Hawaii’s second-largest retail property landlord, Alexander & Baldwin Inc., earned $3.2 million during the third quarter in part from more tenants opening and paying rent as the local economy slowly improves.

The company, which owns more than a dozen shopping centers statewide primarily anchored by grocery stores, said 95% of its tenants are now open, up from 93% in July, 75% in June and 62% in April.

Honolulu-based A&B also said it was able to collect 81% of tenant rent in the July-September quarter, up from 74% in the preceding three months.

A&B’s improving tenant status profile, presented today in a financial report, offers a view into a slice of Hawaii’s commercial real estate landscape affected by government-ordered shutdowns of nonessential businesses that included restrictions on Oahu that prohibited dining in restaurants from late August to late September as part of coronavirus mitigation orders.

A&B owns about 4 million square feet of retail, industrial and office space statewide. However, only 7% of the company’s retail portfolio is tied to resorts, so impacts on businesses largely reliant on tourism aren’t much reflected in A&B operations.

Occupancy at A&B properties was 93.5% at the end of September, down from 95% a year earlier.

In the third quarter, A&B said it absorbed an $8.9 million hit related to revenue it doesn’t expect to collect because of COVID-19.

The company also said that it has adjusted almost 300 tenant leases this year through Sept. 30, including 199 rent deferrals totaling $4.5 million that should result in 95% of deferred rent being paid by the end of next year, and 81 other modifications worth $2.6 million that include having tenants pay a percentage of their revenue as rent.

“Throughout this process we have worked proactively with our tenants to ensure their long-term success,” Chris Benjamin, A&B president and CEO, said on a conference call with stock analysts Thursday. “Not only is this the right thing to do for the community and our tenants, but we would much rather retain occupancy than have to re-tenant a significant percentage of our portfolio.”

Benjamin added that as more restrictions on travel and business operations are lifted, A&B should benefit from the new agreements it has made.

One rent modification example A&B mentioned was for what it described as an iconic specialty food and surf apparel business where rent was abated for two months followed by maintenance costs and percentage rent until the end of 2021 or earlier if sales for the retailer rebounded 85%. A 10-year lease extension with higher rent also was included.

A&B properties include Pearl Highlands Center, Kaneohe Bay Shopping Center, Aikahi Park Shopping Center, Kunia Shopping Center, Waipio Shopping Center, Kahului Shopping Center, Manoa Marketplace, Waianae Mall and most of the commercial core of Kailua.

The company also owns two retail properties focused on tourists, the Shops at Kukui‘ula on Kauai and Queens’ Marketplace on Hawaii island.

Other parts of A&B include a partnership developing residential lots and homes at the Kukui‘ula resort on Kauai, a business park development on Maui and a rock quarry and road paving subsidiary on Oahu.

A&B’s third-quarter profit compared with a $50.9 million loss in the same quarter last year driven by a roughly $50 million noncash charge that cut the value of its road paving business Grace Pacific.

In the second quarter, A&B had a $4.7 million loss largely due to unpaid tenant rents and Grace operations.

A&B on Thursday said it has reduced costs and improved operational efficiency at Grace that helped generate a $1.3 million operating profit for Grace and related business.

Other major contributions to A&B’s third-quarter bottom line included joint-venture proceeds from four residential lot sales at Kukui‘ula, selling a solar farm on Kauai and selling one acre of land at Maui Business Park. Such sales helped produce a $3.4 million operating profit for A&B’s land division, up from $2.8 million in the same quarter last year.

A&B’s core commercial real estate leasing business generated an $11 million operating profit in the third quarter, down from $18 million in the year-ago quarter.

Benjamin said he is hopeful that continued resumption of tourism in Hawaii will lead to steady economic improvements, though caution is also warranted.

“The ultimate trajectory of COVID-19 remains uncertain,” he said. “Local residents and tourists alike need to practice social distancing and generally be prudent, or we could find ourselves moving backward again.”