best interest of its business, financial condition and liquidity and capital resources. 43
With respect to exposure to changes in interest rates, the Company will continue to actively monitor the economic situation and its impact on interest rates and may take further actions that it determines is in the best interest of its business, financial condition and liquidity and capital resources. 47
The table has limited predictive value as average interest rates for variable-rate debt included in the table represent rates that existed as of December 31, 2024, and are subject to change.
The table has limited predictive value as average interest rates for variable-rate debt included in the table represent rates that existed as of December 31, 2025, and are subject to change.
Actual principal outstanding may be greater or less than the amounts indicated. 2 Estimated interest rates on variable-rate debt are determined based on the rate in effect on December 31, 2024.
Actual principal outstanding may be greater or less than the amounts indicated. 2 Estimated interest rates on variable-rate debt are determined based on the rate in effect on December 31, 2025.
Furthermore, the table below incorporates only those exposures that existed as of December 31, 2024, and does not consider exposures or positions that may arise of expire after that date.
Furthermore, the table below incorporates only those exposures that existed as of December 31, 2025, and does not consider exposures or positions that may arise of expire after that date.
As of December 31, 2024, the Company’s fixed-rate debt (after the effects of interest rate swaps), excluding debt premium or discount and debt issuance costs, consisted of $455.2 million in principal term notes and other instruments. As of December 31, 2024, the Company’s variable-rate debt under its revolving credit facilities was $20.0 million.
As of December 31, 2025, the Company’s fixed-rate debt (after the effects of interest rate swaps), excluding debt premium or discount and debt issuance costs, consisted of $486.0 million in principal term notes and other instruments. As of December 31, 2025, the Company’s variable-rate debt under its revolving credit facilities was $8.0 million.
As of December 31, 2023, the Company had $427.1 million of fixed-rate debt outstanding and $37.0 million of variable-rate debt outstanding with weighted average interest rates of 4.2% and 6.5%, respectively, and the aggregate fair value of its interest rate derivatives for variable to fixed interest rate swaps, including two forward interest rate swaps, was an asset of $1.4 million.
As of December 31, 2024, the Company had $455.2 million of fixed-rate debt outstanding and $20.0 million of variable-rate debt outstanding (after the effects of interest rate swaps), with weighted average interest rates of 4.6% and 5.5%, respectively, and the aggregate fair value of its interest rate derivatives for variable to fixed interest rate swaps was an asset of $7.4 million.

Other ALEX 10-K year-over-year comparisons