Alpine Income Property Trust (PINE) 21 Jul 232023 Q2 Earnings call transcript

Good day and welcome to the Alpine Income Property Trust Second Quarter 2023 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there’ll be a question-and-answer session. Instructions will be given at that time.

As a reminder, this call is being recorded.

to Officer. call like Partridge, to now Financial Chief would hand over the Matt I

begin. may You

Good morning, Quarter thank our Alpine Conference everyone, and With CEO Income for us Call. Albright. Property the and today President, Trust today Second me XXXX John Results you Operating is for joining

undertake that no XX-K, Form are detail discussed results materially remind duty from and to I'd future these greater update these securities company’s expectations could of laws. to in Form company's statements. that Factors actual our the statements XX-Q, from comments disclosed risks we Before we in the everyone forward-looking federal actual begin, today from and may under significantly time-to-time differ cause other results matters like the in to and filings. statements, many are considered forward-looking The differ SEC

earnings You we financial and release, most can recent on non-GAAP use, SEC our alpinereit.com. our presentation, of measures contain at find reconciliations reports, which investor website

over his the now John prepared to I’ll remarks. hand call for

Thanks good Matt, morning, and everyone.

outline market. I what highlight the our quarter, with made and activity our the recycling for to strategy, we've progress in transactions seeing some asset insight the we're provide I into want investment Before

returns we've rated XX% nearly to on below point Federal investment-grade funded which investments From acquired to rates. March portfolio, been $XXX For bolster asset attractive of interest million environment have tenants. part been overall have X% now, cash investment. cap that first our driven million. a sales capital of of Funds of markets rate, interest balance has of the a assets in our on quality the rapidly we've This gains in a cap spite has X.X% rate basis cash in properties from rise generating way our of These over and XX unprecedented an above rising a by relative focused of of take the Rate recycling rate, year increase been sold $XX rents attention attractive drive volatile advantage as XXXX, the pricing in accomplished environment, sheet, improve

result, XX selling investment, quickly our into a Buy, shifting Depot. such just tenant raising to in months, we've Family tenants As various our remaining stable Tree, portfolio of Walmart, exposure Best and Goods, Lowe's, our Home Dollar, from our XX% portfolio as more Dick’s industry-leading office transformed XX% and investment-grade Dollar by Sporting

we're reduce X.X end Our pleased investment accretive All more and of rate where our no from debt progress, to floating exposure, net of have the market robust XXXX. we until times in stock the reflected and on us the QX especially have has merchant X.X times opportunistic high evolving XXXX. to at interest in this allowed QX transaction And well gains quality opportunities, positioned not maturities our current be no to a spreads rate to sales while see at say from end I'm price, us leverage starting developers. XXXX, to

coming than During Buy, X.X% rate, rated while and selective economic concentrations We that tenants of a have such operating broader from household a and tenant if tenants. there should non-discretionary XX% Verizon, Home also investment-grade investments annualized centered sale strategies, and of Sporting even include Home emphasizing forward-thinking tenants million with Starbucks, the well outside a Conversely, their second our outperform sheets, Dick’s financial sectors our invested discount portfolio, rent sector as balance Goods, around within Goods, and well-capitalized cap transparency, disposition as investment-grade because and Best slowdown. operational cash non-investment-grade efforts we Lowe's, is These of rated more Marshalls. base Chick-fil-A, quarter, the Depot, ratings. with credit $XX as at names prioritize

cap rate. cash $XX nearly sold During we the quarter, a of X.X% million at properties

of Our two leased rated Academy dispositions to including consisted QX non-investment-grade entirely properties Sports. tenants,

While cash generating rate assets a year-to-date these sold at of now million we've $X.X of X.X%, have million. sales gains of - on cap $XX asset QX the sale

place potential agreements us has our following of to shareholders. over by past would the long-term buy cap allow These capital proud and at execution adding value taken evaluating anchored for focus to yields with assets above development acquisition XX construction. we're rates, is of our completion While our the industry-leading tenants. put meaningfully work Today, year-to-date months, two to agreements the our that we're loan opportunity

we'll $XX no share Additionally, to stock address effort in our public the program There program, approved active hard private cash price on discount, investment-grade to an cap our our to justify repurchase expanded are X% to an relative guarantees underlying to disconnect near sits the in the peers. has it's an million. stock up be price, but especially our board focused as rate,

now call quarterly With guidance. our discuss sheet, to results, revised that, to Matt I'll turn the over and balance

Thanks, John.

tenant X.X XX.X%, totaling of Tree, properties, with General, replaced square States. quarter, industry-leading and Sports Dollar, operating XX of portfolio XX the within Lowe's, as Hobby Lobby, Walmart, As XXX Dick’s and Family our end Walgreens, in our tenants operators top consisted was Dollar Sporting the portfolio such joining Depot sectors million Home list, Academy in Best XX Buy. feet, occupancy Goods, of Dollar

per were of XX% second a Second decrease both per quarter AFFO XXXX. or quarter share, $X.XX XXXX the compared FFO to and share, $X.XX

asset total results a benefited quarterly which in investment our a from driven net X.X% positive from increase largely recycling revenues, was program. spread by Our

reinvested, the asset which recycling first year-over-year quarter, by our asset revenue sales, quarter occurred offset positive quarter the first XXXX. the sole proceeds that of in our case was As drag for in the second well spread second sale of the effects our from as of the were remaining partially office the and resulted negative reinvestment from not that property as the immediately were quarter

XX over fee the new the increased any issuance of The which issuance rate by our past paid quarter fees run result for is expenses administrative the manager, assumed largely or months. XX%, million. and to equity equity annual repurchases as before external the current $X.X General driven a increased management for our management activity

partially and of decrease Year-to-date, per share, and share, interest per AFFO was interest but $X.XX rates expense and XX.X%, an FFO higher $X.XX to balance. first XX.X% FFO months AFFO year-over-year to the Additionally, representing lower share per six from when per was XXXX. offset decrease debt resulting of overall was contributed by outstanding higher share, in the respectively, compared

the per quarter dividend, XXXX representing of second a yield the share, and QX increase For X%. cash the company's dividend of paid current of the X.X% cash XXXX, company a over year-over-year annualized $X.XX.XX nearly

ratios were Second XX%. quarter AFFO FFO both payout and

was rent. $X open debt XX,XXX a maintain value and average common $X previously debt replaced market net forma The more third no total newly rate the total were end rent begin acquisitions program of we of program equity repurchase share ratio higher John $XX.XX net at a and of have previously of in-place total until authorized for than portfolio-wide guidance. in with of we asset EBITDA quarter, of strong dispositions no is million maturities fixed nearly charge X.X million times. base ended repurchase million the $XX line revised shares XX%, In we've forecasted the of quarter repurchase times, program our liquidity $XXX,XXX debt share of price the authorized previously consideration referenced. referenced, XXXX, at previously During XXXX $XX.X drag purchased quarter than with and million exposure, cost annualized million under floating increased on or straight annualized continue and XXXX, million. enterprise interest share. And $XXX cash-based share coverage of We timing in-place sales, to the $XX.X as stock the per quarter instituted with the from X.X We pro to we and an of

FFO AFFO per The of has share, year of respectively, bottom through share increased and $XXX to $XX balance the by million of guidance to and year. ranges of new our we've the sales our and our in $X.XX disposition XXXX in full future ranges top value Overall, guidance respectively. positive and for of the investments, account to share, end we year-to-date We the top per lease by transition FFO into million portfolio resulting asset revised of our per drive of down balance $XXX and and $X.XX of a growth. investments back have guidance to $X.XX million of sheet, million the and net to been the by retail dispositions range AFFO end long-term half for for share, flexibility increased earnings year head $XX a revised to been reduced year has guidance end $X.XX with revised per expectations more $X.XX

please that, line With open Operator, questions. for the

from Matthew Erdner with first Our comes Instructions] [Operator question JonesTrading.

line Your open. is

for the Hey guys. Good Thanks taking morning. question.

you could XXXX? up doesn't given sellers market purchase the guidance, anticipate, net lower do think like if So, you you the in being develop end

the A seeing - No, lot market. being by of it constraint now. we're definitely is seeing in driven debt we're opportunity more the

So, I good think year. we'll of optimistic find the acquisitions here for pretty the we're some rest

viewing for then moment? you. are And Got acquisitions share repurchases at new how the you

good stock as Well, as own certainly seeing buying where we're an opportunity trading, not our our is stock.

our we're cap an at per eight share, at look you So, now implied trading value - book if at per rate. we're $XX.XX share, at

interested are reasons on of some in we're finding asset. being acquiring we and versus That what regular be opportunities. just we're way lots very repurchasing picky to So, shares being buying said, good

Thank you. Awesome.

you. Thank

Scott. Stevenson Rob from Montgomery comes question next Our with Jannie

Your line is open.

the the - back look matched equal one quarters a of terms from it cadence of does So, acquisitions of quarters in half dispositions, front being John, loaded up in the year? to like to or or is remaining going those on these standpoint things? wind backend acquisition going disposition be relatively Are what by

it's Rob, Hey, Matt.

QX, relatively more earlier on earlier. the are side more towards being part and selling the for bit probably I disposition dispositions. visibility That into then acquisition little weighted to things, relative revised a we more guidance have a think selling is, QX said, of it'll in maybe in bit reason little we and the the of even, be

earnings And because more little bit a so, of drag the the timing dispositions on to related acquisitions. the versus there's

the versus you recycle at the any is when a sale Okay. portfolio strong just everything's obviously today And at in how portfolio much for today, of time. look point guys candidate

at candidate XX next you much is a offer in to X% of it, sure this how recycle months you wants but today, today look to rate, I just not? mean, take XX cap portfolio the likely I'm you'll of the in versus way a the that Somebody terms

going getting properties Having so sell. down I We're just said not we're being of we've since to we're for patient. a to that, smaller sure, obviously recycling mean, for sell been to active. amount

take the have to there We are trying that. buy, out forth, and market can't we're particular of and in to buyers they price and as so XXXX advantage find points something

So, keep incredible us not an busy. amount, enough to but

on XXXX a the you those plays or up things potential timeframe? that that finish development are where about timing that are what of sometime these in and take And should how you is thinking we a from talked investment to the sort - - on of How possession event, standpoint would going the a prepared the impact Is ‘XX XXXX comments, from them? is about that numbers? be

opportunities. be investment So, particular year the these funding this will on

the of a we to Now, at sell properties cap to they able be end ability a we’re for whether on they'll at execute up their acquiring buyer. function think depends rates where versus

So, a we and look, position credits last on of high of sort locations. high-quality have a quality kind

if then or anything? line the going acquisitions the to Is enough of need it to to one the is? fund finance is that last Okay. for Matt, ‘XX, remainder going to And on me. you dispositions be the are for

of that assumed some the off No, would sort funder no incremental we funding and buybacks available be small there'd and in dispositions, be a funded cash guidance, the of through that by revolver share be amount so we’ll end year. match the of

you, Thank guys. helpful. Have good That's Okay. a weekend.

you. Thank

Our next Baird. Wesley Golladay with from comes question

Your line is open.

Hey everyone. good morning,

that the a cost lowered right that a quick higher now function have clearly for question year. at capital volume of the you Just on just the Is the moment? acquisition of

it's purely to a Wes, Yes, of limited equity. access function

that. the on by solving the so, volume sort visibility And think acquisition year, we through of end the have given work of related dispositions front we the for we're we can to and what

to I in do cheap where clearly business how some stock the next scale few point, the mean, your eventually market, the a internalization then years. you then also And is that argument but private and balance could buy Okay. I the need buyback? understand go at you in hopefully you to versus

how So, dynamics? you balance do those

equity us versus and obviously, program obviously company kind of value in moment of a take buyback where peers kind time But active it's advantage the a for of issuing we're Look, to the platform. trading sense makes we've hopefully in XX in the where it been to last grow are of where months trading. the the

a we've the company, we're markets that we'll composition that the get the the the the of in love in year. of half So, from bit improved back of optimistic as little value portfolio

to we so, and the to expect we've we other grow portfolio given And the what a able with platform rank still be folks. kind how with done of

any you And or starting just Okay. risk locations within can Walgreens do your you about there. solid still to IG, weaken double-digit then modestly, the has you exposure how do exposure, The your maybe but franchise? debt a that view talk

clearly look lease we and they’re and we've extensions so we locations, of Yes, the with done them. Walgreens, make with strong at talk locations sure a and lot

credits of will around we growing so, progression it makes sense or a the will pair and natural other of portfolio. Walgreens be And kind back where we'll move as

Thanks, Okay. everyone.

Thank you.

International. Colliers comes next Our with Oxford question from Barry

is line Your open.

spread, over in higher and were off quarters and be making able than confident next sell lower few match i.e., to quick, to some sure Real place? guys talking guys exercise get Do guys. buy you'll Thanks, dispositions. about feel rates of just you an you rather of fairly cap sort rates Rob's cap at acquisitions question, of this running funding the that isn't Great. build at

certainly just we're doing Yes, … in place. running if for be it sure. to There’s always wouldn't We be going

Right. that. I didn't mean to imply

no, No, on the only portfolio not fine. looking we're for to this No, accretive recycling that's be improve the but definitely side acquisition program no,

that's seeing marketplace. as what And the in doable as you feel far you're

Yes.

All right. Thanks, guys.

you. Thank

comes with Our from Milligan question Raymond next RJ James.

open. is line Your

Good guys. Hey, morning.

down up considerably now have buying past weigh within the do leverage. has back your you follow months on thinking XX versus guys and over about about Just Leverage how question, wanted come range? thinking just to targeted you shares Wes' leverage

that's fee. double sort Because also at Yes, we're I right? it think but reduces rate point, material load discount market from John's to a G&A of has cap private of and trading for us, wide buying management implied an to back shares NAV, the benefit, significantly values, a the

there. sort a of benefit double there's so, And

think that it's be be up it'll happening material stay while the debt we'll seven event what's I take of just that So, market. net share to times everybody in below program, a to And should to EBITDA. expect going advantage the buyback levering opportunistic, not

was for just six expectations play I'm interest what - for Got do XX you gap-out the credits. or transaction you wondering side Thanks, could market it. give And Or their then next below investment-grade Matt. overall Clearly, will eight to going see that for to a investment-grade some anticipate bigger I the pricing? for in therefore you waiting out rates or months John, cap months seller and seen if the on they're be market. and properties just, think rates non-rated sellers commentary how there provide six And we've are. Do some on declining and hoping investment-grade? you stick to curious

be I going on mean, think to going I lower. banking not that rates Yes, sellers they're cap tightening or realize probably

is to where rates enough, market to this need sell, especially good they interest are. want if So, sell, to comparable

from marginal properties don't out maybe assets tight. that on say I because the false whether they - aren't out would they So, marginal have investments, don't you have want and and But they're you're then capital, being would choosy. - coming hope comfortable selling they investors And non-IG have the definitely whether alternative like think seeing people with sell people that meeting don't credits market. debt they're and say that due, so that their there, picky, there that see I sitting buyers just people - locations, they're like they to the not I

rates take just are properties don't where just less to risk kind sellers because that enough the those wide take the appetite so, pain. there and there's want are on the languishing just of to cap And

guys. All Understood. right. Thanks,

you. Thank

Our next question with comes from Michael Gorman BTIG.

Your open. line is

that funding the Good just the there the also wanted and of kind at Yes. take look the properties end. development create of now in couple you ask option, layering and years the I in lot you're understanding have out you I'm and morning. least and Thanks. How to of opportunities potential equation, investments the just seeing to John, or the these about of at scale curious maybe the now the off do side that opportunistic higher-yielding could being headwind? a How FFO bit of of a on of opportunity versus that do terms burn an earnings balance you out? balance out a that from

on and risk because I may be you opportunity returns rates? the larger getting estate you're But reinvesting Yes, at high-class for real off that's lower mean, we yield future that now high outsized in with And we’ll is look, that look the debt a definitely than Are if will, set that of non-functioning like? because quality the accommodate. that problem is that we're world investing paid what's burn take the market. can you

being So, like do more, keep could we and we'd busy what choosy picky on we it's but nice us do, but here. it'll - wish

Okay, of then side, payout? just to great. do grows these room keep the on the you FFO in dividend any terms result like now? flow kind the new steady what of Or look of retained Matt, baseline are dividends quick investments cash and the the does retain of one some maybe a flow? And a you taxable more at have cash as as And

or cash good it's Yes, a flow today million million. plus question. minus or call $X Free is $X it

retain and investment the company. the of with growing retaining attractive certainly on been to a also cash recycling driving but cash a able amount asset So, the platform. decent balance side, size relative the we're is flow net the to grow especially spreads that of dividend, we've payout ratio to the It's the flow

on of conscious income side, fixed evaluate quarter. fourth probably growth especially well. the we’ll also retail that side But more and and specifically the going to that into the dividend there flexibility back some like the year see some we're have as half we in investors, So, the

Understood. Thanks the guys. time, for

no participation. Thank include does questions disconnect. Everyone, all you. program There your at the and you This are have time. Thank great for may day. now a further this you