Alexander & Baldwin, Inc.

Good afternoon, ladies and gentlemen. Welcome to the fourth quarter 2024 Alexander and Baldwin earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 27, 2025. I would now like to turn the conference over to Michael Imanaka, senior manager on the development team. Please go ahead.

Thank you, operator. Aloha and welcome to Alexander and Baldwin's fourth quarter and full year 2024 earnings conference call. My name is Michael Imanaka, and I'm a senior manager on the A&B development team. With me today are A&B's chief executive officer, Lance Parker, and chief financial officer, Clayton Chun. We are also joined by Kit Milan, Senior Vice President of Asset Management, who is available to participate in the Q&A portion of the call. During our call, please refer to our fourth quarter 2024 financial presentation, available on our website at investors.alexanderbaldwin.com forward slash events. Before we commence, please note that statements in this presentation that are not historical facts or forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities, and competitive positions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the company's REIT status and the company's business, evaluation of alternatives by the companies related to its non-core assets, and the risk factors discussed in the company's most recent Form 10-K, Form 10-Q, and other filings with the Securities and Exchange Commission. The information in this presentation should be evaluated in light of these important risk factors. We do not undertake any obligation to update the company's forward-looking statements. Management will be referring to non-GAAP financial measures during our call today. Please refer to our statement regarding the use of these non-GAAP measures and reconciliations included in our 2024 fourth quarter supplemental information and presentation materials. Lance will start today's presentation with an overview, then hand it off to Clayton for a discussion of financial matters. To close, Lance will return for some final remarks, then we will open it up for your questions. With that, let me turn the call over to Lance.

Thanks, Michael. Great job. To everyone joining us, aloha. 2024 was my first year as the CEO of A&B, and I can't help but reflect on the performance of the company over the past several years compared to our retail peers. Since becoming a REIT in 2017, our same-store NOI growth has averaged 3.8% per year compared to 2.3% for the NAREIT Shopping Center subsector. We began presenting FFO in 2020 and achieved a CAGR on CRE and corporate FFO of 20.4% compared to 9.3% for the Navy Shopping Center subsector. We achieved these impressive results, but it really wasn't until last year that we were able to fully concentrate on executing our Hawaii-focused commercial real estate strategy. Throughout 2024, I emphasized our four priorities related to this execution. operational excellence, balance sheet strength and flexibility, streamlining our business and cost structure, and growth. Over the course of the year, we grew our FFO and NOI and saw a strong leasing activity in the portfolio. We improved our capital structure by refinancing $130 million of mortgage debt with unsecured debt at fixed rates, extended the maturity date on a revolving credit facility to 2028, and established a new at-the-market share program. We opportunistically sold more than 400 acres of non-core land holdings, enabling us to reduce carrying costs within the land operations segment. And from a growth perspective, thanks to Michael and the rest of our development team, we began construction of our 30,000 square foot industrial asset on the island of Mali. Importantly, the team has been busy underwriting other development and redevelopment opportunities. This, of course, is in addition to the 81,500 square foot industrial asset we purchased in the third quarter of last year. Operationally, we ended the year on a high note, with better than expected results in the fourth quarter and for the full year. Same-store NOI grew by 2.4% for the quarter and 2.9% for the year. Excluding the impact of collections of prior year reserves, Our same store NOI growth was 2.9% for the quarter and 3.3% for the year. We executed 47 leases in our improved property portfolio representing more than 140,000 square feet of GLA and 209 leases or 630,000 square feet of GLA during 2024. Our blended leasing spreads remain strong in the fourth quarter at 14% on a comparable basis and 11.7% for 2024. Our leased occupancy was 94.6%, up 60 basis points sequentially and 10 basis points lower than last year. The sequential improvement was driven by a 230 basis point increase in our retail portfolio due to the backfill of our large vacancy at Wai'anae Mall. Economic occupancy at quarter end was 92.9%, down 10 basis points from last quarter as well as the same period last year. These results were driven by the industrial and office vacancies we previously mentioned. We believe that the short-term decline in occupancy will provide long-term opportunity through repositioning. S&O at quarter end was $3.4 million and includes rent for the recently announced Marlin Bar by Tommy Bahama, which we look forward to opening at Queen's Marketplace later this year, and about $1 million of ABR related to our build-a-suit at Maui Business Park, which is expected to become economic at the end of 2025. We are committed to driving operational results from our CRE portfolio, with the mindset that good day-to-day outcomes are the foundation for long-term shareholder value. Looking ahead to 2025, the team will be focused on the following objectives. improving revenue in our retail assets through timely renewals and new leases, increasing occupancy with our industrial portfolio, developing our existing land bank of industrial assets, and sourcing accretive external acquisitions and creative investments. With that, I'll turn the call over to Clayton to discuss our financial results and guidance. Clayton?

Thanks, Lance, and aloha, everyone. We closed out 2024 strong with fourth quarter FFO of 30 cents per share, reflecting a 3 cent increase as compared to the same quarter last year, and AFFO of 19 cents per share, 2 cents higher than last year. The year-over-year FFO and AFFO increase was driven primarily by stronger operating results within our commercial real estate portfolio. For the full year, FFO was $1.37 per share, 28 cents higher than the prior year. The higher year-over-year FFO was primarily attributed to higher land sale margin, stronger commercial real estate performance, and improved G&A in 2024. Full-year 2024 FFO also reflects certain net favorable non-cash swap and financing-related adjustments that occurred in the first quarter. 2024 AFFO was $1.10 per share or 23 cents higher than the prior year, due primarily to higher land sale margins, CRE performance, and G&A improvements. Each of these metrics benefited from collections of prior year reserves of approximately 1.7 million, or two cents per share in 2024, versus $2.1 million of collection, or three cents per share in 2023. During 2024, we continued our efforts to streamline the business and made meaningful progress to improve our cost structure. We decreased G&A expenses by $4.2 million, or 12.4%, in 2024 as compared to 2023. We also made significant progress in reducing carrying costs for land operations during the year. We entered 2024 with a carrying cost run rate of $6 to $7 million. Based upon activity during the year, however, we simplified our cost structure and ended 2024 incurring carrying costs totaling $5.8 million for the year and a run rate ranging from $4 to $5 million. We will continue to prioritize simplifying land operations and will provide updates as we make progress throughout the year. Turning to our balance sheet, we continue to maintain a strong and flexible balance sheet And during the fourth quarter, we took additional steps to further enhance it. In October, we recast our revolving credit facility, extending the maturity to October of 2028 while maintaining the spread on our borrowings. In December, we also paid off our $73 million mortgage, which was secured by Pearl Highland Center. As of 2024 year end, our net debt to adjusted EBITDA ratio stood at 3.6 times. Approximately 96% of our debt was at fixed rates, and our debt maturity profile remained solid with no significant maturities in 2025. With respect to our dividend, we paid a fourth quarter dividend of 22.5 cents per share on January 8th, and our board declared a first quarter 2025 dividend of 22.5 cents payable on April 7th. Moving on to 2025, we are issuing guidance as follows. We expect same-store NOI growth of 2.4% to 3.2%, FFO between $1.13 and $1.20 per share, and CRE and corporate-related FFO of $1.11 to $1.16 per share. While we are not providing quarterly guidance, it should be noted that our quarterly metrics may vary due to the timing of certain items throughout the year. I'd now like to provide some context and highlight important assumptions related to our guidance. First, our CRE and corporate FFO guidance reflects a 4.1% increase at the midpoint when normalized in 2024 for the two cents of FFO attributed to the swap and financing related adjustments. The increase reflected in the 2025 FFO is primarily driven by core CRE performance. Second, our guidance takes into account the approximately 50,000 square feet of vacancy within our industrial portfolio and 13,000 square feet within our office portfolio that we mentioned last quarter. We have both near-term and long-term opportunities that we're pursuing for these spaces and will provide information in the future. Our FFO guidance also includes a penny of contribution related to external acquisitions programmed for the second half of 2025. With respect to G&A, on the heels of achieving a 12.4% reduction in costs in 2024, We will continue to actively pursue opportunities to further simplify our cost structure. But we expect the trajectory of our G&A level to moderate in 2025, ranging from a flat to a penny per share improvement from 2024. Finally, our total FFO guidance also assumes contributions from land operations ranging from two cents to four cents per share in 2025 reflecting a modest amount of assumed land sales margin and joint venture income. With that, I will turn the call over to Lance for his closing remarks.

Thank you, Clayton. I'm pleased with the strategic accomplishments and operating results we achieved last year. I'm also excited about the prospects for 2025, and I'm confident in our ability to continue executing on our strategy to ultimately drive consistent growth and returns for our shareholders. For the remainder of this year, I will report on our progress in the context of the following three priorities. Improving our CRE portfolio performance, internal and external growth, and streamlining our business and cost structure. With that, we'll conclude our formal remarks and open the call up to questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Gaurav Mehta of Alliance Global Partners. Please go ahead.

Yes, thank you. I wanted to go back to your comments about your 2025 priorities around external growth. I think you mentioned that you're looking at underwriting more development and redevelopment opportunities within your portfolio. I was hoping to get some more color on what you guys are looking at.

Hey, Gaurav. It's Lance. Nice to hear from you. Thanks for the question. You know, I've Started to, I would say, be a little bit more optimistic in my remarks over the last couple of quarters with regards to certainly with regards to external growth. And I would say as we look ahead to 2025, that continues to be consistent. Pricing remains challenging, but we are seeing opportunities in the marketplace. And so I am encouraged by that. But specific to your question, we will continue to look and mind opportunities on internal growth. And so specifically on the development front, you know, we talked about the build to suit at Maui Business Park, and that's going to contribute about a million dollars to our S&O pipeline. So something like that, we're seeing similar opportunities within the Maui Business Park for potential build to suit, potentially even some speculative development the industrial market here in Hawaii remains very strong. And I would say similarly to some of our land bank with industrial properties on Oahu, we've started to see some interest there as well. So I'm hopeful that we'll be able to make some announcements later in the year with regard to those initiatives. And then I guess I would just add, you know, this really is sort of the first time we're being transparent about the fact that we are carrying a penny of FFO in our guidance for the full year, and that would be for growth initiatives.

Okay. Second question on your lease expirations for 2025. Do you have any known move outs for the leases that are expiring this year?

Do we have any known move outs?

I just want to make sure I understand the question.

Yeah, are you expecting like any move outs within the exploration that you have this year?

Yeah, Kit, you want to take a stab at that? Sure. Last quarter we signaled that there was about 50,000 square feet of industrial move outs for, that was going to occur in the fourth quarter. We were pleased that 33,000 square feet of that actually stayed in and is actually still there. And we do have backfill opportunities for that that we're actively pursuing. We did have one tenant bankruptcy, and that was Liberated Brands. Very low exposure overall, about $450,000 of ABR and only about 7,000 square feet in total between one retail asset and one industrial asset.

And then I would just add, Gaurav, for some additional color, we do provide our lease expiration schedule in our supplement. And given our WALT, in any given year, I would expect to see somewhere in the low double digits, low teens in terms of role. Our role on an ABR basis for 2025 is just over 8%. So kudos to our leasing team for really getting ahead of a lot of the renewals and mitigating that risk for us this year.

Okay, thank you. That's all I had.

Our next question comes from Rob Stevenson of Cheney. Please go ahead.

Hey Rob, you there? Operator, can you check?

Rob may not, I'm not sure if his volume is working.

If not, maybe we can put him back in the queue and tee up somebody else. Do you guys hear me? We can now. Hey, Rob.

Hey, Rob. Okay. Finally unmuted me. The bankrupt tenant, Liberty Brands, you said, do you have that space back or is that still in the bankruptcy process?

We do not have the space back. They're actually still open and operating and doing their liquidation sale.

Okay. Do you have any expected timing? Is that sort of mid-year, late year, 2026 before you get that space back? I know it's not a lot of ABR or space, but just curious as to your ability to start marketing that space to another tenant in the interim.

So we expect it around mid-year, and the good news is that we actually already have some prospects for the space at Queens Marketplace.

Okay, that's great. And then in the supplemental, there was a big jump quarter-over-quarter in the leased occupancy in the retail portfolio. I think it was like 230 basis points. What drove that?

Sure. So the primary driver is actually really good news. It was backfill of the Wai'anae Mall anchor space that we talked about that terminated in January of last year. So the tenant that we did put in there is a community use. The lease is relatively short term, which provides us with future optionality. And it was really capital efficient. It didn't require very little capital outlay. So the good news overall is that we backfilled it very quickly.

Okay. And then last one for me, Clayton, beyond the sort of 2% to 4% of land operations, what's the biggest lever that causes you to go to either the low end or the high end of the guidance? What's the biggest swing factors in the guidance range for 25 at this point in the year for you?

Yeah. Hi, Rob. So for us, I would say that the low end, it's going to involve delayed tenant occupancy or unplanned vacancies I think bad debt could also come into play in terms of the low end of it. And then in terms of the high end of our guidance, it's effectively the inverse of that. So to the extent that we're able to have our tenants take possession of spaces earlier, then that could certainly be helpful for our FFO. And the same could be said with respect to bad debt. To the extent that we have stronger bad debt collections and just overall tenant health continues to improve, then that would be accretive for us from an FFO perspective.

Okay. That's helpful. Thanks, guys. Appreciate the time tonight.

All right. Thanks, Rob. Your next question comes from Alexander Goldfarb of Piper Sandler. Please go ahead.

Hey, morning out there. So a few questions. Just following up on Rob's tenant credit question, your bankruptcies are obviously very low and credit for you guys tends to be good. Are you expecting that to continue this year? So one, curious your bad debt reserve, and two, is there something specific about the retailers on Hawaii such that maybe when there are tenant credit issues, sort of the Hawaiian outposts are the sort of the last to be affected. Just sort of curious about, you know, the tenant health out in Hawaii versus, you know, the sister locations on the mainland.

Sure. Aloha, Alex. How are you doing?

So what I'll tell you is that... Good, good. So collections have remained really strong. We're not seeing any signs of overall trouble. Customer traffic on Oahu was actually up year over year, and that's where we have most of our centers, even though it was flat elsewhere in the portfolio. And tenant sales have remained strong. We exceeded our percentage rankle for the quarter and the year. Now, in terms of bad debt itself, the opportunity set for prior year reserve recoveries has decreased dramatically. In fact, it was down about 40% in Q4 2024 versus 2023. So obviously that opportunity set going down is a good thing. It means that we're seeing less and less bad debt as we go forward. We don't have a lot of exposure to Green Street's tenant watch list, and we have no real exposure to big bankrupt tenants other than the liberated brands that we just mentioned. And in terms of your question about retailers, I think pharmacy is on everybody's mind right now. And I'll give the example of Long's. So Long's is a CVS tenant. And in Hawaii, that Long's banner is more seen like a local retailer. And all of those stores are very strong. And in fact, we just renewed one of those stores at Manoa Marketplace because the sales are so high there. So I think there's a little bit of insulation for some of the national brands overall.

Okay, that's helpful.

And then the second question is legacy overhead from the land business. Maybe it was a year or two ago, you guys discussed as you exit the land business, there were certain costs. I think they were more pension related and sort of disconnected from the actual business, but that were harder to reduce over time. When I look in your presentation, you talk about pretty healthy reduction, both in corporate and in the land business on overhead expense. So just wanted to revisit some of these stickier legacy land costs. Are you able to accelerate, you know, the unwind of some of these legacy pension costs? or, you know, there's a certain level that's always going to be there even after you sell the last acreage of land.

Hi, Alex Clayton. So, yeah, with respect to the holding costs for land operations, we have made quite a bit of progress in simplifying the cost structure there, and that really corresponded with our ability to just simplify that segment overall. The composition of the remaining cost, it is a combination of you have personnel costs as well as just what I characterize as stewardship. So with the land that we have there, there's just natural costs that are associated with owning the land. And so to the extent that we're able to monetize the remaining non-core lands, there will be variable costs that come out of the system by virtue of that. It should be noted, though, that within land operations, we do have some aspects of what we deem to be core land holdings. And so that would be namely Maui Business Park. And so we expect to keep a hold of those assets for a longer period of time. So I think it's important to point that out.

Okay. Okay. And then just the final question on the land sale specifically, what's the buyer appetite out there for land? I have to believe it's only getting stronger. Just people seem to like real estate these days. But what's the buyer appetite? And as you whittle the holdings down, are you ending up with small pockets here and there? Or is the remaining still sort of large chunks

that are sort of efficient to sell. Hey, Alex, it's Lance.

So I'll answer the question in sort of two buckets. One is our true sort of non-core land bucket, which represents, you know, call it about 3,000 acres left in the portfolio. Those are mostly smaller acreages that are disaggregated, unlike the large contiguous swaths of land that we used to have that we sold in our two, actually three big chunks, two in Maui and one on Kauai. So these would be, you know, a little bit more opportunistic. I would say in general, land interest remains high. Although financing for, you know, smaller agricultural lots, you know, isn't, not that it's not plentiful, but that can be challenging from time to time. So that's sort of our non-core bucket. And then as Clayton mentioned, within Latin operations, we do have Maui Business Park. We do consider that core. And there specifically, I will say that interest remains strong. So this is, you know, immediately adjacent to the airport, fully entitled, fully off-site infrastructure. And we are continuing to see strong demand to buy. So that said, I think it's important to note that as we continue to either build out or sell out, we will be taking a much more strategic perspective with regard to Maui Business Park, meaning a stronger likelihood of us retaining lots to build long-term for our portfolio as opposed to just selling out the remainder of the business park.

Happy to hear that. I know we've discussed that over the years. given they're not making more Hawaii looks, I guess, except for beach erosion or whatever.

Good to hear that you're keeping more of the Maui Business Park for selling. Thank you. Okay.

Thanks, Alex. Thanks, Alex. Your next question comes from Mitch Germain of Citizens. Please go ahead.

Hey, guys. How are you? So I want to ask out. Thanks guys. I just want to ask Alex's question differently. I mean, obviously you talked about cost containment and there's a couple of buckets there, right? There's, there's obviously, you know, what's happening on the land side, right? As you, um, as you sell more, there's also probably some staff utilization changes that are happening there. Is there anything else that is driving, you know, that 4 million, you know, plus decline year over year?

Hey, Mitch, it's Clayton.

Yeah, so with respect to the $4 million G&A reduction that you're referring to, that was outside of land operations. We have obviously our corporate overhead. There's some aspects of commercial real estate that also has G&A, but that's really been a considerable focus of ours over the past few years. And as we've transformed the company and become a pure play REIT, We've been able to streamline processes. We've focused on ways in which we can automate what we've done. And as well as just from a personnel standpoint, we've had our leadership changes and the like. And so through all of that, we've been able to reach some of the benefits of cost efficiencies that we're now seeing play out. And so that's really what the four plus million efficiency was this past year. So as we look ahead, we're going to continue to focus on identifying ways in which we can be more efficient and streamline our operations further. But as I said in the prepared remarks, for 2025, we're expecting to have that trajectory moderate.

And by moderate, you mean you're going to have about a Possibly a tad more G&A. I just want to make sure what I understand from that terminology moderate.

Yeah. Yeah. So we're expecting the G&A level overall to be flat to a penny per share improvement as compared to 2024.

And the word improvement means better, lower G&A. Better.

Lower G&A. Yes.

Okay. That's what I'm trying to get. Okay, great. That's correct. Great. Okay. Great. On the land slide, I never can say these right, but Kapolei Business Park, it was carved out previously. It's no longer there. Is that what was driving the land activity in the fourth quarter?

We did have a couple of parcels in Kapolei Business Park that we did sell, Mitch. So maybe... somewhat contrary to my comments about Maui Business Park and long term strategic for building within our portfolio. We are very much focused on that. But we did get some pretty compelling pricing to sell two lots that we did have two smaller lots that from a development standpoint, could have been done but on a net present value, we determined that the best use or was really the kind of recycle that capital. And so we use that as part of the capital stack in our acquisition of that 81,000 square foot industrial building that we purchased in October of last year. So that did drive part of the activity that was reported in Q4.

Gotcha. That's good to know. Last question for me, same store. I think you've got a little bit of a deceleration. that is being implied by your guidance. I'm just trying to understand some of the variables that are kind of, you know, the principles that are guiding, you know, kind of where your outlook is being based on for next year, obviously.

So I'll talk about it in terms of asset classes. First and foremost, on the retail front, We had really strong retail leasing in 2024. And as a result, we expect same store growth in 2025 to be significant as those spaces continue to go economic and renewal spreads kick in. On the industrial side, growth will be somewhat anemic due to that lease terminations we referenced before at Kakako Commerce Center and Komohana Industrial Park. But the good news is that we do have prospects for both of those assets. We expect the rent to turn on quicker than what we originally expected. And then on the ground side, we don't have any meaningful resets or rent steps in 2025, so growth will be minimal this year.

Thank you. Thanks, Mitch.

Your next question comes from Brandon McCarthy of CDOTI. Please go ahead.

Hey, good afternoon, everybody.

Hey, Brendan. Hey, Brendan.

I just want to touch on, follow up to rent spread. I think last quarter they saw a nice jump kind of above that seven to 8% blended comparable spread level that we saw in the first half of this year, but it looks like it stayed pretty elevated for the fourth quarter of 24. I guess, were there any one-off items that drove that or is that, I guess what's kind of baked into that 14% number?

Yeah, kind of building off of some of Kit's earlier comments, you know, we did see strong leasing activity in 2024. So I would say baseline remained strong. But that said, really sort of exactly to your point, we did have a couple of individual leases that really sort of drove the performance for the quarter. And I would say the one specifically, you know, in Kit's earlier example of the CVS longs renewal, You know, that was an example where we got a pretty significant lift in ABR. It was an anchor space in our Manoa Marketplace Shopping Center. And so that was a contributor to the spread that we received in the quarter.

Great, great. And just to clarify, are you optimistic or confident that, you know, the year-end spreads of that 11.7%, do you think 2025 will see a kind of level similar to that?

You know, I'm going to stop short of providing a number or sort of guidance on the spread itself, but what I can say is that based on what we're seeing in the beginning of the year, we do expect leasing interest to remain strong, consistent with the type of interest that we saw in 2024.

Great. That's helpful. And then one more question from me. Just curious on the office exposure in the portfolio. I know it's obviously a small percentage of NOI, but How can we kind of think about those office assets? And, you know, I think at one point you mentioned they were non-core in general, but can we think those assets may be repurposed or sold altogether?

Yeah, so just to provide, you know, a little bit more context, just in terms of relative scale to the overall portfolio, you know, we're talking about 4%-ish of NOIs, so relatively small. therefore non-core or non-strategic, I should say, small in its impact and non-strategic in that that's not an asset class that we view us owning long term. So with that in mind, you know, we do have four assets, three of which are on Maui. I would say the one in Oahu is strategic in core because it sits within a shopping center. And so it really acts more like a retail asset than a standalone office building. And then the three on Maui, you know, we've talked in the past, and I think to the extent that we find appropriate investments, those would be good opportunities for our capital recycling. And so we'll certainly keep it in mind as an opportunity as part of our capital that we look to either deploy or redeploy into new investments.

Great. Thanks, Lance. And I'll ask you just one quick follow-up question here. I think, Clayton, you mentioned that growth expectations you know, kind of incorporate about a penny in FFO per share on acquisitions for the upcoming year. Just curious if you could provide some more color or detail on that outlook.

So, effectively, that's just reflecting our, we've been signaling the fact that we're encouraged with what we're seeing overall and the fact that we have been prioritizing growth. And so, In terms of what the composition actually is, we're not in a position to comment on specifics of what that would entail, but it could be a combination of external as well as internal opportunities.

So I would just add, so effectively it's unspecified growth. So we expect to be able to place the capital and receive that penny throughout the year, but it is not ascribed to anything specific. We did talk about the million dollars of ABR in our S&O pipeline attributed to the Build a Suit at Maui Business Park. We do expect that to come online at the end of the year and go economic. So it won't have, it'll be a de minimis impact to FFO just because of timing. So this really is, to Clayton's point, just our confidence in the market and our ability to place capital.

That makes sense. That's all from me. Thanks, everybody. All right, Brian.

As a reminder, if you wish to ask a question, please press star followed by the number one. Thank you, ladies and gentlemen. That concludes our question and answer session. I will now turn the conference back over to Clayton Chun, Chief Financial Officer.

Thank you, Operator, and thank you all for joining us today. If you have any follow-up questions, feel free to call us at 808-525-8475 or email us at investorrelations at abhi.com. Aloha and have a great day.

This concludes today's conference. Thank you for attending. You may now disconnect your line.