Alpine Income Property Trust (PINE) 23 Jul 202020 Q2 Earnings call transcript

Good morning, and welcome to the Alpine Income Property Trust Second Quarter 2020 Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to John Albright, President and CEO. ahead. go Please

name Good to operator. Property welcome today's XXXX. to for CEO President Thank the of the morning operating call company. My XX, June review quarter Income John results conference Albright, the and you, ended and is of Trust Alpine

months Financial the quarter and call Mark Corporate with Chief and Mark results details Smith, second Dan financial I Patten, is, the and moment. six our review of a Secretary. and our On our will me Officer in General Counsel

regarding First, the to I'll and turn provide call. you it regarding comments over of format to with Mark the on customary our points today call this our a few disclosures

morning, Thanks, John. everyone. Good

after to future release be Company's these forward statements Securities call made. time the Law. in may in materially matters our we Federal results in statements may disclosed forward-looking issued in we to from not provisions time During certain our the differ release to company's night. filings statements considered from the today, under actual statements last expectations to earnings significantly risks make statements. And these reflect Factors that discussed greater cause to results were SEC may from changes are actual differ looking the that be forward-looking could with and may detail

now Let me our on available website. is presentation note which that we night, filed investor our QX last XXXX

may that back investor during you over Our and find With we John. reference information that, presentation provides turn to additional this useful I'll it may

working of navigate QX were of pandemic. rate with the on part of XXXX all QX and our of Mark. focused to COVID-XX much the our tenants like peers, Much Thanks impact spent latter

remains. but our for of issues pandemic we've evidenced one and potential believe, surrounding tenant needed future recognize of the the still developments We all, the uncertainty addressed with the July XX% certainly collection we that associated resolution as that dislocation of recent the and we issue. While these to rent by

As leased the suspended our activities discussed pandemic. acquisition of for Lansing, of Michigan, the which is in activity which acquired outside during onset but that and on we with years single-tenant that call, has X.X%. and acquisitions Carolina, X.X efforts Asheville, have Lobby of June, leased credit pleased weighted lease. We're we rate of We on COVID-XX part approximately property quarter those the acquired Hobby the and a average the were completed ahead remaining been $X Walmart cap our XX.X of We and was $XX.X in expectations, approximately quarter to for completed has million at second our to we other retail in first investment And the to North of purchase two which the our years million lease. going remaining one quality. to towards focus properties is two able restart a property the at in quarter latter the these

XX% X.X of of in our of ULI of end located in square base approximately, and located states rentable is XX quarter, As of XX space, portfolio our markets. XX million XX the of properties over with feet notably, top consists annualized rent the the

XX% and comprised property In Vacations. of Wells one is XX% to Grand leased which Hilton our and is retail portfolio to Fargo addition, properties office, now office leased two

our quarter certainly on first, and to that dislocation we've a operating elements business portfolio hopeful We're results improve performers our in first to to Hobby our remained will the properties steady and of it office will during a economy activities. challenging of highlight and Lobby some please another to balance three by our pandemic our the few the COVID I'll mirror. add But caused activities soon moment. some continue Mark these over sheet our rearview provide Our times. be But turn second perspective the tenants Walmart. I'll in to results and and additional

Thanks, John.

finished significant in As and we've very quarter two swing John strong collection our a upward on July. mentioned, June with with particularly and in the collections continued experience terrific acquisitions

share of quarter, $X.X release FFO our nearly million more XX%. noted, QX achieved total was our for QX from XX%, approximately per $XXX,XXX approximately of to a for And increase than an an revenue the which share, As we our million. $X.XX increase increase total quarter, and approximately revenue $X.X XX% and bringing million the year-to-date for or of approximately per or is of $X.X

a or is decrease approximately share, from $X.XX AFFO per approximately approximately million, of Our QX which $XXX,XXX. X.X was

approximately adversely Our impact. of relating stemming by from tenants with arrangements AFFO to resolution was the COVID-XX rent, impacted $XXX,XXX deferred of the

we as the impact payments, that entirely. alleviated will rent be expect this We receive deferred

Our annual decrease XXXX of to approximately to $XXX,XXX a related G&A or the first recognition $XXX,XXX decreasing included $XXX,XXX, fees, approximately is audit also the quarter, in primarily trended audit. by compared which quarter XX%, as the nearly first the due to favorably tax

Lastly, our the quarter, late COVID-XX leased to Hobby the acquisition and for we Lobby late noted of $XX,XXX earlier. first to about draws over to relating pandemic, $XXX,XXX our reflects higher our John balance first the and second which made quarter outstanding in totaling the in higher quarter expense, credit to Walmart, the interest second was the the on which facility, borrowings the expense quarter, also attributable by the is that fund properties

borrowing $XX In on terms of the facility our liquidity million. stands approximately credit position, at capacity our

continued to facility, we portion group the acquisition to some working Regarding feature are the lending also that I'll our $XX efforts. facilitate million accordion credit with of potentially access note help our

an quarter for of month months collections of the and review for in some pandemic, the of ongoing. done second to working which our and job Steven portfolio tenants, they the wanted July. remains impact team COVID-XX incredible his I our with have the three have the the in terms of dealt status with current Lastly, as

Florida. Old which rent property to of our to As last July just week, stood Jacksonville, the in unresolved, Friday relates our lease with X% in Pottery collections XX%, of at Time

to month, for of LA expect XX% end the with increase the collections we approximately We as up wrap to agreements Fitness. July

in Our also open, XX% was under XX%, open approximately our or fully and June and AVR. respectively. or properties at mentioned either open are XX% May of April, XX% limited that from properties XX modified our of XX XX operations. represent collection I’ll stood which Those up

Now, it I'll turn back John. over to

that Mark. activity acquisition We with Thanks, acquisition of of pleased like and Hobby particularly prepared to the in quarter. property. some another In not closing restart quality the Lobby remarks, to of I'd the only pleased Walmart of summarize our the our highlights a property quarter, the we're late were

term. our we AFFO estimates, no and impact year reflect year, including COVID-XX note We in FFO the assuming pandemic, also our that expected full full reintroduce for setbacks guidance of which the expectations the the near major XXXX, of

we through the million We nearly also the acquisitions of we of in achieve hope approximately given million, indicated total end which $XX $XXX hope acquisitions is that second to we've completed that attainable quarter.

the completed the $X million second in also We buyback of program quarter.

well earnings as like As we stock allocation appropriate which company's brought NAV. the said the equity us view this wish in endeavors to on him with his in this his and Properties. previously, to Mark in thank would Essential resulted capital by dislocation call a an new of with markets our as our felt was notable severe the is and trading we given COVID-XX last I pandemic, discount

that to had in during In remain with this discussions up already express a CFO and the this economy open optimistic for dissipate several search challenging remain We new the shareholders concludes the well our hope candidate At Operator? have prepared pandemic for of our third history. hope we'd and friend return benefit we'll like time our shareholders. nation's our U.S. We tenants will started a questions. identify the for COVID-XX and it will We of to have remarks. soon our sincere closing, our candidates. a in impact quarter. that strength time, the of That colleagues and

Thank you.

[Operator will Instruction]… now question-and-answer session. begin We the

Thank you, Operator.

from prepared on XX%. knocked Fitness XX%. is Thank note like receiving the earnings I phone a we make as of from on that's to base a payment remarks. rent to would release, in clarification. to up we're prepared mentioned one and That collected of most our adjustment remarks, a that up notice folks In we our will our based you. contractual XX% that the LA And Just us

today Thank Barry from sir. with ahead, go And sir. Please first Davidson. will come D.A. Oxford you, our question

Great. Thanks, guys.

this First unwind through of and you off, type of manner managing like, and I that think making were kind in rent cash is offering timeframe? year, And is and it's the of you ratcheting start between they now there what and component up deferrals, by -- how environment. guys XX have to should collections When same be done that the months great the of it then through relation a that divided AFFO, does same job also look halfway you've that in kind up same three the are deferrals working? we in kind as of kind the we of – next that package

Barry. Thanks, Yeah.

Yeah.

So go ahead.

no, just said, No, yes. I no,

know, the has the re-spread rent any rent early to happens it say easy a tenant when over didn't of on, in and at lumpier, initial year. reopened. But timeframe or the that So happened and a side a hey, when we folks it's back that, good going didn't give very basic was, it to things going -- of of tighter deferment there. agree -- been of safe a and there next we'll we of of XX half of different from the the of go are the are there's a many on But ask this lot all get pandemic generically negotiations kind that those months, deferrals, kind It's to much when the of and us really was that and assumption kinds to it's months. ask pay three kind

actually, not more tenants tenants to you that were their have and lot We negotiations, while rent. of anything on they now ended structuring getting point we re-spread we of So, tenant certainly, this point. we're And we're their businesses those up give hearing in at the deferment. having of a more about rent reopened, just paying had, did re-established, negotiations are with of reference, a all from

so the didn’t the guess trying And when department finance when talking department, And pay really, to happened I something. house real other of estate that negotiate was to the half the rent. decided one half, the to

little in flavour half bit you back were hopefully of negotiations is of being So, like. the of that -- what a the this for the rent anyway year. deferred But bulk gives the that paid

anything? helps. That requested Hilton helps. That Okay. Has

for Hilton we our Well, specifically that I in safe don't us. lot I that you proposals and like want say just give this each earlier tenants to a mentioned to -- happy on go advance would on, it's tenants, someone we that, deal call that, will, assume better I'll earnings that, generically to be through tenant, would a of if were asking. were economic And interests, but

for Hilton, client so, of, And better some, safe and it's them like the we some relationships be And off tenants. our thought our good someone with that certainly sort rents. with give would and good be options And we they're felt shareholders. current with assume relationship us better they that, doing structure just to helpful to would for

looking or last Okay. And of fair pipeline as then, are switching when product? are say looking are amount of still in that guys sellers year. acquisition, at a the product were, beginning at That the today, you let's and the pulling sense. gears, because Is the just back, it question, Just out there the marketplace? less makes you you is guys

I -- there's say, much much there's sellers, But not product. counterparties. would I interested say as would more maybe Yeah.

on, bid this properties we transact or Buyers they buyers a now to be So, property. and lot and to didn't seller we're fact, the the on is selling. less on, like didn't not seller product passed us. coming sold a versus much there get, for And good as in And then interest really looking before seeing sell the what lately what saw much would are out could out okay, which interest. just show market interest that with back either the as in around there's us, are seeing made there, or is that's saying, in

So, that's good.

interest part. seller seeing the on more we're So

the you sale, in you're it If market want to for get sold.

definitely makes guys. right, That's sense. perfect. Right, All thanks

Thank you.

Please Janney. our And with ahead. will next Stevenson question come Rob from go

that guys. rationale location Time in Hi. you least -- at are a can deferral, about Are Old and they given they what's they're Is not some paying guys? open? morning, bankruptcy why entering deferral on candidate? not there not operationally into agreement a the talk Good John, Pottery with they're you with they're going they're while

from payment receive are and but they are So, bankruptcy, a in open them. we they did

would they like discussions And so keep been with with to them we what the basically looks we about like. in And been that have have them, location. talking

them the that's to Not paying there that's reject and lease. property, low market start have is we they And quite need $X.XX well were a -- why good. know, is you the but very pretty to they attracted close. So started foot rent double, paying so they as paying, And the didn't rent, that. only above square

for it. we're So, anyway, And location negotiating They it's a didn't profitable with them. reject them.

do XX,XXX all they think the there? square the the or all standpoint, it like I candidate still from need they mean, reapportion a downsize basically And want feet. that's footage square and I facilities do is

That's a Yes. for them. size good

get could next if then more require actually, rents we beneficial user for it, them could square them, So – be better actually they better subdivide and pay only get they it's out because but not then to like we and another us and wanted of they footage. could half it'd from need rents, they

you’re then when point And is be do here look things about trend I that on the and versus going just abatements the talking being where essentially getting mean the gone? the all hit deferral are we at we how discussions, mean, guys Okay. you abatement August what to the piece? to equal abatement are is

this don't we right see see that go we're do to going I now, routine mean, don't that through to we're going again. lease we

they've tenants As the Container quite you and publicly you our tenants their about, At were look maybe rally stocks. that we a know, worried of some in most of Home Store, if and are traded had

think better shape I feeling in they're or for have avenues all liquidity. more or so, better And

we're unless something global going the So go I happens like dramatic national or to this feel again. don't through routine in market market

shape now. good So I pretty think in right we're

one with out are AFFO got they reported Okay. could determine the you've deducts And the dividend out? to order in here got amount, what deferrals a those mean, metrics the of me. which normalized How's to which to various level using? at about I year. are whether while pump over shake be repaid the dividend? Hold are metrics for What what the Board is it number things for at of discussions the Board looking increases? last they until it remainder then How thinking a this you've AFFO, you at looking or these is type deferral that not days? continue to like And

this obviously as the and the to dividend. to in we have company I with dividend going expectations high think, pulled down can think $X.XX last that there's proactive. another portfolio the our more know, look level, in going grow that But be the happy you that credit more that line, we be Yes. But, at dividend. assume the quarter we to perform. I the we acquisitions we're movement this depending acquisitions, mean, quarter, are I on think was an would at you company as quality year, on be as to some growing announce the and upward acquisitions the happen obviously for held first how I just dividend performs quarter, to the sometime the of But had that third think I every at we expectation and add as

only carrying until, the we negative on was that sheet it lot a that We’re on deploy we're fairly we balance and arbitrage cash. that that And kind of and had paying recently capital. interest of cash

accretive into the to back very coming we’re now So income company. streams

have hopefully answer to revisit we more acquisitions once hope the there's that questions really in flow kind movement of and some is, to cash is the So, and dividend. your we upward some building,

-- mixing the this towards to rate X.X%, half the look acquisition-wise cap for actually, sort you're stuff that’s second of of stuff acquisitions, the of quality. XXXX still your of of the the that -- rate and -- at you're stuff going like more guys end Hobby spectrum, end the the that to for at other spectrum that lower start back quality part given is more a X.X% when to looking range as likely trending and with guidance or be was you second on is you back the cap year, half spectrum One well? Okay. quarter Are in higher low the Walmart the Lobby the quality going

that, XXXX probably the range. think blend say of the No, more I out formed that, shy see as you're acquisitions, X see whole it you be bit I you'll a that to obviously X, that, public, X, we X%. the X%. when way the But the some in X-ish But would X.XX%. that were ones remember, the costs is that going would that went now acquisitions to mentioned, year, closer of more in thought recent little gears thinking we up But expecting than But company, debt range. were our we the higher we when that switched were set we've about to we've be started more out, quality. the of

Now, locked a in X%. rate below that's we've

So is higher. spread actually our

buy off. think able cap that differential and and more that's costs spread much debt higher at than quality favorable a a a rate we great trade before. have to stronger so, is So, We're good now we

Thanks, Okay. it. Appreciate guys.

Sure.

question our with ahead. will go Milligan Please, from come next RJ Baird. And

just calls acquisitions is, Hey, the pointed out, for guys. John, year, as last the amount part $XX of another Guidance which you rest did good same that morning June. in of that for you the million for

can guess, fund So, could one, do $XX think or than do how And, did, it? you would more if million? you you the I you two,

Yeah. Thanks.

we more love ambitious better folks. do to So, And I look, mean, than basically that. we're see we would if opportunity,

looking with hard. acquisitions $XX feel of and are There we're lots very million. the So, obviously, comfortable,

do that could a way line $XXX have and know, find assets more into feature. where more, we credit good accordion an to find to fortune accommodate And good you facility be but up do bringing more, there we to the may we obviously million, discussions about to had our banks we growth. a have if will So, basically

And Okay, then the more uncertainty obviously with the retail. through a exposure office positive that's helpful. lot a pandemic

you the basis, you home office exposure how seeing? As will can more acquire about from going on that just retail, given talk that we're trends a work office But about decrease. mix especially the you feel term forward obviously, longer

Sure.

right, you're our I So, performed for very well think, the portfolio. office

but the if the that there that a fit you that, in get a defense on particular would to you And from side aspect, And is portfolio. work think opportunity -- we well that sectors hesitate into so the can't portfolio, we saw work not office bring whether it's but are totally whether home -- healthcare. some industry, on get from home, it I particular

for properties, So, out aspects at IT. facility of where or mission-critical, a different office looking we where it's of our houses Hilton-MetroWest eye one -- different like are the buildings keeping their the office they critical kind

And see Wells the where so, in the Wells division I trend. is think had to leave to downtown in you're that in out Fargo Hillsborough. a Hillsborough And that fill going burbs, in actually, Fargo location

if So, their closer of rents, we of buildings the about you're all that we're be companies I disruption, of some save all centers, kind approaching big homes, how -- be going urban where less that's forth to operations and people's elevator things. to in want think that things move high-rise to helpful, trend people know see so out that's that don't unless

some just obviously of and been categories in some terms, through That and is is. last longer winners terms losers the And there's just this pandemic. one question

think of struggling rates the out XX of XX that sort months shake you winners Just -- cap you for will and this? coming -- long-term ones think over the out curious are the next over the what to how

different it in way. I'll answer Yes, a

and that tax mentioned relook need but one Congress they're -- be at to the market, like years all couple rates a did XXXX where I going lease you going three core obviously, ground you're I aspect space dramatically rate. going lease that this, to cap the certain has three is think of type to hear presidential quarters net If estate, something may at to of know see aspects trade at the of they every real looking we think I candidate there, look seen very McDonald's for tax-free exchanges. dramatic at for expand that in we've instance, cap

XXXX If I'm least up you of XXX tax-free get points, rid it guessing. basis at exchanges, probably goes

there. look think to there's that's So any movement probably of out to I one if kind see for

to As on the too But cap a higher move rates cap there see so much world going the to far higher seven tenants, of cap of the as not of rate rates I type do lower risk are we're Walmarts seeing, you're rates what world. wonders cap on expanding. quality, are or think, is flock for the the

stay at in out shutdown. out not been where or maybe we're operations widen probably those and those looking opportunities But So, even widened state-wide cap have will rates tenants have further.

guys. you, Thank Helpful.

Thank you.

with Next Gorman come question go will from Michael Please BTIG. ahead.

was wondering I financials and just up process? that new leases John, had? changes your gone disclosure the morning. have and on three looking internal maybe of some the impact at impacted the as Good that underwriting thanks. last tenant process your on for marketplace, discussion looking guys acquisition in of following terms on Yeah, opportunities months What just that's are own the you're you existing some in how has or in the maybe of underwriting of terms of security in

in as even with have they beneficial months like really with getting us. directly what our operations, tenants would In they seeing one to been tenants side. Yeah, so have they're better. three respect, see from with our the described really what the help in their know dialogue for last Having to

tenants very regards particular people then, asset, left? We'll that of trying this say, a performing it to stuff When think talking you're to with from and helpful. competitors getting and always our variations. in you location, information, different tenant your not a you're so And about say, giving how this lens and locations that. tenants, brokers you to store the of are kinds ever yes, And doing a what you an that's all like analyze lot hey, market, underwriting, the they're talk good it’s very particular do regular been has will And but and developers to the whether and beneficial. has buy you're

us strength And we're with so of help that what us. this a our that to lot has is and told very the of happy obviously is which going locations,

Now have And their even acquisition at with that we'll during acquisition good, has tenants we'll the at know us or been and whether to opportunity with that that other when what our that dialogue that landlord we see look look know had helped location store connectivity opportunities. more we been not. has strong pandemic,

way, a our in more now. And we for customers know look about a to So, know roundabout in we lot location. more what about successful a

And so assess weak it's say was easier to than that before. now good it and location a I'd location

Is straight cash well? were there Great, any the how that's any maybe you deferral of COVID adjustment you as guys or helpful. just accounting quick obviously undertaken changes And then any there thinking the rent accounting the were for or line rent the side. abatement, of maybe any on been the either tenants a adjustments have that deferral are other or Mark, accruals about on tenants AFFO housekeeping, have that there under

No, I wouldn't.

We haven't had accounting to of arrangements. any for versions encounter any, of, cash, the sort

that. I'm or might sure issues. anything category So accounting of into be deal we there’d had with not unusual haven't alterations else to fall the that And

very Okay, much. fantastic. Thank you

you. Thank

next Riley Our with Please Craig Instructions] Kucera FBR. question [Operator go from comes ahead. B.

movie theater hear another discussions up weeks morning, guys. to I Good with your AMC opening pushed this Hi. about back your tenants. couple morning. know curious I'm of

reopening, of, you're what just, phase a sort them? but I from curious is Cinemark expecting hearing think,

or month, they that to back when month this we deals. say would negotiated next open expecting up weren't I our Yeah.

the great for road they be felt would if until where are there, meets that not then rubber But late in with have be way be, up discussion another to you -- having lease things starting I They grand for to plans October operating, could is didn't think, they're them. if that the fall. you October, things are aren't the know, looking summer. they any going open shutdown

of, circling kind Valley, to back there? And, the closed I at been they, dialogue another what's of, think Got have it. tenant kind that has Alpine

venue. look, in great. anything it's They on may winter if book Dialogue to there the Valley open been large is be And, Alpine going concert has the back going in didn’t a obviously, air come anything to side, Wisconsin.

this year basically has written-off. been So

some, planning, to sort that if they're going money. like to have open mean, June. I May, don't their act they hands, we're every have there problem feel tour need the call class a on it obviously, be next going -- to to a until they hopefully basically vaccine next a everyone's wood up year knock so past I is just be year, And going this That next pandemic year. in huge obviously, that year, on is world think high booked of, is because make they'll and

Okay, great. me. That's it Thanks. for

you. Thank

Ladies and closing like would session. to any John to this back I conference our for gentlemen, question-and-answer over remarks. concludes Albright the turn

Thank you questions much to very operator. you, forward and look discussing further any you Thank may have.

Thank today's presentation. attending call. today's concludes you This sir. you, for Thank

may now disconnect. You