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 0 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 ANB Development Team. With me today are ANB's Chief Executive Officer, Lance Barker, and Chief Financial Officer, Clayton Chun. We are also joined by Kit Millan, 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 .alexanderbaldwin.com forward slash events. Before we commence, please note that statements in this presentation that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities, and competitive positions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the company's REIT status and the company's business, the evaluation of alternatives by the 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. As becoming a REIT in 2017, our same-store NOI growth has averaged .8% per year compared to .3% for the NaReit Shopping Center subsector. We began presenting FFO in 2020 and achieved a CAGR on CRE and corporate FFO of .4% compared to .3% for the NaReit 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 -the-market share program. We opportunistically sold more than 400 acres of non-core land toils, 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 -square-foot industrial asset on the island of Maui. Importantly, the team has been busy underwriting other development and redevelopment opportunities. This, of course, is in addition to the -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 .4% for the quarter and .9% for the year. Excluding the impact of collections of prior year reserves, our same store NOI growth was .9% for the quarter and .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 remained strong in the fourth quarter at 14% on a comparable basis and .7% for 2024. Our lease 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 Wyni 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 -a-suit at Maui Business Park, which is expected to become economic at the end of 2025. Next up, we are committed to driving operational results from our CRE portfolio with the mindset that good -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 three cent increase as compared to the same quarter last year, an AFFO of 19 cents per share, two cents higher than last year. The -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 -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. For the full year 2024 AFFO was $1.10 per share, or 23 cents higher than the prior year, due primarily to higher land sale margins, series 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 .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 Highlands 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 .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 .1% increase at the midpoint when normalizing 2024 for the 2 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 .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 2 cents to 4 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. First, 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 touchtone 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 leave 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 a 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 a 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 explorations 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 known any move outs within the explorations that you have this year?

Yeah, you want to take a stab at that? Sure. Last quarter, we signaled that there was about 50,000 square feet of industrial move out for that was going to occur in the fourth quarter. We were pleased that thirty three thousand 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 four hundred fifty thousand dollars of ABR and only about seven thousand square feet in total between one retail asset and one industrial asset.

And

then

I would just add Gura for some additional color. We do provide our lease exploration schedule in our supplement and given our walled on in any given year, you know, I would expect to see somewhere in the low double digits, you know, low teens in terms of role. Our role on an ABR basis for 2025 is just over eight percent. 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.

Your 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 get somebody else. You guys hear me? Oh, yeah, no. Hey, Rob.

Okay. Finally, unmuted me. The bankrupt tenant, Liberia 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 midyear, 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, you know, your ability to start marketing that space to another tenant in the interim.

So we expect it around midyear. 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, quarter in the lease occupancy in the retail portfolio. What 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 Y&I 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 two to four cents 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.

OK, that's helpful. Thanks, guys. Appreciate the time tonight. All right. Thank you,

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 your bankruptcies are obviously very low and credit for you guys tends to be to be good. Are you expecting that to continue this year? The one curious or bad debt reserve and two. Is there something specific about the retailers on Hawaii such that maybe they're when there are tenant credit issues, sort of the Hawaiian outposts or the sort of a last to be affected? Just sort of curious about the health, tenant health out in Hawaii versus the sister locations on the mainland.

Sure. Hello, 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 rental 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 percent 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, you know, one of the I think pharmacy is on everybody's mind right now. And I'll give the example of longs. So longs is a CVS tenant. And in Hawaii, that longs 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 there 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 the land business on overhead expense. So just want 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 costs, 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 sales specifically. What is the what's your 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 3000 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 a little bit more opportunistic. I would say in general, land interest remains high, although financing for 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 land 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 immediately adjacent to the airport, fully entitled, fully offsite 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, you know, beach erosion or whatever. Good to hear that

you're keeping more of the Maui Business Park for selling. Thank you. OK, 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 Alex. Thanks, Alex. I just want to ask Alex 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 as you sell more, there's also probably some staff utilization changes that are happening there. Is there anything else that is driving that four million plus decline year over year?

Hey, Mitch, Clayton. Yeah. So with respect to

the four four million GNA reduction that 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 GNA. OK, but that's really been a considerable focus of ours over the past few years. And as we've transformed the company and become pure play, we've been able to streamline processes. We've focused on 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 to reap some of the benefits of cost efficiencies that we're now seeing play out. And so that's really what the four plus million dollar 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 and and streamline our operations further. But as they said in the prepared remarks for twenty twenty five, we're

expecting to have that trajectory moderate.

And by moderate, you mean you can have about a possibly a tad more GNA. I just want to make sure what I understand from

that terminology moderate.

Yeah,

yeah. So we're expecting to the GNA level overall to be flat to a penny per share improvement as compared to twenty twenty four.

And the word improvement means better lower GNA, better, sure that lower

GNA. Yes, that's what I get. That's

correct. OK, 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, you know, 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 eighty one thousand square foot industrial building that we that we purchased in October of last year. So that that did drive part

of the activity that was reported in Q4.

Got you. 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 the principles that are guiding kind of where your outlook is is being based on for next year. So

I'll talk

about it in terms of asset classes. First of all, first and foremost, on the retail front, we had really strong retail leasing in twenty four. And as a result, we expect same store growth in twenty five 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 Comahona, Comahona Industrial Park. But the good news is that we do have prospects for both of those assets. So 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 two thousand twenty five. So growth will be minimal

this year. Thank you. Thanks, Mitch.

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

Hey, good afternoon, everybody.

Hey, Brandon.

Hey, Brandon. 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 eight percent blended comparable spread level that we saw in the first half of this year. But it looks like it's pretty elevated for the fourth quarter of twenty four. I guess. Were there any one off items that drove that or is that it's what's kind of baked into that 14 percent number?

Yeah, kind of building off of some of kids earlier comments, we did see strong leasing activity in twenty twenty four. So I would say baseline remained remained strong. But that said, really sort of exactly to your point, we did have a couple of individual leases that that really sort of drove the performance for the quarter. And I would say the one specifically in kids earlier example of the CVS Long's renewal, you know, that was an example where we got a pretty significant lift in in a B.R. It was an anchor space in our manual marketplace shopping center. And so that was a contributor to to the spread that we received in the quarter.

Great, great. And just to clarify, are you optimistic or confident that the year end spread that eleven point seven percent you think twenty twenty five 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 twenty twenty four.

Great, that's helpful. And then one more question for me, just curious on the office exposure in the portfolio. I know it's obviously small percentage of NOI, but how can we kind of think about that office, those office assets? And 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 a little bit more context, just in terms of relative scale to the overall portfolio, we're talking about four percent ish of NOI, 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, we do have four assets, three of which are on Maui. I would say the one on Oahu is 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, we've talked in the past and I think to the extent that we find appropriate investments, those would be good opportunities for capital recycling. And so we'll certainly keep it in mind as as an opportunity as part of our capital that we look to either deploy or redeploy

into new investments.

Great. Thanks. Thanks, Lance. And also just one quick follow up question here. I think Clayton, you mentioned that growth expectations 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 AVR 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 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 for 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 -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.