Alexander & Baldwin reported a profit of $1 million for the fourth quarter and $5.5 million for 2020 and the Hawaii real estate investment trust said that its business focused on grocery-anchored retail centers that cater to residents is well positioned for growth as the Islands emerge from the Covid-19 pandemic.
Alexander & Baldwin (NYSE: ALEX) reported net income of $1 million, or 1 cent per diluted share, for the fourth quarter, compared to net income of $5.2 million, or 7 cents per diluted share, for the same quarter in 2019. For the full year of 2020, A&B reported net income of $5.5 million, or 8 cents per diluted share, compared to a net loss of $36.6 million, or a loss of 51 cents per diluted share, for all of 2019.
A&B said it collected 85% of rents due during the fourth quarter, as well as in January. Total retail rent collection improved to 82% in the fourth quarter, from 72% in the second quarter at the start of the pandemic. Collections from restaurants improved to 56% in the fourth quarter, from 46% in the second quarter but fell back to 44% in January. Rent collections for grocery tenants, along with hard goods, industrial, ground leases and office were above 90% for the fourth quarter.
A&B President and CEO Chris Benjamin told analysts Thursday that the company worked with tenants to retain occupancy, which included $5.9 million in rent deferrals — $2.4 million of which was repaid by the end of 2020, with the rest due by the end of this year — as well as “other forms of tenant relief modifications” totaling $6.4 million and lease modifications, including extensions.
“Grocery-anchored, community-based retail and services are, and will, remain critically important,” Benjamin said. “There may be some fallout of certain tenants and a period of transitions, but the demand for food, goods, services and lifestyle activities in local communities is only going to grow as people’s lives increasingly are centered around their homes, families and neighborhoods.”
A&B said leasing showed “positive activity” with 65 leases completed in the fourth quarter totaling 368,000 square feet and 220 leases totaling 919,000 square feet for all of 2020.
The fourth quarter figure includes the renewal of the Safeway lease at Aikahi Park Shopping Center and the Sam’s Club lease at Pearl Highlands Center.
Benjamin said there were 21 lease modification extensions related to Covid-19 in the fourth quarter for about 87,000 square feet. For the full year, there were 56 lease modification extensions totaling 180,000 square feet that added, on average, about one year and eight months.
Benjamin said A&B was looking beyond the pandemic to the opportunities the company will have with its grocery-anchored retail centers — A&B has seven leases across the Islands with Safeway and nine leases with Hawaii-owned Foodland and only two centers located in tourism-dependent resort areas.
“I do think that changing commute patterns, and what’s likely to be a permanent increase in remote working, does set up nicely for community-based centers,” he said. “We are expecting more people to be spending more time in their communities which means more services and more food and, and just generally more activity at community-based centers, whether that’s driven by new homes or just simply people spending more time in their existing homes, I think it’s probably a benefit for a grocery-anchored portfolio.”