MLP Builds Momentum on Leasing Growth & Maui Land Value

Global real estate markets are gradually stabilizing following several years of adjustment, driven by rising interest rates and pandemic-related disruptions. Investment activity is improving, capital is re-entering the sector, and property fundamentals across multiple asset classes are strengthening. Industry outlooks increasingly point toward renewed investor confidence and better operating conditions heading into 2026.

Price Performance

The broader global real estate sector has benefited from a constructive macro backdrop over the past year. Within this environment, Maui Land & Pineapple Company MLP has delivered a notable performance. Over the past 12 months, MLP shares have declined 2.7%. While negative, this compares favorably with Newmark Group NMRK, which has lost 19.7% over the same period. However, MLP slightly trailed Vonovia SE VONOY, which has fallen 1.3%.

The recent share pullback does not indicate fading investor interest. Instead, it reflects a transitional phase as the company continues repositioning its asset base and business mix toward more stable recurring income streams and long-duration development value.

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Asset Base & Strategic Positioning

MLP’s core competitive advantage lies in its substantial land holdings. The company owns approximately 22,300 acres across West and Upcountry Maui, much of which was acquired decades ago at historically low costs. Given Maui’s significantly higher current land values, this portfolio represents considerable embedded appreciation relative to book value.

Within the Kapalua Resort area, approximately 900 acres are entitled for residential, resort and mixed-use development. These entitlements provide long-term development optionality in one of the most supply-constrained housing markets in the United States.

In addition to its land bank, MLP owns roughly 247,000 square feet of commercial real estate. These assets generate recurring leasing income, supporting day-to-day operations while helping fund future development initiatives.

The company’s agricultural lands, conservation areas and water infrastructure enhance long-term value. Together, these assets provide a blend of steady recurring revenues, development upside and meaningful land appreciation potential.

Operational Momentum & Growth Initiatives

Leasing remains MLP’s largest and most stable business segment, accounting for the majority of operating revenues. The portfolio includes commercial, industrial, agricultural and land leases, as well as trademark licensing and water system operations.

Leasing performance has strengthened significantly. Recurring leasing revenues increased 39% in the first nine months of 2025 compared with the prior year. Since late 2024, the company has executed approximately 30 leases, reflecting higher occupancy levels, lease renewals at market rates and repositioning of commercial properties. The resulting rise in recurring income enhances cash flow visibility and supports internally funded development.

Agricultural Diversification

MLP has also launched an agricultural initiative centered on blue weber agave cultivation. In 2025, the company planted 15,000 agave plants across 25 acres of previously underutilized cropland and appointed a director of agricultural operations to oversee the program. Deferred development costs related to the agave venture reached approximately $1 million as of Sept. 30, 2025.

This initiative represents a strategic diversification effort aimed at generating value-added agricultural products while optimizing land use that may not be immediately earmarked for real estate development.

Pension De-Risking

A significant long-term positive has been the company’s pension de-risking efforts. In 2025, MLP funded, annuitized and terminated its qualified pension plan, recognizing approximately $6.9 million in pension expenses in the first nine months of the year. While this resulted in elevated GAAP losses in the near term, the move substantially reduces legacy liabilities and future earnings volatility. The remaining supplemental retirement obligation is expected to be terminated in 2026, strengthening the company’s financial position.

Improving Financial Performance

Operating results have begun to reflect the benefits of these strategic initiatives. For the nine months ended Sept. 30, 2025, operating revenues surged 83% year over year. Adjusted EBITDA was $1.6 million against a loss in the prior-year period.

Although the company continues to invest in development and asset stabilization, the improvement in recurring income and operating leverage suggests that its strategy is gaining traction.

Investment Outlook

MLP is repositioning itself as a long-duration land development and leasing platform, supported by growing recurring cash flow. Its substantial land holdings in Maui, disciplined asset monetization, agricultural diversification and strengthened balance sheet following pension termination collectively provide meaningful long-term growth optionality.

While near-term earnings may remain volatile due to development timelines and ongoing investments, the company’s asset base and improving operating fundamentals position it well to benefit from a housing-constrained Maui market and a recovering global real estate environment.

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This article originally published on Zacks Investment Research (zacks.com).

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