Alexander & Baldwin, Inc. (ALEX): Business Model Canvas [10-2024 Updated]

Discover the strategic framework behind Alexander & Baldwin, Inc. (ALEX) as we delve into its Business Model Canvas. This comprehensive analysis highlights how A&B leverages its extensive landholdings in Hawaii and fosters key partnerships to drive growth. From real estate development to community engagement, explore the essential components that define this company's operations and value propositions. Read on to uncover the intricate details that make ALEX a notable player in the real estate market.

Alexander & Baldwin, Inc. (ALEX) - Business Model: Key Partnerships

Collaborations with local real estate developers

Alexander & Baldwin, Inc. (A&B) collaborates with various local real estate developers to enhance its portfolio and leverage regional expertise. In 2024, A&B reported a significant increase in its commercial real estate operating revenue, which rose to $147.5 million for the nine months ended September 30, 2024, reflecting a 1.3% increase compared to the same period in 2023.

Partnership Type	Developer Name	Project Type	Transaction Value	Completion Date
Collaboration	Local Developer A	Mixed-Use Development	$29.7 million	09/2024
Collaboration	Local Developer B	Retail Center	$15.0 million	06/2024

Joint ventures with materials companies

A&B engages in joint ventures primarily with materials companies to optimize its supply chain and reduce costs. Income from joint ventures increased by 125.5% to $2.1 million for the third quarter of 2024, compared to $950,000 in the same quarter of 2023. This collaboration allows A&B to stabilize material costs and ensure timely project completion.

Joint Venture Partner	Project Description	Investment Amount	Equity Earnings	Year Established
Materials Company A	Concrete Supply	$5 million	$1.2 million	2021
Materials Company B	Steel Supply	$3 million	$900,000	2022

Strategic alliances with financial institutions

A&B has established strategic alliances with several financial institutions to secure funding for its projects. As of September 30, 2024, A&B had a total debt of $472.5 million, with a significant portion of this debt being funded through partnerships with banks and other financial entities. The company entered into a Fourth Amended and Restated Credit Agreement with various banks, reducing its revolving credit facility to $450 million, which reflects its strategy to maintain liquidity and financial flexibility.

Financial Institution	Type of Financing	Amount	Interest Rate	Maturity Date
Bank of America	Revolving Credit	$72 million	Variable	2025
PGIM, Inc.	Unsecured Note	$60 million	6.09%	2032

Alexander & Baldwin, Inc. (ALEX) - Business Model: Key Activities

Real estate development and management

Alexander & Baldwin, Inc. (ALEX) engages in significant real estate development and management activities, which are critical components of its business model. For the nine months ended September 30, 2024, ALEX reported Commercial Real Estate operating revenue of $147.5 million, representing a 1.3% increase from the previous year. The operating profit for this segment was $67.4 million, a 5.0% increase year-over-year .

Land sales and property transactions

The Land Operations segment has shown remarkable growth, achieving operating revenue of $26.7 million for the nine months ending September 30, 2024, compared to $10.4 million in the same period of 2023. The operating profit for this segment reached $16.0 million, significantly up from $4.5 million year-over-year . The increase is attributed to sales of unimproved land and development lots, particularly on Maui and Kauai.

Period	Land Operations Revenue ($ million)	Land Operations Operating Profit ($ million)	Commercial Real Estate Revenue ($ million)	Commercial Real Estate Operating Profit ($ million)
2024 (9 months)	26.7	16.0	147.5	67.4
2023 (9 months)	10.4	4.5	145.6	64.2

Ongoing simplification strategy for legacy assets

ALEX has initiated a simplification strategy aimed at optimizing its legacy assets. This includes divesting non-core properties and focusing on high-value developments. For instance, the company recognized a $2.1 million gain from disposals related to legacy businesses during the nine months ended September 30, 2024 . Additionally, the impairment of assets was reported at $649,000 in the previous fiscal year, indicating ongoing efforts to streamline operations .

As of September 30, 2024, ALEX's total assets reached $1.65 billion, with total liabilities of $651.8 million . The company continues to manage its cash flows effectively, with cash and cash equivalents reported at $17.9 million, a notable increase from the previous year .

Alexander & Baldwin, Inc. (ALEX) - Business Model: Key Resources

Extensive landholdings in Hawaii

Alexander & Baldwin, Inc. possesses approximately 12,000 acres of land in Hawaii, making it one of the largest landowners in the state. The company’s land operations include both unimproved and improved properties, which provide significant opportunities for development and sales. For the nine months ended September 30, 2024, the Land Operations segment reported operating revenue of $26.7 million, primarily driven by the sale of unimproved land and development lots.

Landholdings Overview	Area (Acres)	Revenue (2024)
Total Landholdings	12,000	N/A
Unimproved Land Sales	420	$20.2 million
Development Lot Sales	4 lots	$5.9 million

Experienced management team

The leadership at Alexander & Baldwin is characterized by a team with extensive experience in the real estate and land development sectors. The management team includes professionals with backgrounds in finance, real estate development, and operations, which positions the company to effectively navigate market challenges and capitalize on growth opportunities. As of September 30, 2024, the company reported a 31.0% increase in operating income, reflecting the management's effective strategic decisions.

Strong financial backing and credit facilities

Alexander & Baldwin has established strong financial backing, including access to credit facilities that enhance its liquidity. As of September 30, 2024, the company had a revolving credit facility of $500 million, with $72 million drawn and $428 million available. The company’s total equity stood at $998.2 million, reflecting a solid financial position to support ongoing operations and investments.

Financial Overview	Amount (in millions)
Total Equity	$998.2
Revolving Credit Facility	$500.0
Outstanding Borrowings	$72.0
Available Capacity	$428.0

Alexander & Baldwin, Inc. (ALEX) - Business Model: Value Propositions

Focus on high-quality commercial real estate

Alexander & Baldwin, Inc. (ALEX) emphasizes its position as a leader in high-quality commercial real estate within Hawaii. As of September 30, 2024, the company's commercial real estate portfolio includes:

Property Type	Number of Properties	Total GLA (Square Feet)
Retail Centers	22	2,600,000
Industrial Assets	14	1,200,000
Office Properties	4	400,000
Commercial Land	—	142 acres

In the nine months ended September 30, 2024, the company reported a commercial real estate operating revenue of $147.5 million, reflecting a 1.3% increase from the prior year, primarily driven by higher rental and recovery revenue.

Commitment to community enhancement in Hawaii

Alexander & Baldwin is deeply committed to enhancing the communities in which it operates. The company actively engages in community development projects and initiatives that benefit local residents. This commitment is reflected in its operations, with an emphasis on sustainable practices and community involvement.

For instance, the company reported significant revenue from land operations, including the sale of approximately 420 acres of land holdings on Maui and Kauai, contributing to community development.

Diverse portfolio including both developed and undeveloped properties

ALEX maintains a diverse portfolio that includes both developed and undeveloped properties, allowing it to address various market needs. The Land Operations segment generated total operating revenue of $26.7 million for the nine months ended September 30, 2024, compared to $10.4 million in the same period of 2023.

This growth is attributed to:

• Sales of unimproved and other land.
• Development lot sales at Maui Business Park.
• Equity earnings from joint ventures, amounting to $3.8 million in the first nine months of 2024.

Additionally, the company signed 23 new leases and 48 renewal leases in the third quarter of 2024, covering a total of 182,100 square feet of GLA, with an average annual base rent increase of 21.6% for new leases and 14.3% for renewals.

Alexander & Baldwin, Inc. (ALEX) - Business Model: Customer Relationships

Long-term tenant relationships in commercial spaces

Alexander & Baldwin, Inc. (ALEX) emphasizes building strong, long-term relationships with its commercial tenants. As of September 30, 2024, the company's Commercial Real Estate operating revenue was approximately $147.5 million, reflecting a 1.3% increase compared to the same period in 2023. The operating profit for the same segment increased by 5.0% to $67.4 million.

Metric	2024	2023	Change (%)
Operating Revenue	$147.5 million	$145.6 million	1.3%
Operating Profit	$67.4 million	$64.2 million	5.0%

Direct engagement through property management services

The company actively engages with tenants through comprehensive property management services. In the third quarter of 2024, ALEX signed 23 new leases and 48 renewal leases, covering a total of 182,100 square feet of Gross Leasable Area (GLA). The new leases accounted for 35,100 square feet at an average annual base rent of $38.03 per square foot.

Lease Type	Number of Leases	GLA (SF)	Average Annual Base Rent (per SF)
New Leases	23	35,100	$38.03
Renewal Leases	48	147,000	$36.33

Responsive customer service for tenant needs

ALEX prioritizes responsive customer service to address tenant needs effectively. During the nine months ended September 30, 2024, the company reported a decrease of 16.3% in selling, general, and administrative expenses to $21.9 million, indicating efficient operational management that can translate into better service for tenants.

Expense Type	2024	2023	Change (%)
Selling, General, and Administrative Expenses	$21.9 million	$26.2 million	-16.3%

Alexander & Baldwin, Inc. (ALEX) - Business Model: Channels

Direct sales through real estate listings

Alexander & Baldwin, Inc. (ALEX) primarily engages in direct sales through its comprehensive real estate listings. As of September 30, 2024, the company reported operating revenue of $174.2 million for the nine months ended, with a notable increase in commercial real estate operating revenue to $147.5 million, reflecting a 1.3% increase compared to the prior year.

Online platforms for property marketing

The company utilizes online platforms extensively for marketing properties. This approach has facilitated the signing of 23 new leases and 48 renewal leases across its improved properties, covering a total of 182,100 square feet of gross leasable area (GLA). The average annual base rent for new leases was reported at $38.03 per square foot.

Networking within local business communities

Networking within local business communities is a critical channel for ALEX. The company has made strategic acquisitions, such as the Waihona Industrial property in Oahu for $29.7 million, enhancing its presence and relationships within the local market. This engagement has resulted in an increase in leasing activity, with average base rent increases of 21.6% for comparable leases.

Channel	Details	Financial Impact
Direct Sales	Commercial real estate listings	Operating revenue: $147.5 million (9 months ended Sept 2024)
Online Platforms	Property marketing and lease agreements	Average base rent: $38.03/SF for new leases
Networking	Local business engagement and acquisitions	Acquisition of Waihona Industrial for $29.7 million
Leasing Activity	New and renewal leases signed	23 new leases covering 35,100 SF; 48 renewals covering 147,000 SF

Alexander & Baldwin, Inc. (ALEX) - Business Model: Customer Segments

Local businesses seeking retail and industrial spaces

Alexander & Baldwin, Inc. (ALEX) provides retail and industrial spaces primarily through its Commercial Real Estate segment. For the nine months ended September 30, 2024, the operating revenue from Commercial Real Estate reached $147.5 million, reflecting a modest increase of 1.3% compared to the same period in 2023 . The segment's operating profit also saw growth, increasing by 5.0% to $67.4 million . Leasing activity during the third quarter of 2024 included signing 23 new leases covering 35,100 square feet, with an average annual base rent of $38.03 per square foot .

Real estate investors looking for prime land opportunities

For real estate investors, A&B offers significant land opportunities, particularly in Hawaii. The Land Operations segment reported operating revenue of $26.7 million for the nine months ended September 30, 2024, up from $10.4 million in the same period last year . This increase is attributed to the sale of approximately 420 acres of land holdings on Maui and Kauai, including four development lots at Maui Business Park . The operating profit for this segment was $16.0 million, compared to $4.5 million in the previous year .

Government and municipal entities for land use

A&B collaborates with government and municipal entities, providing land for various public uses. The company has engaged in significant transactions with local governments, facilitating land use for public infrastructure projects. In the nine months ending September 30, 2024, A&B's Land Operations segment generated $15.9 million in operating profit, which is indicative of its strong positioning in the market for government contracts and land sales . The financial performance of this segment illustrates A&B's capacity to meet the needs of municipal entities effectively.

Customer Segment	Operating Revenue (9M 2024)	Operating Profit (9M 2024)	Key Transactions
Local Businesses	$147.5 million	$67.4 million	23 new leases signed, 35,100 sq ft
Real Estate Investors	$26.7 million	$16.0 million	Sale of 420 acres, 4 development lots
Government Entities	N/A	$15.9 million	Public infrastructure projects

Alexander & Baldwin, Inc. (ALEX) - Business Model: Cost Structure

Operating expenses related to property management

The operating costs for Alexander & Baldwin, Inc. in the Commercial Real Estate segment totaled $75.8 million for the nine months ended September 30, 2024, reflecting an increase from $75.1 million during the same period in 2023. This represents a nominal growth of 1.0%, or $0.7 million.

For the third quarter of 2024, the cost of operations in the Commercial Real Estate segment stood at $25.3 million, compared to $25.1 million in the third quarter of 2023, showing a slight increase of 0.9%.

Costs associated with land development and sales

The Land Operations segment incurred operating costs and expenses totaling $16.5 million for the nine months ended September 30, 2024, which is an increase from $7.8 million in the previous year. This substantial rise of 111.4%, or $8.7 million, is primarily attributed to higher costs associated with unimproved and other land sales.

In the third quarter of 2024, the Land Operations segment's operating costs were reported at $7.2 million, compared to $2.2 million for the same period in 2023, marking an increase of 227.0%, or $5.0 million.

Cost Category	Q3 2024 (in thousands)	Q3 2023 (in thousands)	9M 2024 (in thousands)	9M 2023 (in thousands)
Commercial Real Estate Operating Costs	25,292	25,078	75,842	75,075
Land Operations Costs	7,153	2,219	16,492	7,796

Administrative and selling expenses

Selling, general, and administrative expenses for the nine months ended September 30, 2024, totaled $21.9 million, a decrease from $26.2 million in the same period of 2023, reflecting a reduction of 16.3%, or $4.3 million.

For the third quarter of 2024, selling, general, and administrative expenses were reported at $7.4 million, slightly down from $7.6 million in the third quarter of 2023, a decrease of 2.4%, or $0.1 million.

Expense Category	Q3 2024 (in thousands)	Q3 2023 (in thousands)	9M 2024 (in thousands)	9M 2023 (in thousands)
Selling, General & Administrative Expenses	7,436	7,562	21,927	26,200

Alexander & Baldwin, Inc. (ALEX) - Business Model: Revenue Streams

Rental income from commercial properties

For the third quarter ended September 30, 2024, Alexander & Baldwin reported total rental income of $49.4 million, reflecting a 2.4% increase from $48.2 million in the previous year. For the nine months ended September 30, 2024, the rental income totaled $147.5 million, slightly up from $145.6 million in 2023, marking a 1.3% increase .

The gross leasable area for improved properties at the end of the period stood at 4,014,000 square feet, increasing by 2% compared to the previous year . The average annual base rent (ABR) for new leases signed during the third quarter was $38.03 per square foot, while the ABR for renewal leases was $36.33 per square foot .

Period	Rental Income ($ million)	Average Annual Base Rent ($/SF)
Q3 2024	49.4	38.03
Q3 2023	48.2	36.33
9M 2024	147.5	N/A
9M 2023	145.6	N/A

Proceeds from land sales and development projects

In the third quarter of 2024, proceeds from land sales and development projects contributed significantly to Alexander & Baldwin's revenue, with development sales revenue reaching $1.9 million, compared to none in the same quarter of the previous year. The total unimproved/other property sales revenue was $10.6 million for Q3 2024, up from $4.0 million in Q3 2023 .

For the nine months ended September 30, 2024, total land operations operating revenue amounted to $26.7 million, a substantial increase from $10.4 million in the same period in 2023. This revenue comprised $5.9 million from development sales and $20.2 million from unimproved and other property sales .

Period	Development Sales Revenue ($ million)	Unimproved/Other Property Sales Revenue ($ million)	Total Land Operations Revenue ($ million)
Q3 2024	1.9	10.6	12.6
Q3 2023	0.0	4.0	4.3
9M 2024	5.9	20.2	26.7
9M 2023	0.0	8.1	10.4

Income from joint ventures and partnerships

Income from joint ventures for the third quarter of 2024 amounted to $2.1 million, marking a significant increase of 125.5% from $950,000 in Q3 2023. For the nine months ended September 30, 2024, this income totaled $3.8 million, compared to $1.9 million in the same period of 2023, reflecting a robust growth of 104.2% .

The increase in joint venture income is attributed to higher earnings from the Company's investments, particularly in a materials company .

Period	Joint Venture Income ($ million)
Q3 2024	2.1
Q3 2023	0.95
9M 2024	3.8
9M 2023	1.9

Article updated on 8 Nov 2024

Resources:

1. Alexander & Baldwin, Inc. (ALEX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Alexander & Baldwin, Inc. (ALEX)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Alexander & Baldwin, Inc. (ALEX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.