Alpine Income Property Trust (PINE) 19 Jul 242024 Q2 Earnings call transcript

Good day, and welcome to the Alpine Income Property Trust Second Quarter 2024 Operating Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to turn the call over to John Albright, President and CEO. Please go ahead.

Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust Second Quarter 2024 Operating Results Conference Call. Phil morning. new have joining Financial to this me pleased Mays, Chief our Officer, I'm

begin, will Phil? we customary Before I disclosures to to regarding provide Phil today's call. turn it over

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

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

back turn that, call I will over With to John. the

Phil. Thanks,

pleased have and We an our are asset higher-yielding earnings led guidance. a increase quarter delivered quality to in recycling and in investments strong that our successful loans

properties. during of recycling to Foods a Galaxy cap On volume disposition Buy and and blended accretive of Lobby million Golf a $XX.X the investment-grade tenants, the leased exit leased rate front, quarter, Best and we the for and to for a yield million X asset sold properties property disposition acquired to Hobby the Festival of $X.X X%

investment opportunities yields. of to the Further, advantage accretive and plan see we're at take that recycling beginning in market we continue to

yield the I submarket pad $X.X the of growing funding which a was loan was first investment investment million Ohio. a Wawa quarter. on million think X of towards XX.X% investment funded the in provide we and was development, originated during to Cincinnati, this retail by $X.X On front, The initial mortgage

quarter, in in XX by $XX.X XXXX. also we November portfolio properties originated that $XX.X interest million, participation our the A-X loans of During sold we million secured

XXXX, rated high-yielding additional was structured whereby by A- loan both sale for and including the received an investments, X.X%, $XX.X total transaction, This investments the of rating. quality a it agency, of exit loan disposition independent has XX, of year-to-date activities capital while yield weighted June part $XX.X a at at our initial As investments property yield average the rating up a weighted investment totaled through million frees X.X%. million of average made company

As within XX feet was quarter square in XX% of and properties operating with portfolio end, our occupied XX consisted sectors XXX X.X totaling tenants states. of million

top tenants sales Buy call Our our first our making recent paring Best and top X Walgreens process. down exposure from we in acquisition. are the into tenants in earnings remain unchanged actively April, quarter Walgreens it have with X our after currently our Further,

of coming of an quarter XXX increase ended XX% last time rents carry ratings. tenants from All investment-grade we with this And total X with base of the basis investment-grade year. an from annualized our credit top tenants our credit rating, points

of on approximately portfolio trading From a a meaningful real share. value our to and currently are we discount at well $XX our implied valuation an X% rate cap estate book above per perspective,

a Additionally, we for projected a share group, Simply in dividend the free Alpine have healthy XXXX. peer yields put, flow per growth strong one highest shares our of AFFO value and along cash are today. with great

share low the high FFO the $X.XX and per we AFFO or strong at end. year, X.X% end Lastly, and a $X.XX or guidance X.X% the by have our half earnings given increased of at our first share during the full

Phil call the turn to talk quarter balance about With over our performance, that, second sheet and to I'll guidance.

Thanks, John.

a increase is not I've few Board management privilege and to sit constantly only weeks, but been it's the it to do are here still and team working Alpine. First, join that a clear here at shareholder the value.

to endeavor do will new the the I same. As CFO,

$X.XX will Today, Beginning and an sheet for along with briefly were second from balance XXXX. highlight accretive results. of share financial to earnings both quarter. call open share increase recycling. by growth FFO our AFFO questions. guidance our in and then driven I per and interest the the our earnings, of income XX% or quarter loan was with The represents over $X.XX the per portfolio, asset This

other commissions $XX.X $XXX,XXX the includes revenue securing Additionally, leasing loan. to properties our for nonrecurring portfolio this of quarter million related XX

prior $X.X quarter of the year. million. with second for quarter both for G&A This quarter is last was and Our consistent G&A the the

As our fee, external management for was quarter. a reminder, of consists primarily the G&A which $X million

of per the cash paid quarter, a $XX.X company share. the dividend During

represents of with to aim consistent past each Our dividend announce for will this as covered the well we payout ratio third do quarter. of out August, income quarterly XXX% our And practice, year. pay towards an AFFO of our end amount the dividend is XX%. We taxable

charge with the quarter debt XX%, and fixed the to Moving sheet. ended balance coverage net X.Xx. of value X.Xx ratio net We a to debt-to-EBITDA of enterprise of

a million A-X with the we million no and debt balance loan. Additionally, One million interest until John as portfolio we $XXX we $XX.X liquidity, quarter participation discussed, of ended sold $XX.X maturity note, and final XXXX. have sheet our

liability by continue on $XX.X million to loan interest. line item we the this report will GAAP, full receivable of our balance required with a participation for sheet As amount separate the

an per $X.XX the the expense, $XX these million remains AFFO underlying sold. each. the for at our outlook interest increasing With $XX are of share income including FFO new and range participation range loan interest a to assumption acquisition guidance increase $X.XX offsetting year to for guidance, be The guidance to million of amount $X.XX range disposition continue the on and XXXX recorded to $X.XX full represents guidance with unchanged of per of This amount new to our ranges. at regards will share. we full X.X% a interest midpoint a Further,

base in-place modeling Lastly, a straight-line million began cash rent. $XX.X notes. quarter $XX.X quick in-place third annualized annualized of base the We and with couple of rent million of

$X.X $X.X million expense now participation sale. approximately by loan interest a income additional with discussed, interest the of currently million, of annualized is as associated Our run offset rate previously has which

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

Alliance Mehta Partners. question with [Operator from Instructions] And Global our first Gaurav comes

you some in seeing net I market color lease wanted to what properties? you for on were the transaction ask

Yes.

So active very still lease last little buyer is we're seeing and million moving net a not a for than that $X market as sure. very interest for and of smaller activity larger below kind property good are quarter much. still some There's properties of bit more lot dislocations,

capital, properties it's I last a are it want than where our people quarter. seeing environment -- better financing. lease need was but sell wouldn't now or We some to opportunities much

the that lease on the firm also was the to plan in was to average Okay. lease some you lower something second is ask wanted quarter, And the I on And your that to color term. weighted the going term? acquisition you wanted than pursue forward? get on I acquisition completed lease

our as to market Yes. we're to there's lease We've at here. as lease or mentioned a where increase location move presentation weighted in credit average we term going look in That investment-grade below rates that from property that we our no investor bought in supply.

opportunity doing the side So are and the available sense. might have tenants no which They another move and find disruption to make well. don't

side. and that So with renew going the right they're discussions to and we high the a have stores them confidence do well very and

knowing that markets, up been context our and lease will higher public that they're our -- as to but in increasing at work you of properties that renew pick line. strategy strong know, going yields the on weighted to So the has mix average we high-quality with

R.J. Our next comes James. from question Raymond Milligan with

dispose. X you under you think you're looking have to mentioned contract Walgreens John, that to -- I

lease expiration the what your exposure? schedule short-term curious Just any If Walgreens looks there's releasing risk? for

Yes.

lease of about average average the years. X is length our -- weighted Walgreens So

duration So reasonable us we cap to rates. a Walgreens with have opportunity the properties sell gives a there the and obviously longer that at better

bring obviously, #X X start we down really some and process and look in locations that others so to that mentioning got Walgreens from the And sales good working position. through are the we'll actively

will make some on the for definitely year of rest doing like good headway So that. the

That's of recovery the of given the that some to cost terms the year stock just stocks. right how do recent I capital curious Curious the position? acquirer net think guidance be of set in equation a Alpine sort you I'm to go and to lease net give need And rest where your and net -- terms of acquisitions for in neutral a changes of helpful. outlook you're now, we And see per in of the dispositions.

that grow. necessarily but growth for going so look, want mean, markets see we're the to still we mentioned, to to finding, patient I and for as to sell be to markets a and good good basically Yes. public do be do public that's happens Obviously, we opportunities, and capital we redeploy I given we'd don't to need supported we're us. down, that whether source love of Walgreens --

like and will for of markets on points put good and to on the as be much And keep broad as net to streaming come here but board we'll a need feel some that successes supportive, obviously, acquirer. it somewhat so And depend don't on the we here. we us, are

And so where are now. that's right of kind we

Stevenson Janney LLC. Montgomery comes with Our question from Scott Rob next

follow to the just Walgreens. John, up on

of local that tenant? lot How days? these something these the people the do X Walgreens properties guys of prospective of reduce Given the these Walgreens characterize buyers the guys a would if just of renew? to issues and Are want the to today? XX you their Are Walgreens exposure, fact are want that who investment-grade these pool doesn't buyer an years to else looking assets potential

Rob. the Basically, above. it all Yes, you've answered

-- have that really at again, We can portfolio, looking good basically you summarize we our demographics have of total locations. our

basically in Walgreens, of want that's we'll have hold one's replacement we dynamic credit get and probably even a you situation you're tenants so closing good XXXX say though saying, bit anything, length we've the okay, Walgreens with then little negotiate there's are growing. lease good And corner. that where Walgreens, a have below a box, can market want basically termination indications it buying tenants buyers who in any of a to the get and No store, but I early don't where situations had I that costs. for good building a And maybe

all the it's So above.

-- retailers? to and over then guys these of rank Golf conversations Galaxy X.X have Best properties Dick's And Wal, the them And these overall the Buy already with you left there's on sense years extension? extending Okay. where your X lease. little comments had about on profitability, Any a scale within

property, properties when and look, them mean, locations that good for basically doing Yes. to the bought the I are talked they very are we doing are say those we them.

can extension, there us. but early it's little some early negotiate we towards and certainly, for and a for them so an in And go

provide strong would And very want store so them. get longer and to don't in to to a you to there's like for refresh do we'll the capital no discuss -- at maybe demographics. that the wait capital. definitely Usually, where so lease appropriate term basically -- that rush time, some them But with on like and a they're anything we return feel located to

And even the so next should couple market in the of be years. better

thinking boxes. you And guys? Okay. then is at you portfolio are in for forward assets smaller this boxes opportunity big going How these Or versus overall all mix boxes? point about the terms bigger just obviously driven of it are

but mentioned boxes, the It is opportunity the opportunity talking driven, really that buyers. not about we're more before given on I smaller larger XXXX you're seeing as

we're the extremely So selling interest cap properties. cap properties, the smaller being down though supportive arbitrage rates the even with is is rates rate -- much greater coming and of the seeing

advantage low at where take a of very rates capital opportunity. And and of there's so selling that we'll buying cost cap

ticket more that. of opportunities seeing be, like kind I we'll items. in mean we larger we're opportunistic, general, on the So but

is, in of year-to-date $X.XX half numbers the drag that rates above or to or where if And the earnings? at drags last half when well Both Is the that to in needs either the to guys of second we the then there FFO this back should we're you the those what's of of range for about Okay. quarter. the $X.XX How about year? quarter of you out that's one back what's done $X.XX I half next come any are $X.XX nonrecurring run anything the that expect these year, the nonreoccurring second thinking thinking be guidance have look the or me.

Yes, Rob, it's Phil.

can per keep guys that was XXX,XXX have, needle for you I move current is commissions loans. talking XX kind XXX,XXX did the in an represents quarter think about commissions leasing my that context FFO, the of earnings so the remarks, in there fees, timing just small nonrecurring But $X.XX a from of this as share, a commissions just management properties primary large leasing underlie that amount here. amount and managing in of in leasing that portfolio the I or quarter. unusual And mentioned

quarter. current was in nonrecurring there about XXX,XXX the So

think the buckets, then be property And could we portfolio loan and a One you've with which And just of our of and one lead properties, well that with I acquisitions and fall credit to a right? acquisitions, mind out. transaction got with our got timing, into Dispositions look, keep largely in very dilutive. dispositions. line would swapped couple

happen, were $XX to really pay down all because swap. if that we've may we the we So not, the way it million of got line can't

be a sitting on redeploy some could September, cash, before right, there So we're temporary it. time. we

loan With you in loan, borrower those properties could time portfolio there. properties, selling loans, the the to and some sell right, have is particular, want portfolio that repay those the

and that largely So onetime then can I and the relatively move between needle. transaction have just timing quickly item the think quarter amount small this you a

Baird. comes next Our with Golladay question from Wes

sort like are looking loan did future make you to parts of deal? A-X sell to look you investments, When the with you

selling from much we on the freed because do deal just up A-X are how Now, investments. loan some capital the can restricted we

another we quarter. allowed that's million loan in us so And investments. have to now do still loan roughly additional opportunity to do the Again, $XX

And that don't we unless expect so but had was that. some -- opportunity, and that being really picky, but larger of us I we're loan see I don't doing sort patient

Family Okay. your is originally brand Family Dollar? thinking And are And to the about sold? how or you ones? where stores dual-branded happens the stores exposure the to your if branded dual Dollars What a

who let and Chief him I'll Officer, that. to speak I'll Investment So let Greathouse Steven our is

of Yes, I us mean, new. look, are most

these at is underwriting of more really, of plenty have credit a when looking play. we term them. we're and on And So lease

So look be portfolio exposure, is that we'll potentially then our of and right to more won't tight but them. now, any sitting produce buying

the of So we in now sitting kind like where portfolio. we're right

Matthew with question Erdner next from Our JonesTrading. comes

to welcome the Phil, team.

a So numbers end higher drives now, what those what acquisition Because kind but half, kind towards takes little of the towards your you're over of the guidance? range? higher of right that activity

due good We're execution. seeing obviously, opportunity, as to diligence subject some -- the I it's mentioned, a and

work. feel So of there. meet that half definitely second comfortable expectations we to obviously year we'll very have We the

have So plenty we of opportunities.

with think deliver. year happy to what be we're So And we I able how we'll next see.

Or it That's And down? up? comfortable kind the credit then you facility good I are how taking to where taking guys and it are know. of to is you start guess, want comfortable

No, with we're comfortable where it is.

the a nice that free And take on will -- bring we again, down. As small doesn't the to cash far side, as flow. leverage much strong had given company, it it

where it if mentioned, money with But is. I comfortable we're have we so And as very the -- is lost.

certain take So a beyond we kind it you want down to of where of swaps. level have

last from And Massocca with B. our comes question John Riley Securities.

With the for Or repaid? portion as for the over more portfolio? down that outlook especially Is replace should here time, investment, to normalized exposure what the of to thought the loan kind wind long-term is that in rate are environment? regards a loans kind of of interest

that down. the real market. their the further stuck are down. That's opportunity if I to in estate into get paying hard banking refinance normalized not banks interest really, mean, capped apartment than Those are given a books in more lot off, a what's They're if of work really they are looking industrial. they're mean we of I the I a normalized, loan lend really with sector, they rather to in Yes. would now environment, call a where were. causing that

is. opportunity real the where that's so And

more getting availability it We we totally but But of kind we on see the a burn as -- taking don't side. point, be So lease interest. some a expect of market advantage down net right better credit it obviously, the ownership to it now. of and at see we're with --

because being an to inside positions able we the be able to unlevered again finding really double we'd would fantastic. digits than way at money It's the we where properties. basis basically And of that and lower mortgage purchase be properties high-quality have would interest cap rates to a at not so be loan those able buy

But there. we out, and see being selective concern. keep so we'll any things And will level investing don't eventually, but

But those prepayment loans of know kind shorter of I rates kind duration here, there for of any options And shift most are those as in Okay. are counterparties? interest nature.

They can many there's prepay, but holes.

a effort X months we just XX knew get months. didn't roughly prepaid duration all of is loan So this to average in on

And most oil. go the early, so have the we a can efforts of to to all going borrowers yes, they bigger pay through save fish for in make would provision, they but short aren't just to amount to likely certain refinancing, have such a a just fry duration,

market whole I a the translating that of rate kind strokes talked Walgreens the coming. then of for rate. the bit is demand Okay. about cap broad mean, types assets? ranges and where where I potential transaction Walgreens for And maybe you into are for sales is how mean the cap those

Yes.

am will it's I not think, closing once HLC. we're mean of as I on start say about some not much localized cap -- seeing we what to more about credit. of give the rates that you the kind location really is going and the I But that

it's I go this not the see rate. Walgreens someone because for and the of property so just duration need spread so here's buying saying, my And to don't I'm property cap

more, basically and corner able to pay able to imagine. you perhaps this I to might never higher buy they're than cap this a build willing will rate basis, It's to for be be

and it sort they'll Now be will lean rate higher. credit situated the will the be where on cap Walgreens

really barbell and that be a want would and a it's on where that of based location. there's good we locations strength So the strong location the who lot tenants be of a lower to have rate would basically where cap effect little bit of at be

a have Oxford Barry with from question We International. Colliers

are they're who if because they want to of natural and a location somebody more that growing kind lease me and replace the getting does if around concerned that are out question lease about are the early if that that's Good. walks that Walgreens the of a Walgreens My to they've that the about tenants have people also of are duration, tenants and kind away and the are certainty of got that Walgreens they some kind were the can a telling backfill. termination

Yes. urgent I have good we for mean a It's a payers. bond medical.

You knows Even you the a which, growing world to would and grow. crazy. scrape know, find need and you to of stores God gains the schools went small they of that that going dollar are fast sort but Rating as that thing. it, casuals, how locations, if they're have like find restaurants to

really bit of that's on about that a think drive quite corner, if there's sort So upfront, because the of Walgreens mostly demand it's you through. the

there's fair amount a So there. of interest

John, would might you could you that would because they're out? where it moving that asset be two you leaving or buyer a spot? have a is because deal Walgreens And good a an just know you on tenant of love get

in We're real low estate a Yes. very case focus. and

had So we tenant dark a if a we are buy transaction. we hand absolutely would handsomely being we for that sort in knew paid Walgreens, of and

We yes, perhaps mean, that could haven't been transaction. really you for location. mean, certain we're us someone for see even I all capital that bridge I that. helping But about

side So the equation be well. on of it as could that

Okay. in Because it seems buyers to interested me like of not be deal. the would kind that XXXX

-- come wouldn't That's conclusion. I No. that to

concludes This you question-and-answer for session. your Thank the participation. you. Thank

have a You great disconnect. may now Everyone, day.